================================================================================

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

                               -----------------

                                   FORM 10-K

                               -----------------

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                       Commission File Number 000-24737

                               -----------------

                       CROWN CASTLE INTERNATIONAL CORP.
            (Exact name of registrant as specified in its charter)


                                            
                     Delaware                         76-0470458
            (State or other jurisdiction           (I.R.S. Employer
         of incorporation or organization)        Identification No.)

                 510 Bering Drive                     77057-1457
                     Suite 500                        (Zip Code)
                  Houston, Texas
      (Address of principal executive offices)


                                (713) 570-3000
             (Registrant's telephone number, including area code)




Title of Each Class of Securities Registered Pursuant to Section
                    12(b) of the Securities                          Name of Exchange
                     Exchange Act of 1934                           on Which Registered
----------------------------------------------------------------    -------------------
                                                              
                 Common Stock, $.01 par value                     New York Stock Exchange

           Rights to Purchase Series A Participating              New York Stock Exchange
                  Cumulative Preferred Stock


Securities Registered Pursuant to Section 12(g) of the Securities Exchange Act
                                of 1934: NONE.

   Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [_]

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

   Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X]  No [_]

   The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the registrant was approximately $558.5 million as of June
28, 2002, the last business day of the registrant's most recently completed
second fiscal quarter, based on the New York Stock Exchange closing price on
that day of $3.93 per share.

                   Applicable Only to Corporate Registrants

   As of March 18, 2003, there were 223,652,374 shares of Common Stock
outstanding.

                      Documents Incorporated by Reference

   The information required to be furnished pursuant to Part III of this Form
10-K will be set forth in, and incorporated by reference from, the registrant's
definitive proxy statement for the annual meeting of stockholders (the "2003
Proxy Statement"), which will be filed with the Securities and Exchange
Commission not later than 120 days after the end of the fiscal year ended
December 31, 2002.

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                       CROWN CASTLE INTERNATIONAL CORP.

                               TABLE OF CONTENTS



                                                                                               Page
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                                              PART I
Item 1.  Business.............................................................................   1
Item 2.  Properties...........................................................................  30
Item 3.  Legal Proceedings....................................................................  31
Item 4.  Submissions of Matters to a Vote of Security Holders.................................  31

                                              PART II
Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters................  32
Item 6.  Selected Financial Data..............................................................  33
Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations  35
Item 7A. Quantitative and Qualitative Disclosures About Market Risk...........................  61
Item 8.  Financial Statements and Supplementary Data..........................................  62
Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 106

                                             PART III
Item 10. Directors and Executive Officers of the Registrant................................... 106
Item 11. Executive Compensation............................................................... 106
Item 12. Security Ownership of Certain Beneficial Owners and Management....................... 106
Item 13. Certain Relationships and Related Transactions....................................... 106
Item 14. Controls and Procedures.............................................................. 106

                                              PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K..................... 107

Signatures and Certifications................................................................. 118


PRELIMINARY NOTE: This Annual Report on Form 10-K contains forward-looking
statements as defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements should be read in conjunction with the cautionary
statements and other important factors included in this Form 10-K. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Cautionary Statement for Purposes of Forward-Looking Statements"
and "Item 1. Business--Risk Factors" for descriptions of important factors
which could cause actual results to differ materially from those contained in
the forward-looking statements.



                                    PART I

Item 1. Business

Overview

   We own, operate and lease towers, including co-locatable rooftop sites, and
transmission networks for wireless communications and broadcast transmission
companies. We engage in such activities through a variety of structures,
including subleasing and management arrangements. As of December 31, 2002, we
owned, leased or managed 15,578 towers, including 10,794 sites in the United
States and Puerto Rico, 3,397 sites in the United Kingdom and 1,387 sites in
Australia. Our customers currently include many of the world's major wireless
communications and broadcast companies, including Verizon, Cingular, Nextel,
T-Mobile, Sprint PCS, AT&T Wireless, SingTel Optus ("Optus"), Vodafone, O2,
Hutchison 3G UK Limited ("Hutchison 3G"), Orange, British Sky Broadcasting
Group plc ("BSkyB"), National Transcommunications Limited ("NTL") and the
British Broadcasting Corporation ("BBC").

   Our strategy is to increase our revenue by increasing the utilization of our
sites by wireless and broadcast companies, and, where appropriate, to continue
to build, acquire and operate new towers and wireless and transmission networks
and infrastructure through opportunities created by:

  .   the transfer to third parties, or outsourcing, of tower ownership and
      management by major wireless carriers;

  .   the need for existing wireless carriers to expand coverage and improve
      network capacity;

  .   the additional demand for towers and wireless infrastructure created by
      new entrants into the wireless communications industry; and

  .   the introduction of wireless technologies including broadband data and
      third generation ("3G") technology.

   Our main businesses are leasing (including via licensing) antenna space on
wireless and broadcast towers that can accommodate multiple tenants
("co-location") and operating analog and digital broadcast transmission
networks and wireless networks. A key component of our strategy is to promote
sharing of wireless towers and broadcast transmission infrastructure. We also
provide certain network services relating to tower or other wireless
infrastructure for our customers, including project management of antenna
installations.

   During 2002, the rate of new tenant additions to our towers decreased by
approximately 40% from 2001. Network services revenues have also been adversely
impacted in the U.S. due to reduced antenna installation activity related to
the decrease in new tenants. Network services revenues declined as a percentage
of our total revenue during 2002, and we expect such decline to continue in the
foreseeable future.

   Our primary business in the United States is the leasing of antenna space on
our sites to wireless carriers. Our tower portfolio consists primarily of
towers in various metropolitan areas. As of December 31, 2002, 52.6% of our
towers were located in the 50 largest basic trading areas, or "BTAs", in the
U.S., and 71.3% of our towers were located in the 100 largest BTAs. See
"Business--The Company--U.S. Operations."

   Our primary businesses in the United Kingdom, which is conducted through our
wholly owned subsidiary Crown Castle UK Limited, or "CCUK", are the operation
of television and radio broadcast transmission networks (including licenses to
use certain spectrum) and the leasing of antenna space to wireless carriers.
Following our 1997 acquisition of the BBC's broadcast and tower infrastructure,
we were awarded long-term contracts to provide the BBC and other broadcasters
analog and digital transmission services. We also lease antenna space to
wireless operators and broadcasters in the U.K. on the towers we acquired from
the BBC. In addition, we lease space to wireless operators on towers that we
acquired from wireless carriers or that we have

                                      1



constructed and on rooftop installations constructed on sites acquired from
British Telecom ("BT"). In 2002, CCUK was granted spectrum licenses with
respect to two digital terrestrial television (DTT) multiplexes in the U.K.,
and, on October 30, 2002, CCUK, in conjunction with the BBC and BSkyB, launched
a multi-channel digital terrestrial television and radio broadcasting service
in the U.K. under the brand "Freeview." See "Business--The Company--U.K.
Operations."

   Our primary business in Australia, which is conducted through Crown Castle
Australia Pty Limited, or "CCAL", is the leasing of antenna space to wireless
carriers. CCAL is owned 77.6% by us and 22.4% by Permanent Nominees (Aust) Ltd
on behalf of a group of professional and institutional investors led by Jump
Capital Limited. We currently operate 1,387 towers in Australia. See
"Business--The Company--Australia Operations".

   We believe our towers are attractive to a diverse range of wireless
communications industries, including personal communications services (PCS),
cellular, enhanced specialized mobile radio, specialized mobile radio, 3G,
paging, and fixed microwave, as well as radio and television broadcasting. In
the U.S. our major customers include Verizon, Cingular, T-Mobile, Nextel,
Sprint PCS and AT&T Wireless. In the U.K. our major customers include the BBC,
Hutchison 3G, T-Mobile, Orange, 02, NTL, Vodafone and BSkyB. Our principal
customers in Australia are Optus, Vodafone Australia, Hutchison and Telstra.

Growth Strategy

   Our objective is to become the leading owner and operator of towers,
transmission networks and other infrastructure for wireless communications and
broadcasting. We believe our experience in expanding and marketing our towers,
as well as our experience in owning and operating analog and digital
transmission networks, positions us to accomplish this objective. The key
elements of our business strategy are to:

  .   Grow Revenue Organically. We are seeking to increase the utilization of
      our communications sites by increasing the number of antenna leases on
      our owned and managed communications sites. Many of our towers have
      capacity available for additional antenna space rental. We believe there
      is demand for such co-location capacity both from existing carriers and
      broadcasters and from new carriers and broadcasters, though the growth of
      such demand has significantly decreased. We intend to continue to use
      targeted sales and marketing techniques to increase utilization of and
      investment return on our towers. During 2002, wireless carriers
      significantly reduced the number of antennas they added to sites, making
      our objective of growing revenue organically more challenging.

  .   Grow Margins. We are seeking to take advantage of the operating leverage
      afforded by the relatively fixed nature of the operating costs associated
      with our site rental business. The majority of the operating costs of our
      site rental business consist of ground lease expense, property taxes,
      repair and maintenance, utilities and salaries, which tend to escalate at
      approximately the rate of inflation. Consequently, if increased
      utilization of tower capacity is achieved at low incremental cost, our
      site rental business should experience operating margin expansion.

  .   Allocate Capital Efficiently. We are focused on the efficient utilization
      of capital. We may seek to expand our existing tower portfolios through
      the selective acquisition and build of strategically located towers that
      satisfy certain investment criteria and are complementary to our tower
      portfolios. With respect to tower acquisitions, such transactions may
      include acquisitions of sites from major wireless carriers or other tower
      companies through direct acquisitions, tower exchanges, joint ventures or
      other means. With respect to tower builds we may selectively build new
      towers for wireless carriers as they expand and fill in their service
      areas and deploy new technologies requiring additional communications
      sites. Our decisions to invest additional capital in selective
      acquisitions or build activities are generally based upon whether such
      investments exhibit sufficient co-location revenue potential to achieve
      our risk-adjusted return on investment hurdle rates. We may also allocate
      capital to certain strategic adjacent activities that satisfy investment
      return criteria or complement our tower portfolios. From time to time, we
      may sell or swap certain of our towers or other assets as opportunities
      arise. In addition, we may use some of our capital to acquire our debt
      and equity securities when such acquisitions appear economically viable
      and capital efficient.

                                      2



  .   Extend Revenue Around Our Existing Assets. We are seeking to leverage our
      assets and the skills of our personnel in the U.S., the U.K. and
      Australia. With our wireless communications and broadcast transmission
      network design and radio frequency engineering expertise, we are
      positioned to extend the products and services we offer beyond the
      leasing of tower space to other potentially shareable activities, such as
      antenna and base station maintenance, shared antennas, shared microwave
      backhaul and network monitoring. In addition, as evidenced by our recent
      acquisition of DTT licenses and the launch of Freeview in the U.K., we
      are pursuing other strategic opportunities, including the possible
      opportunistic acquisition of spectrum licenses, which are complementary
      to our existing assets and may provide revenue growth.

The Company

   We operate our business through our subsidiaries primarily in three
geographic areas--the United States, the United Kingdom and Australia. We
conduct our U.S. operations principally through certain wholly owned
subsidiaries of Crown Castle Operating Company and our two joint ventures with
Verizon Communications. CCUK is our principal U.K. operating subsidiary, and
CCAL, a joint venture between us and Permanent Nominees (Aust) Ltd, is our
principal Australian operating subsidiary. We also use subsidiaries to hold the
assets we acquire or control as a result of various transactions we have
engaged or may engage in from time to time.

  U.S. Operations

   Overview

   Our primary business in the United States is the leasing of antenna space on
multiple-tenant towers to a variety of wireless carriers under long-term lease
contracts. Supporting our competitive position in the site rental business, we
offer our customers certain infrastructure and network services, including
project management of antenna installations.

   We lease antenna space to our customers on our owned, leased and managed
towers. We generally receive monthly rental payments from customers payable
under site rental leases that are typically five years with renewal options. We
also receive fees for managing the installation of customers' equipment and
antennas on certain of our sites. Our U.S. customers include such companies as
Verizon, Cingular, T-Mobile, Nextel, Sprint PCS and AT&T Wireless. We also
provide tower space to private network operators and various federal and local
government agencies.

   At December 31, 2002, we owned 10,794 sites in the U.S. and Puerto Rico.
These towers are located predominantly in the eastern, midwestern and
southwestern United States, along with Puerto Rico. A substantial number of our
towers were acquired through transactions consummated within the past four
years. In addition, we may consider and enter into arrangements with other
wireless carriers and independent tower operators to acquire additional towers
or tower portfolios.

   Through the Powertel acquisition, which closed in June 1999, we control and
operate approximately 675 towers. These towers represented substantially all of
the towers owned by Powertel (now a part of T-Mobile) in its 1.9 GHz wireless
network in the southeastern and midwestern United States. Approximately 90% of
these towers are in seven southeastern states providing coverage of such
metropolitan areas as Atlanta, Birmingham, Jacksonville, Memphis and
Louisville, and a number of major connecting highway corridors in the
southeast. These towers are complementary to BellSouth Mobility's 850 MHz tower
portfolio in the southeast and have minimal coverage overlap. Substantially all
of the Powertel towers are over 100 feet tall and can accommodate multiple
tenants.

   Through the BellSouth Mobility and BellSouth DCS (now part of Cingular)
transactions, which were substantially completed in September 2000, we control
and operate approximately 3,060 towers (including towers built pursuant to
build-to-suit agreements). These towers represented (1) substantially all of
the towers in

                                      3



BellSouth Mobility's 850 MHz wireless network in the southeastern and
midwestern United States providing coverage of 12 of the top 50 U.S.
metropolitan areas, including Miami, Atlanta, Tampa, Nashville and Indianapolis
and (2) substantially all of the towers in BellSouth DCS's 1.9 GHz wireless
network in North Carolina, South Carolina, east Tennessee and parts of Georgia.
A substantial majority of these towers are over 100 feet tall and can
accommodate multiple tenants.

   Our joint venture with Verizon Communications relating to the Bell Atlantic
Mobile towers (the "Bell Atlantic Mobile venture") controlled and operated
approximately 2,020 towers (including towers built pursuant to a build-to-suit
agreement) as of December 31, 2002. Through our joint venture with Verizon
Communications relating to the GTE Wireless towers (the "GTE venture"), we
controlled and operated approximately 2,940 towers (including towers built
pursuant to a build-to-suit agreement) as of December 31, 2002. At the time of
acquisition, these towers represented substantially all the towers used in the
850 MHz wireless network of Verizon Wireless in the eastern, midwestern,
southwestern and Pacific coast areas of the U.S. and currently provide coverage
of 22 of the top 50 U.S. metropolitan areas, including New York, Chicago,
Houston, Washington, D.C., Philadelphia, Boston, Phoenix and San Francisco. A
substantial majority of these towers are over 100 feet tall and can accommodate
multiple tenants. We currently own 56.9% of the Bell Atlantic Mobile venture,
and Verizon Communications owns the remaining 43.1%. We currently own 82.2% of
the GTE venture, and Verizon Communications owns the remaining 17.8%.

   The agreements relating to our joint ventures with Verizon Communications
provide that upon a dissolution of either venture and following satisfaction
(or adequate provision for satisfaction) of such venture's liabilities, we will
receive all the assets of the dissolved venture, other than any shares of our
common stock then held by the venture that were contributed by us as capital
contributions (15,597,783 shares to the Bell Atlantic Mobile venture and
5,063,731 shares to the GTE venture), all of which shares will be distributed
to the applicable Verizon Communications partner. In exchange for the
distribution of the venture's assets to us, we will pay to the applicable
Verizon Communications partner the then fair market value of such partner's
interest in the venture, excluding (1) an agreed venture interest relating to
the common stock held by the venture and distributed to such partner and (2) a
..001% interest retained by an affiliate of Verizon Communications and
concommitent operating restrictions. A dissolution of either venture may be
triggered (1) by the Verizon Communications partner at any time following the
third anniversary of the formation of the applicable venture and (2) by us at
any time following the fourth anniversary of such venture's formation (subject
to certain penalties if prior to the seventh anniversary in the case of the
Bell Atlantic Mobile venture). The GTE venture was formed on January 31, 2000,
and the Bell Atlantic Mobile venture was formed on March 31, 1999. As the third
anniversary of formation of both ventures has passed, the Verizon
Communications partners could trigger dissolution at any time, requiring us to
address the applicable payment obligations. As of December 31, 2002, assuming
the distribution of the shares of common stock held by the ventures to the
Verizon Communications partner, the interest of the Verizon Communications
partner in the GTE venture and the Bell Atlantic Mobile venture would have been
approximately 11.0% and 24.1%, respectively. As payment to our venture partner,
the dissolution of the GTE venture would require us to deliver cash, and the
dissolution of the Bell Atlantic Mobile venture would require us to deliver
cash or common stock at our option; such payments may negatively impact our
liquidity or cause dilution of our common stock. Additional information
regarding the venture dissolution terms can be found in the text of our prior
filings with the SEC and in the relevant venture agreements, which have been
filed as exhibits to certain of our prior SEC filings. We are currently in
discussions with Verizon Communications regarding certain amendments to the
venture agreements with respect to the procedures, payments and other aspects
of the dissolution provisions relating to the ventures, including a potential
deferral of dissolution or payments due upon dissolution. There can be no
assurances as to the outcome of these discussions.

   During the third quarter of 2002, each of our ventures with Verizon
Communications negotiated a mutual consent to terminate its build-to-suit
commitments with Verizon, and we negotiated a mutual consent to terminate our
build-to-suit commitments with Cingular. Such agreement terminations eliminated
any requirement to build additional towers for either carrier. As a part of the
build-to-suit terminations, we sold certain tower construction projects for
approximately $22.9 million in cash. Asset write-down charges of approximately
$6.4 million were recorded during 2002 related to these projects.

                                      4



   We plan to continue to selectively build new towers which meet certain
economic criteria on a limited basis in areas where carriers fail to transmit
or drop signals in their coverage areas. To reduce risk and speculation, we now
generally look for sites with multiple tenant demand and obtain lease
commitments from wireless carriers prior to building a tower. Further, the
towers are constructed to accomodate multiple tenants in order to obviate the
need for expensive and time consuming upgrades, saving capital and time for
carriers.

   Site Rental

   In the U.S., we rent antenna space on our towers to a variety of carriers
operating cellular, personal communication services, specialized mobile radio,
enhanced specialized mobile radio, paging and other networks.

   We generally receive monthly rental payments from customers payable under
site leases, and we also receive fees for managing the installation of
customers' equipment and antennas on certain of our sites. In the U.S., the new
leases typically entered into by us have original terms of five years (with
three or four optional renewal periods of five years each) and provide for
annual price increases based primarily on a consumer price index (subject to
certain caps). The lease agreements relating to tower network acquisitions
generally have a base term of 10 years, with multiple renewal options, each
typically ranging from five to ten years. We have existing master lease
agreements with most major wireless carriers, including AT&T Wireless, Verizon,
T-Mobile, Nextel and Sprint PCS, which provide certain terms (including
economic terms) that govern leases on our towers entered into by such parties
during the term of their master lease agreements.

   The average monthly rental payment of a new tenant added to a tower varies
among the different regions in the U.S. and the type of service being provided
by the tenant, with broadband tenants (such as personal communications
services) paying more than narrowband tenants (such as paging), primarily as a
result of the physical size of the antenna installation. In addition, we also
routinely receive rental payment increases in connection with lease amendments
which authorize carriers to add additional antennas or other equipment to sites
on which they already have equipment pursuant to pre-existing lease agreements.

   We have site rental opportunities in connection with our larger tower
acquisition transactions as a result of the fact that such transactions
typically involve a master lease agreement of some type with the selling or
transferring carrier and the opportunity to lease additional space to other
carriers. For example, in connection with each of the joint ventures with
Verizon Communications, we entered into a master lease agreement under which
its domestic wireless businesses lease antenna space on the towers transferred
to the ventures. Further, in connection with the Powertel, BellSouth Mobility
and BellSouth DCS transactions, we entered into agreements under which the
transferring carriers occupy space on the towers transferred to us. In each of
these transactions, we are permitted to lease additional space on the towers to
third parties.

   Network Services

   We design, build and operate our own communication sites on a limited basis.
During 2002, we slowed this activity significantly and expect to build less
than 20 towers in the U.S. in 2003. We also provide network services such as
network design and site selection, site acquisition, site development and
project management of antenna installations. Our customers are typically
charged for such services on a fixed price contract or a time and materials
basis. While we maintain network design services primarily to support the
location and construction of our multiple tenant towers, we do, from time to
time, provide network design and site selection services to carriers and other
customers on a consulting contract basis. In addition, we have engaged in site
acquisition services for our own purposes and for third parties. We generally
set prices for each site development

                                      5



or project management service separately, and we may negotiate fees on
individual sites or for groups of sites. We manage the installation of antenna
systems for our cellular, personal communications services, specialized mobile
radio, enhanced specialized mobile radio, microwave and paging customers.

   During 2002, network services revenues were adversely impacted in the U.S.
due to reduced antenna installation activity related to a decrease in new
tenant leases and our strategic decision to reduce our service offerings to
primarily the management of antenna installations on our sites and radio
frequency planning and testing. Network services revenue declined as a
percentage of our total revenues during 2002, and we expect such decline to
continue in the foreseeable future.

   Significant Contracts

   We have many agreements with telecommunications providers in the U.S.,
including leases, site management contracts and independent contractor
agreements. We currently have significant contracts with most of the major
wireless carriers, among others.

   Customers

   In both our site rental and network services businesses, we work with a
number of customers in a variety of businesses including cellular, personal
communications services, enhanced specialized mobile radio and paging. We work
primarily with large national carriers such as Verizon, Cingular, AT&T
Wireless, Sprint PCS, T-Mobile and Nextel. For the year ended December 31,
2002, Verizon Communications and its subsidiaries accounted for 16.3% of our
consolidated revenues. No other single customer in the U.S. accounted for more
than 10.0% of our consolidated revenues.



             Industry                               Representative Customers
             --------                               ------------------------
                                 
Cellular / Personal Communications
  Services......................... AT&T Wireless, Verizon, Sprint PCS, Cingular, T-Mobile,
                                      Alltel, U.S. Cellular
Specialized Mobile Radio / Enhanced
  Specialized Mobile Radio......... Nextel
Governmental Agencies.............. INS, Coast Guard, FBI, U.S. Postal Service, FAA, DEA, IRS
Private Industrial Users........... Federal Express, Laidlaw Transit, BFI
Data............................... Cingular, Datacom Information Systems, Ardis
Paging............................. WebLink Wireless, WorldCom, Arch
Utilities.......................... Peco Energy Corporation, Nevada Power, Reliant Energy
                                      Entex
Other.............................. XM Satellite Radio


   Sales and Marketing

   Our sales organization maintains our profile within the wireless
telecommunications industry. We use public and proprietary databases to develop
targeted marketing programs focused on carrier network build-outs,
modifications, site additions and network services. Information about carriers'
existing sites, licenses, capital spend plans, deployment status, and actual
signal strength measurements taken in the field is analyzed to match specific
towers in our portfolios with potential new site demand.

   A team of national account directors maintains our relationships with our
largest customers. These directors work to develop new site leasing
opportunities, network services contracts and site management opportunities, as
well as to ensure that customers' emerging needs are translated into new
products and services. This group also supports third party project management
partnerships to provide network deployments and backhaul transmission services.

                                      6



   Sales personnel in our regional offices develop and maintain close local
relationships with carriers that are expanding their networks, entering new
markets, bringing new technologies to market or requiring maintenance or add-on
business. We target numerous types of wireless carriers, including cellular,
personal communications services, enhanced specialized mobile radio, wireless
data, paging and government agencies. Our objective is to lease space on
existing towers and pre-sell capacity on our new towers prior to construction.

   In addition to our full-time sales and marketing staff, a number of senior
managers spend a significant portion of their time on sales and marketing
activities and call on existing and prospective customers.

   Competition

   In the U.S., we compete with other independent tower owners which also
provide site rental and network services; wireless carriers which own and
operate their own tower networks; broadcasters and building owners that lease
antenna space, primarily on colocatable rooftop sites; and other potential
competitors, such as utilities and outdoor advertisers, some of which have
already entered the tower industry. Wireless carriers that own and operate
their own tower networks generally are substantially larger and have greater
financial resources than we have. We believe that tower location, capacity,
quality of service and deployment speed have been and will continue to be the
most significant competitive factors affecting tower rental companies.

   The following is a list of some of the larger independent tower companies
that we compete with in the U.S.: American Tower Corp., SpectraSite, Pinnacle
Towers, and SBA Communications. We also compete with Sprint Sites USA, a
division of Sprint that markets and manages Sprint's sites and towers.
Significant additional site rental competition comes from the leasing of
rooftops and other alternative sites for antennas.

   Competitors in the network services business include Bechtel, General
Dynamics, Lucent, Wireless Facilities, Inc., SBA Communications and Whalen &
Company (a subsidiary of Tetra Tech, Inc.). In 2002, we made a strategic
decision to reduce our service offerings to primarily management of antenna
installations on our sites and radio frequency planning and testing. We believe
that carriers base their decisions on the outsourcing of network services on
criteria such as a company's experience, track record, local reputation, price
and time for completion of a project.

  U.K. Operations

   Overview

   We own and operate, through CCUK, one of the world's most established
broadcast television and radio transmission networks. In addition to providing
transmission services, we also lease antenna space on our 3,397 communications
sites in the United Kingdom to various communications service providers,
including T-Mobile, O2, Orange, Hutchison 3G and Vodafone, and provide
telecommunications network installation and maintenance services and
engineering consulting services. We provide transmission services for four of
the six digital terrestrial television multiplexes in the U.K., two BBC analog
television services, six UK-wide BBC radio services on FM, AM and DAB (the
first digital audio broadcast service in the U.K.), five BBC regional radio
services for Scotland, Wales and Northern Ireland, 38 local BBC radio stations
and two national commercial radio services through our network of transmitters,
which reach 99.4% of the U.K. population. These transmitters are located on
approximately 1,300 sites, more than half of which we own or control and the
balance of which are either licensed to us under a site-sharing agreement with
NTL or other third party site operators. In April 2001, we launched a new
wireless carrier network service for T-Mobile (previously One 2 One) in
Northern Ireland. In 2002, CCUK was granted spectrum licenses with respect to
two DTT multiplexes in the U.K., and on October 30, 2002, CCUK, together with
the BBC and BSkyB, launched a multi-channel DTT and radio broadcasting service,
under the brand "Freeview." In connection with Freeview, we have secured
long-term contracts to provide digital television transmission services to the
BBC, BSkyB, UKTV, Flextech Television, MTV (part of Viacom) and EMAP. See
"Business--The Company--U.K. Operations--Transmission Business" and
"--Significant Contracts".

                                      7



   Our core revenue generating activity in the U.K. is the analog and digital
terrestrial transmission of radio and television programs broadcast by the BBC.
CCUK's transmission business, which was formerly owned by the BBC, was
privatized under the Broadcasting Act 1996 and sold to CCUK in February 1997.
At the time the BBC home service transmission business was acquired, CCUK
entered into a 10-year transmission contract with the BBC for the provision of
terrestrial analog television and analog and digital radio transmission
services in the U.K. Digital television contracts were added in 1998 and 2002
as described below. For the 12 months ended December 31, 2002, approximately
33.7% of CCUK's consolidated revenues were derived from the provision of
transmission services to the BBC.

   At December 31, 2002, we owned or managed 3,397 sites in the U.K. Our sites
are located throughout England, Wales, Scotland and Northern Ireland.

   We expect to expand our existing portfolio in the U.K. by building and
acquiring additional sites. We anticipate that most of these new sites will be
developed on BT sites under our agreement with BT. See "Business--The
Company--U.K. Operations--Significant Contracts--British Telecom Agreement". We
believe our existing network of sites and towers encompasses many of the most
desirable site locations in the U.K. for wireless communications. However, due
to the shorter range over which telecommunications signals carry, as compared
to broadcast signals, wireless communications providers require a denser
portfolio of sites to cover a given area.

   In March 1999, CCUK completed the One 2 One (now part of T-mobile)
transaction. Through this transaction, CCUK has added an aggregate of 1,672
towers (including towers built pursuant to a build-to-suit agreement with
T-Mobile) to its portfolio. These towers represent substantially all the towers
in T-Mobile's nationwide wireless network in the U.K. These towers form part of
CCUK's nationwide network of sites and towers to be marketed to wireless
carriers in the United Kingdom. See "Business--The Company--U.K.
Operations--Significant Contracts--T-Mobile Northern Ireland Network".

   In November 2000, CCUK entered into an agreement with BT to lease space on
as many as 4,000 BT sites throughout the U.K. These sites are principally
rooftop facilities owned by BT in urban areas. As of December 31, 2002, we had
developed 648 sites under this agreement. In April 2002, CCUK reached agreement
with BT to defer until March 2003 payment of (Pounds)50 million (approximately
$80.5 million) which had been due March 2002 from CCUK to BT under this
agreement. We are currently in discussions with BT regarding certain amendments
to this agreement, including the further deferral or reduction of this payment
and a reduction of the number of BT sites acquired. There can be no assurances
as to the outcome of these discussions. See "Business--The Company--U.K.
Operations--Significant Contracts--British Telecom Agreement".

   In February 2001, CCUK signed an agreement with Hutchison 3G whereby
Hutchison 3G would lease space on a minimum of 4,000 CCUK sites throughout the
U.K. In addition, in February 2001, CCUK signed an initial agreement with its
existing customer O2 (previously BT Cellnet) pursuant to which O2 would lease
additional space on CCUK sites throughout the U.K., with a minimum take up of
500 additional sites per year for each of the years 2001, 2002 and 2003. Under
each of these agreements, the carrier is disputing the terms of the agreement
and is not currently leasing the required number of sites within the time
period contemplated by the agreement, and CCUK is currently in discussions with
the carriers regarding the terms of the agreements and resolution of the
disputed issues. There can be no assurances as to the outcome of these
discussions. See "Business--The Company--U.K. Operations--Significant
Contracts--Hutchison 3G Agreement" and "--O2 Agreement".

   Transmission Business

   Analog. For the 12 months ended December 31, 2002, CCUK generated
approximately 27.2% of its revenues from the provision of analog broadcast
transmission services to the BBC. Under the BBC analog

                                      8



transmission contract, we provide terrestrial transmission services for the
BBC's analog television and radio programs and certain other related services
(including BBC digital radio) for an initial 10-year term through March 31,
2007. See "Business--The Company--U.K. Operations--Significant Contracts--BBC
Analog Transmission Contract".

   In addition to the BBC analog transmission contract, we have separate
contracts to provide maintenance and transmission services for two national
commercial radio stations, Virgin Radio and talkSPORT (formerly Talk Radio). In
July 2001, the Virgin Radio contract was renewed for a period expiring April
30, 2008. The talkSPORT contract commenced on February 4, 1995 and expires on
December 31, 2008.

   We own all of the transmitter equipment used for broadcasting the BBC's
domestic radio and television programs within the U.K., whether located on one
of CCUK's sites or on an NTL or other third-party site. As of December 31,
2002, CCUK had 3,929 transmitters, of which 2,571 were for television
broadcasting and the remainder were for radio.

   A few of our most powerful television transmitters together cover the
majority of the U.K. population. The coverage achieved by the less powerful
transmitters is relatively low, but is important to the BBC's ambition of
attaining universal coverage in the U.K. This is illustrated by the fact that
one of our analog television transmitters (Crystal Palace) provides coverage to
20% of the U.K. population and the top 16 analog transmitters provide coverage
to 79% of the U.K. population.

   All of our U.K. transmitters are capable of unmanned operation and are
maintained by mobile maintenance teams from 25 bases located across the U.K. A
site-sharing agreement provides us with reciprocal access rights to NTL's
broadcast transmission sites on which we have equipment.

   DTT Network. In January 2000, we completed the rollout of the 80 station
network required under our contracts with the then current holders (including
the BBC and ITV Digital) of four of the six licenses issued in the U.K. for
digital terrestrial television (DTT) services. Of these sites, 49 are owned or
controlled by us, and the remainder are on NTL owned or controlled towers
pursuant to a site sharing arrangement. In 2002, following the award of the DTT
licenses formerly held by ITV Digital ("ITVD") to the BBC (one license) and
CCUK (two licenses), we upgraded our DTT network to provide a more reliable
signal. This upgrade consisted of (1) a change in the radio frequency
modulation scheme and (2) increases to the transmission power at a number of
transmitter sites.

   Digital Transmission and Broadcast ("Freeview"). In 1997, the U.K.
Independent Television Commission ("ITC") awarded ITVD three of the five
available commercial digital terrestrial television "multiplexes" for new
program services. From 1999 to March 2002, pursuant to a digital transmission
contract with an original term of twelve years, CCUK was responsible for the
transmission of the ITVD signal through the CCUK-owned digital terrestrial
television network to approximately 1.2 million ITVD subscribers in the U.K. In
April 2002, ITVD announced plans to liquidate its assets and returned its DTT
multiplex licenses to the ITC. Prior to the liquidation, CCUK earned gross
revenues of approximately (Pounds)19.4 million ($27.6 million) annually under
the ITVD transmission contract. ITVD represented approximately 12% of the 2001
gross revenues of CCUK and approximately 3% of the 2001 consolidated gross
revenues of the Company.

   Following the return of the licenses by ITVD, the ITC conditionally awarded
the license for one multiplex to the BBC and the licenses for two multiplexes
to CCUK. No license fees were paid to the U.K. government with respect to the
award of the multiplex licenses other than an approximately $38,000 application
fee per multiplex. The licenses were formally granted on August 16, 2002 for a
term of 12 years, and CCUK has the right to renew the licenses for an
additional term of 12 years subject to satisfaction of certain performance
criteria. On October 30, 2002, the BBC, CCUK and BSkyB launched their
multi-channel digital TV and radio broadcasting services, under the brand
"Freeview". Digital TV Services Ltd ("DTVSL"), a cost-sharing cooperative in
which CCUK, the BBC and BSkyB are equal shareholders, has been created
specifically to

                                      9



promote Freeview. In addition to being the licensed broadcast operator of the
two multiplexes awarded to CCUK, CCUK provides the transmission of the DTT
program signals for the two CCUK and two BBC multiplexes through the CCUK-owned
DTT network.

   Following the award of the DTT licenses and in connection with the launch of
Freeview, in August 2002 CCUK entered into an agreement with the BBC to provide
transmission and distribution service for the multiplex awarded to the BBC.
Also in August 2002, CCUK entered into an agreement with BSkyB to provide
transmission, distribution and multiplexing service in relation to 75% of the
capacity of one of the CCUK multiplexes. Both of these agreements are for an
initial period of six years with an option by the BBC and BSkyB for an
additional six-year term. In addition, CCUK has entered into agreements to
provide transmission, distribution and multiplexing services to a number of TV
and radio content providers (EMAP, Flextech, Guardian Media Group, MTV, OneWord
and UKTV) through the two multiplexes awarded to CCUK. Agreements with the TV
content providers are also for six-year terms, with renewal options, while
agreements with radio providers are generally for shorter terms. Through such
agreements, CCUK is currently transmitting content for such customers with
respect to approximately 90% of its licensed capacity and is currently in
negotiations with content providers with respect to the remaining capacity.
CCUK has contracted annual revenues of approximately (Pounds)25.3 million
($40.7 million) for the provision of transmission, distribution and
multiplexing services related to the new multiplex licenses in 2003, which
replaces the approximately (Pounds)19.4 million annual revenues previously
earned from the ITVD contract and is in addition to the revenues generated from
the original 1998 BBC Digital Transmission Contract. See "Business--The
Company--U.K. Operations--Significant Contracts--1998 BBC Digital Transmission
Contract", "--2002 BBC Digital Transmission Contract" and "--BSkyB Digital
Transmission Contract."

   CCUK has invested, as a result of its previous contract with ITVD,
substantially all of the capital required to provide the services described
above. CCUK is already incurring, again by virtue of its previous contract with
ITVD, a large proportion of the operating costs required to provide these
services (including payments to British Telecom for distribution circuits and
payments to NTL for site rental). Since CCUK will offer a more complete
end-to-end service to content providers than was provided to ITVD, CCUK expects
to incur certain additional operating costs including (1) payments to BBC's
technology division for multiplexing services and (2) payments to DTVSL for
promotion and marketing of Freeview. In 2003, CCUK will incur additional annual
operating expenses of approximately (Pounds)5.3 million ($8.5 million) above
the costs incurred for the provision of broadcast services to ITVD.

   Digital Radio (DAB). In addition to our DTT transmission and broadcast
services, we currently provide transmission services for digital radio
broadcasts (DAB) in the U.K. In 1995, the BBC launched, over our transmission
network, its initial national digital radio service, and this service is now
broadcast to approximately 65% of the U.K. population. A license for an
independent national digital radio network was awarded to the Digital One
consortium during 1998. In addition, local digital radio licenses have been
awarded since 1999, and on July 14, 2000, we were awarded a 12 year contract
with Switchdigital (London) Limited to provide their London local digital radio
network service. Since that time, CCUK has been awarded two additional 12 year
contracts by other Switchdigital consortia, covering two areas of Scotland.
Site sharing for other DAB multiplexes provides additional revenues at several
other transmission sites.

   Site Rental

   The acquisition of the BBC transmission network provided a valuable initial
portfolio for the location of wireless antennas. As of December 31, 2002,
approximately 310 companies rented antenna space on CCUK's 3,397 towers. These
site rental agreements have normally been for three to 20 years and are
generally subject to rent reviews every three years. Site sharing customers are
generally charged annually in advance, according to rate schedules that are
based on the antenna size and position on the tower. Our largest site rental
customer in the U.K. is NTL under the Site-Sharing Agreement and the digital
broadcasting site sharing agreement.

                                      10



These site sharing agreements relate to the reciprocal use of sites for the
respective broadcast contracts of CCUK and NTL and are not representative of
the typical wireless colocation tenant. See "Business--The Company--U.K.
Operations--Significant Contracts--Site-Sharing Agreement."

   CCUK's largest (by revenue) site rental customers consist mainly of wireless
carriers such as Hutchison 3G, T-Mobile, O2, Orange, NTL, Vodafone and BT.
Revenues from these non-BBC sources continue to become an increasing portion of
CCUK's total U.K. revenue base. We believe that site rental from communication
service providers will increase in line with the expected growth of these
communication services along with the deployment of new technologies, such as
3G, in the U.K.

   We have master lease agreements with all of the major U.K.
telecommunications site users, including BT, O2, T-Mobile, Orange, Hutchison 3G
and Vodafone. These agreements typically specify the terms and conditions
(including pricing and volume discount plans) under which these customers have
access to all sites within our U.K. portfolio. Customers submit orders for
specific sites using the standard terms included in the master lease agreements.

   Network Services

   CCUK provides broadcast and telecommunications network services to various
customers in the U.K. We have engineering and technical staff capable of
meeting the requirements of our current customer base and the challenges of
developing digital technology. Within the U.K., CCUK has worked with several
telecommunications operators on design and build projects as they rollout their
networks.

   Network Design and Site Selection.

   In December 1999, CCUK and T-Mobile entered into an agreement under which
CCUK would establish a turnkey mobile network for T-Mobile in Northern Ireland.
In April 2001, CCUK launched the network, which now covers approximately 98.5%
of the population of Northern Ireland. CCUK provides cell planning,
acquisition, design, build, operation and maintenance services related to the
network, including ownership of the antenna, provisioning of backhaul and
signal monitoring. T-Mobile provides the base stations and holds the spectrum
license. The agreement with T-Mobile is for an initial term of 11 years. We
currently own and operate approximately 200 tower sites in Northern Ireland,
and T-Mobile is a tenant on substantially all of these sites as part of the
network.

   In June 2000, CCUK was awarded a contract for the first phase of a
three-phase network rollout of Europe's first commercial 3G network on the Isle
of Man. In March 2001, CCUK was awarded a further contract with Manx Telecom
for the second and third phases. The network, comprised of approximately 28
sites, was built by NEC and Siemens for Manx Telecom, a wholly owned subsidiary
of mmO2, and was completed in September 2001. CCUK provided turnkey project
management, installation and commissioning of the 3G radio access network,
including site planning, design, build and radio frequency planning. Service on
the network was launched in December 2001.

   Site Acquisition. In the U.K. we are involved in site acquisition services
for our own purposes and for third parties. We recognize that the site
acquisition phase often carries the highest risk for a project. To ensure the
greatest possible likelihood of success and timely acquisition, we combine a
desktop survey of potential barriers to development with a physical site search
with relevant analyses, assessments and, where necessary, surveys. We seek to
utilize our experience in site acquisition and co-location when meeting with
local planning authorities.

   Site Development and Antenna Installation. CCUK provides turnkey network
rollout and deployment services, including site design, site construction and
installation activity for wireless infrastructure. CCUK's operations division
provides program and project management through its delivery teams, using
project management tools and software. The majority of construction activities
are completed through independent contractors experienced in the wireless
telecommunications construction industry. Operations are located in four
regional offices across the U.K., providing a nationwide service to our
customers.

                                      11



   Significant Contracts

   CCUK's principal analog broadcast transmission contract is the BBC analog
transmission contract. CCUK also has entered into DTT contracts with the BBC.
In connection with Freeview, CCUK has entered into transmission and
multiplexing contracts with BSkyB and various other broadcasters. Under the
site-sharing agreement, CCUK also gives NTL access to facilities to provide
broadcast transmission to non-CCUK customers. CCUK also has long-term service
agreements with broadcast customers such as Virgin Radio, talkSPORT and
Switchdigital plus a number of smaller broadcasters. In addition, CCUK has
several agreements with telecommunication providers, including leases, site
management contracts and independent contractor agreements. CCUK has agreements
with Hutchison 3G and O2 which contain lease commitments for a minimum number
of CCUK sites. Certain terms of each such agreement are currently in dispute
and we are currently in discussions with Hutchison 3G and O2 in an effort to
resolve the disputed issues. CCUK has also entered into contracts to design and
build infrastructure for customers such as O2, T-Mobile, Orange and Vodafone,
including the turnkey network contract for T-Mobile in Northern Ireland.

   BBC Analog Transmission Contract. CCUK entered into a 10-year transmission
contract with the BBC for the provision of terrestrial analog television and
analog and digital radio transmission services in the U.K. at the time the BBC
home service transmission business was acquired. The BBC analog transmission
contract also provides for CCUK to be liable to the BBC for "service credits"
(i.e., rebates of its charges) in the event that certain standards of service
are not attained as a result of what the contract characterizes as "accountable
faults" or the failure to meet certain "response times" in relation to making
repairs at certain key sites. Experience has shown that CCUK is equipped to
meet the BBC's service requirements as demonstrated by the fact that CCUK is
subject to periodic performance reviews and to date has paid no service credit
penalties.

   The initial term of the BBC analog transmission contract ends on March 31,
2007. Thereafter, the BBC analog transmission contract may be terminated with
12 months' prior notice by either of the parties, expiring on March 31 in any
contract year, from and including March 31, 2007. It may also be terminated
earlier by or upon mutual agreement, bankruptcy or insolvency of a party,
certain force majeure events, a material breach and certain change of control
events (as defined in the BBC analog transmission contract).

   It is contemplated that the BBC analog transmission contract will be amended
and extended in some manner. However, there can be no assurances that any such
modifications or extensions will occur.

   1998 BBC Digital Transmission Contract. In 1998, we bid for and won the
12-year contract from the BBC to build and operate the DTT transmission network
for its first multiplex. The BBC has committed to the full DTT roll-out
contemplated by the contract. Under the contract, the BBC may send us notice to
terminate the contract during November 2003 through January 2004 (the
three-month period following the fifth anniversary of our commencement of
digital terrestrial transmission services for the BBC), but only if the BBC's
Board of Governors determines, in its sole discretion, that digital television
in the U.K. does not have sufficient viewership to justify continued digital
television broadcasts. Under this provision, the BBC will pay us a termination
fee in cash that substantially recovers our capital investment in the network
as a result of this contract, and any residual ongoing operating costs and
liabilities. Like the BBC analog transmission contract, the contract is
terminable upon the occurrence of certain change of control events.

   2002 BBC Digital Transmission Contract. Following the award of the DTT
licenses and in connection with the launch of Freeview, in August 2002 CCUK
entered into an agreement with the BBC to provide transmission and distribution
service for the new DTT multiplex licensed to the BBC. This agreement commenced
on October 30, 2002 and has an initial term of six years, with an option by the
BBC to renew for an additional six-year term.

   BSkyB Digital Transmission Contract. In addition, following the award of the
DTT licenses and in connection with the launch of Freeview, in August 2002 CCUK
entered into an agreement with BSkyB to provide multiplexing, distribution and
transmission service in relation to 75% of the capacity of one of the
multiplexes licensed to CCUK. This agreement is for an initial period of six
years, with an option by BSkyB to renew for an additional six-year term.

                                      12



   BT Digital Distribution Contract. Under the BBC and Freeview related digital
transmission contracts (including the contracts described above), in addition
to providing DTT transmission services, CCUK has agreed to provide for the
distribution of the BBC and Freeview related broadcast signals from their
respective television studios to CCUK's transmission network. In May 1998, CCUK
entered into a 12-year distribution contract with BT in which BT has agreed to
provide fully duplicated, primarily fiber-based, digital distribution services.
This contract is now being used to provide program distribution services in
connection with Freeview and has been amended to expire contemporaneously with
our DTT multiplex licenses in 2014 (with provisions for extending the term).

   Site-Sharing Agreement. In order to optimize service coverage for television
and radio services and to enable viewers to receive all analog UHF television
services using one receiving antenna, the BBC, as the predecessor to CCUK, and
NTL made arrangements to share certain broadcast sites. This arrangement was
introduced in the 1960s when UHF television broadcasting began in the U.K. In
addition to service coverage advantages, the arrangement also minimizes costs
and avoids the difficulties of obtaining additional sites.

   On September 10, 1991, the BBC and NTL entered into the Site-Sharing
Agreement which set out the commercial site sharing terms under which the
parties were entitled to share each other's sites for any television and radio
services. Under the Site-Sharing Agreement, the party that is the owner, lessee
or licensee of each site is defined as the "Station Owner". The other party,
the "Sharer", is entitled to request a license to use certain facilities at
that site. The Site-Sharing Agreement and each site license provide for the
Station Owner to be paid a commercial license fee in accordance with the
Site-Sharing Agreement rate schedule and for the Sharer to be responsible, in
normal circumstances, for the costs of accommodation and equipment used
exclusively by it. The Site-Sharing Agreement may be terminated with five
years' prior notice on December 31, 2005 or on any tenth anniversary of that
date. As no notice was served in 2000, the next termination date is December
31, 2015. It may also be terminated upon a material breach, bankruptcy or
insolvency of a party, and cessation of a broadcast transmission business or
function.

   Similar site sharing arrangements have been entered into between NTL and us
for the build-out of digital transmission sites and equipment, including a
supplementary ratecard related to site sharing fees for new digital facilities
and revised operating and maintenance procedures related to digital equipment.

   Revenues received by CCUK under these NTL agreements with respect to space
rented by NTL on CCUK owned sites are substantially offset by payments made to
NTL with respect to space rented by CCUK on NTL owned sites.

   T-Mobile Northern Ireland Network. In December 1999, CCUK and T-Mobile
entered into an agreement under which CCUK would establish a turnkey mobile
network for T-Mobile in Northern Ireland. In April 2001, CCUK launched the
network, which now covers approximately 98.5% of the population of Northern
Ireland. CCUK provides cell planning, acquisition, design, build, operation and
maintenance services related to the network, including ownership of the
antenna, provisioning of backhaul and signal monitoring. T-Mobile provides the
base stations and holds the spectrum license. The agreement with T-Mobile is
for an initial term of 11 years. We currently own and operate approximately 200
tower sites in Northern Ireland, and T-Mobile is a tenant on substantially all
of these sites as part of the network.

   British Telecom Agreement. In November 2000, CCUK entered into an agreement
with BT to lease space on as many as 4,000 BT sites (principally rooftop
facilities) throughout the U.K. We are developing the BT site portfolio for the
deployment of wireless services, including second generation ("2G") and 3G
services. We contracted to invest an aggregate of (Pounds)150 million
(approximately $241 million) for the first 1,500 sites from the BT site
portfolio, but the final payment due is the subject of discussions as described
below. As of December 31, 2002, we had developed 648 sites under this
agreement. In June 2001, CCUK signed a management services agreement to manage
the pre-existing BT site sharing customers on the sites subject to this
agreement. In April 2002, CCUK reached agreement with BT to defer until March
2003 the final required payment of (Pounds)50 million (approximately $80.5
million), for the third of three tranches of 500 sites, which had been due
March 2002 from

                                      13



CCUK to BT under this agreement. We are currently in discussions with BT
regarding certain amendments to this agreement, including the further deferral
or reduction of the payment that would otherwise be owed in March 2003 and a
reduction in the number of BT sites acquired. There can be no assurances as to
the outcome of these discussions.

   Hutchison 3G Agreement. In February 2001, CCUK signed an agreement with
Hutchison 3G whereby Hutchison 3G would lease space on a minimum of 4,000 CCUK
sites throughout the U.K. Currently, Hutchison 3G is not leasing the number of
sites required within the time period contemplated by the agreement. We are
currently in discussions with Hutchison 3G regarding several potential
amendments to this agreement, including one such amendment which may result in
the deferral or reduction of Hutchison 3G's take or pay commitments. We are
also discussing with Hutchison 3G amending the agreement to include CCUK's new
build processes. There can be no assurances as to the outcome of these
discussions.

   O2 Agreement. In February 2001, CCUK signed an initial agreement with its
existing customer O2 pursuant to which O2 would lease additional space on CCUK
sites throughout the U.K., with a minimum take up of 1,500 additional through
2003 (a minimum take up of 500 sites per year for each of 2001, 2002 and 2003).
O2 did not satisfy the minimum take up requirements in 2001 or 2002. The terms
of the agreement are in dispute, and we are currently in discussions with O2
which may result in the deferral or reduction of O2's take or pay commitments.
There can be no assurances as to the outcome of these discussions.

   Third Generation Technology

   During April 2000, the United Kingdom auctioned five licenses relating to 3G
mobile communications. Vodafone, O2, T-Mobile, Orange and Hutchison 3G
currently hold the 3G licenses acquired through these auctions. We contemplate
working with the 3G license holders in order to provide site sharing of network
towers, equipment and other communications infrastructure as a solution to many
of the commercial and technical challenges and costs which the 3G license
holders will face.

   During 2000 and 2001, CCUK provided turnkey project management, installation
and commissioning of the 3G radio access network (including site planning,
design, build and radio frequency planning) with respect to the network rollout
of Europe's first 3G network on the Isle of Man. The network, comprised of
approximately 28 sites, was built by NEC and Siemens for Manx Telecom, a wholly
owned subsidiary of mmO2 plc, and was launched in December 2001. See
"Business--The Company--U.K. Operations--Network Services--Network Design and
Site Selection".

   There can be no assurances that 3G or other new wireless technologies will
be introduced or deployed as rapidly or in the manner previously or presently
projected by the wireless industry. The deployment of 3G has already been
significantly delayed as to prior projections. In addition, demand and customer
adoption rates of 3G and other technologies may be lower or slower than
anticipated for numerous reasons. As a result, growth opportunities and demand
for site rental as a result of such technologies may not be realized at the
times or to the extent previously or presently anticipated.

   Customers

   For the 12 months ended December 31, 2002, the BBC accounted for
approximately 33.7% of CCUK's consolidated revenues. This percentage has
decreased from 44.2% and 39.4% for the 12 months ended December 31, 2000 and
December 31, 2001, respectively, and is expected to continue to decline as CCUK
continues to expand its site rental business. CCUK provides the five largest
U.K. personal communications network/cellular operators (O2, T-Mobile, Orange,
Vodafone and Hutchison 3G) with infrastructure services and

                                      14



also provides fixed telecommunications operators, such as BT and Energis, with
microwave links and backhaul infrastructure. The following is a list of some of
CCUK's leading site rental customers by industry segment.



        Industry                   Representative Customers
        --------                   ------------------------
                 
      Broadcasting. BBC, NTL, Virgin Radio, talkSPORT, XFM, Switchdigital,
                      BSkyB, UKTV, Flextech Television, MTV, EMAP
      Cellular--GSM Vodafone, O2, Orange, T-Mobile
      3G........... Hutchison 3G, O2, Orange, Vodafone, T-Mobile
      PMR/TETRA.... Airwave, Inquam


   Sales and Marketing

   We have a staff of sales and business development personnel in the U.K. who
identify new revenue-generating opportunities, develop and maintain key account
relationships, and tailor service offerings to meet the needs of specific
customers. A good relationship has been maintained with the BBC, and good
relationships have been developed and maintained with many of the major
broadcasters and wireless communications carriers in the U.K.

   Competition

   CCUK's primary competitors with respect to its digital terrestrial broadcast
transmission platform are satellite and cable broadcast operators, including
BSkyB, NTL, Telewest and Cable & Wireless. NTL is CCUK's primary competitor in
the terrestrial broadcast transmission market in the U.K. NTL provides analog
transmission services to ITV, Channels 4 and 5, and S4C television networks,
the national commercial radio service Classic FM, a number of local analog
commercial radio stations and Digital One, the national digital radio license
holder. NTL retains partial ownership of both the SDN digital television
multiplex and Digital One, the national independent digital radio licensee. NTL
has also been awarded the transmission contract for two of the six DTT
multiplexes. CCUK operates the transmission network contracts for the other
four multiplexes, two for the BBC and two for the CCUK licensed multiplexes.

   Although CCUK and NTL are broadcast competitors, they have reciprocal rights
to the use of each others' sites for broadcast transmission usage in order to
enable each of them to achieve the necessary country-wide coverage. This
relationship is formalized by the Site-Sharing Agreement entered into in 1991,
the time at which NTL was privatized. See "Business--The Company--U.K.
Operations--Significant Contracts--Site-Sharing Agreement."

   CCUK's primary competition to its site leasing business comes from building
owners, including utilities, that lease space on co-locatable rooftop sites.
NTL also offers site rental on approximately 2,000 of its sites, some of which
are managed on behalf of third parties. U.K. mobile operators own site
infrastructure and lease space to other users. Their openness to sharing with
direct competitors varies by operator; however, several operators have made
public statements indicating they are willing to share or jointly develop
certain sites with competitors and other third parties under certain
circumstances.

   CCUK faces competition from a large number of companies in the provision of
network services. The companies include specialty consultants and equipment
manufacturers such as Nortel and Ericsson. NTL also offers certain network
services to its customers, including installation and maintenance.

  Australia Operations

   Our primary business in Australia is the leasing of antenna space to
wireless carriers. CCAL, a joint venture which is owned 77.6% by us and 22.4%
by Permanent Nominees (Aust) Ltd, acting on behalf of a group of professional
and institutional investors led by Jump Capital Limited, is our principal
Australian operating subsidiary.

                                      15



   CCAL is the largest independent tower operator in Australia with a
nationwide tower portfolio providing sites for cellular coverage for over 92%
of the population in Australia. CCAL currently operates 1,387 towers, with a
strategic presence in all of Australia's licensed regions including Sydney,
Melbourne, Brisbane, Adelaide and Perth.

   716 of CCAL's towers were purchased from Optus during 2000 for approximately
$135 million (Australia $220 million) in cash. As part of this transaction,
Optus agreed to lease space on these towers for an initial term of 15 years.
The agreement also provided CCAL with an exclusive right to develop all future
tower sites for Optus through April 2006. These build-to-suit provisions were
terminated in March 2002 by mutual consent. In terminating the build-to-suit
arrangement, it was agreed that CCAL would purchase an additional 44 sites for
an aggregate of $5.7 million (Australia $10.5 million), 41 of which have been
acquired to date.

   An additional 643 towers were acquired from Vodafone Australia in April 2001
for approximately $121 million (Australia $240 million). As part of this
transaction, Vodafone Australia has agreed to lease space on these towers for
an initial period of 10 years, and CCAL has the exclusive right to acquire up
to 600 additional tower sites that Vodafone may construct through April 2007.
The Vodafone Australia acquisition was funded 85.1% by us and 14.9% by the Jump
Capital group, which resulted in our interest in CCAL being increased from
66.7% to 77.6%. In 2002, CCAL exercised its right under the warranty provisions
of the original acquisition agreement to return 18 towers which did not meet
certain criteria. This resulted in a return to CCAL of $3.5 million (Australia
$6.3 million) of consideration which was originally paid for these sites. In
2002, CCAL acquired an additional four sites from Vodafone pursuant to the
terms of the original acquisition agreement.

   As of December 31, 2002, CCAL also provided maintenance services on
approximately 1,067 customer sites and management services on approximately
1,094 customer sites.

   In Australia, CCAL competes with other independent tower owners which also
provide site rental and network services; wireless carriers, which own and
operate their own tower networks; service companies that provide engineering
and site acquisition services; and other site owners, such as broadcasters and
building owners. The two other significant tower owners in Australia are
Telstra and Broadcast Australia. We believe that tower location, capacity,
quality of service, deployment speed and price within a geographic market are
the most significant competitive factors affecting tower rental companies.

Employees

   At December 31, 2002, we employed approximately 1,462 people worldwide.
Other than in the U.K., we are not a party to any collective bargaining
agreements. In the U.K., we are party to a collective bargaining agreement with
the Broadcast, Entertainment, Cinematographic and Theatrical Union (BECTU).
This agreement establishes bargaining procedures relating to the terms and
conditions of employment for all of CCUK's non-management staff. CCUK is
currently in discussions with BECTU regarding the potential restructure of
pension arrangements as they relate to the former employees of the BBC. We
contemplate a satisfactory resolution to these discussions without a work
stoppage or similar event, but there can be no assurances of such an outcome.
We have not experienced any strikes or work stoppages, and management believes
that our employee relations are satisfactory. See "Business--2002
Events--Restructurings."

Regulatory Matters

   To date, we have not incurred any material fines or penalties or experienced
any material adverse effects to our business as a result of any domestic or
international regulations. The summary below is based on regulations currently
in effect, and such regulations are subject to review and modification by the
applicable governmental authority from time to time. See "Business--Risk
Factors."

                                      16



  United States

   Federal Regulations

   Both the FCC and FAA regulate towers used for wireless communications
transmitters and receivers. Such regulations control the siting and marking of
towers and may, depending on the characteristics of particular towers, require
the registration of tower facilities and the issuance of determinations
confirming no hazard to air traffic. Wireless communications devices operating
on towers are separately regulated and independently licensed based upon the
particular frequency used. In addition, the FCC and the FAA have developed
standards to consider proposals for new or modified tower and antenna
structures based upon the height and location, including proximity to airports,
of proposed tower and antenna structures. Proposals to construct or to modify
existing tower and antenna structures above certain heights are reviewed by the
FAA to ensure the structure will not present a hazard to aviation, which
determination may be conditioned upon compliance with lighting and marking
requirements. The FCC requires its licensees to operate communications devices
only on towers that comply with FAA rules and are registered with the FCC, if
required by its regulations. Where tower lighting is required by FAA
regulation, tower owners bear the responsibility of notifying the FAA of any
tower lighting outage. Failure to comply with the applicable requirements may
lead to civil penalties.

   Local Regulations

   Local regulations include city and other local ordinances (including
subdivision and zoning ordinances), approvals for construction and removal of
towers, and restrictive covenants imposed by community developers. These
regulations vary greatly, but typically require us to obtain approval from
local officials prior to tower construction. Local zoning authorities may
render decisions or place conditions on construction that are responsive to
community residents' concerns regarding the height and visibility of the towers.

   Other Regulations

   We hold, through certain of our subsidiaries, certain licenses for radio
transmission facilities granted by the FCC, including licenses for common
carrier microwave and commercial mobile radio services, including specialized
mobile radio and paging facilities, as well as private mobile radio services
including industrial/business radio facilities, which are subject to additional
regulation by the FCC. We are required to obtain the FCC's approval prior to
the transfer of control of any of our FCC licenses.

  United Kingdom

   Telecommunications systems and equipment used for the transmission of
signals over radio frequencies have to be licensed in the U.K. These licenses
are issued on behalf of the British Government by the Secretary of State for
Trade and Industry under the Telecommunications Act 1984, the Wireless
Telegraphy Acts 1949, 1968 and 1998 and the Broadcasting Act 1996. CCUK has a
number of such licenses under which it runs the telecommunications distribution
and transmission systems which are necessary for the provision of its
transmission services.

   Licenses under the Telecommunications Act 1984

   CCUK has the following three licenses under the Telecommunications Act 1984:

   Transmission License. The Transmission License is a renewable license to run
telecommunications systems for the transmission via radio of broadcasting
services. This license is for a period of at least 25 years from January 23,
1997, and is CCUK's principal license. The license has certain price control
conditions and change of control provisions.


                                      17



   General Telecom License. The general telecom license is a general license to
run telecommunications systems and authorizes CCUK to run all the necessary
telecommunications systems to convey messages to its transmitter sites (e.g.,
via leased circuits or using its own microwave links). The license does not
cover the provision of public switched telephony networks (which would require
a public telecommunications license as described above).

   Satellite License. The satellite license is a license to run
telecommunications systems for the provision of satellite telecommunication
services and allows the conveyance via satellite of messages, including data
and radio broadcasting. The license excludes television broadcasting direct to
the home via satellite although distribution via satellite of television
broadcasting services which are to be transmitted terrestrially is permitted.

   Licenses under the Wireless Telegraphy Acts 1949, 1968 and 1998

   CCUK has a number of licenses under the Wireless Telegraphy Acts 1949, 1968
and 1998, authorizing the use of radio equipment for the provision of certain
services over allocated radio frequencies including:

  .   a broadcasting services license in relation to the transmission services
      provided to the BBC and other broadcast customers,

  .   a fixed point-to-point radio links license, and

  .   DTT test and development licenses.

   All the existing licenses under the Wireless Telegraphy Acts 1949, 1968 and
1998 have to be renewed annually with the payment of a fee. The BBC, Virgin
Radio and talkSPORT have each contracted to pay their portion of these fees.
CCUK is also obliged to pay these fees in respect of its DTT licenses.

   Multiplex Spectrum Licenses - Broadcasting Act 1996

   In August 2002, CCUK was granted two 12 year multiplex spectrum licenses to
provide DTT broadcasting services in the UK, with a 12 year renewal option
subject to certain performance criteria. Each of the these two licenses
contains conditions relating to how CCUK provides its services, including
conditions regarding signal quality, marketing, and fairness and open
competition regarding contracts with program providers. In addition, CCUK must
meet obligations to implement certain power increases with respect to a number
of the stations listed in the licenses. See "Business--The Company--U.K.
Operations--Transmission Business."

   New Legislation

   The EU Counsel of Ministers and the European Parliament have reached an
agreement on new directives that will establish a framework for the regulation
of electronic communications networks, services and associated facilities
throughout the European Union. As part of this initiative, new legislation is
planned for implementation in the U.K. by the end of 2003, which will
consolidate various regulatory bodies including Office of Telecommunications
(OFTEL) and the Independent Television Commission (ITC) to create a single body
to regulate broadcasting and telecommunications in the U.K. Under the proposed
new legislation CCUK's existing telecommunications licenses will be updated and
replaced. CCUK is currently in consultation with OFTEL to discuss the
implications of the proposed changes.

  Australia

   Federal Regulation

   Carrier licenses and nominated carrier declarations issued under the Federal
Telecommunications Act 1997 authorize the use of network units for the supply
of telecommunications services to the public. The definition of "network units"
includes line links and base stations used for wireless telephony services but
does not include

                                      18



tower infrastructure. Accordingly, CCAL as a tower owner and operator does not
require a carrier license. Similarly, because CCAL does not own any
transmitters or spectrum, it does not currently require any apparatus or
spectrum licenses issued under the Federal Radiocommunications Act 1992.

   Carriers have a statutory obligation to provide other carriers with access
to tower facilities and sites and, if there is a dispute (including as to
pricing), the matter may be referred to the Australian Competition and Consumer
Commission for resolution. As a non-carrier, CCAL is not currently subject to
this regime and negotiates site access on a commercial basis.

   While the Federal Telecommunications Act 1997 grants certain exemptions from
planning laws for the installation of "low impact facilities," towers are
expressly excluded from the definition of "low impact facilities." Accordingly,
in connection with the construction of new tower facilities, CCAL is subject to
state and local planning laws which vary on a site by site basis. For a limited
number of sites, CCAL is also required to install aircraft warning lighting in
compliance with federal aviation regulations.

   Local Regulations

   In Australia there are various local, state and territory laws and
regulations which relate to, among other things, town planning and zoning
restrictions, standards and approvals for the design, construction or
alteration of a structure or facility, and environmental regulations. As in the
U.S., these laws vary greatly, but typically require tower owners to obtain
approval from government bodies prior to tower construction and for ongoing
compliance with environmental laws.

Environmental Matters

   To date, we have not incurred any material fines or penalties or experienced
any material adverse effects to our business as a result of any domestic or
international environmental regulations or matters. See "Business--Risk
Factors."

   Our operations are subject to foreign, federal, state and local laws and
regulations relating to the management, use, storage, disposal, emission, and
remediation of, and exposure to, hazardous and non-hazardous substances,
materials and wastes. As an owner and operator of real property, we are subject
to certain environmental laws that impose strict, joint-and-several liability
for the cleanup of on-site or off-site contamination relating to existing or
historical operations, and we could also be subject to personal injury or
property damage claims relating to such contamination. We are potentially
subject to environmental and cleanup liabilities in the U.S., U.K. and
Australia.

   As licensees and site owners, we are also subject to regulations and
guidelines that impose a variety of operational requirements relating to radio
frequency emissions. As employers, we are subject to OSHA and similar
guidelines regarding employee protection from radio frequency exposure. The
potential connection between radio frequency emissions and certain negative
health effects, including some forms of cancer, has been the subject of
substantial study by the scientific community in recent years. To date, the
results of these studies have been inconclusive.

   We have compliance programs and monitoring projects to help assure that we
are in substantial compliance with applicable environmental laws. Nevertheless,
there can be no assurance that the costs of compliance with existing or future
environmental laws will not have a material adverse effect on our business,
results of operations, or financial condition.

                                      19



2002 Events

   Set forth below is a description of certain other significant events which
took place during 2002 and involved or affected our business or operations. The
description of a significant event set forth below is only a summary of the
main points relating to such event.

   Restructurings

   In March 2002, we announced a restructuring of our U.K. operations. In
connection with the restructuring, we reduced our U.K. staff by 212 full time
employees and disposed of certain service lines. We recorded cash charges of
$8.5 million during 2002 with respect to this restructuring.

   In October 2002, the Company announced a restructuring of its U.S. business.
As part of the restructuring, the Company is reducing its U.S. workforce by
approximately 230 employees and is closing some smaller offices. The actions
taken for the restructuring will be substantially completed by the end of the
first quarter of 2003. In connection with this restructuring, the Company
recorded cash charges of approximately $6.1 million in the fourth quarter of
2002 related to employee severance payments and costs of office closures.

   Deferral of British Telecom Payments

   In April 2002, CCUK reached agreement with BT to defer until March 2003 the
final required payment of (Pounds)50 million (approximately $80.5 million), for
the third of three tranches of 500 sites, which had been due March 2002 from
CCUK to BT under the BT site agreement. We are currently in discussions with BT
regarding certain amendments to this agreement, including the further deferral
or reduction of the payment that would otherwise be owed in March 2003 and a
reduction of the number of BT sites acquired. There can be no assurances as to
the outcome of these discussions. See "Business--The Company--U.K.
Operations--Significant Contracts--British Telecom Agreement".

   Repurchase of Securities

   In August and September of 2002, we began repurchasing our stock (both
common and preferred) and debt securities in public market transactions.
Through December 31, 2002, we repurchased debt securities and shares of
preferred stock with aggregate principal and redemption amounts (at maturity)
of approximately $407.4 million. We utilized approximately $203.8 million in
cash to effect these repurchases, resulting in aggregate gains of $178.6
million. Through December 31, 2002, we also repurchased a total of 1.5 million
shares of common stock (in addition to the common stock purchases described
below), utilizing $3.0 million in cash.

   In July 2002, we repurchased 8.5 million shares of our common stock through
a privately negotiated transaction for approximately $18.3 million in cash. The
shares purchased represented all of the remaining shares previously owned by
affiliates of France Telecom.

   In June, September and December 2002, we paid our quarterly dividends on the
8 1/4% Convertible Preferred Stock by issuing a total of 3.7 million shares of
our common stock. As allowed by the Deposit Agreement relating to dividend
payments on the 8 1/4% Convertible Preferred Stock, we repurchased the 3.7
million shares of common stock from the dividend paying agent for a total of
approximately $12.2 million in cash. We may choose to continue such issuances
and repurchases of stock in the future in order to avoid further dilution
caused by the issuance of common stock as dividends on its preferred stock.

   Termination of U.S. Build-to-Suit Agreements

   During the third quarter of 2002, each of our joint ventures with Verizon
Communications negotiated a mutual consent to terminate its build-to-suit
agreements with Verizon Wireless, and we negotiated a mutual

                                      20



consent to terminate our build-to-suit agreements with Cingular. Such agreement
terminations eliminated any requirement to build additional towers for either
carrier. As a part of the build-to-suit terminations, we sold certain tower
construction projects for approximately $22.9 million in cash. Asset write-down
charges of approximately $6.4 million were recorded during 2002 related to
these projects.

   Paydown of Joint Venture Credit Facility

   In September 2002, the Bell Atlantic Mobile venture repaid $50.0 million in
outstanding borrowings under its credit facility. The Bell Atlantic Mobile
venture utilized cash provided by its operations to effect this repayment.

   Freeview

   On October 30, 2002, CCUK, in conjunction with BBC and BSkyB, launched
Freeview, a DTT service in the U.K. CCUK currently provides broadcast services,
including transmission services, with respect to the four DTT multiplexes
utilized in connection with Freeview. CCUK has contracted annual revenues of
approximately (Pounds)25.3 million ($40.7 million) for the provision of
transmission, distribution and multiplexing services related to the new DTT
multiplex spectrum licenses relating to Freeview in 2003. Additional annual
operating costs of approximately (Pounds)5.3 million ($8.5 million) above the
costs incurred for the provision of broadcast services pursuant to the former
ITVD contract, are expected. See "Business--The Company--U.K.
Operations--Transmission Business."

   CCUK Credit Facility Amendment

   On November 22, 2002, CCUK completed an amendment to its U.K. revolving
credit facility to cure a termination event, which resulted from the
termination of the ITVD transmission contract in connection with the
liquidation of ITVD. Under terms of the amended facility due June 18, 2006,
CCUK will have (Pounds)120.0 million of borrowing capacity, of which (Pounds)90
million was drawn as of December 31, 2002. The amendments postpone any
additional reductions in the revolver until June 30, 2004, eliminate certain
financial covenants and increase the applicable interest rate by 25 basis
points.

   Senior Management and Board of Directors Changes

   In May 2002, J. Landis Martin was named non-executive Chairman of our Board
of Directors, succeeding Ted B. Miller, Jr. Ted B. Miller, Jr., our former
Chief Executive Officer and Chairman of the Board, resigned from our Board of
Directors effective August 2, 2002. David L. Ivy resigned from our Board of
Directors effective August 9, 2002. In addition, Carl Ferenbach, age 60, and
Ari Q. Fitzgerald, age 40, were appointed to our Board of Directors in July
2002 and August 2002, respectively, to fill vacancies on the Board.

Risk Factors

   You should carefully consider the risks described below, as well as the
other information contained in this document, when evaluating your investment
in our securities.

Substantial Level of Indebtedness--Our substantial level of indebtedness could
adversely affect our ability to react to changes in our business. We may also
be limited in our ability to use debt to fund future capital needs.

   We have a substantial amount of indebtedness. The following chart sets forth
certain important credit information and is presented as of December 31, 2002
(dollars in thousands).


                                                          
         Total indebtedness................................. $3,226,960
         Redeemable preferred stock.........................    756,014
         Stockholders' equity...............................  2,208,498
         Debt and redeemable preferred stock to equity ratio      1.80x


                                      21



   In addition, our earnings for the twelve months ended December 31, 2002 were
insufficient to cover fixed charges by $262.7 million.

   As a result of our substantial indebtedness:

  .   we could be more vulnerable to general adverse economic and industry
      conditions;

  .   we may find it more difficult to obtain additional financing to fund
      future working capital, capital expenditures and other general corporate
      requirements;

  .   we will be required to dedicate a substantial portion of our cash flow
      from operations to the payment of principal and interest on our debt,
      reducing the available cash flow to fund other projects;

  .   we may have limited flexibility in planning for, or reacting to, changes
      in our business and in the industry; and

  .   we may have a competitive disadvantage relative to other companies in our
      industry with less debt.

   We cannot guarantee that we will be able to generate enough cash flow from
operations or that we will be able to obtain enough capital to service our
debt, pay our obligations under our convertible preferred stock or fund our
planned capital expenditures. In addition, we may need to refinance some or all
of our indebtedness on or before maturity. We cannot guarantee, however, that
we will be able to refinance our indebtedness on commercially reasonable terms
or at all.

Ability to Service Debt--To service our indebtedness, we will require a
significant amount of cash from our subsidiaries. An inability to access our
subsidiaries' cash flow may lead to an acceleration of our indebtedness,
including our notes. Currently, the instruments governing our subsidiaries'
indebtedness do not allow sufficient funds to be distributed to CCIC to service
its indebtedness.

   If CCIC is unable to refinance its subsidiary debt or renegotiate the terms
of such debt, CCIC may not be able to meet its debt service requirements,
including interest payments on our notes, in the future. Our 10 5/8% discount
notes, our 9% senior notes, our 9 1/2% senior notes, our 10 3/4% senior notes
and our 9 3/8% senior notes require annual cash interest payments of
approximately $25.4 million, $14.9 million, $10.9 million, $47.6 million and
$38.2 million, respectively. Prior to May 15, 2004 and August 1, 2004, the
interest expense on our 10 3/8% discount notes and our 11 1/4% discount notes,
respectively, will be comprised solely of the amortization of original issue
discount. Thereafter, the 10 3/8% discount notes and the 11 1/4% discount notes
will require annual cash interest payments of approximately $46.6 million and
$22.8 million, respectively. Prior to December 15, 2003, we do not expect to
pay cash dividends on our exchangeable preferred stock or, if issued, cash
interest on the exchange debentures. Thereafter, assuming all dividends or
interest have been paid-in-kind, our exchangeable preferred stock or, if
issued, the exchange debentures will require annual cash dividend or interest
payments of approximately $34.3 million. Annual cash interest payments on the
CCUK bonds are (Pounds)11.25 million ($18.1 million). In addition, our various
credit facilities will require periodic interest payments on amounts borrowed
thereunder, which amounts could be substantial.

Our Business Depends on the Demand for Wireless Communications and Towers--We
have been and are likely to continue to be adversely affected by the slowdown
in the growth of, or reduction in demand for, wireless communications.

   Demand for our site rentals depends on demand for communication sites from
wireless carriers, which, in turn, depends on the demand for wireless services.
The demand for our sites depends on many factors which we cannot control,
including:

  .   the level of demand for specific sites;

  .   the level of demand for wireless services generally;

                                      22



  .   the financial condition and access to capital of wireless carriers;

  .   the strategy of carriers relating to owning or leasing communication
      sites;

  .   the availability of equipment to wireless carriers;

  .   changes in telecommunications regulations; and

  .   general economic conditions.

   Wireless carriers are currently competing vigorously with each other through
price reductions of their services to customers. A prolonged "price war" among
our carrier customers could adversely affect their business and result in a
significant reduction in the number of new site leases from such carriers or
other material adverse effect on our business or operations.

   A slowdown in the growth of, or reduction in, demand in a particular
wireless segment could adversely affect the demand for communication sites.
Moreover, wireless carriers often operate with substantial indebtedness, and
financial problems for our customers could result in accounts receivable going
uncollected, the loss of a customer (and associated lease revenue) or a reduced
ability of these customers to finance expansion activities. A slowdown in the
deployment of equipment for new wireless technology, the consolidation of
wireless carriers, the sharing of networks by wireless carriers or the
increased use of alternative sites (e.g. rooftops) could also adversely affect
the demand for our sites. Finally, advances in technology, such as the
development of new antenna systems, new terrestrial deployment technologies and
new satellite systems, could reduce the need for land-based, or terrestrial,
transmission networks. To some extent, almost all of the above factors have
occurred in recent years with an adverse effect on our business, and such
factors are likely to persist in the future. The occurrence of any of these
factors could have a material adverse effect on our financial condition and
results of operations.

Continuation of the Current Economic and Telecommunications Industry
Slowdown--This slowdown could materially and adversely affect our business
(including reducing demand for our towers and network services) and the
business of our customers.

   The significant general slowdown in the U.S. and certain international
economies, particularly in the wireless and telecommunications industries, has
negatively affected the factors described in the immediately preceding risk
factor, influencing demand for tower space and network services. This slowdown
could reduce consumer demand for wireless services, or negatively impact the
debt and equity markets, thereby causing carriers to delay or abandon
implementation of new systems and technologies, including 3G and other wireless
broadband services. Further, the war with Iraq, the war on terrorism, the
threat of additional terrorist attacks and the political and economic
uncertainties resulting therefrom may impose additional risks upon and
adversely effect the telecommunications industry, our business and our results
of operations.

   We believe that the current economic slowdown, particularly in the wireless
and telecommunications industries, has already harmed, and may continue to
harm, the financial condition of some wireless service providers, certain of
which, including customers of ours, have filed or may file for bankruptcy.

Failure to Properly Manage Our Operations and Growth--If we are unable to
successfully integrate acquired operations or manage our existing operations as
we grow, our business will be adversely affected, and we may not be able to
continue our current business strategy.

   We cannot guarantee that we will be able to successfully integrate acquired
businesses and assets into our business or implement our growth plans without
delay. If we fail to do so it could have a material adverse effect on our
financial condition and results of operations. We have grown significantly over
the past four years and have undergone several restructurings. Further, we will
be integrating additional sites relating to the BT Agreement into our
portfolios. See "Business--The Company--U.K. Operations--Significant Contracts--

                                      23



British Telecom Agreement". Successful integration of these transactions and
assets will depend primarily on our ability to manage these combined
operations. For the twelve months ended December 31, 2002 we had a net loss of
$272.5 million, depreciation and amortization of $301.9 million and interest
expense of $302.6 million. We expect that such significant net losses and
expenses will continue, at least in the near term, as a result of our prior
growth and the financing thereof.

   Implementation of any future consolidations, acquisitions or exchanges may
impose significant strains on our management, operating systems and financial
resources. If we fail to manage our growth or encounter unexpected difficulties
during expansion or transition, it could have a material adverse effect on our
financial condition and results of operations. The pursuit and integration of
certain acquisitions, exchanges and joint venture opportunities may require
substantial attention from our senior management, which will limit the amount
of time they would otherwise be able to devote to our existing operations.

A Substantial Portion Of Our Revenues Is Derived From a Small Number of
Customers, Including Verizon, the BBC and Cingular--The loss or consolidation
of any of our limited number of customers could materially decrease revenues.

   Approximately 64.7% of our revenues are derived from 10 customers, including
Verizon and Cingular, which represented 16.3% and 9.6% of our revenues,
respectively, for the twelve-month period ended December 31, 2002. The loss of
any one of our large customers as a result of consolidation, merger or
bankruptcy with other customers of ours or otherwise could materially decrease
our revenues and have other adverse effects on our business.

   In addition, a substantial portion of our revenues are received from a few
major wireless carriers, particularly carriers that have transferred their
tower assets to us. We cannot guarantee that the lease or management service
agreements with such carriers will not be terminated or that these carriers
will renew such agreements.

   If we were to lose our contracts with the BBC or our site sharing agreement
with NTL, we would likely lose a substantial portion of our revenues. The BBC
accounted for approximately 11.2% of our revenues for the twelve-month period
ended December 31, 2002. Further, NTL has recently experienced some financial
difficulties, and there can be no assurances that we will not experience
adverse effects relating to the financial difficulties of NTL.

   Our broadcast business is substantially dependent on our contracts with the
BBC. We cannot guarantee that the BBC will renew our contracts or that they
will not attempt to negotiate terms that are not as favorable to us as those in
place now. If we were to lose these BBC contracts, our business, results of
operations and financial condition would be materially adversely affected. The
initial term of our analog transmission contract with the BBC will expire on
March 31, 2007, and the initial terms of our two digital television
transmission contracts with the BBC expire on October 31, 2008 and October 30,
2010, respectively. In addition, the BBC can serve notice to terminate our
original digital transmission contract with them (which currently provides
annual revenues of approximately (Pounds)11.4 million ($18.4 million) per year)
during November 2003 through January 2004 if the BBC's board of governors does
not believe that digital television in the U.K. has enough viewers.

   A substantial portion of our U.K. broadcast transmission operations is
conducted using sites owned by NTL, our principal broadcast competitor in the
U.K. NTL also utilizes our sites for their broadcast operations. This site
sharing arrangement with NTL may be terminated on December 31, 2015, or any
10-year anniversary of that date, with five years' prior notice by either us or
NTL, and may be terminated sooner if there is a continuing breach of the
agreement. We cannot guarantee that this agreement will not be terminated,
which could have a material adverse effect on our business, results of
operations and financial condition.

                                      24



As a Holding Company, We Require Dividends From Subsidiaries to Meet Cash
Requirements or Pay Dividends--If our subsidiaries are unable to dividend cash
to us when we need it, we may be unable to pay dividends or satisfy our
obligations, including interest and principal payments, under our debt
instruments.

   Crown Castle International Corp., or "CCIC", is a holding company with no
business operations of its own. CCIC's most significant asset is the
outstanding capital stock of its subsidiaries. CCIC conducts all of its
business operations through its subsidiaries. Accordingly, CCIC's only source
of cash to pay dividends or make other distributions on its capital stock or to
pay interest and principal on its outstanding indebtedness is distributions
relating to its ownership interest in its subsidiaries from the net earnings
and cash flow generated by such subsidiaries or from proceeds of debt or equity
offerings. We currently expect that the earnings and cash flow of CCIC's
subsidiaries will be retained and used by such subsidiaries in their
operations, including the service of their respective debt obligations. Even if
we did determine to make a distribution in respect of the capital stock of
CCIC's subsidiaries, there can be no assurance that CCIC's subsidiaries will
generate sufficient cash flow to pay or distribute such a dividend or funds, or
that applicable state law and contractual restrictions, including negative
covenants contained in the debt instruments of such subsidiaries, would permit
such dividends, distributions or payments. Furthermore, the terms of our credit
facilities place restrictions on our principal subsidiaries' ability to pay
dividends or to make distributions, and in any event, such dividends or
distributions may only be paid if no default has occurred under the applicable
instrument. Moreover, CCIC's subsidiaries are permitted under the terms of
their existing debt instruments to incur additional indebtedness that may
restrict or prohibit the making of distributions, the payment of dividends or
the making of loans by such subsidiaries to CCIC. See "Business--Risk
Factors--Substantial Level of Indebtedness" and "Business--Risk
Factors--Ability to Service Debt".

Restrictive Debt Covenants--The terms of our debt instruments limit our ability
to take a number of actions that our management might otherwise believe to be
in our best interests. In addition, if we fail to comply with our covenants,
our debt could be accelerated.

   Currently we have debt instruments in place that restrict our ability to
incur more indebtedness, pay dividends, create liens, sell assets and engage in
certain mergers and acquisitions. Our subsidiaries, under their debt
instruments, are also required to maintain specific financial ratios. Our
ability to comply with the restrictions of these instruments and to satisfy our
debt obligations will depend on our future operating performance. If we fail to
comply with the debt restrictions, we will be in default under those
instruments, which in some cases would cause the maturity of substantially all
of our long-term indebtedness to be accelerated. The restrictions may also
effect our decisions relating to certain strategic growth opportunities.

We Operate Our Business In a Competitive Industry and Some Of Our Competitors
Have Significantly More Resources--As a result of this competition, we may find
it more difficult to achieve favorable lease rates on our towers.

   We face competition for site rental customers from various sources,
including:

  .   other large independent tower owners;

  .   wireless carriers that own and operate their own towers and lease antenna
      space to other carriers;

  .   alternative facilities such as rooftops, broadcast towers and utility
      poles;

  .   new alternative deployment methods;

  .   site development companies that acquire antenna space on existing towers
      for wireless carriers and manage new tower construction; and

  .   traditional local independent tower operators.

   Wireless carriers that own and operate their own tower portfolios generally
are substantially larger and have greater financial resources than we have.
Further, the weak financial status of certain of our competitors could

                                      25



lead to increased competition in certain areas. Competition for tenants on
towers could adversely affect lease rates and service income.

New Technologies Could Make Our Tower Antenna Leasing Services Less Desirable
to Potential Tenants and Result in Decreasing Revenues--Such new technologies
could decrease demand for tower leases and negatively impact our revenues.

   The development and deployment of signal combining technologies, which
permit one antenna to service multiple transmission frequencies and, thereby,
multiple customers, may reduce the need for tower-based broadcast transmission
and hence demand for our antenna space.

   Mobile satellite systems and other new technologies could compete with
land-based wireless communications systems, thereby reducing the demand for
tower lease space and other services we provide. The FCC has granted license
applications for several low-earth orbiting satellite systems that are intended
to provide mobile voice or data services. The growth in delivery of video
services by direct broadcast satellites could also adversely affect demand for
our antenna space.

   Other technologies which may be developed and emerge could serve as
substitutes and alternatives to leasing which might otherwise be anticipated or
expected on our sites and towers had such technologies not existed. Any
reduction in tower leasing demand resulting from multiple band, satellite or
other technologies could negatively impact our revenues or otherwise have a
material adverse effect on our business, financial condition or results of
operations.

Agreements Among Our Customers May Act as Alternatives to Leasing Sites From
Us--The proliferation of such agreements could have a material adverse effect
on our revenues and operations.

   Wireless service providers frequently enter into agreements with competitors
allowing them to utilize one another's wireless communications facilities to
accommodate customers who are out of range of their home providers' services.
In addition, wireless service providers have also entered into agreements
allowing two or more carriers to share a single wireless network or jointly
develop a tower portfolio in certain locations. Such agreements may be viewed
by wireless service providers as a superior alternative to leasing space for
their own antennas on our communication sites. The proliferation of these
roaming, network sharing and joint development agreements could have a material
adverse effect on our business, financial condition or results of operations.

Variability In Demand For Network Services Business Has Reduced The
Predictability of Our Results--Our network services business has historically
experienced significant volatility in demand.

   The operating results of our network services business for any particular
period may vary significantly and should not necessarily be considered
indicative of longer-term results. Network services revenues have also been
adversely impacted in the U.S. due to reduced antenna installation activity
related to a decrease in new tenants. Further, we continue to reduce our
network service offerings, and, therefore, the service business has and should
continue to become less significant to our operations.

We May Need Additional Financing for Strategic Growth Opportunities Which May
Not Be Available--If we are unable to raise capital in the future when needed,
we may not be able to fund future growth opportunities.

   Over time, we may require significant capital expenditures for strategic
growth opportunities . Currently, we have agreed to lease space on and develop
as many as 4,000 BT sites throughout the United Kingdom. We are contractually
committed to invest (Pounds)150 million (approximately $241 million) for the
first 1,500 sites from the BT site portfolio. See "Business--The Company--U.K.
Operations--Significant Contracts--British Telecom Agreement". Further, our
partners in our two joint ventures with Verizon Communications have the right
to dissolve those ventures and require us to purchase (for cash, in the case of
the GTE venture, and for cash or

                                      26



common stock, at our option, in the case of the Bell Atlantic Mobile venture)
their interests in the ventures. See "Business--The Company--U.S. Operations."

   As of December 31, 2002, we had consolidated cash and cash equivalents of
$516.2 million and consolidated liquid investments (consisting of marketable
securities) of $115.7 million. We also had approximately $1.1 billion in
outstanding borrowings under our credit facilities at that date. Our ability to
borrow under the credit facilities is limited by the financial covenants
contained in those agreements, including covenants relating to current
financial performance (as defined in the various credit agreements), levels of
indebtedness and debt service requirements. Under the terms of the credit
facilities, we could draw approximately $500 million in additional borrowings
as of December 31, 2002 while remaining in compliance with these covenants.

   We may need additional sources of debt or equity capital in the future to
fund future growth opportunities. Additional financing may not be available or
may be restricted by the terms of our credit facilities and the terms of our
other outstanding indebtedness. Additional sales of equity securities will
dilute our existing stockholders. If we are unable to raise capital when our
needs arise, we may not be able to fund future growth opportunities.

We Generally Lease or Sublease the Land Under Our Towers and May Not Be Able to
Maintain These Leases--If we fail to protect our rights against persons
claiming superior rights in our communications sites, our business may be
adversely affected.

   Our real property interests relating to our communications sites consist
primarily of fee interests, leasehold and sub-leasehold interests, easements,
licenses and rights-of-way. A loss of these interests, including losses arising
from the bankruptcy of one or more of our significant lessors or from the
default by one or more of our lessors under their mortgage financing, could
interfere with our ability to conduct our business and generate revenues. For
various reasons, we may not always have the ability to access, analyze and
verify all information regarding titles and other issues prior to completing an
acquisition of sites. Further, we may not be able to renew ground leases on
commercially viable terms. Approximately 13% of our sites are on land where our
property interests in such land have a final expiration date of less than ten
years. Our inability to protect our rights to the land under our towers could
have a material adverse affect on our business, financial condition and results
of operations.

Laws and Regulations Which Could Change at Any Time and With Which We Could
Fail to Comply Regulate Our Business--If we fail to comply with applicable laws
or regulations, we could be fined or even lose our right to conduct some of our
business.

   A variety of foreign, federal, state and local laws and regulations apply to
our business. Failure to comply with applicable requirements may lead to civil
penalties or require us to assume indemnification obligations or breach
contractual provisions. We cannot guarantee that existing or future laws or
regulations will not adversely affect our business, increase delays or result
in additional costs. These factors could have a material adverse effect on our
financial condition and results of operations.

Emissions From Antennas on Our Towers May Create Health Risks--We could suffer
from future claims if the radio frequency emissions from equipment on our
towers is demonstrated to cause negative health effects.

   The FCC and other government agencies impose requirements and other
guidelines on its licensees relating to radio frequency emissions. The
potential connection between radio frequency emissions and certain negative
health effects, including some forms of cancer, has been the subject of
substantial study by the scientific community in recent years. To date, the
results of these studies have been inconclusive. We cannot guarantee that
claims relating to radio frequency emissions will not arise in the future or
that the results of such studies will not be adverse to our business.

   Public perception of possible health risks associated with cellular and
other wireless communications could slow or diminish the growth of wireless
companies, which could in turn slow or diminish our growth. In

                                      27



particular, negative public perception of, and regulations regarding, these
perceived health risks could slow or diminish the market acceptance of wireless
communications services.

   Our exposure to the potential risk of harm due to radio frequency emissions
may increase as the number of rooftop sites in our portfolios, including the
sites we acquire on rooftop sites pursuant to our agreement with BT, increases.
See "Business--The Company--U.K. Operations--Significant Contracts--British
Telecom Agreement". Rooftop sites may tend to be more accessible to a wider
range of personnel (including personnel with little or no knowledge of wireless
communications equipment) than tower sites, increasing the number of persons
who may be potentially exposed to emissions emanating from equipment located on
such rooftops.

   If a connection between radio emissions and possible negative health effects
were established, our operations, costs and revenues would be materially and
adversely affected. We do not maintain any significant insurance with respect
to these matters.

Our International Operations Expose Us to Changes in Foreign Currency Exchange
Rates--If we fail to properly match or hedge the currencies in which we conduct
business, we could suffer losses as a result of changes in currency exchange
rates.

   We conduct business in countries outside the U.S., which exposes us to
fluctuations in foreign currency exchange rates. For the 12 months ended
December 31, 2002, approximately 36.3% of our consolidated revenues originated
outside the U.S., all of which were denominated in currencies other than U.S.
dollars, principally British pounds sterling and Australian dollars. We have
not historically engaged in significant hedging activities relating to our
non-U.S. dollar operations, and we could suffer future losses as a result of
changes in currency exchange rates.

We Are Heavily Dependent on Our Senior Management--If we lose members of our
senior management, we may not be able to find appropriate replacements on a
timely basis and our business could be adversely affected.

   Our existing operations and continued future development depend to a
significant extent upon the performance and active participation of certain key
individuals as employees, including our chief executive officer. We cannot
guarantee that we will be successful in retaining the services of these or
other key personnel. If we were to lose any of these individuals, we may not be
able to find or integrate appropriate replacements on a timely basis and our
financial condition and results of operations could be materially adversely
affected.

Anti-Takeover Provisions in Our Certificate of Incorporation and Competition
Laws Could Have Effects That Conflict with the Interests of Our
Stockholders--Certain provisions of our certificate of incorporation, by-laws
and operative agreements and domestic and international competition laws could
make it more difficult for a third party to acquire control of us or for us to
acquire control of a third party even if such a change in control would be
beneficial to you.

   We have a number of anti-takeover devices in place that will hinder takeover
attempts and could reduce the market value of our common stock. Our
anti-takeover provisions include:

  .   a staggered board of directors;

  .   a shareholder rights agreement;

  .   the authority of the board of directors to issue preferred stock without
      approval of the holders of common stock; and

  .   advance notice requirements for director nominations and actions to be
      taken at annual meetings.

                                      28



   Our by-laws permit special meetings of the stockholders to be called only
upon the request of a majority of the board of directors, and deny stockholders
the ability to call such meetings. Further, our BBC contracts may be terminated
upon the occurrence of certain change of control events described in such
contracts. Such provisions, as well as the provisions of Section 203 of the
Delaware General Corporation Law, could impede a merger, consolidation,
takeover or other business combination or discourage a potential acquiror from
making a tender offer or otherwise attempting to obtain control of us.

   In addition, domestic and international competition laws could prevent us
from acquiring towers or tower networks in certain geographical areas or impede
a merger, consolidation, takeover or other business combination or discourage a
potential acquiror from making a tender offer or otherwise attempting to obtain
control of us.

Shares Eligible For Future Sale--Sales of a substantial number of shares of
common stock could adversely affect the market price of the common stock.

   Future sales of a substantial number of shares of our common stock could
adversely affect the market price of our common stock. As of March 18, 2003, we
had 223,652,374 shares of common stock outstanding. In addition, we have
reserved 26,089,891 shares of common stock for issuance under our various stock
compensation plans, 1,639,990 shares of common stock upon exercise of
outstanding warrants and 16,066,944 shares of common stock for the conversion
of our outstanding convertible preferred stock.

   A small number of shareholders owns a significant percentage of our
outstanding common stock. If any one of these shareholders, or any group of our
shareholders, sells a large quantity of shares of our common stock, or the
public market perceives that existing shareholders might sell shares of common
stock, the market price of our common stock could significantly decline.

   Our partners in our two joint ventures with Verizon Communications have the
right to dissolve those ventures. Upon a dissolution of either venture, the
shares of our common stock then held by the venture (currently 5,063,731 shares
and 15,597,783 shares with respect to the GTE venture and the Bell Atlantic
Mobile venture, respectively) will be distributed to the applicable Verizon
Communications partner. The sale of all or a portion of the shares distributed
to the applicable Verizon Communications partner following the dissolution of
either such venture could adversely affect the market price of our common stock.

   The holders of our 8 1/4% Convertible Preferred Stock and our 6.25%
Convertible Preferred Stock are entitled to receive cumulative dividends at the
rate of 8 1/4% per annum and 6.25% per annum, respectively, payable on a
quarterly basis. We have the option to pay the dividends on such series of
preferred stock in cash or in shares of our common stock. We have historically
paid such dividends with shares of our common stock, and we expect to continue
to do so. The number of shares of our common stock required to be issued to pay
such dividends is dependent upon the current market value of our common stock
at the time such dividend is required to be paid. For the years ended December
31, 2001 and 2002, dividends on our 8 1/4% Convertible Preferred Stock were
paid with 1,400,000 and 4,290,000 shares of common stock, respectively, and
dividends on our 6.25% Convertible Preferred Stock were paid with 1,781,764 and
6,338,153 shares of common stock, respectively. The shares of common stock
issued to pay such dividends will continue to have a dilutive effect upon the
shares of our common stock otherwise outstanding, and further declines in the
fair market value of our common stock will increase the effective dilution. In
2002, as allowed by the Deposit Agreement relating to dividend payments on the
8 1/4% Convertible Preferred Stock, we repurchased 3,745,000 shares of common
stock from the dividend paying agent for a total of $12.2 million in cash. We
may continue to repurchase the shares of common stock issued as dividends on
our preferred stock in order to mitigate the dilution caused by the issuance of
such common stock; however, there can be no assurances that we will do so.

                                      29



We Have Experienced Disputes With Customers and Suppliers--Such disputes could
lead to increased tensions, damaged relationships or litigation which could
result in the loss of a key customer or supplier.

   We have experienced certain conflicts or disputes between ourselves and some
of our customers and service providers. Most of these disputes relate to the
interpretation of terms in our contracts. While we seek to resolve such
conflicts amicably and have generally resolved customer and supplier disputes
on commercially reasonable terms, such disputes could lead to increased
tensions and damaged relationships between ourselves and these entities, some
of whom are key customers or suppliers of ours. In addition, if we are unable
to resolve these differences amicably, we may be forced to litigate these
disputes in order to enforce or defend our rights. There can be no assurances
as to the outcome of these disputes. Damaged relationships or litigation with
our key customers or suppliers could lead to decreased revenues (including as a
result of losing a customer) or increased costs, which would have a material
adverse effect on our business, operations or financial condition.

Internet Access to Reports

   We maintain an internet website www.crowncastle.com. Our annual reports on
Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K (and
any amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934) are made available, free of
charge, through the investor relations section of internet website at
http://investor.crowncastle.com/edgar.cfm as soon as reasonably practicable
after we electronically file such material, or furnish it to, the Securities
and Exchange Commission ("SEC").

Item 2. Properties

   Our principal corporate offices are located in Houston, Texas; Canonsburg,
Pennsylvania; Warwick, United Kingdom; and Sydney, Australia.



                                          Size
                  Location       Title  (Sq. Ft.)       Use
                  --------      ------- ---------       ---
                                         
              Houston, TX...... Leased*   19,563  Corporate office
              Canonsburg, PA... Owned    124,000  Corporate office
              Warwick, U.K..... Owned     50,000  Corporate office
              Sydney, Australia Leased    10,500  Corporate office

--------
*  We previously owned the 100,250 square foot building in which this leased
   office space is located. On March 25, 2003, we sold the building to a third
   party and entered into a lease for the office space shown above.

   We have seven additional regional offices (called "Area Offices") in the
U.S. located in Albany, Alpharetta (Georgia), Canonsburg (Pennsylvania),
Charlotte, Louisville, Pleasanton (California), and Tampa. The principal
responsibilities of these offices are to manage the leasing of tower space on a
local basis, maintain the towers already located in the region and service our
customers in the area. In addition, we maintain additional, smaller district
offices, which report to the Area Offices, in locations with high site
concentrations, including Phoenix, Houston, Chicago and San Juan. We also own a
48,500 square foot building in Canonsburg, Pennsylvania which is currently
vacant and for sale or lease.

   In the U.S., our interests in our tower sites are comprised of a variety of
ownership interests, leases created by long-term lease agreements, easements,
licenses or rights-of-way granted by government entities. In rural areas, a
tower site typically consists of a three- to five-acre tract, which supports
towers, equipment shelters and, at certain sites, guy wires to stabilize the
structure. Less than 3,000 square feet are required for a self-supporting tower
structure of the kind typically used in metropolitan areas. Our land leases
generally have five- or ten-year initial terms and frequently contain one or
more renewal options. Some land leases provide "trade" arrangements whereby we
allow the landlord to use tower space in lieu of our paying all or part of the
land rent. As of December 31, 2002, we had approximately 8,700 sites with land
leases in the U.S. Under the 2000 Credit

                                      30



Facility, our senior lenders have liens on a substantial number of our land
leases and other property interests in the U.S.

   In the U.K., tower sites range from less than 400 square feet for a small
rural TV booster station to over 50 acres for a high-power radio station. As in
the U.S., the site accommodates the towers, equipment buildings or shelters
and, where necessary, guy wires to support the structure. Land is either owned
freehold, which is usual for the larger sites, or is held on long-term leases
that generally have terms of 21 years or more. As of December 31, 2002, we had
approximately 2,130 land leases in the U.K. In addition, we have a master lease
agreement with respect to the 648 sites (primarily rooftops) acquired through
our agreement with BT.

   In Australia, our interests in tower sites are comprised of mainly leases
and licenses granted by private, governmental and semi-governmental entities
and individuals. The tower sites range from approximately 430 square feet to
2,400 square feet. Our land leases generally have terms up to 15 years through
sequential leases and options to renew. As of December 31, 2002, we owned or
managed a portfolio of approximately 1,387 towers in Australia. For
approximately 1,317 of these towers, site tenure takes the form of a land lease
or occupation license. For the balance, tenure on the land is currently secured
by statutory access rights.

Item 3. Legal Proceedings

   We are periodically involved in legal proceedings that arise in the ordinary
course of business. Most of these proceedings involve disputes with landlords,
collection matters involving bankrupt customers, appeals of zoning and variance
matters or wrongful termination claims. While the outcome of these proceedings
cannot be predicted with certainty, management does not expect any pending
matters to have a material adverse effect on our financial condition or results
of operations.

Item 4. Submissions of Matters to a Vote of Security Holders

   None.

                                      31



                                    PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Price Range of Common Stock

   The Common Stock is listed and traded on the New York Stock Exchange
("NYSE") under the symbol "CCI". Prior to April 25, 2001, the Common Stock was
listed and traded on The Nasdaq Stock Market's National Market/SM/ ("Nasdaq")
under the symbol "TWRS". The following table sets forth for the calendar
periods indicated the high and low sales prices per share of the Common Stock
as reported by NYSE and Nasdaq.



                                            High   Low
                                           ------ ------
                                            
                        2001:
                           First Quarter.. $30.13 $13.88
                           Second Quarter.  25.76  11.19
                           Third Quarter..  16.15   7.40
                           Fourth Quarter.  12.50   8.14
                        2002:
                           First Quarter.. $11.55 $ 5.10
                           Second Quarter.   7.30   3.62
                           Third Quarter..   4.05   1.00
                           Fourth Quarter.   4.38   1.68


   As of March 18, 2003, there were approximately 925 holders of record of the
Common Stock.

Dividend Policy

   We have never declared nor paid any cash dividends on our capital stock and
do not anticipate paying cash dividends on our capital stock in the foreseeable
future. It is our current policy to retain earnings to finance the expansion of
our operations. Future declaration and payment of cash dividends, if any, will
be determined in light of the then-current conditions, including our earnings,
operations, capital requirements, financial condition and other factors deemed
relevant by the Board of Directors. In addition, our ability to pay dividends
is limited by the terms of our debt instruments and the terms of the
certificates of designations in respect of our exchangeable preferred stock and
our convertible preferred stock.

   The holders of our 8 1/4% Convertible Preferred Stock and our 6.25%
Convertible Preferred Stock are entitled to receive cumulative dividends at the
rate of 8 1/4% per annum and 6.25% per annum, respectively, payable on a
quarterly basis. We have the option to pay the dividends on such series of
preferred stock in cash or in shares of our common stock. We have historically
paid such dividends with shares of our common stock, and we expect to continue
to do so. The number of shares of our common stock required to be issued to pay
such dividends is dependent upon the current market value of our common stock
at the time such dividend is required to be paid. For the years ended December
31, 2000, 2001 and 2002, dividends on our 8 1/4% Convertible Preferred Stock
were paid with 579,000, 1,400,000 and 4,290,000 shares of common stock,
respectively, and dividends on our 6.25% Convertible Preferred Stock were paid
with 281,968, 1,781,764 and 6,338,153 shares of common stock, respectively. The
shares of common stock issued to pay such dividends will continue to have a
dilutive effect upon the shares of our common stock otherwise outstanding, and
further declines in the fair market value of our common stock will increase the
effective dilution. In 2002, as allowed by the Deposit Agreement relating to
dividend payments on the 8 1/4% Convertible Preferred Stock, we repurchased
3,745,000 shares of common stock from the dividend paying agent for a total of
$12.2 million in cash. We utilized cash from an unrestricted investment
subsidiary to effect the stock repurchases. We have also repurchased shares of
our common stock on other occasions (see "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources"). We may choose to continue such issuances and

                                      32



repurchases of stock in the future in order to avoid further dilution caused by
the issuance of common stock as dividends on our preferred stock.

Issuance of Unregistered Securities

   We made no unregistered sales of equity securities during 2002.

Item 6. Selected Financial Data

   The selected historical consolidated financial and other data for the
Company set forth below for each of the five years in the period ended December
31, 2002, and as of December 31, 1998, 1999, 2000, 2001 and 2002, have been
derived from the consolidated financial statements of the Company, which have
been audited by KPMG LLP, independent accountants. The results of operations
for the year ended December 31, 2001 are not comparable to the year ended
December 31, 2000, the results for the year ended December 31, 2000 are not
comparable to the year ended December 31, 1999, and the results for the year
ended December 31, 1999 are not comparable to the year ended December 31, 1998
as a result of business and tower acquisitions consummated in 1998, 1999 and
2000. Results of operations of these acquired businesses and towers are
included in the Company's consolidated financial statements for the periods
after the respective dates of acquisition. The information set forth below
should be read in conjunction with "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Item 8.
Financial Statements and Supplementary Data".

                                      33





                                                                                     Years Ended December 31,
                                                                   ------------------------------------------------------------
                                                                      1998         1999         2000        2001        2002
                                                                   ----------  -----------  -----------  ----------  ----------
                                                                        (In thousands of dollars, except per share amounts)
                                                                                                      
Statement of Operations Data:
Net revenues:
   Site rental and broadcast transmission......................... $   75,028  $   267,894  $   446,039  $  575,961  $  677,839
   Network services and other.....................................     38,050       77,865      203,126     322,990     223,694
                                                                   ----------  -----------  -----------  ----------  ----------
     Total net revenues...........................................    113,078      345,759      649,165     898,951     901,533
                                                                   ----------  -----------  -----------  ----------  ----------
Costs of operations:
   Site rental and broadcast transmission.........................     26,254      114,436      194,424     238,748     270,024
   Network services and other.....................................     21,564       42,312      120,176     228,485     176,175
                                                                   ----------  -----------  -----------  ----------  ----------
     Total costs of operations....................................     47,818      156,748      314,600     467,233     446,199
                                                                   ----------  -----------  -----------  ----------  ----------
General and administrative........................................     23,571       43,823       76,944     102,539      94,222
Corporate development(a)..........................................      4,625        5,403       10,489      12,337       7,483
Restructuring charges.............................................         --        5,645           --      19,416      17,147
Asset write-down charges..........................................         --           --           --      24,922      55,796
Non-cash general and administrative compensation charges(b).......     12,758        2,173        3,127       6,112       5,349
Depreciation and amortization.....................................     37,239      130,106      238,796     328,491     301,928
                                                                   ----------  -----------  -----------  ----------  ----------
Operating income (loss)...........................................    (12,933)       1,861        5,209     (62,099)    (26,591)
Equity in earnings of unconsolidated affiliate....................      2,055           --           --          --          --
Interest and other income (expense)(c)............................      4,220       17,731       32,266       8,548      66,418
Interest expense and amortization of deferred financing costs.....    (29,089)    (110,908)    (241,294)   (297,444)   (302,570)
                                                                   ----------  -----------  -----------  ----------  ----------
Loss before income taxes, minority interests and cumulative
 effect of change in accounting principle.........................    (35,747)     (91,316)    (203,819)   (350,995)   (262,743)
Provision for income taxes........................................       (374)        (275)        (246)    (16,478)    (12,276)
Minority interests................................................     (1,654)      (2,756)        (721)      1,306       2,498
                                                                   ----------  -----------  -----------  ----------  ----------
Loss before cumulative effect of change in accounting principle...    (37,775)     (94,347)    (204,786)   (366,167)   (272,521)
Cumulative effect of change in accounting principle for costs of
 start-up activities..............................................         --       (2,414)          --          --          --
                                                                   ----------  -----------  -----------  ----------  ----------
Net loss..........................................................    (37,775)     (96,761)    (204,786)   (366,167)   (272,521)
Dividends on preferred stock(d)...................................     (5,411)     (28,881)     (59,469)    (79,028)     19,638
                                                                   ----------  -----------  -----------  ----------  ----------
Net loss after deduction of dividends on preferred stock.......... $  (43,186) $  (125,642) $  (264,255) $ (445,195) $ (252,883)
                                                                   ==========  ===========  ===========  ==========  ==========
Per common share--basic and diluted:
   Loss before cumulative effect of change in accounting
    principle..................................................... $    (1.02) $     (0.94) $     (1.48) $    (2.08) $    (1.16)
   Cumulative effect of change in accounting principle............         --        (0.02)          --          --          --
                                                                   ----------  -----------  -----------  ----------  ----------
   Net loss....................................................... $    (1.02) $     (0.96) $     (1.48) $    (2.08) $    (1.16)
                                                                   ==========  ===========  ===========  ==========  ==========
Common shares outstanding--basic and diluted (in thousands).......     42,518      131,466      178,588     214,246     218,028
                                                                   ==========  ===========  ===========  ==========  ==========
Other Data:
Summary cash flow information:
   Net cash provided by operating activities...................... $   44,976  $    92,608  $   165,495  $  131,930  $  208,932
   Net cash used for investing activities.........................   (149,248)  (1,509,146)  (1,957,687)   (895,136)   (176,917)
   Net cash provided by (used for) financing activities...........    345,248    1,670,402    1,707,091   1,109,309    (335,086)
Ratio of earnings to fixed charges(e).............................         --           --           --          --          --
Balance Sheet Data (at period end):
Cash and cash equivalents......................................... $  296,450  $   549,328  $   453,833  $  804,602  $  516,172
Short-term investments............................................         --           --       38,000      72,963     115,697
Investments.......................................................         --           --      137,000     128,500          --
Property and equipment, net.......................................    592,594    2,468,101    4,303,037   4,844,912   4,828,033
Total assets......................................................  1,523,230    3,836,650    6,401,885   7,375,458   6,892,601
Total debt........................................................    429,710    1,542,343    2,602,687   3,423,097   3,226,960
Redeemable preferred stock(f).....................................    201,063      422,923      842,718     878,861     756,014
Total stockholders' equity........................................    737,562    1,617,747    2,420,862   2,364,648   2,208,498

--------
(a) Corporate development expenses represent costs incurred in connection with
    acquisitions and development of new business initiatives. These expenses
    consist primarily of allocated compensation, benefits and overhead costs
    that are not directly related to the administration or management of
    existing towers.

                                      34



(b) Represents charges related to the issuance of stock options to certain
    employees and executives, and the issuance of common stock and stock
    options in connection with certain acquisitions.
(c) Includes a $1.5 million loss on early extinguishment of debt in 2000 which
    was previously classified as an extraordinary item. For the year ended
    December 31, 2002, includes gains of $79.1 million on debt repurchases and
    charges of $29.1 million for losses from, and write-downs of, investments
    in unconsolidated affiliates.
(d) Includes gains of $99.4 million on repurchases of preferred stock in 2002.
(e) For purposes of computing the ratio of earnings to fixed charges, earnings
    represent income (loss) before income taxes, minority interests, cumulative
    effect of change in accounting principle, fixed charges and equity in
    earnings of unconsolidated affiliate. Fixed charges consist of interest
    expense, the interest component of operating leases and amortization of
    deferred financing costs. For the years ended December 31, 1998, 1999,
    2000, 2001 and 2002, earnings were insufficient to cover fixed charges by
    $37.8 million, $91.3 million, $203.8 million, $351.0 million and $262.7
    million, respectively.
(f) The 1998 amount represents the 12 3/4% exchangeable preferred stock. The
    1999 amount represents the 12 3/4% exchangeable preferred stock and the
    8 1/4% convertible preferred stock. The 2000, 2001 and 2002 amounts
    represent the 12 3/4% exchangeable preferred stock, the 8 1/4% convertible
    preferred stock and the 6.25% convertible preferred stock.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

   The following discussion is intended to assist in understanding our
consolidated financial condition as of December 31, 2002 and our consolidated
results of operations for each year in the three-year period ended December 31,
2002. The statements in this discussion regarding the industry outlook, our
expectations regarding the future performance of our businesses and the other
nonhistorical statements in this discussion are forward-looking statements. See
"--Cautionary Statement for Purposes of Forward-Looking Statements". This
discussion should be read in conjunction with "Selected Financial Data" and the
consolidated financial statements and related notes included elsewhere in this
document. Results of operations of the acquired businesses and towers that are
wholly and majority owned are included in our consolidated financial statements
for the periods subsequent to the respective dates of acquisition. As such, our
results of operations for the year ended December 31, 2001 are not comparable
to the year ended December 31, 2000.

Overview

   The growth of our business depends substantially on the condition of the
wireless communications and broadcast industries. We believe that the demand
for new communications sites will continue, although possibly not at the levels
experienced in prior years. The level of demand for new sites declined in 2002
as compared to 2001, as evidenced by a decrease of approximately 40% in the
number of new tenants we were able to add to our sites. We also expect that,
due to increased competition, wireless carriers will continue to seek operating
and capital efficiencies by (1) outsourcing certain network services and the
build-out and operation of new and existing infrastructure; and (2) planning to
use a tower site as a common location for the placement of their antennas and
transmission equipment alongside the equipment of other communications
providers.

   Further, we believe that wireless carriers and broadcasters will continue to
seek to outsource the operation of their towers and may, eventually, outsource
all or part of their transmission networks, including the transmission of their
signals. Management believes that our ability to (1) manage towers and
transmission networks and (2) provide services addressing most aspects of
signaling systems, from the originating station to the terminating receiver, to
the wireless communications and broadcasting industries position us to capture
such business.

   The willingness of wireless carriers to utilize our infrastructure and
related services is affected by numerous factors, including:

  .   consumer demand for wireless services;

  .   availability and location of our sites and alternative sites;

  .   cost of capital, including interest rates;

  .   availability of capital to wireless carriers;

                                      35



  .   willingness to co-locate equipment;

  .   local restrictions on the proliferation of towers;

  .   cost of building towers;

  .   technological changes affecting the number of communications sites needed
      to provide wireless communications services to a given geographic area;

  .   our ability to efficiently satisfy their service requirements; and

  .   tax policies.

   Our revenues that are derived from the provision of transmission services to
the broadcasting industry will be affected by, among other things:

  .   consumer demand for digital television broadcasts from tower-mounted
      antenna systems, or "digital terrestrial television broadcasts",
      principally in the United Kingdom;

  .   cost of capital, including interest rates;

  .   zoning restrictions on towers; and

  .   the cost of building towers.

   As an important part of our business strategy, we will seek to:

   (1) maximize utilization of our tower capacity to grow revenues organically,

   (2) grow our margins by taking advantage of the relatively fixed nature of
       the operating costs associated with our site rental business,

   (3) allocate capital efficiently as we selectively build new towers for
       wireless carriers, acquire other assets or repurchase our own
       securities, and

   (4) utilize the expertise of U.S., U.K. (including our broadcast
       transmission expertise) and Australian personnel to extend revenues
       around our existing assets.

Critical Accounting Policies

   The following is a discussion of the accounting policies that we believe (1)
are most important to the portrayal of our financial condition and results of
operations and (2) require our most difficult, subjective or complex judgments,
often as a result of the need to make estimates about the effect of matters
that are inherently uncertain.

   Revenue Recognition

   Site rental and broadcast transmission revenues are recognized on a monthly
basis over the term of the relevant lease, agreement or contract. In accordance
with applicable accounting standards, these revenues are recognized on a
straight-line basis, regardless of whether the payments from the customer are
received in equal monthly amounts. Some agreements provide for rent-free
periods at the beginning of the lease term, while others call for rent to be
prepaid for some period. If the payment terms call for fixed escalations (as in
fixed dollar or fixed percentage increases), the effect of such increases is
spread evenly over the term of the agreement. As a result of this accounting
method, a portion of the revenue recognized in a given period represents cash
collected in other periods. For 2001 and 2002, the non-cash portion of our site
rental and broadcast transmission revenues amounted to approximately $23.6
million and $26.4 million, respectively.

   Network services revenues are generally recognized under the completed
contract method. Under the completed contract method, revenues and costs for a
particular project are recognized in total at the completion

                                      36



date. When using the completed contract method of accounting for network
services revenues, we must accurately determine the completion date for the
project in order to record the revenues and costs in the proper period. For
antenna installations, we consider the project complete when the customer can
begin transmitting its signal through the antenna. We must also be able to
estimate losses on uncompleted contracts, as such losses must be recognized as
soon as they are known. The completed contract method is used for projects that
require relatively short periods of time to complete (generally less than one
year). We do not believe that our use of the completed contract method for
network services projects produces operating results that differ substantially
from the percentage-of-completion method.

   Allowance for Doubtful Accounts Receivable

   As part of our normal accounting procedures, we must evaluate our
outstanding accounts receivable to estimate whether they will be collected.
This is a subjective process that involves making judgments about our
customers' ability and willingness to pay these accounts. An allowance for
doubtful accounts is recorded as an offset to accounts receivable in order to
present a net balance that we believe will be collected. In estimating the
appropriate balance for this allowance, we consider (1) specific reserves for
accounts we believe may prove to be uncollectible and (2) additional reserves,
based on historical collections, for the remainder of our accounts. Additions
to the allowance for doubtful accounts are charged to operating expenses, and
deductions from the allowance are recorded when specific accounts receivable
are written off as uncollectible. If our estimate of uncollectible accounts
should prove to be inaccurate at some future date, the results of operations
for the period could be materially affected by any necessary correction to the
allowance for doubtful accounts.

   Valuation of Long-Lived Assets

   We review the carrying values of property and equipment and other long-lived
assets for impairment whenever events or changes in circumstances indicate that
the carrying amounts may not be recoverable. If the sum of the estimated future
cash flows (undiscounted) from the asset is less than its carrying amount, an
impairment loss is recognized. Measurement of an impairment loss is based on
the fair value of the asset. Our determination that an adverse event or change
in circumstance has occurred will generally involve (1) a deterioration in an
asset's financial performance compared to historical results, (2) a shortfall
in an asset's financial performance compared to forecasted results or (3) a
change in strategy affecting the utility of the asset. Our measurement of the
fair value of an impaired asset will generally be based on an estimate of
discounted future cash flows.

   On January 1, 2002, we adopted the new accounting standard for goodwill and
other intangible assets. In accordance with that new standard, we test goodwill
for impairment on an annual basis, regardless of whether adverse events or
changes in circumstances have occurred. This annual impairment test involves
(1) a step to identify potential impairment at a reporting unit level based on
fair values, and (2) a step to measure the amount of the impairment, if any.
Our measurement of the fair value for goodwill is based on an estimate of
discounted future cash flows of the reporting unit.

   During the fourth quarter of 2002, we performed our annual update of the
impairment test for goodwill. The results of this test indicate that goodwill
is not impaired at any of our reporting units. However, the amount by which the
estimated fair value for CCUSA exceeds its carrying value has declined since
January 1, 2002. This decline is a function of our reduced forecasts for site
leasing and antenna installation revenues, as indicated by our operating
results for 2002. Further declines in our site leasing and network services
business at CCUSA could result in an impairment of goodwill in the future.
Furthermore, if an impairment at CCUSA were to occur in the future, we believe
that the calculations to measure the impairment could result in the write-off
of substantially all of CCUSA's goodwill ($164.0 million). Due to the continued
weakness in the telecommunications industry, we intend to closely monitor the
performance of our reporting units in 2003 in order to assess whether a
goodwill impairment is indicated.

                                      37



   Deferred Income Taxes

   We record deferred income tax assets and liabilities on our balance sheet
related to events that impact our financial statements and tax returns in
different periods. In order to compute these deferred tax balances, we first
analyze the differences between the book basis and tax basis of our assets and
liabilities (referred to as "temporary differences"). These temporary
differences are then multiplied by current tax rates to arrive at the balances
for the deferred income tax assets and liabilities. If deferred tax assets
exceed deferred tax liabilities, we must estimate whether those net deferred
asset amounts will be realized in the future. A valuation allowance is then
provided for the net deferred asset amounts that are not likely to be realized.

   The change in our net deferred income tax balances during a period results
in a deferred income tax provision or benefit in our statement of operations.
If our expectations about the future tax consequences of past events should
prove to be inaccurate, the balances of our deferred income tax assets and
liabilities could require significant adjustments in future periods. Such
adjustments could cause a material effect on our results of operations for the
period of the adjustment.

Results of Operations

   Our primary sources of revenues are from:

   (1) renting antenna space on towers and rooftops sites,

   (2) providing analog and digital broadcast transmission services, and

   (3) providing network services, including the installation of antennas on
       our sites as well as third party sites.

   Site rental revenues in the U.S. are received primarily from wireless
communications companies, including those operating in the following categories
of wireless communications:

  .   cellular;

  .   personal communications services ("PCS"), a digital service operating at
      a higher frequency range than cellular;

  .   enhanced specialized mobile radio ("ESMR"), a service operating in the
      SMR frequency range using enhanced technology;

  .   wireless data services;

  .   microwave;

  .   paging; and

  .   specialized mobile radio ("SMR"), a service operating in the frequency
      range used for two-way radio communication by public safety, trucking
      companies, and other dispatch service users.

Site rental revenues are generally recognized on a monthly basis under lease
agreements, which typically have original terms of five to ten years (with
three or four optional renewal periods of five years each).

   Broadcast transmission services revenues in the U.K. are received for both
analog and digital transmission services. Monthly analog transmission revenues
are principally received from the BBC under a contract with an initial 10-year
term through March 31, 2007. Digital transmission services revenues from the
BBC are recognized under a contract with an initial term of 12 years through
November 15, 2010. Monthly revenues from this digital transmission contract
increase over time as the network rollout progresses. In addition, in
connection with the launch of Freeview, we receive digital transmission
services revenues from the BBC, BSkyB and other TV content providers under
contracts with initial terms of six years. See "Item 1. Business--The
Company--U.K. Operations".

                                      38



   Site rental revenues in the U.K. are received from other broadcast
transmission service providers (primarily NTL) and wireless communications
companies, including the U.K. cellular operators. Site rental revenues are
generally recognized on a monthly basis under lease agreements with original
terms of three to 12 years. Such lease agreements generally require annual
payments in advance, and include rental rate adjustment provisions between one
and three years from the commencement of the lease. CCUK is a party to two
agreements that contemplate a minimum level of site leasing and contain certain
"take or pay" commitments by the carriers. In each case, the carrier is not
leasing the number of sites within the time period contemplated by the
agreement. CCUK is working with the carriers to resolve differences, and it is
possible that some form of negotiated settlement will occur that would relieve
the carriers of their site leasing commitments. See "--CCUK Take or Pay
Agreements".

   Network services revenues in the U.S. consist of revenues from:

   (1) antenna installation,

   (2) site acquisition,

   (3) site development and construction,

   (4) network design and site selection, and

   (5) other services.

Network services revenues are received primarily from wireless communications
companies. Network services revenues in the U.S. are recognized under service
contracts which provide for billings on either a fixed price basis or a time
and materials basis. Demand for our network services fluctuates from period to
period and within periods. See "Item 1. Business--Risk Factors--Variability in
Demand for Services Business Has Reduced the Predictability of Our Results".
Consequently, the operating results of our network services businesses for any
particular period may vary significantly, and should not be considered as
indicative of longer-term results. In 2002, we made a strategic decision to
reduce our network services offerings to primarily the management of antenna
installations on our sites and radio frequency planning and testing. We also
derive services revenues from the ownership and operation of microwave radio
and SMR networks in Puerto Rico where we own radio wave spectrum in the 2,000
MHz and 6,000 MHz range (for microwave radio) and the 800 MHz range (for
specialized mobile radio). These revenues are generally recognized under
monthly management or service agreements.

   Network services revenues in the U.K. consist of (1) network design and site
selection, site acquisition, site development and antenna installation and (2)
site management and other services. Network design and development and related
services are provided to:

   (1) a number of broadcasting and related organizations, both in the United
       Kingdom and other countries,

   (2) certain U.K. cellular operators, and

   (3) Hutchison as part of their deployment of 3G services in the U.K.

These services are often subject to a competitive bid, and a significant
proportion result from an operator coming onto an existing CCUK site. Revenues
from such services are recognized on either a fixed price or a time and
materials basis. Site management and other services, consisting of both network
monitoring and equipment maintenance, are carried out in the U.K. for a number
of emergency service organizations. CCUK receives revenues for such services
under contracts with original terms of between three and five years. Such
contracts provide fixed prices for network monitoring and variable pricing
dependent on the level of equipment maintenance carried out in a given period.

   Costs of operations for site rental in the U.S. primarily consist of:

  .   land leases;

  .   property taxes;

                                      39



  .   repairs and maintenance;

  .   employee compensation and related benefits costs;

  .   utilities;

  .   insurance; and

  .   monitoring costs.

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

   Costs of operations for broadcast transmission services in the U.K. consist
primarily of employee compensation and related benefits costs, utilities,
rental payments under the Site-Sharing Agreement with NTL, circuit costs,
repairs and maintenance on both transmission equipment and structures, property
taxes and insurance. Site rental operating costs in the U.K. consist primarily
of employee compensation and related benefits costs, utilities and repairs,
maintenance and leases of land or rooftop sites, property taxes and insurance.
With the exception of land and rooftop leases, the majority of such costs are
relatively fixed in nature, with increases in revenue from new installations on
existing sites generally being achieved without a corresponding increase in
costs. Generally, leases of land and rooftop sites have a revenue sharing
component that averages 20% to 35% of additional revenues added from subsequent
tenants.

   Costs of operations for network services consist primarily of employee
compensation and related benefits costs, subcontractor services, consulting
fees, and other on-site construction and materials costs. We incur these
network services costs (1) to support our internal operations, including
maintenance of our owned towers, and (2) to maintain the employees necessary to
provide services to third parties.

   General and administrative expenses consist primarily of:

  .   employee compensation, training, recruitment and related benefits costs;

  .   professional and consulting fees;

  .   office rent and related expenses;

  .   state franchise taxes; and

  .   travel costs.

   Corporate development expenses represent costs incurred in connection with
acquisitions and development of new business initiatives. These expenses
consist primarily of:

  .   allocated compensation and related benefits costs;

  .   external professional fees; and

  .   overhead costs that are not directly related to the administration or
      management of existing towers.

   Depreciation and amortization charges relate to our property and equipment
(which consists primarily of towers, broadcast transmission equipment,
associated buildings, construction equipment and vehicles) and other intangible
assets recorded in connection with business acquisitions. Depreciation of
towers and broadcast transmission equipment is generally computed with a useful
life of 20 years. Amortization of other intangible assets (principally the
value of existing site rental contracts at Crown Communication) is computed
with a useful life of 10 years. Depreciation of buildings is generally computed
with useful lives ranging from 20 to 40 years. Depreciation of construction
equipment and vehicles is generally computed with useful lives of 10 years and
5 years, respectively.

                                      40



   During 2000 and 2001 we completed the transactions with BellSouth and
BellSouth DCS. In 2000, we completed the transaction with GTE. Additionally,
during 2000 Crown Atlantic acquired the Frontier towers from Bell Atlantic
Mobile, and CCAL completed the substantial portion of the transaction with
Cable & Wireless Optus. Results of operations of these acquired businesses and
towers are included in our consolidated financial statements for the periods
subsequent to the respective dates of acquisition. In addition, we have various
transactions recorded in our financial statements (as described below) that are
non-recurring in nature. As such, our results of operations for the year ended
December 31, 2002 are not comparable to the year ended December 31, 2001, and
the results for the year ended December 31, 2001 are not comparable to the year
ended December 31, 2000.

   During 2002, US wireless carriers developed significantly fewer new
communications sites than were developed in 2001. As a result, the pace at
which we were able to add new tenants to our sites decreased by approximately
40% during 2002. Network services revenues have also been adversely impacted in
the US due to reduced antenna installation activity related to the decrease in
new tenants, along with our strategic decision to reduce our US network
services offerings to primarily the management of antenna installations on our
sites and radio frequency planning and testing. Network services revenues
declined as a percentage of our total revenues during 2002, and we expect such
decline as a percentage of total revenues to continue in the foreseeable future.

   The following information is derived from our historical Consolidated
Statements of Operations for the periods indicated.



                                                                 Year Ended          Year Ended          Year Ended
                                                              December 31, 2000   December 31, 2001   December 31, 2002
                                                             -----------------   -----------------   -----------------
                                                                        Percent             Percent             Percent
                                                                         of Net              of Net              of Net
                                                               Amount   Revenues   Amount   Revenues   Amount   Revenues
                                                             ---------  -------- ---------  -------- ---------  --------
                                                                              (In thousands of dollars)
                                                                                              
Net revenues:
   Site rental and broadcast transmission................... $ 446,039    68.7%  $ 575,961    64.1%  $ 677,839    75.2%
   Network services and other...............................   203,126    31.3     322,990    35.9     223,694    24.8
                                                             ---------   -----   ---------   -----   ---------   -----
         Total net revenues.................................   649,165   100.0     898,951   100.0     901,533   100.0
                                                             ---------   -----   ---------   -----   ---------   -----
Operating expenses:
   Costs of operations:
      Site rental and broadcast transmission................   194,424    43.6     238,748    41.5     270,024    39.8
      Network services and other............................   120,176    59.2     228,485    70.7     176,175    78.8
                                                             ---------           ---------           ---------
         Total costs of operations..........................   314,600    48.5     467,233    52.0     446,199    49.5
   General and administrative...............................    76,944    11.8     102,539    11.4      94,222    10.5
   Corporate development....................................    10,489     1.6      12,337     1.4       7,483     0.8
   Restructuring charges....................................        --      --      19,416     2.1      17,147     1.9
   Asset write-down charges.................................        --      --      24,922     2.8      55,796     6.2
   Non-cash general and administrative compensation
    charges.................................................     3,127     0.5       6,112     0.7       5,349     0.6
   Depreciation and amortization............................   238,796    36.8     328,491    36.5     301,928    33.5
                                                             ---------   -----   ---------   -----   ---------   -----
Operating income (loss).....................................     5,209     0.8     (62,099)   (6.9)    (26,591)   (3.0)
Other income (expense):
   Interest and other income (expense)......................    32,266     5.0       8,548     1.0      66,418     7.4
   Interest expense and amortization of deferred financing
    costs...................................................  (241,294)  (37.2)   (297,444)  (33.1)   (302,570)  (33.5)
                                                             ---------   -----   ---------   -----   ---------   -----
Loss before income taxes and minority interests.............  (203,819)  (31.4)   (350,995)  (39.0)   (262,743)  (29.1)
Provision for income taxes..................................      (246)     --     (16,478)   (1.8)    (12,276)   (1.4)
Minority interests..........................................      (721)   (0.1)      1,306     0.1       2,498     0.3
                                                             ---------   -----   ---------   -----   ---------   -----
Net loss.................................................... $(204,786)  (31.5)% $(366,167)  (40.7)% $(272,521)  (30.2)%
                                                             =========   =====   =========   =====   =========   =====


   Comparison of Years Ended December 31, 2002 and 2001--Operating Segments

   CCUSA.  CCUSA's revenues for 2002 were $455.1 million, a decrease of $68.7
million from 2001. This decrease was attributable to a $122.8 million, or
48.4%, decrease in network services and other revenues,

                                      41



partially offset by a $54.1 million increase in site rental revenues. The
increase in site rental revenues reflects the new tenant additions on our tower
sites and contractual escalations on existing leases. The decrease in network
services and other revenues reflects a decrease in demand for antenna
installation from our tenants, along with our strategic decision to reduce our
US network services offerings to primarily the management of antenna
installations on our sites and radio frequency planning and testing. We expect
that network services and other revenues will continue to decline as a
percentage of CCUSA's total revenues. Costs of operations for 2002 were $217.4
million, a decrease of $63.1 million from 2001. This decrease was attributable
to a $70.9 million decrease in network services costs, partially offset by a
$7.7 million increase in site rental costs. Costs of operations for site rental
as a percentage of site rental revenues decreased to 34.2% for 2002 from 38.2%
for 2001. Costs of operations for network services and other as a percentage of
network services and other revenues increased to 81.4% for 2002 from 69.9% for
2001. General and administrative expenses for 2002 were $56.2 million, a
decrease of $5.0 million from 2001. General and administrative expenses as a
percentage of revenues increased to 12.3% for 2002 from 11.7% for 2001. For
2002, CCUSA recorded restructuring charges and asset write-down charges of $4.3
million and $39.2 million, respectively (see "--Restructuring Charges and Asset
Write-Down Charges"). CCUSA recorded non-cash general and administrative
compensation charges of $2.1 million for 2002 and 2001 (see "--Compensation
Charges Related to Stock Option Grants and Acquisitions"). Depreciation and
amortization for 2002 was $183.5 million, an increase of $5.5 million from
2001. This increase was primarily attributable to a $16.4 million increase in
depreciation related to property and equipment, partially offset by a $9.8
million decrease in goodwill amortization and a $1.1 million decrease in
amortization of other intangible assets resulting from the adoption of a new
accounting standard for goodwill and other intangible assets (see "--Impact of
Recently Issued Accounting Standards"). Interest and other income (expense) for
2002 was $(1.2) million, a decrease of $2.6 million from 2001. Interest expense
and amortization of deferred financing costs for 2002 was $38.4 million, a
decrease of $14.9 million from 2001. This decrease was attributable to lower
interest rates on bank indebtedness.

   CCAL. CCAL's revenues for 2002 were $26.0 million, an increase of $6.0
million from 2001. This increase was attributable to a $5.2 million, or 28.4%,
increase in site rental revenues and a $0.8 million increase in network
services and other revenues. The increase in site rental revenues reflects the
impact of tower acquisitions, the new tenant additions on our tower sites and
termination fees from a customer. Costs of operations for 2002 were $10.5
million, an increase of $2.4 million from 2001. This increase was attributable
to a $1.8 million increase in site rental costs and a $0.6 million increase in
network services costs. Costs of operations for site rental as a percentage of
site rental revenues decreased to 37.9% for 2002 from 39.1% for 2001. Costs of
operations for network services and other as a percentage of network services
and other revenues increased to 65.3% for 2002 from 62.0% for 2001. General and
administrative expenses for 2002 were $5.8 million, a decrease of $0.5 million
from 2001. General and administrative expenses as a percentage of revenues
decreased to 22.2% for 2002 from 31.3% for 2001. Depreciation and amortization
for 2002 was $13.7 million, an increase of $2.6 million from 2001. Interest and
other income (expense) was $0.4 million for 2002 and 2001. Interest expense and
amortization of deferred financing costs for 2002 was $3.4 million, an increase
of $1.0 million from 2001.

   CCUK. CCUK's revenues for 2002 were $300.8 million, an increase of $63.1
million from 2001. This increase was attributable to a $30.8 million, or 15.0%,
increase in site rental and broadcast transmission revenues and a $32.3 million
increase in network services and other revenues. The increase in site rental
and broadcast transmission revenues reflects the new tenant additions on our
tower sites, partially offset by a temporary disruption in digital broadcast
transmission revenues (see "Item 1. Business--The Company-U.K. Operations").
The increase in network services and other revenues reflects continued demand
for antenna installation from our tenants. Costs of operations for 2002 were
$167.7 million, an increase of $43.4 million from 2001. This increase was
attributable to a $17.1 million increase in site rental and broadcast
transmission costs and a $26.4 million increase in network services costs.
Costs of operations for site rental and broadcast transmission as a percentage
of site rental and broadcast transmission revenues increased to 48.1% for 2002
from 47.0% for 2001. Costs of operations for network services and other as a
percentage of network services and other revenues decreased to 84.0% for 2002
from 86.3% for 2001. General and administrative expenses for 2002 were $10.0
million, a

                                      42



decrease of $1.4 million from 2001. General and administrative expenses as a
percentage of revenues decreased to 3.3% for 2002 from 4.8% for 2001. For 2002,
CCUK recorded restructuring charges and asset write-down charges of $8.5
million and $3.2 million, respectively (see "--Restructuring Charges and Asset
Write-Down Charges"). For 2002, CCUK recorded non-cash general and
administrative compensation charges of $1.9 million, compared to $2.6 million
for 2001 (see "--Compensation Charges Related to Stock Option Grants and
Acquisitions"). Depreciation and amortization for 2002 was $61.5 million, a
decrease of $32.0 million from 2001. This decrease was primarily attributable
to a $47.5 million decrease in goodwill amortization resulting from the
adoption of a new accounting standard for goodwill and other intangible assets
(see "--Impact of Recently Issued Accounting Standards"), partially offset by a
$15.5 million increase in depreciation related to property and equipment.
Interest and other income (expense) for 2002 was $1.5 million, a decrease of
$3.9 million from 2001. Interest expense and amortization of deferred financing
costs for 2002 was $28.7 million, an increase of $2.0 million from 2001. CCUK's
provision for income taxes of $11.9 million for 2002 consists of a non-cash
deferred tax liability. This deferred tax liability resulted from an excess of
basis differences for its property and equipment over its available tax net
operating losses.

   Crown Atlantic. Crown Atlantic's revenues for 2002 were $119.6 million, an
increase of $2.1 million from 2001. This increase was attributable to an $11.8
million, or 14.4%, increase in site rental revenues, partially offset by a $9.6
million decrease in network services and other revenues. The increase in site
rental revenues reflects the new tenant additions on our tower sites and
contractual escalations on existing leases. The decrease in network services
and other revenues reflects a decrease in demand for antenna installation from
our tenants, along with our strategic decision to reduce our US network
services offerings to primarily the management of antenna installations on our
sites and radio frequency planning and testing. We expect that network services
and other revenues will continue to decline as a percentage of Crown Atlantic's
total revenues. Costs of operations for 2002 were $50.5 million, a decrease of
$3.7 million from 2001. This decrease was attributable to an $8.4 million
decrease in network services costs, partially offset by a $4.7 million increase
in site rental costs. Costs of operations for site rental as a percentage of
site rental revenues increased to 39.1% for 2002 from 39.0% for 2001. Costs of
operations for network services and other as a percentage of network services
and other revenues decreased to 53.6% for 2002 from 62.7% for 2001. General and
administrative expenses for 2002 were $5.5 million, a decrease of $2.6 million
from 2001. General and administrative expenses as a percentage of revenues
decreased to 4.6% for 2002 from 7.0% for 2001. For 2002, Crown Atlantic
recorded restructuring charges and asset write-down charges of $0.9 million and
$11.1 million, respectively (see "--Restructuring Charges and Asset Write-Down
Charges"). Depreciation and amortization for 2002 was $41.4 million, a decrease
of $2.9 million from 2001. This decrease was primarily attributable to a $3.2
million decrease in goodwill amortization resulting from the adoption of a new
accounting standard for goodwill and other intangible assets (see "--Impact of
Recently Issued Accounting Standards"), partially offset by a $0.3 million
increase in depreciation related to property and equipment. Interest and other
income (expense) for 2002 was $0.2 million, a decrease of $0.1 million from
2001. Interest expense and amortization of deferred financing costs for 2002
was $18.4 million, a decrease of $2.2 million from 2001.

   Corporate Office and Other. General and administrative expenses for 2002
were $16.8 million, an increase of $1.2 million from 2001. Corporate
development expenses for 2002 were $7.5 million, compared to $12.3 million for
2001. For 2002, the corporate office recorded restructuring charges and asset
write-down charges of $3.5 million and $2.4 million, respectively (see
"--Restructuring Charges and Asset Write-Down Charges"). For 2002 and 2001, the
corporate office recorded non-cash general and administrative compensation
charges of $1.4 million (see "--Compensation Charges Related to Stock Option
Grants and Acquisitions"). Depreciation and amortization for 2002 was $1.9
million, an increase of $0.2 million from 2001. Interest and other income
(expense) for 2002 was $65.6 million, an increase of $64.5 million from 2001.
This increase was primarily attributable to gains on debt repurchases of
approximately $79.1 million, partially offset by charges of approximately $29.1
million for our share of losses incurred by, and the write-down of our
investments in, unconsolidated affiliates. Interest expense and amortization of
deferred financing costs for 2002 was $213.7 million, an increase of $19.3
million from 2001. This increase was primarily attributable to interest on the
9 3/8% senior notes, which were issued in May of 2001.


                                      43



   Comparison of Years Ended December 31, 2002 and 2001--Consolidated

   Consolidated revenues for 2002 were $901.5 million, an increase of $2.6
million from 2001. This increase was primarily attributable to:

   (1) a $101.9 million, or 17.7%, increase in site rental and broadcast
       transmission revenues, of which $30.8 million was attributable to CCUK,
       $11.8 million was attributable to Crown Atlantic, $5.2 million was
       attributable to CCAL and $54.1 million was attributable to CCUSA,

   (2) a $32.3 million increase in network services and other revenues from
       CCUK, and

   (3) a $0.8 million increase in network services and other revenues from
       CCAL, largely offset by

   (4) a $122.8 million decrease in network services and other revenues from
       CCUSA, and

   (5) a $9.6 million decrease in network services and other revenues from
       Crown Atlantic.

   The following is a summary of tenant leasing activity on our tower sites:



                                                                                 Years Ended
                                                                                December 31,
                                                                                -------------
                                                                                 2001   2002
                                                                                ------ ------
                                                                                 
New tenants added on existing, newly constructed and acquired tower sites, net:
   CCUSA (includes 130 tenants from acquired tower sites in 2001)..............  3,772  1,900
   Crown Atlantic..............................................................    710    341
   CCUK (includes 578 tenants from acquired tower sites in 2001)...............  2,887  1,363
   CCAL (includes 1,054 tenants from acquired tower sites in 2001).............  1,448    446
                                                                                ------ ------
                                                                                 8,817  4,050
                                                                                ====== ======
Average monthly lease rate per new tenant added on existing tower sites:
   CCUSA and Crown Atlantic.................................................... $1,481 $1,491
   CCUK........................................................................    779  1,092
   CCAL........................................................................    607    540


The increases in site rental and broadcast transmission revenues reflect the
new tenant additions on our tower sites and contractual escalations on existing
leases. However, after excluding the new tenants from acquired tower sites in
2001, the level of tenant leasing activity on our sites declined by
approximately 40% in 2002 as compared to 2001. The increases or decreases in
network services and other revenues reflect fluctuations in demand for antenna
installation from our tenants, along with our strategic decision to reduce our
US network services offerings to primarily the management of antenna
installations on our sites and radio frequency planning and testing. We expect
that network services and other revenues will continue to decline as a
percentage of total revenues for CCUSA and Crown Atlantic.

   Costs of operations for 2002 were $446.2 million, a decrease of $21.0
million from 2001. This decrease was primarily attributable to:

   (1) a $70.9 million decrease in network services costs related to CCUSA and

   (2) an $8.4 million decrease in network services costs from Crown Atlantic,
       partially offset by

   (3) a $31.3 million increase in site rental and broadcast transmission
       costs, of which $17.1 million was attributable to CCUK, $4.7 million was
       attributable to Crown Atlantic, $1.8 million was attributable to CCAL
       and $7.7 million was attributable to CCUSA,

   (4) a $26.4 million increase in network services costs from CCUK and

   (5) a $0.6 million increase in network services costs from CCAL.

Costs of operations for site rental and broadcast transmission as a percentage
of site rental and broadcast transmission revenues decreased to 39.8% for 2002
from 41.5% for 2001 because of higher margins attributable

                                      44



to incremental revenues from the CCUSA and CCAL operations. Costs of operations
for network services and other as a percentage of network services and other
revenues increased to 78.8% for 2002 from 70.7% for 2001 because of lower
margins from the CCUSA and CCAL operations.

   General and administrative expenses for 2002 were $94.2 million, a decrease
of $8.3 million from 2001. This decrease was primarily attributable to:

   (1) a $5.0 million decrease in expenses related to the CCUSA operations,

   (2) a $2.6 million decrease in expenses at Crown Atlantic,

   (3) a $1.4 million decrease in expenses at CCUK, and

   (4) a $0.5 million decrease in expenses at CCAL, partially offset by

   (5) a $1.2 million increase in expenses at our corporate office.

The decreases in general and administrative expenses resulted primarily from
lower staffing levels after the restructurings of our business announced in
2001 and 2002, partially offset by a charge of approximately $2.6 million for a
bad debt provision at CCUK related to the ITV Digital liquidation (see "Item 1.
Business--The Company--U.K. Operations--Transmission Business--Digital
Transmission and Broadcast ("Freeview")"). General and administrative expenses
as a percentage of revenues decreased to 10.5% for 2002 from 11.4% for 2001
because of lower overhead costs as a percentage of revenues for CCAL, CCUK and
Crown Atlantic.

   Corporate development expenses for 2002 were $7.5 million, compared to $12.3
million for 2001. This decrease was attributable to a decrease in expenses at
our corporate office.

   For 2002, we recorded cash restructuring charges of $17.1 million, compared
to $19.4 million for 2001. Such charges related to employee severance payments
and costs of office closures. See "--Restructuring Charges and Asset Write-Down
Charges".

   During 2002, we recorded asset write-down charges of $39.2 million for
CCUSA, $11.1 million for Crown Atlantic and $2.4 million at our corporate
office. Such non-cash charges related to the abandonment of a portion of our
construction in process for certain open projects, the cancellation of certain
build-to-suit agreements and write-downs of the related construction in
process, write-downs of certain inventories, and write-downs of three office
buildings. In 2002, we also recorded asset write-down charges of $3.2 million
for CCUK related to certain inventories and property and equipment. In 2001, we
recorded asset write-down charges of $24.9 million in connection with the July
2001 restructuring. Such non-cash charges related to write-downs of certain
inventories, property and equipment, and other assets. See "--Restructuring
Charges and Asset Write-Down Charges".

   For 2002, we recorded non-cash general and administrative compensation
charges of $5.3 million related to the issuance of stock and stock options to
certain employees and executives, compared to $6.1 million for 2001. See
"--Compensation Charges Related to Stock Option Grants and Acquisitions".

   Depreciation and amortization for 2002 was $301.9 million, a decrease of
$26.6 million from 2001. This decrease was primarily attributable to:

   (1) a $60.5 million decrease in goodwill amortization resulting from the
       adoption of a new accounting standard for goodwill and other intangible
       assets, of which $9.8 million was attributable to CCUSA, $47.5 million
       was attributable to CCUK and $3.2 million was attributable to Crown
       Atlantic (see "--Impact of Recently Issued Accounting Standards"),
       partially offset by

   (2) a $15.5 million increase in depreciation related to property and
       equipment from CCUK,

   (3) a $16.4 million increase in depreciation related to property and
       equipment, offset by a $1.1 million decrease in amortization of other
       intangible assets, from CCUSA,

                                      45



   (4) a $2.6 million increase in depreciation related to property and
       equipment from CCAL, and

   (5) a $0.3 million increase in depreciation related to property and
       equipment from Crown Atlantic.

   Interest and other income (expense) for 2002 resulted primarily from:

   (1) interest income and foreign exchange gains from invested cash balances,
       and

   (2) gains of approximately $79.1 million on debt repurchases, partially
       offset by

   (3) charges of approximately $29.1 million for our share of losses incurred
       by, and the write-down of our investments in, unconsolidated affiliates,
       and

   (4) costs incurred in connection with unsuccessful investment projects.

   Interest expense and amortization of deferred financing costs for 2002 was
$302.6 million, an increase of $5.1 million, or 1.7%, from 2001. This increase
was primarily attributable to interest on the 9 3/8% senior notes, partially
offset by lower interest rates on bank indebtedness at CCUSA and Crown
Atlantic. See "--Liquidity and Capital Resources".

   The provision for income taxes of $12.3 million for 2002 consists primarily
of a non-cash deferred tax liability recognized by CCUK. CCUK's deferred tax
liability resulted from differences between book and tax basis for its property
and equipment.

   Minority interests represent the minority partner's 43.1% interest in Crown
Atlantic's operations, the minority partner's 17.8% interest in the operations
of the GTE joint venture and the minority shareholder's 22.4% interest in the
CCAL operations.

   Comparison of Years Ended December 31, 2001 and 2000--Operating Segments

   CCUSA. CCUSA's revenues for 2001 were $523.8 million, an increase of $194.6
million from 2000. This increase was attributable to an $86.6 million, or
47.2%, increase in site rental revenues and a $108.0 million increase in
network services and other revenues. The increase in site rental revenues
reflects the new tenant additions on our tower sites. The increase in network
services and other revenues reflects continued demand for antenna installation
from our tenants along with increased third party service work. Costs of
operations for 2001 were $280.5 million, an increase of $120.7 million from
2000. This increase was attributable to a $94.4 million increase in network
services costs and a $26.3 million increase in site rental costs. Costs of
operations for site rental as a percentage of site rental revenues decreased to
38.2% for 2001 from 41.9% for 2000. Costs of operations for network services
and other as a percentage of network services and other revenues increased to
69.9% for 2001 from 57.0% for 2000. General and administrative expenses for
2001 were $61.1 million, an increase of $11.4 million from 2000. General and
administrative expenses as a percentage of revenues decreased to 11.7% for 2001
from 15.1% for 2000. For 2001, CCUSA recorded restructuring charges and asset
write-down charges of $7.1 million and $6.5 million, respectively (see
"--Restructuring Charges and Asset Write-Down Charges"). For 2001, CCUSA
recorded non-cash general and administrative compensation charges of $2.1
million, compared to $0.8 million for 2000 (see "--Compensation Charges Related
to Stock Option Grants and Acquisitions"). Depreciation and amortization for
2001 was $178.0 million, an increase of $56.3 million from 2000. Interest and
other income (expense) for 2001 was $1.4 million, a decrease of $2.8 million
from 2000. Interest expense and amortization of deferred financing costs for
2001 was $53.3 million, an increase of $10.3 million from 2000.

   CCAL. CCAL's revenues for 2001 were $20.0 million, an increase of $13.2
million from 2000. This increase was attributable to an $11.5 million, or
169.3%, increase in site rental revenues and $1.6 million in network services
and other revenues. The increase in site rental revenues reflects the impact of
tower acquisitions along with the new tenant additions on our tower sites.
Costs of operations for 2001 were $8.2 million, an

                                      46



increase of $4.6 million from 2000. This increase was attributable to a $3.6
million increase in site rental costs and $1.0 million in network services
costs. Costs of operations for site rental as a percentage of site rental
revenues decreased to 39.1% for 2001 from 52.5% for 2000. Costs of operations
for network services and other as a percentage of network services and other
revenues were 62.0% for 2001. General and administrative expenses for 2001 were
$6.3 million, an increase of $1.8 million from 2000. General and
administrative  expenses as a percentage of revenues decreased to 31.3% for
2001 from 65.3% for 2000. Depreciation and amortization for 2001 was $11.1
million, an increase of $5.9 million from 2000. Interest and other income
(expense) for 2001 was $0.4 million, an increase of $0.2 million from 2000.
Interest expense and amortization of deferred financing costs for 2001 was $2.4
million, an increase of $2.3 million from 2000.

   CCUK. CCUK's revenues for 2001 were $237.7 million, an increase of $20.0
million from 2000. This increase was attributable to a $13.3 million, or 6.9%,
increase in site rental and broadcast transmission revenues and a $6.7 million
increase in network services and other revenues. The increase in site rental
and broadcast transmission revenues reflects the new tenant additions on our
tower sites. The increase in network services and other revenues reflects
continued demand for antenna installation from our tenants along with increased
third party service work. Costs of operations for 2001 were $124.3 million, an
increase of $17.9 million from 2000. This increase was attributable to an $8.7
million increase in site rental and broadcast transmission costs and a $9.2
million increase in network services costs. Costs of operations for site rental
and broadcast transmission as a percentage of site rental and broadcast
transmission revenues increased to 47.0% for 2001 from 45.7% for 2000. Costs of
operations for network services and other as a percentage of network services
and other revenues increased to 86.3% for 2001 from 73.2% for 2000. General and
administrative expenses for 2001 were $11.4 million, an increase of $3.3
million from 2000. General and administrative expenses as a percentage of
revenues increased to 4.8% for 2001 from 3.7% for 2000. For 2001, CCUK recorded
restructuring charges and asset write-down charges of $1.8 million and $11.9
million, respectively (see "--Restructuring Charges and Asset Write-Down
Charges"). For 2001, CCUK recorded non-cash general and administrative
compensation charges of $2.6 million, compared to $1.0 million for 2000 (see
"--Compensation Charges Related to Stock Option Grants and Acquisitions").
Depreciation and amortization for 2001 was $93.5 million, an increase of $16.3
million from 2000. Interest and other income (expense) for 2001 was $5.4
million, an increase of $5.1 million from 2000. Interest expense and
amortization of deferred financing costs for 2001 was $26.7 million, a decrease
of $5.3 million from 2000. CCUK's provision for income taxes of $16.0 million
for 2001 consists of a non-cash deferred tax liability. This deferred tax
liability resulted from an excess of basis differences for its property and
equipment over its available tax net operating losses.

   Crown Atlantic. Crown Atlantic's revenues for 2001 were $117.5 million, an
increase of $22.0 million from 2000. This increase was attributable to an $18.4
million, or 29.0%, increase in site rental revenues and a $3.5 million increase
in network services and other revenues. The increase in site rental revenues
reflects the new tenant additions on our tower sites. Costs of operations for
2001 were $54.2 million, an increase of $9.5 million from 2000. This increase
was attributable to a $5.7 million increase in site rental costs and a $3.8
million increase in network services costs. Costs of operations for site rental
as a percentage of site rental revenues decreased to 39.0% for 2001 from 41.3%
for 2000. Costs of operations for network services and other as a percentage of
network services and other revenues increased to 62.7% for 2001 from 57.8% for
2000. General and administrative expenses for 2001 were $8.2 million, a
decrease of $0.3 million from 2000. General and administrative expenses as a
percentage of revenues decreased to 7.0% for 2001 from 8.8% for 2000. For 2001,
Crown Atlantic recorded restructuring charges and asset write-down charges of
$1.0 million and $0.8 million, respectively (see "--Restructuring Charges and
Asset Write-Down Charges"). Depreciation and amortization for 2001 was $44.3
million, an increase of $10.9 million from 2000. Interest and other income
(expense) for 2001 was $0.3 million, a decrease of $0.6 million from 2000.
Interest expense and amortization of deferred financing costs for 2001 was
$20.7 million, an increase of $2.8 million from 2000.

   Corporate Office and Other. General and administrative expenses for 2001
were $15.6 million, an increase of $9.4 million from 2000. Corporate
development expenses for 2001 were $12.3 million, compared to $9.7 million for
2000. For 2001, the corporate office recorded restructuring charges and asset
write-down charges of

                                      47



$9.5 million and $5.8 million, respectively (see "--Restructuring Charges and
Asset Write-Down Charges"). For 2001 and 2000, the corporate office recorded
non-cash general and administrative compensation charges of $1.4 million (see
"--Compensation Charges Related to Stock Option Grants and Acquisitions").
Depreciation and amortization for 2001 was $1.7 million, an increase of $0.4
million from 2000. Interest and other income (expense) for 2001 was $1.1
million, a decrease of $27.1 million from 2000. Interest expense and
amortization of deferred financing costs for 2001 was $194.4 million, an
increase of $46.0 million from 2000.

   Comparison of Years Ended December 31, 2001 and 2000--Consolidated

   Consolidated revenues for 2001 were $899.0 million, an increase of $249.8
million from 2000. This increase was primarily attributable to:

   (1) a $129.9 million, or 29.1%, increase in site rental and broadcast
       transmission revenues, of which $13.3 million was attributable to CCUK,
       $18.4 million was attributable to Crown Atlantic, $11.5 million was
       attributable to CCAL and $86.6 million was attributable to CCUSA,

   (2) a $108.0 million increase in network services and other revenues from
       CCUSA,

   (3) a $6.7 million increase in network services and other revenues from CCUK,

   (4) a $3.5 million increase in network services and other revenues from
       Crown Atlantic, and

   (5) $1.6 million in network services and other revenues from CCAL.

   The following is a summary of tenant leasing activity on our tower sites for
the year ended December 31, 2001:


                                                                             
New tenants added on existing, newly constructed and acquired tower sites, net:
   CCUSA (includes 130 tenants from acquired tower sites)......................  3,772
   Crown Atlantic..............................................................    710
   CCUK (includes 578 tenants from acquired tower sites).......................  2,887
   CCAL (includes 1,054 tenants from acquired tower sites).....................  1,448
                                                                                ------
                                                                                 8,817
                                                                                ======
Average monthly lease rate per new tenant added on existing tower sites:
   CCUSA and Crown Atlantic.................................................... $1,481
   CCUK........................................................................    779
   CCAL........................................................................    607


The increases in site rental and broadcast transmission revenues reflect the
new tenant additions on our tower sites. The increases in network services and
other revenues reflect continued demand for antenna installation from our
tenants along with increased third party service work.

   Costs of operations for 2001 were $467.2 million, an increase of $152.6
million from 2000. This increase was primarily attributable to:

   (1) a $44.3 million increase in site rental and broadcast transmission
       costs, of which $8.7 million was attributable to CCUK, $5.7 million was
       attributable to Crown Atlantic, $3.6 million was attributable to CCAL
       and $26.3 million was attributable to CCUSA,

   (2) a $94.4 million increase in network services costs related to CCUSA,

   (3) a $9.2 million increase in network services costs from CCUK,

   (4) a $3.8 million increase in network services costs from Crown Atlantic,
       and

   (5) $1.0 million in network services costs from CCAL.

                                      48



Costs of operations for site rental and broadcast transmission as a percentage
of site rental and broadcast transmission revenues decreased to 41.5% for 2001
from 43.6% for 2000 because of higher margins attributable to incremental
revenues from the Crown Atlantic, CCAL and CCUSA operations. Costs of
operations for network services and other as a percentage of network services
and other revenues increased to 70.7% for 2001 from 59.2% for 2000 because of
lower margins from the CCUSA, CCUK and Crown Atlantic operations. Network
services revenues for 2001 included a greater proportion of third party service
work than in 2000, and third party services typically produce lower margins
than tenant antenna installation services.

   General and administrative expenses for 2001 were $102.5 million, an
increase of $25.6 million from 2000. This increase was primarily attributable
to:

   (1) an $11.4 million increase in expenses related to the CCUSA operations,

   (2) a $9.4 million increase in expenses at our corporate office,

   (3) a $3.3 million increase in expenses at CCUK, and

   (4) a $1.8 million increase in expenses at CCAL, partially offset by

   (5) a $0.3 million decrease in expenses at Crown Atlantic.

The increases in general and administrative expenses resulted primarily from
higher staffing levels to support the growth of our business. General and
administrative expenses as a percentage of revenues decreased for 2001 to 11.4%
from 11.8% for 2000 because of lower overhead costs as a percentage of revenues
for CCUSA, CCAL and Crown Atlantic.

   Corporate development expenses for 2001 were $12.3 million, compared to
$10.5 million for 2000. This increase was primarily attributable to an increase
in expenses at our corporate office.

   For 2001, we recorded cash charges of $19.4 million in connection with a
restructuring of our business announced in July 2001. Such charges related to
employee severance payments and costs of office closures. See "--Restructuring
Charges and Asset Write-Down Charges".

   For 2001, we recorded asset write-down charges of $24.9 million in
connection with the restructuring of our business announced in July 2001. Such
non-cash charges related to write-downs of certain inventories, property and
equipment, and other assets. See "--Restructuring Charges and Asset Write-Down
Charges".

   For 2001, we recorded non-cash general and administrative compensation
charges of $6.1 million related to the issuance of stock and stock options to
certain employees and executives, compared to $3.1 million for 2000. See
"--Compensation Charges Related to Stock Option Grants and Acquisitions".

   Depreciation and amortization for 2001 was $328.5 million, an increase of
$89.7 million from 2000. This increase was primarily attributable to:

   (1) a $16.3 million increase in depreciation and amortization related to the
       property and equipment and goodwill from CCUK,

   (2) a $10.9 million increase in depreciation and amortization related to the
       property and equipment and goodwill from Crown Atlantic,

   (3) a $5.9 million increase in depreciation and amortization related to
       property and equipment from CCAL, and

   (4) a $56.3 million increase in depreciation and amortization related to the
       property and equipment, goodwill and other intangible assets related to
       the CCUSA operations.

                                      49



   Interest and other income (expense) for 2001 resulted primarily from:

   (1) the investment of the net proceeds from our securities offerings, offset
       by

   (2) costs incurred in connection with unsuccessful acquisition attempts and

   (3) our share of losses incurred by unconsolidated affiliates.

   Interest expense and amortization of deferred financing costs for 2001 was
$297.4 million, an increase of $56.2 million, or 23.3%, from 2000. This
increase was primarily attributable to interest on indebtedness at CCUSA, CCUK
and Crown Atlantic, and interest on the 103/4% senior notes and the 9 3/8%
senior notes. See "--Liquidity and Capital Resources".

   The provision for income taxes of $16.5 million for 2001 consists primarily
of a non-cash deferred tax liability recognized by CCUK. CCUK's deferred tax
liability resulted from an excess of basis differences for its property and
equipment over its available tax net operating losses.

   Minority interests represent the minority partner's 43.1% interest in Crown
Atlantic's operations, the minority partner's 17.8% interest in the operations
of the GTE joint venture and the minority shareholder's 22.4% interest in the
CCAL operations.

Liquidity and Capital Resources

   Our business strategy contemplates substantial capital expenditures,
although significantly reduced from previous years' levels, in connection with
the selective expansion of our tower portfolios in the markets in which we
currently operate. During 2003, we expect that the majority of our
discretionary capital expenditures (other than the (Pounds)50.0 million site
access fee payment due to British Telecom) will occur at CCUK in connection
with the development of the sites acquired from British Telecom.

   Since its inception, CCIC has generally funded its activities, other than
acquisitions and investments, through excess proceeds from contributions of
equity capital and cash provided by operations. CCIC has financed acquisitions
and investments with the proceeds from equity contributions, borrowings under
our senior credit facilities and issuances of debt securities. Since its
inception, CCUK has generally funded its activities, other than the acquisition
of the BBC home service transmission business, through cash provided by
operations and borrowings under CCUK's credit facility. CCUK financed the
acquisition of the BBC home service transmission business with the proceeds
from equity contributions and the issuance of the CCUK bonds.

   During 2002, we have taken actions to reduce, delay or eliminate contractual
obligations for certain capital expenditures. We have accomplished the
following:

   (1) the deferral of a (Pounds)50.0 million payment due to British Telecom
       from 2002 to 2003, and

   (2) the completion and winding up (by mutual agreement) of build-to-suit
       contracts with two significant customers of CCUSA and Crown Atlantic,
       thereby eliminating future tower construction obligations.

These actions, and others we are pursuing, will serve to increase our financial
flexibility and improve our ability to allocate our capital on a discretionary
basis to the highest yielding investments, including the securities repurchases
as described below. Our goal is to maximize net cash from operating activities
and fund substantially all capital spending and debt service from our operating
cash flow beginning in 2003, without reliance on additional borrowing or the
use of our cash and liquid investments. However, due to the risk factors
outlined above, there can be no assurance that this will be possible.

   For the years ended December 31, 2000, 2001 and 2002, our net cash provided
by operating activities was $165.5 million, $131.9 million and $208.9 million,
respectively. For the years ended December 31, 2000, 2001

                                      50



and 2002, our net cash provided by (used for) financing activities was $1,707.1
million, $1,109.3 million and $(335.1) million, respectively. For the year
ending December 31, 2003, we expect that our net cash provided by operating
activities will be between approximately $140 million and $200 million.

   Capital expenditures were $277.3 million for the year ended December 31,
2002, of which $0.7 million were for CCIC, $82.4 million were for CCUSA, $23.5
million were for Crown Atlantic, $165.6 million were for CCUK and $5.1 million
were for CCAL. We anticipate that we will build, through the end of 2003,
approximately 10 to 20 towers in the United States at a cost of approximately
$4.8 million and approximately 240 to 280 tower sites in the United Kingdom at
a cost of approximately $16.0 million. In addition, we are obligated to pay a
site access fee to British Telecom in the amount of (Pounds)50.0 million ($80.5
million), with such payment due in March 2003. We are currently in discussions
regarding the mitigation of this payment, but there can be no assurance as to
the outcome of these discussions. We also expect to spend approximately $40.0
million for tower improvements, including enhancements to the structural
capacity of our towers in order to support the anticipated leasing, and
approximately $40.0 million for maintenance activities. For the year ending
December 31, 2003, we expect that our total capital expenditures will be
between approximately $95 million and $125 million. As such, we expect that our
capital expenditures for this period, excluding the payment to British Telecom,
will be fully funded by net cash from operating activities, as discussed above.

   We expect that the construction of new tower sites will continue to have an
impact on our liquidity. We expect that once integrated, these new towers will
have a positive impact on liquidity, but will require some period of time to
offset the initial adverse impact on liquidity. In addition, we believe that as
new towers become operational and we begin to add tenants, they should result
in a long-term increase in liquidity. Our decisions regarding the construction
of new towers are discretionary, and depend upon expectations of achieving
acceptable rates of return given current market conditions. Such decisions are
influenced by the availability of capital and expected returns on alternative
investments. We have increased our minimum acceptable level for internal rates
of return on new tower builds given current market conditions, and expect to
continue to decrease the number of new towers built in the foreseeable future.

   To fund the execution of our business strategy, including the construction
of new towers, we expect to use our available cash balances and cash provided
by future operations. We do not currently expect to utilize further borrowings
available under our U.S. and U.K. credit facilities in any significant amounts.
We will have additional cash needs to fund our operations in the future. We may
also have additional cash needs in the future if additional tower acquisitions,
build-to-suit or other opportunities arise. If we do not otherwise have cash
available, or borrowings under our credit facilities have otherwise been
utilized, when our cash need arises, we would be forced to seek additional debt
or equity financing or to forego the opportunity. In the event we determine to
seek additional debt or equity financing, there can be no assurance that any
such financing will be available, on commercially acceptable terms or at all,
or permitted by the terms of our existing indebtedness.

   As of December 31, 2002, we had consolidated cash and cash equivalents of
$516.2 million (including $49.4 million at CCUSA, $113.3 million at CCUK, $10.6
million at Crown Atlantic, $16.3 million at CCAL, $167.2 million in an
unrestricted investment subsidiary and $159.4 million at CCIC and a restricted
investment subsidiary), consolidated liquid investments (consisting of
marketable securities) of $115.7 million, consolidated long-term debt of
$3,227.0 million, consolidated redeemable preferred stock of $756.0 million and
consolidated stockholders' equity of $2,208.5 million.

   In June, September and December of 2002, we paid our quarterly dividends on
the 81/4% Convertible Preferred Stock by issuing a total of 3.7 million shares
of our common stock. As allowed by the Deposit Agreement relating to dividend
payments on the 81/4% Convertible Preferred Stock, we repurchased the 3.7
million shares of common stock from the dividend paying agent for a total of
$12.2 million in cash. We utilized cash from an unrestricted investment
subsidiary to effect the stock repurchases. We may choose to continue such
issuances and repurchases of stock in the future in order to avoid further
dilution caused by the issuance of common stock as dividends on our preferred
stock.

                                      51



   In July of 2002, we repurchased 8.5 million shares of our common stock for
$18.3 million in cash. The shares purchased by us represented all of the
remaining shares previously owned by affiliates of France Telecom. The purchase
was conducted through a privately negotiated transaction. We utilized cash from
an unrestricted investment subsidiary to effect the stock repurchase.

   In September 2002, Crown Atlantic repaid $50.0 million in outstanding
borrowings under its credit facility. Crown Atlantic utilized cash provided by
its operations to effect this repayment.

   In August and September of 2002, we began repurchasing our stock (both
common and preferred) and debt securities in public market transactions.
Through December of 2002, we repurchased debt securities with an aggregate
principal amount (at maturity) of $244.6 million. Such debt securities had an
aggregate carrying value (net of unamortized discounts) of $226.5 million. We
utilized $142.8 million in cash ($96.5 million from an unrestricted investment
subsidiary and $46.3 million from CCIC) to effect these debt repurchases. The
debt repurchases resulted in gains of $79.1 million. Through December of 2002,
we repurchased shares of preferred stock with an aggregate redemption amount of
$162.9 million. Such shares of preferred stock had an aggregate carrying value
(net of unamortized issue costs) of $160.4 million. We utilized $61.0 million
in cash from an unrestricted investment subsidiary to effect these preferred
stock repurchases. The preferred stock repurchases resulted in gains of $99.4
million. Such gains are offset against dividends on preferred stock in
determining the net loss applicable to common stock for the calculation of loss
per common share. When the debt and preferred stock repurchases are added
together, we have spent approximately $203.8 million in cash to retire
securities with aggregate principal and redemption amounts (at maturity) of
approximately $407.4 million. These repurchases (at an average discount to par
value of approximately 50%) represent an attractive use of our liquidity, and
the future interest savings will enhance our cash flow from operating
activities. Through December of 2002, we also repurchased a total of 1.5
million shares of common stock. We utilized $3.0 million in cash from an
unrestricted investment subsidiary to effect these common stock repurchases.

   In March of 2003, we repurchased additional shares of our preferred stock in
a public market transaction. Such shares of preferred stock had an aggregate
redemption amount and carrying value of $12.7 million. We utilized $9.4 million
in cash from an unrestricted investment subsidiary to effect this March
preferred stock repurchase. The March preferred stock repurchase resulted in a
gain of $3.3 million.

   We seek to allocate our available capital among the investment alternatives
that provide the greatest returns given current market conditions. As such, we
may continue to acquire sites, build new towers and make improvements to
existing towers when the expected returns from such expenditures meet our
investment criteria. In addition, we may continue to utilize a portion of our
available cash balances to repurchase our own stock (either common or
preferred) or debt securities from time to time as market prices make such
investments attractive.

   In April 2002, ITV Digital ("ITVD", a significant customer of CCUK)
announced plans to liquidate its assets and returned its digital terrestrial
television multiplex licenses to the UK Independent Television Commission (See
"Item 1. Business--The Company--U.K. Operations--Transmission Business--Digital
Transmission and Broadcast ("Freeview")"). The termination of the ITVD
transmission contract was a Termination Event (a defined event of default)
under CCUK's credit facility. In November 2002, we obtained an amendment to
CCUK's credit facility such that the Termination Event was cured. The amended
CCUK credit facility consists of a (Pounds)120.0 million (approximately $193.1
million) secured revolving loan facility. Since we were able to obtain an
amendment to CCUK's credit facility, the termination of the ITVD transmission
contract did not result in an event of default under the trust deed governing
the CCUK bonds. None of our other debt instruments, including our public debt
securities and the two U.S. bank credit facilities, contained default
provisions related to the ITVD transmission contract. Furthermore, none of
these other debt instruments contain cross default provisions with either of
the CCUK debt instruments. As such, the events of default under the two CCUK
debt instruments did not constitute events of default under any of our other
debt instruments.

                                      52



   As of March 17, 2003, Crown Atlantic had unused borrowing availability under
its amended credit facility of approximately $84.5 million, and CCUK had unused
borrowing availability under its amended credit facility of approximately
(Pounds)30.0 million ($48.3 million). As of March 17, 2003, our restricted U.S.
and Australian subsidiaries had approximately $367.6 million of unused
borrowing availability under the 2000 credit facility. Our various credit
facilities require our subsidiaries to maintain certain financial covenants and
place restrictions on the ability of our subsidiaries to, among other things,
incur debt and liens, pay dividends, make capital expenditures, undertake
transactions with affiliates and make investments. These facilities also limit
the ability of the borrowing subsidiaries to pay dividends to CCIC.

   The primary factors that determine our subsidiaries' ability to comply with
their debt covenants are (1) their current financial performance (as defined in
the various credit agreements), (2) their levels of indebtedness and (3) their
debt service requirements. Since we do not currently expect that our
subsidiaries will need to utilize significant additional borrowings under their
credit facilities, the primary risk of a debt covenant violation would result
from a deterioration of a subsidiary's financial performance. In addition,
certain of the credit facilities will require that financial performance
increase in future years as covenant calculations become more restrictive.
Should a covenant violation occur in the future as a result of a shortfall in
financial performance (or for any other reason), we might be required to make
principal payments earlier than currently scheduled and may not have access to
additional borrowings under these facilities as long as the covenant violation
continues. Any such early principal payments would have to be made from our
existing cash balances.

   If we are unable to refinance our subsidiary debt or renegotiate the terms
of such debt, we may not be able to meet our debt service requirements,
including interest payments on the notes, in the future. Our 10 5/8% discount
notes, our 9% senior notes, our 91/2% senior notes, our 103/4% senior notes and
our 9 3/8% senior notes require annual cash interest payments of approximately
$25.4 million, $14.9 million, $10.9 million, $47.6 million and $38.2 million,
respectively. Prior to May 15, 2004 and August 1, 2004, the interest expense on
our 10 3/8% discount notes and our 111/4% discount notes, respectively, will be
comprised solely of the amortization of original issue discount. Thereafter,
the 10 3/8% discount notes and the 111/4% discount notes will require annual
cash interest payments of approximately $46.6 million and $22.8 million,
respectively. Prior to December 15, 2003, we do not expect to pay cash
dividends on our 123/4% exchangeable preferred stock or, if issued, cash
interest on the exchange debentures. Thereafter, assuming all dividends or
interest have been paid-in-kind, our exchangeable preferred stock or, if
issued, the exchange debentures will require annual cash dividend or interest
payments of approximately $34.3 million. Annual cash interest payments on the
CCUK bonds are (Pounds)11.25 million ($18.1 million). In addition, our various
credit facilities will require periodic interest payments on amounts borrowed
thereunder, which amounts could be substantial.

   As a holding company, CCIC will require distributions or dividends from its
subsidiaries, or will be forced to use capital raised in debt and equity
offerings, to fund its debt obligations, including interest payments on the
cash-pay notes and eventually the 10 3/8% discount notes and the 111/4%
discount notes. The terms of the indebtedness of our subsidiaries significantly
limit their ability to distribute cash to CCIC. As a result, we will be
required to apply a portion of the net proceeds from the debt offerings to fund
interest payments on the notes. If we do not retain sufficient funds from the
offerings or any future financing, we may not be able to make our interest
payments on the notes.

                                      53



   The following table summarizes our contractual cash obligations as of
December 31, 2002:



                                                              Years Ending December 31,
                                               -------------------------------------------------------
                                                 2003     2004     2005     2006     2007   Thereafter   Totals
                                               -------- -------- -------- -------- -------- ---------- ----------
                                                                   (In thousands of dollars)
                                                                                  
Long-term debt................................ $ 14,250 $ 62,975 $229,261 $305,869 $541,848 $2,163,250 $3,317,453
Interest payments on long-term debt (a).......  204,616  223,597  263,726  249,498  242,287    696,524  1,880,248
Capital lease obligations.....................    3,386    2,089       98        3       --         --      5,576
Operating lease obligations...................  142,185  135,155  132,550  131,397  130,977    615,100  1,287,364
Site access fee to British Telecom, secured by
 letter of credit.............................   80,475       --       --       --       --         --     80,475
Redeemable preferred stock....................       --       --       --       --       --    800,717    800,717
Dividend payments on exchangeable preferred
 stock........................................       --   36,040   36,040   36,040   36,040    108,120    252,280
                                               -------- -------- -------- -------- -------- ---------- ----------
                                               $444,912 $459,856 $661,675 $722,807 $951,152 $4,383,711 $7,624,113
                                               ======== ======== ======== ======== ======== ========== ==========

--------
(a) Interest payments on floating rate debt are estimated based on rates in
    effect during the first quarter of 2003. See Note 4 to the Consolidated
    Financial Statements.

   Our joint venture agreements with Bell Atlantic Mobile and GTE (both now
part of Verizon Communications) provide that, upon dissolution of either
venture, Verizon Communications will receive (1) the shares of our common stock
contributed to the venture (15,597,783 shares for the Bell Atlantic Mobile
venture and 5,063,731 shares for the GTE venture) and (2) a payment equal to a
percentage of the fair market value (to be determined based on an appraisal
process at the dissolution date) of the venture's other net assets. As of
December 31, 2002, such percentages would be approximately 24.1% for the Bell
Atlantic Mobile venture and 11.0% for the GTE venture. The 24.1% payment for
the Bell Atlantic Mobile venture could be paid either in cash or shares of our
common stock, at our election. The 11.0% payment for the GTE venture could only
be paid in cash. A dissolution of either venture may be triggered (1) by
Verizon Communications at any time, after a 30-day notice period and (2) by us
at any time following the fourth anniversary of such venture's formation
(subject to certain penalties if prior to the seventh anniversary for the Bell
Atlantic Mobile venture). Our joint venture with Bell Atlantic Mobile was
formed on March 31, 1999, and our joint venture with GTE was formed on January
31, 2000. See "Item 1. Business--The Company--U.S. Operations--Overview".

   During 2002, we issued letters of credit to various insurers in connection
with certain contingent retirement obligations under various tower site land
leases. The letters of credit were issued through one of CCUSA's lenders in
amounts aggregating $8.5 million and expire on various dates through October
2003.

   Our ability to make scheduled payments of principal of, or to pay interest
on, our debt obligations, and our ability to refinance any such debt
obligations, will depend on our future performance, which, to a certain extent,
is subject to general economic, financial, competitive, legislative, regulatory
and other factors that are beyond our control. In addition, our ability to
refinance any indebtedness in the future would depend in part on our
maintaining adequate credit ratings from the commercial rating agencies. Such
credit ratings are dependent on all the liquidity and performance factors
discussed above, as well as general expectations that the rating agencies have
regarding the outlook for our business and our industry. We anticipate that we
may need to refinance a substantial portion of our indebtedness on or prior to
its scheduled maturity. There can be no assurance that we will be able to
effect any required refinancings of our indebtedness on commercially reasonable
terms or at all. See "Item 1. Business--Risk Factors".

Reporting Requirements Under the Indentures Governing the Company's Debt
Securities (the "Indentures") and the Certificate of Designations Governing the
Company's 123/4% Senior Exchangeable Preferred Stock (the "Certificate")

   The following information (as such capitalized terms are defined in the
Indentures and the Certificate) is presented solely as a requirement of the
Indentures and the Certificate; such information is not intended as an

                                      54



alternative measure of financial position, operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles). Furthermore, our measure of the following information may not be
comparable to similarly titled measures of other companies.

   We have designated CCUK, Crown Atlantic and certain investment subsidiaries
as Unrestricted Subsidiaries. Summarized financial information for (1) CCIC and
our Restricted Subsidiaries and (2) our Unrestricted Subsidiaries is as follows:



                                                          December 31, 2002
                                         ----------------------------------------------------
                                           Company
                                             and
                                          Restricted  Unrestricted Consolidation Consolidated
                                         Subsidiaries Subsidiaries Eliminations     Total
                                         ------------ ------------ ------------- ------------
                                                      (In thousands of dollars)
                                                                     
Cash and cash equivalents...............  $  225,101   $  291,071   $        --   $  516,172
Other current assets....................     208,419      142,490            --      350,909
Property and equipment, net.............   3,203,955    1,624,078            --    4,828,033
Investments.............................          --           --            --           --
Investments in Unrestricted Subsidiaries   1,983,127           --    (1,983,127)          --
Goodwill................................     164,023      903,018            --    1,067,041
Other assets, net.......................     102,138       28,308            --      130,446
                                          ----------   ----------   -----------   ----------
                                          $5,886,763   $2,988,965   $(1,983,127)  $6,892,601
                                          ==========   ==========   ===========   ==========
Current liabilities.....................  $  175,136   $  185,633   $        --   $  360,769
Long-term debt, less current maturities.   2,616,667      596,043            --    3,212,710
Other liabilities.......................      36,656      146,571            --      183,227
Minority interests......................      93,792       77,591            --      171,383
Redeemable preferred stock..............     756,014           --            --      756,014
Stockholders' equity....................   2,208,498    1,983,127    (1,983,127)   2,208,498
                                          ----------   ----------   -----------   ----------
                                          $5,886,763   $2,988,965   $(1,983,127)  $6,892,601
                                          ==========   ==========   ===========   ==========




                                      Three Months Ended December 31, 2002       Year Ended December 31, 2002
                                     -------------------------------------  -------------------------------------
                                       Company                                Company
                                         and                                    and
                                      Restricted  Unrestricted Consolidated  Restricted  Unrestricted Consolidated
                                     Subsidiaries Subsidiaries    Total     Subsidiaries Subsidiaries    Total
                                     ------------ ------------ ------------ ------------ ------------ ------------
                                                               (In thousands of dollars)
                                                                                    
Net revenues........................   $112,347     $115,614     $227,961    $ 481,125     $420,408    $ 901,533
Costs of operations (exclusive of
 depreciation and amortization).....     49,889       60,747      110,636      227,945      218,254      446,199
General and administrative..........     18,764        3,477       22,241       76,651       17,571       94,222
Corporate development...............      1,451           --        1,451        7,483           --        7,483
Restructuring charges...............      5,110        5,428       10,538        7,755        9,392       17,147
Asset write-down charges............      5,266        3,284        8,550       41,538       14,258       55,796
Non-cash general and administrative
 compensation charges...............        872          486        1,358        3,488        1,861        5,349
Depreciation and amortization.......     49,686       27,075       76,761      198,678      103,250      301,928
                                       --------     --------     --------    ---------     --------    ---------
Operating income (loss).............    (18,691)      15,117       (3,574)     (82,413)      55,822      (26,591)
Interest and other income (expense).     49,711       (1,622)      48,089       73,031       (6,613)      66,418
Interest expense and amortization of
 deferred financing costs...........    (60,225)     (11,511)     (71,736)    (255,472)     (47,098)    (302,570)
Provision for income taxes..........       (109)      (6,723)      (6,832)        (407)     (11,869)     (12,276)
Minority interests..................        590       (1,439)        (849)       3,967       (1,469)       2,498
                                       --------     --------     --------    ---------     --------    ---------
Net loss............................   $(28,724)    $ (6,178)    $(34,902)   $(261,294)    $(11,227)   $(272,521)
                                       ========     ========     ========    =========     ========    =========



                                      55



   Tower Cash Flow and Adjusted Consolidated Cash Flow for CCIC and our
Restricted Subsidiaries is as follows under (1) the indenture governing the
10 5/8% Discount Notes and the Certificate (the "1997 and 1998 Securities") and
(2) the indentures governing the 10 3/8% Discount Notes, the 9% Senior Notes,
the 111/4% Discount Notes, the 91/2% Senior Notes, the 103/4% Senior Notes and
the 9 3/8% Senior Notes (the "1999, 2000 and 2001 Securities"):



                                                                                            1999, 2000
                                                                                1997 and       and
                                                                                  1998         2001
                                                                               Securities   Securities
                                                                               ----------   ----------
                                                                               (In thousands of dollars)
                                                                                      
Tower Cash Flow, for the three months ended December 31, 2002................. $  53,780    $  53,780
                                                                               =========    =========
Consolidated Cash Flow, for the twelve months ended December 31, 2002......... $ 169,046    $ 176,529
Less: Tower Cash Flow, for the twelve months ended December 31, 2002..........  (203,660)    (203,660)
Plus: four times Tower Cash Flow, for the three months ended December 31, 2002   215,120      215,120
                                                                               ---------    ---------
Adjusted Consolidated Cash Flow, for the twelve months ended December 31, 2002 $ 180,506    $ 187,989
                                                                               =========    =========


Related Party Transactions

   For the years ended December 31, 2000, 2001 and 2002, the Bell Atlantic
Mobile venture had revenues from Verizon Communications of $44.1 million, $44.0
million and $45.5 million, respectively. For the years ended December 31, 2000,
2001 and 2002, the GTE venture had revenues from Verizon Communications of
$46.2 million, $61.8 million and $67.6 million, respectively. Verizon
Communications is our partner in both of these ventures.

   For the years ended December 31, 2000, 2001 and 2002, CCUK had revenues from
the BBC of $96.1 million, $93.7 million and $101.4 million, respectively. For
the year ended December 31, 2002, CCUK had revenues from BSkyB of $2.5 million.
The BBC and BSkyB are CCUK's partners in Digital TV Services Ltd, which was
created to promote Freeview (see "Item 1. Business--The Company--U.K.
Operations--Transmission Business--Digital Transmission and Broadcast
("Freeview")").

Restructuring Charges and Asset Write-Down Charges

   In July 2001, we announced a restructuring of our business in order to
increase operational efficiency and better align costs with anticipated
revenues. As part of the restructuring, we reduced our global staff by
approximately 312 full-time employees, closed five offices in the United States
and closed our development offices in Brazil and Europe. The actions taken for
the restructuring were substantially completed as of the end of 2001. In
connection with the restructuring, we recorded cash charges of approximately
$19.4 million during 2001 related to employee severance payments ($13.9
million) and costs of office closures ($5.5 million).

   For the year ended December 31, 2002, we recorded cash charges of $8.5
million in connection with a restructuring of our CCUK business announced in
March 2002. Such charges relate to staff reductions (approximately 212
employees) and the disposition of certain service lines. For the year ended
December 31, 2002, we also recorded cash charges of $3.1 million related
primarily to additional employee severance payments at our corporate office in
connection with the July 2001 restructuring. In October 2002, we announced a
restructuring of our U.S. business in order to flatten its organizational
structure to better align with customer demand and enhance our regional focus
to improve customer service. As part of the restructuring, we are reducing our
U.S. workforce by approximately 230 employees and are closing some smaller
offices. The actions taken for the October 2002 restructuring will be
substantially completed by the end of the first quarter of 2003. In connection
with this restructuring, we recorded cash charges of approximately $6.1 million
in the fourth quarter of 2002 related to employee severance payments ($3.3
million) and costs of office closures ($2.8 million).

                                      56



   We have recorded asset write-down charges of $24.9 million during 2001 in
connection with the restructuring of our business announced in July 2001. Such
non-cash charges related to the write-down of certain inventories ($11.9
million), property and equipment ($8.5 million), and other assets ($4.5
million) that were deemed to have no value as a result of the restructuring.

   During the year ended December 31, 2002, we abandoned a portion of our
construction in process related to certain open projects, mutually agreed to
terminate certain build-to-suit agreements and wrote down the value of the
related construction in process, wrote down the value of certain inventories,
and wrote down the value of three office buildings. As a result, we have
recorded asset write-down charges of $39.2 million for CCUSA, $11.1 million for
Crown Atlantic and $2.3 million for the corporate office. For the year ended
December 31, 2002, we also recorded asset write-down charges of $3.2 million
for CCUK related to certain inventories and property and equipment. We will
continue to evaluate the carrying value of our goodwill and our property and
equipment as required by SFAS 142 and SFAS 144. Implicit in the determination
of fair value for such long-lived assets are certain assumptions regarding the
future leasing of our communication sites. Should future business conditions
require the amendment of previous assumptions, our assets could be deemed
impaired and a charge to earnings would be required.

CCUK Take or Pay Agreements

   CCUK is a party to two agreements that contemplate a minimum level of site
leasing and contain certain "take or pay" commitments by the carriers. One
agreement contemplates that at least 1,000 sites will be annually leased for a
total of 4,000 sites by 2005. The other agreement contemplates that at least
1,500 sites will be leased by 2004. In each case, the carrier is not leasing
the number of sites within the time period contemplated by the agreement and is
disputing the terms. It is likely that the carriers will not need the full
number of sites originally contemplated. CCUK is working with the carriers to
resolve differences and to find viable commercial alternatives to maintain good
relationships with such carriers. It is possible that some form of negotiated
settlement will occur that would relieve the carriers of their site leasing
commitments. However, there can be no assurance that satisfactory results will
be achieved in either situation.

Compensation Charges Related to Stock Option Grants and Acquisitions

   We have recognized non-cash general and administrative compensation charges
related to certain stock options granted to employees and executives prior to
our IPO. Such charges amounted to approximately $1.4 million for each of the
three years ended December 31, 2002.

   In July 2000, we issued (1) 199,473 shares of our common stock and (2)
options to purchase 17,577 shares of our common stock with an exercise price of
$.01 per share in connection with an acquisition by CCUK. Such shares and
options were deemed to be compensation to the former shareholders of the
acquired company (who remained employed by the Company). As a result, CCUK will
recognize non-cash general and administrative compensation charges of
approximately $8.4 million over five years.

   In September 2000, we issued 336,600 shares of our common stock in
connection with an acquisition by CCUSA. Of such shares, 170,710 were deemed to
be compensation to the former shareholders of the acquired company (who
remained employed by the Company). As a result, CCUSA will recognize non-cash
general and administrative compensation charges of approximately $5.9 million
over four years.

   During the first quarter of 2003, we granted 5,805,187 shares of restricted
common stock to our executives and certain employees. These restricted shares
have a weighted-average grant-date fair value of $4.15 per share. The
restrictions on the shares will expire in various annual amounts over the
vesting period of five years, with provisions for accelerated vesting based on
the market performance of our common stock. In connection with these restricted
shares, we will recognize non-cash general and administrative compensation
charges of approximately $24.1 million over the vesting period.

                                      57



   In February 2003, we issued 105,000 shares of common stock to the
non-executive members of our Board of Directors. These shares have a grant-date
fair value of $3.95 per share. In connection with these shares, we will
recognize non-cash general and administrative compensation charges of
approximately $0.4 million for the first quarter of 2003.

Impact of Recently Issued Accounting Standards

   In June 2001, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 141, Business Combinations
("SFAS 141"), and Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets ("SFAS 142"). SFAS 141 prohibits the use of the
pooling-of-interests method of accounting for business combinations, and
requires that the purchase method be used for all business combinations after
June 30, 2001. SFAS 141 also changes the manner in which acquired intangible
assets are identified and recognized apart from goodwill. Further, SFAS 141
requires additional disclosures regarding the reasons for business
combinations, the allocation of the purchase price to recognized assets and
liabilities and the recognition of goodwill and other intangible assets. We
have used the purchase method of accounting since our inception, so the
adoption of SFAS 141 will not change our method of accounting for business
combinations. We have adopted the other recognition and disclosure requirements
of SFAS 141 as of July 1, 2001 for any future business combinations. The
transition provisions of SFAS 141 require that the carrying amounts for
goodwill and other intangible assets acquired in prior purchase method business
combinations be reviewed and reclassified in accordance with the new
recognition rules; such reclassifications are to be made in conjunction with
the adoption of SFAS 142. The application of these transition provisions of
SFAS 141 as of January 1, 2002 resulted in a reclassification of other
intangible assets with finite useful lives (the value of site rental contracts
from the acquisition of Crown Communication) to deferred financing costs and
other assets on our consolidated balance sheet. The gross carrying amount,
accumulated amortization and net book value of such reclassified intangible
assets were approximately $26.0 million, $11.5 million and $14.5 million at
January 1, 2002, respectively, and $26.0 million, $12.9 million and $13.1
million at December 31, 2002, respectively. The net book value of these
intangible assets will be amortized using a revised life of 10 years, resulting
in amortization expense of approximately $1.5 million for each of the years
ending December 31, 2002 through 2007. We have no other intangible assets from
prior business combinations.

   SFAS 142 changes the accounting and disclosure requirements for acquired
goodwill and other intangible assets. The most significant provision of SFAS
142 is that goodwill and other intangible assets with indefinite useful lives
will no longer be amortized, but rather will be tested for impairment on an
annual basis. This annual impairment test will involve (1) a step to identify
potential impairment at a reporting unit level based on fair values, and (2) a
step to measure the amount of the impairment, if any. Intangible assets with
finite useful lives will continue to be amortized over such lives, and tested
for impairment in accordance with our existing policies. SFAS 142 requires
disclosures about goodwill and other intangible assets in the periods
subsequent to their acquisition, including (1) changes in the carrying amount
of goodwill, in total and by operating segment, (2) the carrying amounts of
intangible assets subject to amortization and those which are not subject to
amortization, (3) information about impairment losses recognized, and (4) the
estimated amount of intangible asset amortization expense for the next five
years. The provisions of SFAS 142 are effective for fiscal years beginning
after December 15, 2001. In addition, the nonamortization provisions of SFAS
142 were to be immediately applied for goodwill and other intangible assets
acquired in business combinations subsequent to June 30, 2001. We have adopted
the requirements of SFAS 142 as of January 1, 2002. SFAS 142 requires that
transitional impairment tests be performed at its adoption, and provides that
resulting impairment losses for goodwill and other intangible assets with
indefinite useful lives be reported as the effect of a change in accounting
principle. We have completed our transitional impairment tests and have
determined that no impairment losses for goodwill and other intangible assets
were to be recorded upon the adoption of SFAS 142. Our depreciation and
amortization expense has decreased by approximately $60.6 million per year as a
result of the adoption of SFAS 142. If amortization of goodwill had not been
recorded, and if amortization of other intangible assets had been recorded
using the revised life, our net loss and loss per share for the years ended
December 31, 2000, 2001 and 2002 would have been $158.1 million ($1.22 per
share), $304.5 million ($1.79 per share) and $272.5 million ($1.16 per share),
respectively.

                                      58



   During the fourth quarter of 2002, we performed our annual update of the
impairment test for goodwill. The results of this test indicate that goodwill
is not impaired at any of our reporting units. However, the amount by which the
estimated fair value for CCUSA exceeds its carrying value has declined since
January 1, 2002. This decline is a function of our reduced forecasts for site
leasing and antenna installation revenues, as indicated by our operating
results for 2002. Further declines in our site leasing and network services
business at CCUSA could result in an impairment of goodwill in the future.
Furthermore, if an impairment at CCUSA were to occur in the future, we believe
that the calculations to measure the impairment could result in the write-off
of substantially all of CCUSA's goodwill ($164.0 million). Due to the continued
weakness in the telecommunications industry, we intend to closely monitor the
performance of our reporting units in 2003 in order to assess whether a
goodwill impairment is indicated.

   In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement Obligations ("SFAS 143"). SFAS 143
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the related asset retirement
costs. The fair value of a liability for an asset retirement obligation is to
be recognized in the period in which it is incurred and can be reasonably
estimated. Such asset retirement costs are to be capitalized as part of the
carrying amount of the related long-lived asset and depreciated over the
asset's estimated useful life. Fair value estimates of liabilities for asset
retirement obligations will generally involve discounted future cash flows.
Periodic accretion of such liabilities due to the passage of time is to be
recorded as an operating expense. The provisions of SFAS 143 are effective for
fiscal years beginning after June 15, 2002, with initial application as of the
beginning of the fiscal year. We will adopt the requirements of SFAS 143 as of
January 1, 2003, and have not yet determined the effect that such adoption will
have on our consolidated financial statements. However, we do expect that
contingent retirement obligations under certain of our tower site land leases
will require recognition as liabilities under SFAS 143.

   In August 2001, the FASB issued Statement of Financial Accounting Standards
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS
144"). SFAS 144 supersedes Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of ("SFAS 121"), but retains many of its fundamental provisions.
SFAS 144 also clarifies certain measurement and classification issues from SFAS
121. In addition, SFAS 144 supersedes the accounting and reporting provisions
for the disposal of a business segment as found in Accounting Principles Board
Opinion No. 30, Reporting the Results of Operations--Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions ("APB 30"). However, SFAS 144
retains the requirement in APB 30 to separately report discontinued operations,
and broadens the scope of such requirement to include more types of disposal
transactions. The scope of SFAS 144 excludes goodwill and other intangible
assets that are not to be amortized, as the accounting for such items is
prescribed by SFAS 142. The provisions of SFAS 144 are effective for fiscal
years beginning after December 15, 2001, and are to be applied prospectively.
The adoption of the requirements of SFAS 144 as of January 1, 2002 had no
impact on our consolidated financial statements.

   In April 2002, the FASB issued Statement of Financial Accounting Standards
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections ("SFAS 145"). SFAS 145 amends or
rescinds a number of authoritative pronouncements, including Statement of
Financial Accounting Standards No. 4, Reporting Gains and Losses from
Extinguishment of Debt ("SFAS 4"). SFAS 4 required that gains and losses from
extinguishment of debt that were included in the determination of net income or
loss be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect. Upon adoption of SFAS 145, gains and losses from
extinguishment of debt will no longer be classified as an extraordinary item,
but rather will generally be classified as part of other income (expense) on
our consolidated statement of operations. Any such gains or losses classified
as an extraordinary item in prior periods will be reclassified in future
financial statement presentations. The provisions of SFAS 145 related to the
rescission of SFAS 4 are effective for fiscal years beginning after May 15,
2002, with early application encouraged. We have adopted the provisions of SFAS
145 as of January 1, 2002.

                                      59



   In June 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, Accounting for Costs Associated with Exit or Disposal Activities
("SFAS 146"). SFAS 146 replaces the previous accounting guidance provided by
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)" ("EITF 94-3"). SFAS 146 requires
that costs associated with exit or disposal activities be recognized when they
are incurred, rather than at the date of a commitment to an exit or disposal
plan (as provided by EITF 94-3). Examples of costs covered by SFAS 146 include
certain employee severance costs and lease termination costs that are
associated with a restructuring or discontinued operation. The provisions of
SFAS 146 are effective for exit or disposal activities initiated after December
31, 2002, and are to be applied prospectively. We will adopt the requirements
of SFAS 146 as of January 1, 2003.

   In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, Accounting for Stock-Based Compensation--Transition and
Disclosure ("SFAS 148"). SFAS 148 amends Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), to
provide alternative methods of transition for a voluntary change to the fair
value method of accounting for stock-based employee compensation. In addition,
SFAS 148 amends the provisions of SFAS 123 to require more prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results of operations. We have adopted the disclosure
requirements of SFAS 148 as of December 31, 2002.

   In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation
of Variable Interest Entities ("FIN 46"). FIN 46 clarifies existing accounting
literature regarding the consolidation of entities in which a company holds a
"controlling financial interest". A majority voting interest in an entity has
generally been considered indicative of a controlling financial interest. FIN
46 specifies other factors ("variable interests") which must be considered when
determining whether a company holds a controlling financial interest in, and
therefore must consolidate, an entity ("variable interest entities"). The
provisions of FIN 46 are immediately effective for variable interest entities
created, or invested in, after January 31, 2003. For variable interest entities
created prior to February 1, 2003, the provisions of FIN 46 are effective as of
the beginning of the first interim period after June 15, 2003. We will adopt
the provisions of FIN 46 as of July 1, 2003, and do not expect that such
adoption will have a significant effect on our consolidated financial
statements.

Cautionary Statement for Purposes of Forward-Looking Statements

   Certain information contained in this Annual Report on Form 10-K (including
statements contained in "Item 1. Business", "Item 3. Legal Proceedings" and
"Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations"), as well as other written and oral statements made or
incorporated by reference from time to time by us in other reports, filings
with the Securities and Exchange Commission, press releases, conferences,
conference calls, or otherwise, may be deemed to be forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934 and
are subject to the "Safe Harbor" provisions of that section. This information
includes, without limitation, expectations, projections, estimates and other
forward-looking information regarding results of operations, revenues,
liquidity, costs and expenses and margins; capital expenditures of wireless
carriers and broadcasters; the quality, capacity and further applications and
revenue sources of our assets; our competitive position and demand for our
assets; timing and demand for anticipated releases and technological advances;
the effects of and benefits from acquisitions and strategic alliances; the
effect of changes in accounting standards; adversarial proceedings and other
contingent liabilities; capital expenditures and financial condition; wireless
and broadcast industry conditions; and world economic conditions. These
statements are based on current expectations and involve a number of risks and
uncertainties, including those set forth below and elsewhere in this Annual
Report on Form 10-K. Although we believe that the expectations reflected in
such forward-looking statements are reasonable, there can be no assurances that
such expectations will prove correct.

   When used in this report, the words "anticipate," "estimate," "expect,"
"may," "project" and similar expressions are intended to be among the
statements that identify forward-looking statements. Important factors

                                      60



which could affect actual results and cause actual results to differ materially
from those results which might be projected, forecast, estimated or budgeted in
such forward-looking statements include, but are not limited to the factors set
forth in "--Overview" above and "Item 1. Business--Risk Factors."

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

   As a result of our international operating, investing and financing
activities, we are exposed to market risks, which include changes in foreign
currency exchange rates and interest rates which may adversely affect our
results of operations and financial position. In attempting to minimize the
risks and/or costs associated with such activities, we seek to manage exposure
to changes in interest rates and foreign currency exchange rates where
economically prudent to do so.

   Certain of the financial instruments we have used to obtain capital are
subject to market risks from fluctuations in market interest rates. The
majority of our financial instruments, however, are long-term fixed interest
rate notes and debentures. A fluctuation in market interest rates of one
percentage point in 2003 would impact our interest expense by approximately
$9.4 million. As of December 31, 2002, we have approximately $1,094.9 million
of floating rate indebtedness, of which $150.0 million has been effectively
converted to fixed rate indebtedness through the use of interest rate swap
agreements.

   The majority of our foreign currency transactions are denominated in the
British pound sterling or the Australian dollar, which are the functional
currencies of CCUK and CCAL, respectively. As a result of CCUK's and CCAL's
transactions being denominated and settled in such functional currencies, the
risks associated with currency fluctuations are generally limited to foreign
currency translation adjustments. We do not currently hedge against foreign
currency translation risks and believe that foreign currency exchange risk is
not significant to our operations.

                                      61



Item 8.  Financial Statements And Supplementary Data

               Crown Castle International Corp. and Subsidiaries
                  Index to Consolidated Financial Statements



                                                                                                      Page
                                                                                                      ----
                                                                                                   

Report of KPMG LLP, Independent Auditors.............................................................
                                                                                                       63

Consolidated Balance Sheet as of December 31, 2001 and 2002..........................................
                                                                                                       64

Consolidated Statement of Operations and Comprehensive Loss for each of the three years in the period
  ended December 31, 2002............................................................................
                                                                                                       65

Consolidated Statement of Cash Flows for each of the three years in the period ended December 31,
  2002...............................................................................................
                                                                                                       66

Consolidated Statement of Stockholders' Equity for each of the three years in the period ended
  December 31, 2002..................................................................................
                                                                                                       67

Notes to Consolidated Financial Statements...........................................................
                                                                                                       68


                                      62



                         INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
  Crown Castle International Corp.:

   We have audited the accompanying consolidated balance sheets of Crown Castle
International Corp. and subsidiaries as of December 31, 2001 and 2002, and the
related consolidated statements of operations and comprehensive loss, cash
flows and stockholders' equity for each of the years in the three-year period
ended December 31, 2002. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

   We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

   In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Crown
Castle International Corp. and subsidiaries as of December 31, 2001 and 2002,
and the results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States of America.

   As discussed in Note 1 to the consolidated financial statements, the Company
adopted the provisions of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets" and Statement of Financial Accounting
Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" on January 1, 2002, and in
2001 changed its method of accounting for derivative instruments and hedging
activities.

                                          KPMG LLP

Houston, Texas
February 26, 2003

                                      63



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEET
                (In thousands of dollars, except share amounts)



                                                                                          December 31,
                                                                                    -----------------------
                                                                                       2001         2002
                                                                                    ----------  -----------
                                    ASSETS
                                                                                          
Current assets:
   Cash and cash equivalents....................................................... $  804,602  $   516,172
   Receivables:
       Trade, net of allowance for doubtful accounts of $24,785 and $15,309 at
         December 31, 2001 and 2002, respectively..................................    188,496      125,950
       Other.......................................................................      2,364        9,914
   Short-term investments..........................................................     72,963      115,697
   Inventories.....................................................................    102,771       45,616
   Prepaid expenses and other current assets.......................................     44,865       53,732
                                                                                    ----------  -----------
          Total current assets.....................................................  1,216,061      867,081
Property and equipment, net........................................................  4,844,912    4,828,033
Investments........................................................................    128,500           --
Goodwill, net of accumulated amortization of $152,451 at December 31, 2001.........  1,036,914    1,067,041
Deferred financing costs and other assets, net of accumulated amortization of
  $32,859 and $47,453 at December 31, 2001 and 2002, respectively..................    149,071      130,446
                                                                                    ----------  -----------
                                                                                    $7,375,458  $ 6,892,601
                                                                                    ==========  ===========
                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable................................................................ $  104,149  $    63,852
   Accrued interest................................................................     60,081       59,811
   Accrued compensation and related benefits.......................................     13,553       14,661
   Deferred rental revenues and other accrued liabilities..........................    204,584      208,195
   Long-term debt, current maturities..............................................     29,086       14,250
                                                                                    ----------  -----------
          Total current liabilities................................................    411,453      360,769
Long-term debt, less current maturities............................................  3,394,011    3,212,710
Other liabilities..................................................................    157,549      183,227
                                                                                    ----------  -----------
          Total liabilities........................................................  3,963,013    3,756,706
                                                                                    ----------  -----------
Commitments and contingencies (Note 11)
Minority interests.................................................................    168,936      171,383
Redeemable preferred stock.........................................................    878,861      756,014
Stockholders' equity:
   Common stock, $.01 par value; 690,000,000 shares authorized; shares issued:
     December 31, 2001--218,804,363 and December 31, 2002--215,983,294.............      2,188        2,160
 Additional paid-in capital........................................................  3,301,023    3,315,215
 Accumulated other comprehensive income (loss).....................................    (43,246)      39,323
 Accumulated deficit...............................................................   (895,317)  (1,148,200)
                                                                                    ----------  -----------
          Total stockholders' equity...............................................  2,364,648    2,208,498
                                                                                    ----------  -----------
                                                                                    $7,375,458  $ 6,892,601
                                                                                    ==========  ===========


                See notes to consolidated financial statements.

                                      64



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

          CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
              (In thousands of dollars, except per share amounts)



                                                                                 Years Ended December 31,
                                                                             -------------------------------
                                                                                2000       2001       2002
                                                                             ---------  ---------  ---------
                                                                                          
Net revenues:
   Site rental and broadcast transmission................................... $ 446,039  $ 575,961  $ 677,839
   Network services and other...............................................   203,126    322,990    223,694
                                                                             ---------  ---------  ---------
                                                                               649,165    898,951    901,533
                                                                             ---------  ---------  ---------
Operating expenses:
   Costs of operations (exclusive of depreciation and amortization):
       Site rental and broadcast transmission...............................   194,424    238,748    270,024
       Network services and other...........................................   120,176    228,485    176,175
   General and administrative...............................................    76,944    102,539     94,222
   Corporate development....................................................    10,489     12,337      7,483
   Restructuring charges....................................................        --     19,416     17,147
   Asset write-down charges.................................................        --     24,922     55,796
   Non-cash general and administrative compensation charges.................     3,127      6,112      5,349
   Depreciation and amortization............................................   238,796    328,491    301,928
                                                                             ---------  ---------  ---------
                                                                               643,956    961,050    928,124
                                                                             ---------  ---------  ---------
Operating income (loss).....................................................     5,209    (62,099)   (26,591)
Other income (expense):
   Interest and other income (expense)......................................    32,266      8,548     66,418
   Interest expense and amortization of deferred financing costs............  (241,294)  (297,444)  (302,570)
                                                                             ---------  ---------  ---------
Loss before income taxes and minority interests.............................  (203,819)  (350,995)  (262,743)
Provision for income taxes..................................................      (246)   (16,478)   (12,276)
Minority interests..........................................................      (721)     1,306      2,498
                                                                             ---------  ---------  ---------
Net loss....................................................................  (204,786)  (366,167)  (272,521)
Dividends on preferred stock, net of gains on repurchases of preferred
  stock.....................................................................   (59,469)   (79,028)    19,638
                                                                             ---------  ---------  ---------
Net loss after deduction of dividends on preferred stock, net of gains on
  repurchases of preferred stock............................................ $(264,255) $(445,195) $(252,883)
                                                                             =========  =========  =========
Net loss.................................................................... $(204,786) $(366,167) $(272,521)
Other comprehensive income (loss):
   Foreign currency translation adjustments.................................   (22,087)   (10,154)    92,905
   Derivative instruments:
       Net change in fair value of cash flow hedging instruments............        --    (10,336)    (7,883)
       Amounts reclassified into results of operations......................        --      2,166      5,964
   Minimum pension liability adjustment.....................................        --         --     (8,417)
                                                                             ---------  ---------  ---------
Comprehensive loss before cumulative effect of change in accounting
  principle.................................................................  (226,873)  (384,491)  (189,952)
Cumulative effect of change in accounting principle for derivative financial
  instruments...............................................................        --        178         --
                                                                             ---------  ---------  ---------
Comprehensive loss.......................................................... $(226,873) $(384,313) $(189,952)
                                                                             =========  =========  =========
Loss per common share - basic and diluted................................... $   (1.48) $   (2.08) $   (1.16)
                                                                             =========  =========  =========
Common shares outstanding - basic and diluted (in thousands)................   178,588    214,246    218,028
                                                                             =========  =========  =========


                See notes to consolidated financial statements.

                                      65



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENT OF CASH FLOWS
                           (In thousands of dollars)



                                                                                        Years Ended December 31,
                                                                                   ----------------------------------
                                                                                       2000        2001        2002
                                                                                   -----------  ----------  ---------
                                                                                                   
Cash flows from operating activities:
  Net loss........................................................................ $  (204,786) $ (366,167) $(272,521)
  Adjustments to reconcile net loss to net cash provided by operating activities:
    Depreciation and amortization.................................................     238,796     328,491    301,928
    Amortization of deferred financing costs and discounts on long-term debt......      81,003      91,753     94,567
    Asset write-down charges......................................................          --      24,922     55,796
    Equity in losses (earnings) and write-downs of unconsolidated affiliates......        (740)      3,276     29,108
    Non-cash general and administrative compensation charges......................       3,127       6,112      5,349
    Gains on purchases of long-term debt..........................................          --          --    (79,138)
    Minority interests............................................................         721      (1,306)    (2,498)
    Loss on early extinguishment of debt..........................................       1,495          --         --
    Changes in assets and liabilities, excluding the effects of acquisitions:
     (Increase) decrease in receivables...........................................     (92,019)    (20,686)    71,771
     (Increase) decrease in inventories, prepaid expenses and other assets........     (88,370)    (91,957)    46,222
     Increase in deferred rental revenues and other liabilities...................     143,999     140,649      4,021
     Increase (decrease) in accounts payable......................................      55,466       4,175    (44,483)
     Increase (decrease) in accrued interest......................................      26,803      12,668     (1,190)
                                                                                   -----------  ----------  ---------
       Net cash provided by operating activities..................................     165,495     131,930    208,932
                                                                                   -----------  ----------  ---------
Cash flows from investing activities:
  Maturities of investments.......................................................          --     311,000    280,463
  Proceeds from disposition of property and equipment.............................          --          --     30,321
  Capital expenditures............................................................    (636,506)   (683,102)  (277,262)
  Purchases of investments........................................................    (175,000)   (337,463)  (194,697)
  Investments in affiliates and other.............................................      (2,499)    (29,920)   (11,293)
  Acquisitions of businesses and assets, net of cash acquired.....................  (1,143,682)   (155,651)    (4,449)
                                                                                   -----------  ----------  ---------
       Net cash used for investing activities.....................................  (1,957,687)   (895,136)  (176,917)
                                                                                   -----------  ----------  ---------
Cash flows from financing activities:
  Proceeds from issuance of capital stock.........................................     743,290     358,207      1,032
  Purchases of long-term debt.....................................................          --          --   (142,820)
  Purchases of capital stock......................................................          --          --    (94,470)
  Net borrowings (payments) under revolving credit agreements.....................      78,000      96,829    (50,000)
  Principal payments on long-term debt............................................     (82,000)         --    (46,155)
  Incurrence of financing costs...................................................     (47,219)    (12,161)    (2,673)
  Proceeds from issuance of long-term debt........................................   1,015,020     650,000         --
  Proceeds from issuance of subsidiary stock to minority shareholder..............          --      16,434         --
                                                                                   -----------  ----------  ---------
       Net cash provided by (used for) financing activities.......................   1,707,091   1,109,309   (335,086)
                                                                                   -----------  ----------  ---------
Effect of exchange rate changes on cash...........................................     (10,394)      4,666     14,641
                                                                                   -----------  ----------  ---------
Net increase (decrease) in cash and cash equivalents..............................     (95,495)    350,769   (288,430)
Cash and cash equivalents at beginning of year....................................     549,328     453,833    804,602
                                                                                   -----------  ----------  ---------
Cash and cash equivalents at end of year.......................................... $   453,833  $  804,602  $ 516,172
                                                                                   ===========  ==========  =========
Supplementary schedule of non-cash investing and financing activities:
  Amounts recorded in connection with acquisitions (see Note 2):
    Fair value of net assets acquired, including goodwill and other intangible
     assets....................................................................... $ 2,005,935  $  157,458  $      --
    Escrow deposits for acquisitions..............................................     (50,000)         --         --
    Issuance of common stock......................................................     707,389       1,807         --
    Minority interests............................................................     104,864          --         --
Supplemental disclosure of cash flow information:
  Interest paid................................................................... $   128,996  $  194,927  $ 206,861
  Income taxes paid...............................................................         257         492        407


                See notes to consolidated financial statements.

                                      66



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                (In thousands of dollars, except share amounts)





                                                                                    Class A
                                                             Common Stock        Common Stock
                                                         -------------------  ------------------  Additional
                                                                       ($.01               ($.01   Paid-In
                                                            Shares     Par)      Shares    Par)    Capital
                                                         -----------  ------  -----------  -----  ----------
                                                                                   
Balance, January 1, 2000................................ 146,074,905  $1,461   11,340,000  $ 113  $1,805,053
   Conversion of Class A Common Stock to Common
    Stock...............................................  11,340,000     113  (11,340,000)  (113)         --
   Issuances of capital stock...........................  40,636,221     406           --     --   1,061,861
   Non-cash general and administrative compensation
    charges.............................................          --      --           --     --       2,248
   Foreign currency translation adjustments.............          --      --           --     --          --
   Dividends on preferred stock.........................     860,968       9           --     --      24,933
   Net loss.............................................          --      --           --     --          --
                                                         -----------  ------  -----------  -----  ----------
Balance, December 31, 2000.............................. 198,912,094   1,989           --     --   2,894,095
   Issuances of capital stock...........................  16,710,505     167           --     --     359,847
   Non-cash general and administrative compensation
    charges.............................................          --      --           --     --       4,228
   Foreign currency translation adjustments.............          --      --           --     --          --
   Derivative instruments:
      Net change in fair value of cash flow hedging
       instruments......................................          --      --           --     --          --
      Amounts reclassified into results of
       operations.......................................          --      --           --     --          --
      Cumulative effect of change in accounting
       principle for derivative financial
       instruments......................................          --      --           --     --          --
   Dividends on preferred stock.........................   3,181,764      32           --     --      42,853
   Net loss.............................................          --      --           --     --          --
                                                         -----------  ------  -----------  -----  ----------
Balance, December 31, 2001.............................. 218,804,363   2,188           --     --   3,301,023
   Issuances of capital stock...........................     306,678       3           --     --       1,029
   Purchases of capital stock........................... (13,755,900)   (137)          --     --     (33,344)
   Non-cash general and administrative compensation
    charges.............................................          --      --           --     --       3,733
   Foreign currency translation adjustments.............          --      --           --     --          --
   Derivative instruments:
      Net change in fair value of cash flow hedging
       instruments......................................          --      --           --     --          --
      Amounts reclassified into results of
       operations.......................................          --      --           --     --          --
   Minimum pension liability adjustment.................          --      --           --     --          --
   Dividends on preferred stock.........................  10,628,153     106           --     --      42,774
   Gains on repurchases of preferred stock..............          --      --           --     --          --
   Net loss.............................................          --      --           --     --          --
                                                         -----------  ------  -----------  -----  ----------
Balance, December 31, 2002.............................. 215,983,294  $2,160           --  $  --  $3,315,215
                                                         ===========  ======  ===========  =====  ==========



                                                          Accumulated Other Comprehensive
                                                                   Income (Loss)
                                                         ---------------------------------
                                                           Foreign                Minimum
                                                          Currency                Pension
                                                         Translation Derivative  Liability  Accumulated
                                                         Adjustments Instruments Adjustment   Deficit       Total
                                                         ----------- ----------- ---------- -----------  ----------
                                                                                          
Balance, January 1, 2000................................  $ (3,013)   $     --    $    --   $  (185,867) $1,617,747
   Conversion of Class A Common Stock to Common
    Stock...............................................        --          --         --            --          --
   Issuances of capital stock...........................        --          --         --            --   1,062,267
   Non-cash general and administrative compensation
    charges.............................................        --          --         --            --       2,248
   Foreign currency translation adjustments.............   (22,087)         --         --            --     (22,087)
   Dividends on preferred stock.........................        --          --         --       (59,469)    (34,527)
   Net loss.............................................        --          --         --      (204,786)   (204,786)
                                                          --------    --------    -------   -----------  ----------
Balance, December 31, 2000..............................   (25,100)         --         --      (450,122)  2,420,862
   Issuances of capital stock...........................        --          --         --            --     360,014
   Non-cash general and administrative compensation
    charges.............................................        --          --         --            --       4,228
   Foreign currency translation adjustments.............   (10,154)         --         --            --     (10,154)
   Derivative instruments:
      Net change in fair value of cash flow hedging
       instruments......................................        --     (10,336)        --            --     (10,336)
      Amounts reclassified into results of
       operations.......................................        --       2,166         --            --       2,166
      Cumulative effect of change in accounting
       principle for derivative financial
       instruments......................................        --         178         --            --         178
   Dividends on preferred stock.........................        --          --         --       (79,028)    (36,143)
   Net loss.............................................        --          --         --      (366,167)   (366,167)
                                                          --------    --------    -------   -----------  ----------
Balance, December 31, 2001..............................   (35,254)     (7,992)        --      (895,317)  2,364,648
   Issuances of capital stock...........................        --          --         --            --       1,032
   Purchases of capital stock...........................        --          --         --            --     (33,481)
   Non-cash general and administrative compensation
    charges.............................................        --          --         --            --       3,733
   Foreign currency translation adjustments.............    92,905          --         --            --      92,905
   Derivative instruments:
      Net change in fair value of cash flow hedging
       instruments......................................        --      (7,883)        --            --      (7,883)
      Amounts reclassified into results of
       operations.......................................        --       5,964         --            --       5,964
   Minimum pension liability adjustment.................        --          --     (8,417)           --      (8,417)
   Dividends on preferred stock.........................        --          --         --       (79,786)    (36,906)
   Gains on repurchases of preferred stock..............        --          --         --        99,424      99,424
   Net loss.............................................        --          --         --      (272,521)   (272,521)
                                                          --------    --------    -------   -----------  ----------
Balance, December 31, 2002..............................  $ 57,651    $ (9,911)   $(8,417)  $(1,148,200) $2,208,498
                                                          ========    ========    =======   ===========  ==========


                See notes to consolidated financial statements.

                                      67



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Summary of Significant Accounting Policies

  Basis of Presentation

   The consolidated financial statements include the accounts of Crown Castle
International Corp. ("CCIC") and its majority and wholly owned subsidiaries,
collectively referred to herein as the "Company". All significant intercompany
balances and transactions have been eliminated in consolidation. Certain
reclassifications have been made to the prior year's financial statements to be
consistent with the presentation in the current year.

   The Company owns, operates and manages wireless communications sites and
broadcast transmission networks. The Company also provides complementary
services to its customers, including network design, radio frequency
engineering, site acquisition, site development and construction, antenna
installation and network management and maintenance. The Company's
communications sites are located throughout the United States, in Puerto Rico,
in the United Kingdom and in Australia. In the United States, Puerto Rico and
Australia, the Company's primary business is the leasing of antenna space to
wireless operators under long-term contracts. In the United Kingdom, the
Company's primary businesses are the operation of television and radio
broadcast transmission networks and the leasing of antenna space to wireless
operators in the United Kingdom.

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities as of the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

  Summary of Significant Accounting Policies

   Cash Equivalents

   Cash equivalents consist of highly liquid investments with original
maturities of three months or less.

   Investments

   As of December 31, 2001 and 2002, all investments (consisting of government
agency debt securities) are classified as held-to-maturity since the Company
has the positive intent and ability to hold such investments until they mature.
Held-to-maturity securities are stated at amortized cost. Gross unrealized
holding gains amounted to $425,000 and $764,000 at December 31, 2001 and 2002,
respectively. Investments classified as current assets mature within one year,
while those classified as noncurrent mature after one year and within three
years.

   Inventories

   Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method. Inventories include work in
process amounting $83,804,000 and $30,038,000 at December 31, 2001 and 2002,
respectively.

   Property and Equipment

   Property and equipment is stated at cost, net of accumulated depreciation.
Depreciation is computed utilizing the straight-line method at rates based upon
the estimated useful lives of the various classes of assets. Additions,
renewals and improvements are capitalized, while maintenance and repairs are
expensed. Upon the sale or retirement of an asset, the related cost and
accumulated depreciation are removed from the accounts and

                                      68



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

any gain or loss is recognized. The carrying value of property and equipment
and other long-lived assets, including other intangible assets with finite
useful lives, will be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable. If the sum of the estimated future cash flows (undiscounted)
expected to result from the use and eventual disposition of an asset is less
than the carrying amount of the asset, an impairment loss is recognized.
Measurement of an impairment loss is based on the fair value of the asset.

   Goodwill

   Goodwill represents the excess of the purchase price for an acquired
business over the allocated value of the related net assets (see Note 2). Prior
to January 1, 2002, goodwill was amortized on a straight-line basis over a 20
year life. On January 1, 2002, the Company adopted the new accounting standard
for goodwill and other intangible assets (see "Recent Accounting
Pronouncements"). In accordance with that new standard, goodwill is no longer
amortized, but rather is tested for impairment on an annual basis. This annual
impairment test involves (1) a step to identify potential impairment at a
reporting unit level based on fair values, and (2) a step to measure the amount
of the impairment, if any. Our measurement of the fair value for goodwill is
based on an estimate of discounted future cash flows of the reporting unit.

   Deferred Financing Costs

   Costs incurred to obtain financing are deferred and amortized over the
estimated term of the related borrowing.

   Revenue Recognition

   Site rental revenues are recognized on a monthly basis under lease or
management agreements with terms ranging from 12 months to 25 years. Broadcast
transmission revenues are recognized on a monthly basis under transmission
contracts with terms ranging from 8 years to 12 years.

   Network services revenues are generally recognized under a method which
approximates the completed contract method. This method is used because these
services are typically completed in relatively short periods of time and
financial position and results of operations do not vary significantly from
those which would result from use of the percentage-of-completion method. These
services are considered complete when the terms and conditions of the contract
or agreement have been completed. Costs and revenues associated with contracts
not complete at the end of a period are deferred and recognized when the
installation becomes operational. Any losses on contracts are recognized at
such time as they become known.

   Corporate Development Expenses

   Corporate development expenses represent costs incurred in connection with
acquisitions and development of new business initiatives.

                                      69



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Income Taxes

   The Company accounts for income taxes using an asset and liability approach,
which requires the recognition of deferred income tax assets and liabilities
for the expected future tax consequences of events that have been recognized in
the Company's financial statements or tax returns. Deferred income tax assets
and liabilities are determined based on the temporary differences between the
financial statement and tax bases of assets and liabilities using enacted tax
rates.

   Per Share Information

   Per share information is based on the weighted-average number of common
shares outstanding during each period for the basic computation and, if
dilutive, the weighted-average number of potential common shares resulting from
the assumed conversion of outstanding stock options, warrants and convertible
preferred stock for the diluted computation.

   A reconciliation of the numerators and denominators of the basic and diluted
per share computations is as follows:



                                                                           Years Ended December 31,
                                                                       -------------------------------
                                                                          2000       2001       2002
                                                                       ---------  ---------  ---------
                                                                          (In thousands of dollars,
                                                                          except per share amounts)
                                                                                    
Net loss.............................................................. $(204,786) $(366,167) $(272,521)
Dividends on preferred stock..........................................   (59,469)   (79,028)   (79,786)
Gains on repurchases of preferred stock...............................        --         --     99,424
                                                                       ---------  ---------  ---------
Net loss applicable to common stock for basic and diluted computations $(264,255) $(445,195) $(252,883)
                                                                       =========  =========  =========
Weighted-average number of common shares outstanding during the
  period for basic and diluted computations (in thousands)............   178,588    214,246    218,028
                                                                       =========  =========  =========
Loss per common share - basic and diluted............................. $   (1.48) $   (2.08) $   (1.16)
                                                                       =========  =========  =========


   The calculations of common shares outstanding for the diluted computations
exclude the following potential common shares as of December 31, 2002: (1)
options to purchase 22,975,116 shares of common stock at exercise prices
ranging from $-0- to $39.75 per share, (2) warrants to purchase 639,990 shares
of common stock at an exercise price of $7.50 per share, (3) warrants to
purchase 1,000,000 shares of common stock at an exercise price of $26.875 per
share, (4) shares of the Company's 81/4% Cumulative Convertible Redeemable
Preferred Stock (see Note 7) which are convertible into 7,441,860 shares of
common stock and (5) shares of the Company's 6.25% Convertible Preferred Stock
(see Note 7) which are convertible into 8,625,084 shares of common stock. The
inclusion of such potential common shares in the diluted per share computations
would be antidilutive since the Company incurred net losses for each of the
three years in the period ended December 31, 2002.

   Foreign Currency Translation

   Crown Castle UK Holdings Limited ("CCUK") and Crown Castle Australia
Holdings Pty Ltd. ("CCAL") use the British pound sterling and the Australian
dollar, respectively, as the functional currencies for their operations. The
Company translates CCUK's and CCAL's results of operations using the average
exchange rates for the period, and translates CCUK's and CCAL's assets and
liabilities using the exchange rates at the end of the period. The cumulative
effect of changes in the exchange rates are recorded as translation adjustments
in stockholders' equity.

                                      70



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Financial Instruments

   The carrying amount of cash and cash equivalents approximates fair value for
these instruments. The estimated fair value of the investment securities is
based on quoted market prices. The estimated fair value of the Company's public
debt securities is based on quoted market prices, and the estimated fair value
of the other long-term debt is determined based on the current rates offered
for similar borrowings. The estimated fair value of the interest rate swap
agreements is based on the amount that the Company would receive or pay to
terminate the agreements at the balance sheet date. The estimated fair values
of the Company's financial instruments, along with the carrying amounts of the
related assets (liabilities), are as follows:



                                                    December 31, 2001         December 31, 2002
                                                ------------------------  ------------------------
                                                  Carrying      Fair        Carrying      Fair
                                                   Amount       Value        Amount       Value
                                                -----------  -----------  -----------  -----------
                                                             (In thousands of dollars)
                                                                           
Cash and cash equivalents...................... $   804,602  $   804,602  $   516,172  $   516,172
Short-term investments (to be held to maturity)      72,963       73,224      115,697      116,461
Investments (to be held to maturity)...........     128,500      128,664           --           --
Long-term debt.................................  (3,423,097)  (3,236,191)  (3,226,960)  (2,886,091)
Interest rate swap agreements, net.............      (7,992)      (7,992)      (9,911)      (9,911)


   The Company does not currently hold or issue derivative financial
instruments for trading purposes.

   Stock-Based Compensation

   The Company uses the "intrinsic value based method" of accounting for its
stock-based employee compensation plans (see Note 8). This method does not
result in the recognition of compensation expense when employee stock options
are granted if the exercise price of the options equals or exceeds the fair
market value of the stock at the date of grant. The exercise prices for the
substantial portion of the options granted during the years ended December 31,
2000, 2001 and 2002 were equal to or in excess of the market value of the
Company's common stock at the date of grant. As such, no compensation cost was
recognized for the substantial portion of the stock options granted during
those years (see Note 8). The following table shows the pro forma effect on the
Company's net loss and loss per share as if compensation cost had been
recognized for stock options based on their fair value at the date of grant.
The pro forma effect of stock options on the Company's net loss for those years
may not be representative of the pro forma effect for future years due to the
impact of vesting and potential future awards.

                                      71



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)




                                                                            Years Ended December 31,
                                                                        -------------------------------
                                                                           2000       2001       2002
                                                                        ---------  ---------  ---------
                                                                           (In thousands of dollars,
                                                                           except per share amounts)
                                                                                     
Net loss, as reported.................................................. $(204,786) $(366,167) $(272,521)
Add: Stock-based employee compensation expense included in reported
  net loss.............................................................     3,127      6,112      5,349
Deduct: Total stock-based employee compensation expense determined
  under fair value based method for all awards.........................   (25,338)   (35,861)   (32,625)
                                                                        ---------  ---------  ---------
Net loss, as adjusted..................................................  (226,997)  (395,916)  (299,797)
Dividends on preferred stock, net of gains on repurchases of preferred
  stock................................................................   (59,469)   (79,028)    19,638
                                                                        ---------  ---------  ---------
Net loss applicable to common stock for basic and diluted computations,
  as adjusted.......................................................... $(286,466) $(474,944) $(280,159)
                                                                        =========  =========  =========
Loss per common share--basic and diluted:
   As reported......................................................... $   (1.48) $   (2.08) $   (1.16)
                                                                        =========  =========  =========
   As adjusted......................................................... $   (1.60) $   (2.22) $   (1.28)
                                                                        =========  =========  =========


   Recent Accounting Pronouncements

   On January 1, 2001, the Company adopted the requirements of Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133"). SFAS 133 requires that derivative
instruments be recognized as either assets or liabilities in the consolidated
balance sheet based on their fair values. Changes in the fair values of such
derivative instruments are recorded either in results of operations or in other
comprehensive income (loss), depending on the intended use of the derivative
instrument. The initial application of SFAS 133 is reported as the effect of a
change in accounting principle. The adoption of SFAS 133 resulted in a net
transition adjustment gain of approximately $178,000 in accumulated other
comprehensive income (loss), the recognition of approximately $363,000 of
derivative instrument assets and the recognition of approximately $185,000 of
derivative instrument liabilities. The amounts for this transition adjustment
are based on current fair value measurements at the date of adoption of SFAS
133. The Company expects that the adoption of SFAS 133 will increase the
volatility of other comprehensive income (loss) as reported in its future
financial statements.

   The derivative instruments recognized upon the Company's adoption of SFAS
133 consist of interest rate swap agreements. Such agreements are used to
manage interest rate risk on a portion of the Company's floating rate
indebtedness, and are designated as cash flow hedging instruments in accordance
with SFAS 133. The interest rate swap agreements have notional amounts
aggregating $150,000,000 and effectively convert the interest payments on an
equal amount of debt from a floating rate to a fixed rate. As such, the Company
is protected from future increases in market interest rates on that portion of
its indebtedness. To the extent that the interest rate swap agreements are
effective in hedging the Company's interest rate risk, the changes in their
fair values are recorded as other comprehensive income (loss). Amounts recorded
as other comprehensive income (loss) are reclassified into results of
operations in the same periods that the hedged interest costs are recorded in
interest expense. The Company estimates that such reclassified amounts will be
approximately $6,700,000 for the year ending December 31, 2003. To the extent
that any portions of the interest rate swap agreements are deemed ineffective,
the related changes in fair values are recognized in results of operations. As
of December 31, 2001 and 2002, the accumulated other comprehensive income
(loss) in consolidated stockholders' equity includes $7,992,000 and $9,911,000,
respectively, in losses related to derivative instruments.

                                      72



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   In June 2001, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 141, Business Combinations
("SFAS 141"), and Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets ("SFAS 142"). SFAS 141 prohibits the use of the
pooling-of-interests method of accounting for business combinations, and
requires that the purchase method be used for all business combinations after
June 30, 2001. SFAS 141 also changes the manner in which acquired intangible
assets are identified and recognized apart from goodwill. Further, SFAS 141
requires additional disclosures regarding the reasons for business
combinations, the allocation of the purchase price to recognized assets and
liabilities and the recognition of goodwill and other intangible assets. The
Company has used the purchase method of accounting since its inception, so the
adoption of SFAS 141 will not change its method of accounting for business
combinations. The Company has adopted the other recognition and disclosure
requirements of SFAS 141 as of July 1, 2001 for any future business
combinations. The transition provisions of SFAS 141 require that the carrying
amounts for goodwill and other intangible assets acquired in prior purchase
method business combinations be reviewed and reclassified in accordance with
the new recognition rules; such reclassifications are to be made in conjunction
with the adoption of SFAS 142. The application of these transition provisions
of SFAS 141 as of January 1, 2002 resulted in a reclassification of other
intangible assets with finite useful lives (the value of site rental contracts
from the acquisition of Crown Communication) to deferred financing costs and
other assets on the Company's consolidated balance sheet. The gross carrying
amount, accumulated amortization and net book value of such reclassified
intangible assets were $26,000,000, $11,483,000 and $14,517,000 at January 1,
2002, respectively, and $26,000,000, $12,935,000 and $13,065,000 at December
31, 2002, respectively. The net book value of these intangible assets will be
amortized using a revised life of 10 years, resulting in amortization expense
of $1,452,000 for each of the years ending December 31, 2002 through 2007. The
Company has no other intangible assets from prior business combinations.

   SFAS 142 changes the accounting and disclosure requirements for acquired
goodwill and other intangible assets. The most significant provision of SFAS
142 is that goodwill and other intangible assets with indefinite useful lives
will no longer be amortized, but rather will be tested for impairment on an
annual basis. This annual impairment test will involve (1) a step to identify
potential impairment at a reporting unit level based on fair values, and (2) a
step to measure the amount of the impairment, if any. Intangible assets with
finite useful lives will continue to be amortized over such lives, and tested
for impairment in accordance with the Company's existing policies. SFAS 142
requires disclosures about goodwill and other intangible assets in the periods
subsequent to their acquisition, including (1) changes in the carrying amount
of goodwill, in total and by operating segment, (2) the carrying amounts of
intangible assets subject to amortization and those which are not subject to
amortization, (3) information about impairment losses recognized, and (4) the
estimated amount of intangible asset amortization expense for the next five
years. The provisions of SFAS 142 are effective for fiscal years beginning
after December 15, 2001. In addition, the nonamortization provisions of SFAS
142 were to be immediately applied for goodwill and other intangible assets
acquired in business combinations subsequent to June 30, 2001. The Company has
adopted the requirements of SFAS 142 as of January 1, 2002. SFAS 142 requires
that transitional impairment tests be performed at its adoption, and provides
that resulting impairment losses for goodwill and other intangible assets with
indefinite useful lives be reported as the effect of a change in accounting
principle. The Company has completed its transitional impairment tests and has
determined that no impairment losses for goodwill and other intangible assets
were to be recorded upon the adoption of SFAS 142. The Company's depreciation
and amortization expense has decreased by approximately $60,617,000 per year as
a result of the adoption of SFAS 142. If amortization of goodwill had not been
recorded, and if amortization of other intangible assets had been recorded
using the revised life, the Company's net loss and loss per share would have
been as follows:

                                      73



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)




                                                                               Years Ended December 31,
                                                                           -------------------------------
                                                                              2000       2001       2002
                                                                           ---------  ---------  ---------
                                                                           (In thousand of dollars, except
                                                                                  per share amounts)
                                                                                        
Net loss, as reported..................................................... $(204,786) $(366,167) $(272,521)
Add back: amortization of goodwill........................................    45,538     60,485         --
Adjust: amortization of other intangible assets...........................     1,148      1,148         --
                                                                           ---------  ---------  ---------
Net loss, as adjusted.....................................................  (158,100)  (304,534)  (272,521)
Dividends on preferred stock, net of gains on repurchases of preferred
  stock...................................................................   (59,469)   (79,028)    19,638
                                                                           ---------  ---------  ---------
Net loss applicable to common stock for basic and diluted computations, as
  adjusted................................................................ $(217,569) $(383,562) $(252,883)
                                                                           =========  =========  =========
Per common share -- basic and diluted:
   Net loss, as reported.................................................. $   (1.48) $   (2.08) $   (1.16)
   Amortization of goodwill...............................................      0.25       0.28         --
   Adjustment for amortization of other intangible assets.................      0.01       0.01         --
                                                                           ---------  ---------  ---------
   Net loss, as adjusted.................................................. $   (1.22) $   (1.79) $   (1.16)
                                                                           =========  =========  =========


   A summary of goodwill by operating segment is as follows:



                                         Year Ended December 31, 2002
                                    ---------------------------------------
                                                       Crown   Consolidated
                                     CCUSA     CCUK   Atlantic    Total
                                    -------- -------- -------- ------------
                                           (In thousands of dollars)
                                                   
    Balance at beginning of year... $164,023 $817,514 $55,377   $1,036,914
    Effect of exchange rate changes       --   30,127      --       30,127
                                    -------- -------- -------   ----------
    Balance at end of year......... $164,023 $847,641 $55,377   $1,067,041
                                    ======== ======== =======   ==========


   During the fourth quarter of 2002, the Company performed its annual update
of the impairment test for goodwill. The results of this test indicate that
goodwill is not impaired at any of the Company's reporting units. However, the
amount by which the estimated fair value for CCUSA exceeds its carrying value
has declined since January 1, 2002. This decline is a function of the Company's
reduced forecasts for site leasing and antenna installation revenues, as
indicated by its operating results for 2002. Further declines in the site
leasing and network services business at CCUSA could result in an impairment of
goodwill in the future. Furthermore, if an impairment at CCUSA were to occur in
the future, the Company believes that the calculations to measure the
impairment could result in the write-off of substantially all of CCUSA's
goodwill ($164,023,000). Due to the continued weakness in the
telecommunications industry, the Company intends to closely monitor the
performance of its reporting units in 2003 in order to assess whether a
goodwill impairment is indicated.

   In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement Obligations ("SFAS 143"). SFAS 143
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the related asset retirement
costs. The fair value of a liability for an asset retirement obligation is to
be recognized in the period in which it is incurred and can be reasonably
estimated. Such asset retirement costs are to be capitalized as part of the
carrying amount of the related long-lived asset and depreciated over the
asset's estimated useful life. Fair value estimates of liabilities for asset
retirement obligations will generally involve discounted future cash flows.
Periodic accretion of such liabilities due to the passage of time is to be
recorded as an operating expense. The provisions of SFAS 143 are

                                      74



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

effective for fiscal years beginning after June 15, 2002, with initial
application as of the beginning of the fiscal year. The Company will adopt the
requirements of SFAS 143 as of January 1, 2003, and has not yet determined the
effect that such adoption will have on its consolidated financial statements.
However, the Company does expect that contingent retirement obligations under
certain of its tower site land leases will require recognition as liabilities
under SFAS 143.

   In August 2001, the FASB issued Statement of Financial Accounting Standards
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS
144"). SFAS 144 supersedes Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of ("SFAS 121"), but retains many of its fundamental provisions.
SFAS 144 also clarifies certain measurement and classification issues from SFAS
121. In addition, SFAS 144 supersedes the accounting and reporting provisions
for the disposal of a business segment as found in Accounting Principles Board
Opinion No. 30, Reporting the Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions ("APB 30"). However, SFAS 144
retains the requirement in APB 30 to separately report discontinued operations,
and broadens the scope of such requirement to include more types of disposal
transactions. The scope of SFAS 144 excludes goodwill and other intangible
assets that are not to be amortized, as the accounting for such items is
prescribed by SFAS 142. The provisions of SFAS 144 are effective for fiscal
years beginning after December 15, 2001, and are to be applied prospectively.
The adoption of the requirements of SFAS 144 as of January 1, 2002 had no
impact on the Company's consolidated financial statements.

   In April 2002, the FASB issued Statement of Financial Accounting Standards
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections ("SFAS 145"). SFAS 145 amends or
rescinds a number of authoritative pronouncements, including Statement of
Financial Accounting Standards No. 4, Reporting Gains and Losses from
Extinguishment of Debt ("SFAS 4"). SFAS 4 required that gains and losses from
extinguishment of debt that were included in the determination of net income or
loss be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect. Upon adoption of SFAS 145, gains and losses from
extinguishment of debt will no longer be classified as an extraordinary item,
but rather will generally be classified as part of other income (expense) on
the Company's consolidated statement of operations. Any such gains or losses
classified as an extraordinary item in prior periods will be reclassified in
future financial statement presentations. The provisions of SFAS 145 related to
the rescission of SFAS 4 are effective for fiscal years beginning after May 15,
2002, with early application encouraged. The Company has adopted the provisions
of SFAS 145 as of January 1, 2002. See Note 4.

   In June 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, Accounting for Costs Associated with Exit or Disposal Activities
("SFAS 146"). SFAS 146 replaces the previous accounting guidance provided by
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)" ("EITF 94-3"). SFAS 146 requires
that costs associated with exit or disposal activities be recognized when they
are incurred, rather than at the date of a commitment to an exit or disposal
plan (as provided by EITF 94-3). Examples of costs covered by SFAS 146 include
certain employee severance costs and lease termination costs that are
associated with a restructuring or discontinued operation. The provisions of
SFAS 146 are effective for exit or disposal activities initiated after December
31, 2002, and are to be applied prospectively. The Company has adopted the
requirements of SFAS 146 as of January 1, 2003.

   In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure ("SFAS 148"). SFAS 148 amends Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), to
provide alternative methods of transition for a voluntary change to the fair
value method of accounting for stock-based

                                      75



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

employee compensation. In addition, SFAS 148 amends the provisions of SFAS 123
to require more prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee compensation
and the effect of the method used on reported results of operations. The
Company has adopted the disclosure requirements of SFAS 148 as of December 31,
2002.

   In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation
of Variable Interest Entities ("FIN 46"). FIN 46 clarifies existing accounting
literature regarding the consolidation of entities in which a company holds a
"controlling financial interest". A majority voting interest in an entity has
generally been considered indicative of a controlling financial interest. FIN
46 specifies other factors ("variable interests") which must be considered when
determining whether a company holds a controlling financial interest in, and
therefore must consolidate, an entity ("variable interest entities"). The
provisions of FIN 46 are immediately effective for variable interest entities
created, or invested in, after January 31, 2003. For variable interest entities
created prior to February 1, 2003, the provisions of FIN 46 are effective as of
the beginning of the first interim period after June 15, 2003. The Company will
adopt the provisions of FIN 46 as of July 1, 2003, and does not expect that
such adoption will have a significant effect on its consolidated financial
statements.

2. Acquisitions

   During the years ended December 31, 2000 and 2001, the Company consummated a
number of business and asset acquisitions which were accounted for using the
purchase method. Results of operations and cash flows of the acquired
businesses and assets are included in the consolidated financial statements for
the periods subsequent to the respective dates of acquisition.

   Agreement with Bell Atlantic Mobile ("BAM")

   The Company has a joint venture ("Crown Atlantic") with BAM (now part of
Verizon Communications). In addition to the towers originally contributed to
Crown Atlantic by BAM, the Company and BAM agreed that certain additional
towers owned by BAM (the "Frontier towers") could be contributed to Crown
Atlantic. In August and October 2000, BAM contributed 215 of the Frontier
towers in exchange for additional ownership interests in Crown Atlantic. See
Note 6.

   BellSouth Mobility Inc. and BellSouth Telecommunications Inc. ("BellSouth")

   The Company has an agreement with BellSouth (now part of Cingular) under
which the Company acquired the operating rights for certain of their towers.
During 2000 and 2001, the Company closed on 368 towers, paid $93,530,000 in
cash and issued 1,355,238 shares of its common stock.

   BellSouth DCS

   The Company has an agreement with certain affiliates of BellSouth
("BellSouth DCS", now part of Cingular) under which the Company acquired the
operating rights for certain of their towers. During 2000 and 2001, the Company
closed on 97 towers and paid $40,158,000 in cash.

   Agreement With GTE Corporation ("GTE")

   The Company has a joint venture ("Crown Castle GT") with GTE (now part of
Verizon Communications). During 2000, (1) the Company contributed an aggregate
of approximately $815,266,000 (of which approximately $94,464,000 was in shares
of its common stock, with the balance in cash) in exchange for a majority
ownership interest in Crown Castle GT, and (2) GTE contributed approximately
2,300 towers in exchange for cash

                                      76



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

distributions aggregating approximately $695,802,000 from Crown Castle GT and a
minority ownership interest in Crown Castle GT. See Note 6.

   In addition to the approximately 2,300 towers contributed pursuant to the
formation agreement, GTE had the right to contribute certain additional towers
to Crown Castle GT, including towers acquired by GTE from Ameritech Corp.
("Ameritech"), on terms substantially similar to those in the formation
agreement. In April 2000, the Company agreed with GTE that the Ameritech towers
would be contributed to Crown Castle GT. In August and September 2000, the
Company contributed $181,641,000 in cash, and GTE contributed 497 of the
Ameritech towers in exchange for a cash distribution of $181,641,000 from Crown
Castle GT.

   Crown Castle Australia Holdings Pty Ltd. ("CCAL")

   In March 2000, CCAL (a 77.6% owned subsidiary of the Company) entered into
an agreement to purchase approximately 700 towers in Australia from Cable &
Wireless Optus ("Optus"). The total purchase price for the towers was
approximately $135,000,000 in cash (Australian $220,000,000). The Company has
accounted for its investment in CCAL as a purchase of tower assets, and has
included CCAL's results of operations and cash flows in the Company's
consolidated financial statements for periods subsequent to the purchase date.
On April 3, 2000, the first closing took place for CCAL. The Company
contributed $90,786,000 in cash (Australian $147,500,000) to CCAL. The largest
portion of this amount, along with a capital contribution from CCAL's minority
shareholder, was used to pay $103,485,000 (Australian $168,131,000) to Optus.
The substantial portion of the remaining payments to Optus have been made by
CCAL during 2000 and 2001.

   CCUK

   On July 5, 2000, TeleDiffusion de France International S.A. ("TdF", a
subsidiary of France Telecom) and an affiliate of TdF sold their remaining
interests in the Company to a third party (see Note 8). In connection with this
disposition, the Company issued 17,443,500 shares of its Common Stock in
exchange for TdF's 20% interest in CCUK. As a result, CCUK became a wholly
owned subsidiary of the Company. The Company recognized additional goodwill of
approximately $493,751,000 in connection with this transaction.

3. Property and Equipment

   The major classes of property and equipment are as follows:



                                                                                 December 31,
                                                                Estimated   ------------------------
                                                               Useful Lives    2001         2002
                                                               ------------ ----------   ----------
                                                                            (In thousands of dollars)
                                                                                
Land and buildings............................................  0-40 years  $  168,252   $  193,235
Telecommunications towers and broadcast transmission equipment  5-20 years   5,119,821    5,377,156
Transportation and other equipment............................  3-15 years      20,085       18,476
Office furniture and equipment................................  2-10 years     103,591      119,877
                                                                            ----------   ----------
                                                                             5,411,749    5,708,744
Less: accumulated depreciation................................                (566,837)    (880,711)
                                                                            ----------   ----------
                                                                            $4,844,912   $4,828,033
                                                                            ==========   ==========


   Depreciation expense for the years ended December 31, 2000, 2001 and 2002
was $190,610,000, $265,395,000 and $300,461,000, respectively. Accumulated
depreciation on telecommunications towers and broadcast transmission equipment
was $406,607,000 and $593,752,000 at December 31, 2001 and 2002, respectively.
At December 31, 2002, minimum rentals receivable under existing operating
leases for towers are as follows: years ending December 31, 2003--$671,249,000;
2004--$662,817,000; 2005--$630,476,000; 2006--$576,885,000; 2007--$481,252,000;
thereafter--$1,330,616,000.

                                      77



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


4. Long-term Debt

   Long-term debt consists of the following:



                                                             December 31,
                                                        ------------------------
                                                           2001         2002
                                                        ----------   ----------
                                                        (In thousands of dollars)
                                                               
2000 Credit Facility................................... $  700,000   $  700,000
CCUK Credit Facility...................................    172,050      144,855
Crown Atlantic Credit Facility.........................    300,000      250,000
9% Guaranteed Bonds due 2007...........................    177,401      201,188
10 5/8% Senior Discount Notes due 2007, net of discount    229,321      239,160
10 3/8% Senior Discount Notes due 2011, net of discount    393,320      390,905
9% Senior Notes due 2011...............................    180,000      165,700
111/4% Senior Discount Notes due 2011, net of discount.    196,005      170,777
91/2% Senior Notes due 2011............................    125,000      114,265
103/4% Senior Notes due 2011...........................    500,000      442,885
9 3/8% Senior Notes due 2011...........................    450,000      407,225
                                                        ----------   ----------
                                                         3,423,097    3,226,960
Less: current maturities...............................    (29,086)     (14,250)
                                                        ----------   ----------
                                                        $3,394,011   $3,212,710
                                                        ==========   ==========


   2000 Credit Facility

   In March 2000, a subsidiary of the Company entered into a credit agreement
with a syndicate of banks (the "2000 Credit Facility") which consists of two
term loan facilities and a revolving line of credit aggregating $1,200,000,000.
Available borrowings under the 2000 Credit Facility are generally to be used
for the construction and purchase of towers and for general corporate purposes
of CCUSA, Crown Castle GT and CCAL. The amount of available borrowings will be
determined based on the current financial performance (as defined) of those
subsidiaries' assets. In addition, up to $25,000,000 of borrowing availability
under the 2000 Credit Facility can be used for letters of credit.

   On March 15, 2000, the Company used $83,375,000 in borrowings under one of
the term loan facilities of the 2000 Credit Facility to repay outstanding
borrowings and accrued interest under a prior credit facility. The net proceeds
from $316,625,000 in additional borrowings under this term loan facility were
used to fund a portion of the purchase price for Crown Castle GT and for
general corporate purposes. As of December 31, 2002, approximately $367,621,000
of borrowings was available under the 2000 Credit Facility, of which
$25,000,000 was available for letters of credit. There were no letters of
credit outstanding under the 2000 Credit Facility as of December 31, 2002. In
the first quarter of 2000, the Company recorded a loss of $1,495,000 consisting
of the write-off of unamortized deferred financing costs related to the prior
credit facility. In prior years, this loss was presented as an extraordinary
item on the Company's consolidated statement of operations. In the Company's
current year financial statements, this loss has been included in interest and
other income (expense) in accordance with the provisions of SFAS 145 (see Note
1).

   The amount of available borrowings under the 2000 Credit Facility's term
loans and revolving line of credit will decrease by stated amounts at the end
of each calendar quarter beginning on June 30, 2003. Any remaining borrowings
under one of the term loans must be repaid on March 15, 2008. Any remaining
borrowings under the other term loan and the revolving line of credit must be
repaid on September 15, 2007. Under certain

                                      78



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

circumstances, the Company's subsidiaries may be required to make principal
prepayments under the 2000 Credit Facility in an amount equal to 50% of excess
cash flow (as defined), the net cash proceeds from certain asset sales or the
net cash proceeds from certain borrowings.

   The 2000 Credit Facility is secured by substantially all of the assets of
CCUSA and CCAL, and the Company's pledge of the capital stock of those
subsidiaries and Crown Castle GT. In addition, the 2000 Credit Facility is
guaranteed by CCIC. Borrowings under the 2000 Credit Facility bear interest at
rates per annum, at the Company's election, equal to the bank's prime rate plus
margins ranging from 1.75% to 2.00% or a Eurodollar interbank offered rate
(LIBOR) plus margins ranging from 2.75% to 3.00% (approximately 6.00% and
4.15%, respectively, at December 31, 2002). The interest rate margins may be
reduced by up to 1.00% (non-cumulatively) based on a financial test, determined
quarterly. Interest on prime rate loans is due quarterly, while interest on
LIBOR loans is due at the end of the period (from one to six months) for which
such LIBOR rate is in effect. The 2000 Credit Facility requires the borrower to
maintain certain financial covenants and places restrictions on its ability to,
among other things, incur debt and liens, pay dividends, make capital
expenditures, dispose of assets, undertake transactions with affiliates and
make investments.

   CCUK Credit Facility

   CCUK has a credit agreement with a syndicate of banks (as amended, the "CCUK
Credit Facility"). In April 2002, ITV Digital ("ITVD", a significant customer
of CCUK) announced plans to liquidate its assets and returned its digital
terrestrial television multiplex licenses to the UK Independent Television
Commission (see Note 14). The termination of the ITVD transmission contract was
a Termination Event (a defined event of default) under the CCUK Credit
Facility, and this Termination Event could have resulted in an event of default
under the trust deed governing the 9% Guaranteed Bonds due 2007 (the "CCUK
Bonds"). As a result, the Company had reclassified the outstanding borrowings
under the CCUK Credit Facility and the principal amount of the CCUK Bonds as
current liabilities on its interim consolidated balance sheets as of March 31,
June 30 and September 30 of 2002. . In November 2002, the Company obtained an
amendment to the CCUK Credit Facility such that the Termination Event was
cured. Since the Company was able to obtain an amendment to the CCUK Credit
Facility, the termination of the ITVD transmission contract did not result in
an event of default under the trust deed governing the CCUK Bonds. Accordingly,
the Company has classified the outstanding borrowings under the CCUK Credit
Facility and the principal amount of the CCUK Bonds as long-term liabilities on
its consolidated balance sheet as of December 31, 2002. None of the Company's
other debt instruments, including the public debt securities and the two U.S.
bank credit facilities, contained default provisions related to the ITVD
transmission contract. Furthermore, none of these other debt instruments
contain cross default provisions with either of the CCUK debt instruments. As
such, the events of default under the two CCUK debt instruments did not
constitute events of default under any of the Company's other debt instruments.

   The amended CCUK Credit Facility consists of a (Pounds)120,000,000
(approximately $193,140,000) secured revolving loan facility. Available
borrowings under the CCUK Credit Facility are generally to be used to finance
capital expenditures and for working capital and general corporate purposes. As
of December 31, 2002, unused borrowing availability under the CCUK Credit
Facility amounted to approximately (Pounds)30,000,000 (approximately
$48,285,000).

   The amount of available borrowings under the CCUK Credit Facility will
decrease by a stated amount on June 30 and December 31 of each year beginning
in 2004. Any remaining borrowings must be repaid on June 18, 2006. Under
certain circumstances, CCUK may be required to make principal prepayments under
the CCUK Credit Facility in an amount equal to 50% of excess cash flow (as
defined), the net cash proceeds from certain asset sales or the net cash
proceeds from certain sales of equity securities.

                                      79



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The CCUK Credit Facility is secured by substantially all of CCUK's assets.
Borrowings under the CCUK Credit Facility bear interest at a rate per annum
equal to a Eurodollar interbank offered rate (LIBOR) plus 2.0% (approximately
5.79% at December 31, 2002). The interest rate margin may be reduced by up to
0.75% (non-cumulatively) based on a financial test, determined quarterly.
Interest is due at the end of the period (from one to six months) for which
such LIBOR rate is in effect. The CCUK Credit Facility requires CCUK to
maintain certain financial covenants and places restrictions on CCUK's ability
to, among other things, incur debt and liens, pay dividends, make capital
expenditures, dispose of assets, undertake transactions with affiliates and
make investments.

   Crown Atlantic Credit Facility

   Crown Atlantic has a credit agreement with a syndicate of banks (as amended,
the "Crown Atlantic Credit Facility") which consists of a $334,500,000 secured
revolving line of credit. Available borrowings under the Crown Atlantic Credit
Facility are generally to be used to construct new towers and to finance a
portion of the purchase price for towers and related assets of Crown Atlantic.
The amount of available borrowings is determined based on the current financial
performance (as defined) of Crown Atlantic's assets. In addition, up to
$25,000,000 of borrowing availability under the Crown Atlantic Credit Facility
can be used for letters of credit.

   In September 2002, Crown Atlantic repaid $50,000,000 in outstanding
borrowings under the Crown Atlantic Credit Facility. Crown Atlantic utilized
cash provided by its operations to effect this repayment. As of December 31,
2002, approximately $84,500,000 of borrowings was available under the Crown
Atlantic Credit Facility, of which $25,000,000 was available for letters of
credit. There were no letters of credit outstanding as of December 31, 2002.

   The amount of available borrowings under the Crown Atlantic Credit Facility
will decrease by a stated amount at the end of each calendar quarter beginning
on March 31, 2003 until March 31, 2006, at which time any remaining borrowings
must be repaid. Under certain circumstances, Crown Atlantic may be required to
make principal prepayments under the Crown Atlantic Credit Facility in an
amount equal to 50% of excess cash flow (as defined), the net cash proceeds
from certain asset sales or the net cash proceeds from certain sales of equity
or debt securities.

   The Crown Atlantic Credit Facility is secured by a pledge of the membership
interest in Crown Atlantic and a security interest in Crown Atlantic's tenant
leases. Borrowings under the Crown Atlantic Credit Facility bear interest at a
rate per annum, at Crown Atlantic's election, equal to the bank's prime rate
plus 1.25% or a Eurodollar interbank offered rate (LIBOR) plus 2.75%
(approximately 4.25% and 2.90%, respectively, at December 31, 2002). The
interest rate margins may be reduced by up to 1.25% (non-cumulatively) based on
a financial test, determined quarterly. Interest on prime rate loans is due
quarterly, while interest on LIBOR loans is due at the end of the period (from
one to three months) for which such LIBOR rate is in effect. The Crown Atlantic
Credit Facility requires Crown Atlantic to maintain certain financial covenants
and places restrictions on Crown Atlantic's ability to, among other things,
incur debt and liens, pay dividends, make capital expenditures, dispose of
assets, undertake transactions with affiliates and make investments.

   9% Guaranteed Bonds due 2007 ("CCUK Bonds")

   CCUK has issued (Pounds)125,000,000 (approximately $201,188,000) aggregate
principal amount of the CCUK Bonds. Interest payments on the CCUK Bonds are due
annually on each March 30. The maturity date of the CCUK Bonds is March 30,
2007.

                                      80



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The CCUK Bonds are redeemable, at the option of CCUK, in whole or in part at
any time, at the greater of their principal amount and such a price as will
provide a gross redemption yield 0.5% per annum above the gross redemption
yield on the benchmark gilt plus, in either case, accrued and unpaid interest.
Under certain circumstances, each holder of the CCUK Bonds has the right to
require CCUK to repurchase all or a portion of such holder's CCUK Bonds at a
price equal to 101% of their aggregate principal amount plus accrued and unpaid
interest.

   The CCUK Bonds are guaranteed by CCUK; however, they are unsecured and
effectively subordinate to the outstanding borrowings under the CCUK Credit
Facility. The trust deed governing the CCUK Bonds places restrictions on CCUK's
ability to, among other things, pay dividends and make capital distributions,
make investments, incur additional debt and liens, dispose of assets and
undertake transactions with affiliates.

   10 5/8% Senior Discount Notes due 2007 (the "10 5/8% Discount Notes")

   The Company issued $251,000,000 aggregate principal amount (at maturity) of
the 10 5/8% Discount Notes. The 10 5/8% Discount Notes will not pay any
interest until May 15, 2003, at which time semi-annual interest payments will
commence and become due on each May 15 and November 15 thereafter. The maturity
date of the 10 5/8% Discount Notes is November 15, 2007. The 10 5/8% Discount
Notes are net of unamortized discount of $21,679,000 at December 31, 2001.

   The 10 5/8% Discount Notes are redeemable at the option of the Company, in
whole or in part, at a price of 105.313% of the principal amount plus accrued
interest. The redemption price is reduced annually until November 15, 2005,
after which time the 10 5/8% Discount Notes are redeemable at par.

     10 3/8% Senior Discount Notes due 2011 (the "10 3/8% Discount Notes") and
     9% Senior Notes due 2011 (the "9% Senior Notes")

   The Company issued $500,000,000 aggregate principal amount (at maturity) of
its 10 3/8% Discount Notes and $180,000,000 aggregate principal amount of its
9% Senior Notes. The 10 3/8% Discount Notes will not pay any interest until
November 15, 2004, at which time semi-annual interest payments will commence
and become due on each May 15 and November 15 thereafter. Semi-annual interest
payments for the 9% Senior Notes are due on each May 15 and November 15. The
maturity date of the 10 3/8% Discount Notes and the 9% Senior Notes is May 15,
2011. The 10 3/8% Discount Notes are net of unamortized discount of
$106,680,000 and $58,220,000 at December 31, 2001 and 2002, respectively.

   The 10 3/8% Discount Notes and the 9% Senior Notes are redeemable at the
option of the Company, in whole or in part, on or after May 15, 2004 at prices
of 105.187% and 104.5%, respectively, of the principal amount plus accrued
interest. The redemption prices are reduced annually until May 15, 2007, after
which time the 10 3/8% Discount Notes and the 9% Senior Notes are redeemable at
par.

     11 1/4% Senior Discount Notes due 2011 (the "11 1/4% Discount Notes") and
     9 1/2% Senior Notes due 2011 (the "9 1/2% Senior Notes")

   The Company issued $260,000,000 aggregate principal amount (at maturity) of
its 11 1/4% Discount Notes and $125,000,000 aggregate principal amount of its
9 1/2% Senior Notes. The 11 1/4% Discount Notes will not pay any interest until
February 1, 2005, at which time semi-annual interest payments will commence and
become due on each February 1 and August 1 thereafter. Semi-annual interest
payments for the 9 1/2% Senior Notes are due on each February 1 and August 1.
The maturity date of the 11 1/4% Discount Notes and the 9 1/2% Senior Notes is

                                      81



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

August 1, 2011. The 11 1/4% Discount Notes are net of unamortized discount of
$63,995,000 and $32,273,000 at December 31, 2001 and 2002, respectively.

   The 11 1/4% Discount Notes and the 9 1/2% Senior Notes are redeemable at the
option of the Company, in whole or in part, on or after August 1, 2004 at
prices of 105.625% and 104.75%, respectively, of the principal amount plus
accrued interest. The redemption prices are reduced annually until August 1,
2007, after which time the 11 1/4% Discount Notes and the 9 1/2% Senior Notes
are redeemable at par.

   Term Loans due 2011

   On April 3, 2000, the Company borrowed $400,000,000 under a term loan
agreement with a group of lenders (the "Term Loans"). The net proceeds from
this borrowing, which amounted to $395,875,000, were used to fund a portion of
the cash contribution for the towers at Crown Castle GT (See Note 2). The Term
Loans were repaid in June 2000 with proceeds from the sale of the Company's
10 3/4% Senior Notes.

   10 3/4% Senior Notes due 2011 (the "10 3/4% Senior Notes")

   On June 21, 2000, the Company issued $500,000,000 aggregate principal amount
of its 10 3/4% Senior Notes for proceeds of $483,674,000 (after underwriting
discounts of $16,326,000). A portion of the proceeds from the sale of these
securities were used to repay the Term Loans (as discussed above), and the
remaining proceeds are being used to fund the initial interest payments on the
10 3/4% Senior Notes and for general corporate purposes. Semi-annual interest
payments for the 10 3/4% Senior Notes are due on each February 1 and August 1.
The maturity date of the 10 3/4% Senior Notes is August 1, 2011.

   The 10 3/4% Senior Notes are redeemable at the option of the Company, in
whole or in part, on or after August 1, 2005 at a price of 105.375% of the
principal amount plus accrued interest. The redemption price is reduced
annually until August 1, 2008, after which time the 10 3/4% Senior Notes are
redeemable at par. Prior to August 1, 2003, the Company may redeem up to 35% of
the aggregate principal amount of the 10 3/4% Senior Notes, at a price of
110.75% of the principal amount thereof, with the net cash proceeds from a
public offering of the Company's common stock.

   9 3/8% Senior Notes due 2011 (the "9 3/8% Senior Notes")

   On May 10, 2001, the Company issued $450,000,000 aggregate principal amount
of its 9 3/8% Senior Notes for proceeds of $441,000,000 (after underwriting
discounts of $9,000,000). The proceeds from the sale of these securities are
being used to fund the initial interest payments on the 9 3/8% Senior Notes and
for general corporate purposes. Semi-annual interest payments for the 9 3/8%
Senior Notes are due on each February 1 and August 1. The maturity date of the
9 3/8% Senior Notes is August 1, 2011.

   The 9 3/8% Senior Notes are redeemable at the option of the Company, in
whole or in part, on or after August 1, 2006 at a price of 104.688% of the
principal amount plus accrued interest. The redemption price is reduced
annually until August 1, 2009, after which time the 9 3/8% Senior Notes are
redeemable at par. Prior to August 1, 2004, the Company may redeem up to 35% of
the aggregate principal amount of the 9 3/8% Senior Notes, at a price of
109.375% of the principal amount thereof, with the net cash proceeds from a
public offering of the Company's common stock.

   Structural Subordination of the Debt Securities

   The 10 5/8% Discount Notes, the 10 3/8% Discount Notes, the 9% Senior Notes,
the 11 1/4% Discount Notes, the 9  1/2% Senior Notes, the 10 3/4% Senior Notes
and the 9 3/8% Senior Notes (collectively, the "Debt

                                      82



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Securities") are senior indebtedness of the Company; however, they are
unsecured and effectively subordinate to the liabilities of the Company's
subsidiaries, which include outstanding borrowings under the 2000 Credit
Facility, the CCUK Credit Facility, the Crown Atlantic Credit Facility and the
CCUK Bonds. The indentures governing the Debt Securities (the "Indentures")
place restrictions on the Company's ability to, among other things, pay
dividends and make capital distributions, make investments, incur additional
debt and liens, issue additional preferred stock, dispose of assets and
undertake transactions with affiliates. As of December 31, 2002, the Company
was effectively precluded from paying dividends on its capital stock under the
terms of the Indentures.

   Repurchases of the Company's Debt Securities

   In August and September of 2002, the Company began repurchasing its stock
(both common and preferred) and debt securities in public market transactions
(see Notes 7 and 8). Through December 31, 2002, the Company repurchased debt
securities with an aggregate principal amount (at maturity) of $244,590,000.
Such debt securities had an aggregate carrying value (net of unamortized
discounts) of $226,511,000. The Company utilized $142,820,000 in cash
($96,509,000 from an Unrestricted investment subsidiary and $46,311,000 from
CCIC) to effect these debt repurchases. The debt repurchases resulted in gains
of $79,138,000 ($0.36 per share for the year ended December 31, 2002). Such
gains are included in interest and other income (expense) on the Company's
consolidated statement of operations. The Company's repurchases of its debt
securities in 2002 were as follows:



                                                               Cash Paid
                                                     -----------------------------
                                  Principal Carrying         Unrestricted           Gains on
                                   Amount    Value    CCIC    Subsidiary   Total   Repurchases
                                  --------- -------- ------- ------------ -------- -----------
                                                   (In thousands of dollars)
                                                                 
10 5/8% Senior Discount Notes due
  2007........................... $ 11,840  $ 11,701 $ 4,335   $ 4,149    $  8,484   $ 2,859
10 3/8% Senior Discount Notes due
  2011...........................   50,875    43,290  12,707    12,188      24,895    17,662
9% Senior Notes due 2011.........   14,300    14,300   3,105     5,798       8,903     5,054
11 1/4% Senior Discount Notes due
  2011...........................   56,950    46,595  11,587    15,304      26,891    19,137
9 1/2% Senior Notes due 2011.....   10,735    10,735   1,718     5,296       7,014     3,537
10 3/4% Senior Notes due 2011....   57,115    57,115  12,859    26,520      39,379    16,178
9  3/8% Senior Notes due 2011....   42,775    42,775      --    27,254      27,254    14,711
                                  --------  -------- -------   -------    --------   -------
                                  $244,590  $226,511 $46,311   $96,509    $142,820   $79,138
                                  ========  ======== =======   =======    ========   =======


     Reporting Requirements Under the Indentures Governing the Company's Debt
     Securities and the Certificate of Designations Governing the Company's
     12 3/4% Senior Exchangeable Preferred Stock (the "Certificate")

   The following information (as such capitalized terms are defined in the
Indentures and the Certificate) is presented solely as a requirement of the
Indentures and the Certificate; such information is not intended as an
alternative measure of financial position, operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles). Furthermore, the Company's measure of the following information
may not be comparable to similarly titled measures of other companies.

                                      83



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The Company has designated CCUK, Crown Atlantic and certain investment
subsidiaries as Unrestricted Subsidiaries. Summarized financial information for
(1) the Company and its Restricted Subsidiaries and (2) the Company's
Unrestricted Subsidiaries is as follows:



                                                          December 31, 2002
                                         ----------------------------------------------------
                                           Company
                                             and
                                          Restricted  Unrestricted Consolidation Consolidated
                                         Subsidiaries Subsidiaries Eliminations     Total
                                         ------------ ------------ ------------- ------------
                                                      (In thousands of dollars)
                                                                     
Cash and cash equivalents...............  $  225,101   $  291,071   $        --   $  516,172
Other current assets....................     208,419      142,490            --      350,909
Property and equipment, net.............   3,203,955    1,624,078            --    4,828,033
Investments.............................          --           --            --           --
Investments in Unrestricted Subsidiaries   1,983,127           --    (1,983,127)          --
Goodwill................................     164,023      903,018            --    1,067,041
Other assets, net.......................     102,138       28,308            --      130,446
                                          ----------   ----------   -----------   ----------
                                          $5,886,763   $2,988,965   $(1,983,127)  $6,892,601
                                          ==========   ==========   ===========   ==========
Current liabilities.....................  $  175,136   $  185,633   $        --   $  360,769
Long-term debt, less current maturities.   2,616,667      596,043            --    3,212,710
Other liabilities.......................      36,656      146,571            --      183,227
Minority interests......................      93,792       77,591            --      171,383
Redeemable preferred stock..............     756,014           --            --      756,014
Stockholders' equity....................   2,208,498    1,983,127    (1,983,127)   2,208,498
                                          ----------   ----------   -----------   ----------
                                          $5,886,763   $2,988,965   $(1,983,127)  $6,892,601
                                          ==========   ==========   ===========   ==========



                                      84



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



                                            Three Months Ended
                                      December 31, 2002 (Unaudited)           Year Ended December 31, 2002
                                  -------------------------------------  -------------------------------------
                                  Company and                            Company and
                                   Restricted  Unrestricted Consolidated  Restricted  Unrestricted Consolidated
                                  Subsidiaries Subsidiaries    Total     Subsidiaries Subsidiaries    Total
                                  ------------ ------------ ------------ ------------ ------------ ------------
                                                            (In thousands of dollars)
                                                                                 
Net revenues.....................   $112,347     $115,614     $227,961    $ 481,125     $420,408    $ 901,533
Costs of operations (exclusive of
  depreciation and
  amortization)..................     49,889       60,747      110,636      227,945      218,254      446,199
General and administrative.......     18,764        3,477       22,241       76,651       17,571       94,222
Corporate development............      1,451           --        1,451        7,483           --        7,483
Restructuring charges............      5,110        5,428       10,538        7,755        9,392       17,147
Asset write-down charges.........      5,266        3,284        8,550       41,538       14,258       55,796
Non-cash general and
  administrative compensation
  charges........................        872          486        1,358        3,488        1,861        5,349
Depreciation and amortization....     49,686       27,075       76,761      198,678      103,250      301,928
                                    --------     --------     --------    ---------     --------    ---------
Operating income (loss)..........    (18,691)      15,117       (3,574)     (82,413)      55,822      (26,591)
Interest and other income
  (expense)......................     49,711       (1,622)      48,089       73,031       (6,613)      66,418
Interest expense and amortization
  of deferred financing costs....    (60,225)     (11,511)     (71,736)    (255,472)     (47,098)    (302,570)
Provision for income taxes.......       (109)      (6,723)      (6,832)        (407)     (11,869)     (12,276)
Minority interests...............        590       (1,439)        (849)       3,967       (1,469)       2,498
                                    --------     --------     --------    ---------     --------    ---------
Net loss.........................   $(28,724)    $ (6,178)    $(34,902)   $(261,294)    $(11,227)   $(272,521)
                                    ========     ========     ========    =========     ========    =========


   Tower Cash Flow and Adjusted Consolidated Cash Flow for the Company and its
Restricted Subsidiaries is as follows under (1) the indenture governing the
10 5/8% Discount Notes and the Certificate (the "1997 and 1998 Securities") and
(2) the indentures governing the 10 3/8% Discount Notes, the 9% Senior Notes,
the 11 1/4% Discount Notes, the 9 1/2% Senior Notes, the 10 3/4% Senior Notes
and the 9 3/8% Senior Notes (the "1999, 2000 and 2001 Securities"):



                                                                                1997 and    1999, 2000
                                                                                  1998       and 2001
                                                                               Securities   Securities
                                                                               ----------   ----------
                                                                               (In thousands of dollars)
                                                                                    (Unaudited)
                                                                                      
Tower Cash Flow, for the three months ended December 31, 2002................. $  53,780    $  53,780
                                                                               =========    =========
Consolidated Cash Flow, for the twelve months ended December 31, 2002......... $ 169,046    $ 176,529
Less: Tower Cash Flow, for the twelve months ended December 31, 2002..........  (203,660)    (203,660)
Plus: four times Tower Cash Flow, for the three months ended December 31, 2002   215,120      215,120
                                                                               ---------    ---------
Adjusted Consolidated Cash Flow, for the twelve months ended December 31,2002. $ 180,506    $ 187,989
                                                                               =========    =========



                                      85



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Maturities

   Scheduled maturities of long-term debt outstanding at December 31, 2002 are
as follows: years ending December 31, 2003--$14,250,000; 2004--$62,975,000;
2005--$229,261,000; 2006--$305,869,000; 2007--$541,848,000;
thereafter--$2,163,250,000.

   Restricted Net Assets of Subsidiaries

   Under the terms of the 2000 Credit Facility, the CCUK Credit Facility, the
Crown Atlantic Credit Facility and the CCUK Bonds, the Company's subsidiaries
are limited in the amount of dividends which can be paid to the Company. Under
the 2000 Credit Facility, the amount of such dividends is generally limited to
(1) $17,500,000 per year; (2) an amount to pay income taxes attributable to
CCIC and the borrowers under the 2000 Credit Facility; and (3) an amount to pay
interest on certain of CCIC's indebtedness. CCUK and Crown Atlantic are
effectively precluded from paying dividends. The restricted net assets of the
Company's subsidiaries totaled approximately $3,616,466,000 at December 31,
2002.

   Interest Rate Swap Agreements

   The Company has an interest rate swap agreement in connection with amounts
originally borrowed under the Crown Atlantic Credit Facility. This interest
rate swap agreement has an initial notional amount of $100,000,000, decreasing
on a quarterly basis beginning September 30, 2003 until the termination of the
agreement on March 31, 2006. The Company pays a fixed rate of 5.79% on the
notional amount and receives a floating rate based on LIBOR. This agreement
effectively changes the interest rate on a portion of the borrowings under the
Crown Atlantic Credit Facility from a floating rate to a fixed rate of 5.79%
plus the applicable margin.

   In December 2000, the Company entered into an additional interest rate swap
agreement in connection with amounts borrowed under the Crown Atlantic Credit
Facility. This interest rate swap agreement has a notional amount of
$50,000,000 and terminates on December 31, 2003. The Company pays a fixed rate
of 5.89% on the notional amount and receives a floating rate based on LIBOR.
This agreement effectively changes the interest rate on a portion of the
borrowings under the Crown Atlantic Credit Facility from a floating rate to a
fixed rate of 5.89% plus the applicable margin.

   The Company does not believe there is any significant exposure to credit
risk from these interest rate swap agreements due to the creditworthiness of
the counterparty. In the event of nonperformance by the counterparty, the
Company's loss would be limited to any unfavorable interest rate differential.

   Letters of Credit

   In April 2002, CCUK issued a letter of credit to British Telecom in
connection with a site acquisition agreement. The letter of credit was issued
through one of CCUSA's lenders in the amount of (Pounds)50,000,000
(approximately $80,475,000) and expires on March 31, 2003.

   In September 2002, the Company issued a letter of credit to one of its
insurers in connection with certain contingent retirement obligations under
various tower site land leases. The letter of credit was issued through one of
CCUSA's lenders in the amount of $7,450,000 and expires on August 22, 2003.

   In October 2002, the Company issued a letter of credit to one of its
insurers in connection with certain contingent retirement obligations under a
tower site land lease. The letter of credit was issued through one of CCUSA's
lenders in the amount of $1,000,000 and expires on October 8, 2003.

                                      86



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


5. Income Taxes

   Income (loss) before income taxes and minority interests by geographic area
is as follows:



                                Years Ended December 31,
                            -------------------------------
                               2000       2001       2002
                            ---------  ---------  ---------
                               (In thousands of dollars)
                                         
                   Domestic $(188,046) $(275,329) $(271,006)
                   Foreign.   (15,773)   (75,666)     8,263
                            ---------  ---------  ---------
                            $(203,819) $(350,995) $(262,743)
                            =========  =========  =========


   The provision for income taxes consists of the following:



                                  Years Ended December 31,
                                 --------------------------
                                  2000     2001      2002
                                 ------- --------- --------
                                 (In thousands of dollars)
                                          
                     Current:
                        State... $   225 $      33 $     --
                        Foreign.      21       459      407
                                 ------- --------- --------
                                     246       492      407
                                 ------- --------- --------
                     Deferred:
                        Foreign.      --    15,986   11,869
                                 ------- --------- --------
                                 $   246 $  16,478 $ 12,276
                                 ======= ========= ========


   A reconciliation between the provision for income taxes and the amount
computed by applying the federal statutory income tax rate to the loss before
income taxes is as follows:



                                                            Years Ended December 31,
                                                         -----------------------------
                                                           2000       2001      2002
                                                         --------  ---------  --------
                                                           (In thousands of dollars)
                                                                     
Benefit for income taxes at statutory rate.............. $(71,337) $(122,849) $(91,960)
Amortization of intangible assets.......................   12,808     15,606       147
Depreciation on basis differences in joint ventures.....    1,131      1,116        --
Stock-based compensation................................      468        973     1,221
Expenses for which no federal tax benefit was recognized      238        115       123
State taxes, net of federal tax benefit.................      146         21        --
Losses for which no tax benefit was recognized..........   55,190    118,628   102,021
Other...................................................    1,602      2,868       724
                                                         --------  ---------  --------
                                                         $    246  $  16,478  $ 12,276
                                                         ========  =========  ========


                                      87



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The components of the net deferred income tax assets and liabilities are as
follows:



                                                           December 31,
                                                      ------------------------
                                                         2001         2002
                                                       ---------   ----------
                                                      (In thousands of dollars)
                                                             
    Deferred income tax liabilities:
       Property and equipment........................ $ 124,723    $  170,444
       Basis differences in joint ventures...........     4,548         5,644
       Other.........................................        54            --
                                                       ---------   ----------
           Total deferred income tax liabilities.....   129,325       176,088
                                                       ---------   ----------
    Deferred income tax assets:
       Net operating loss carryforwards..............   324,220       548,965
       Foreign losses................................    12,163        16,609
       Accrued liabilities...........................     3,554         5,772
       Receivables allowance.........................     6,280         3,766
       Intangible assets.............................     3,233         3,064
       Pension liability.............................        --         2,945
       Derivative instruments........................     1,591         1,974
       Puerto Rico losses............................       408           620
       Noncompete agreement..........................       164           152
       Other.........................................       663           728
       Valuation allowances..........................  (238,937)     (436,362)
                                                       ---------   ----------
           Total deferred income tax assets, net.....   113,339       148,233
                                                       ---------   ----------
    Net deferred income tax liabilities.............. $  15,986    $   27,855
                                                       =========   ==========


   Valuation allowances of $238,937,000 and $436,362,000 were recognized to
offset net deferred income tax assets as of December 31, 2001 and 2002,
respectively. If the benefits related to the valuation allowance are recognized
in the future, such benefits would be allocated as follows in the Company's
consolidated financial statements:


                                                 
               Consolidated statement of operations $407,010,000
               Other comprehensive income (loss)...    4,919,000
               Additional paid-in capital..........   24,433,000
                                                    ------------
                                                    $436,362,000
                                                    ============


   At December 31, 2002, the Company had net operating loss carryforwards of
approximately $1,568,000,000 which are available to offset future federal
taxable income. These loss carryforwards will expire in 2010 through 2022. The
utilization of the loss carryforwards is subject to certain limitations.

6. Minority Interests

   Minority interests represent the minority shareholder's 20% interest in CCUK
(prior to July 2000), the minority partner's 43.1% interest in Crown Atlantic,
the minority partner's 17.8% interest in Crown Castle GT and the minority
shareholder's 22.4% interest in CCAL.

   Upon dissolution of Crown Atlantic, BAM will receive (1) the 15,597,783
shares of the Company's common stock contributed to Crown Atlantic and (2) a
payment (either in cash or in shares of the Company's common stock, at the
Company's election) equal to approximately 24.1% of the fair market value (to
be determined based on an appraisal process at the dissolution date) of Crown
Atlantic's other net assets; the Company would then receive the remaining
assets and liabilities of Crown Atlantic. The dissolution of Crown Atlantic may
be caused by BAM at any time, after a 30-day notice period.

                                      88



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Upon dissolution of Crown Castle GT, GTE will receive (1) the 5,063,731
shares of the Company's common stock contributed to Crown Castle GT and (2) a
payment in cash equal to approximately 11.0% of the fair market value (to be
determined based on an appraisal process at the dissolution date) of Crown
Castle GT's other net assets; the Company will then receive the remaining
assets and liabilities of Crown Castle GT. The dissolution of Crown Castle GT
may be caused by GTE at any time beginning on January 31, 2003, after a 30-day
notice period.

7. Redeemable Preferred Stock

   Redeemable preferred stock ($.01 par value, 20,000,000 shares authorized)
consists of the following:



                                                                                     December 31,
                                                                                   -------------------------
                                                                                     2001         2002
                                                                                     --------     --------
                                                                                   (In thousands of dollars)
                                                                                          
12 3/4% Senior Exchangeable Preferred Stock; shares issued:
   December 31, 2001--291,444 and December 31, 2002--249,325 (stated at
     mandatory redemption and aggregate liquidation value)........................ $292,992     $250,650
8 1/4% Cumulative Convertible Redeemable Preferred Stock; shares issued:
   200,000 (stated net of unamortized value of warrants; mandatory redemption and
     aggregate liquidation value of $200,000).....................................  195,793      196,204
6.25% Convertible Preferred Stock; shares issued:
   December 31, 2001--8,050,000 and December 31, 2002--6,361,000 (stated net of
     unamortized issuance costs; mandatory redemption and aggregate liquidation
     value: December 31, 2001--$402,500 and December 31, 2002--$318,050)..........  390,076      309,160
                                                                                     --------     --------
                                                                                   $878,861     $756,014
                                                                                     ========     ========


   Exchangeable Preferred Stock

   The Company issued 200,000 shares of its 12 3/4% Senior Exchangeable
Preferred Stock due 2010 (the "Exchangeable Preferred Stock") at a price of
$1,000 per share (the liquidation preference per share). The holders of the
Exchangeable Preferred Stock are entitled to receive cumulative dividends at
the rate of 12 3/4% per share, compounded quarterly on each March 15, June 15,
September 15 and December 15 of each year. On or before December 15, 2003, the
Company has the option to pay dividends in cash or in additional shares of
Exchangeable Preferred Stock. After December 15, 2003, dividends are payable
only in cash. For the years ended December 31, 2000, 2001 and 2002, dividends
were paid in additional shares of Exchangeable Preferred Stock.

   The Company is required to redeem all outstanding shares of Exchangeable
Preferred Stock on December 15, 2010 at a price equal to the liquidation
preference plus accumulated and unpaid dividends. On or after December 15,
2003, the shares are redeemable at the option of the Company, in whole or in
part, at a price of 106.375% of the liquidation preference. The redemption
price is reduced on an annual basis until December 15, 2007, at which time the
shares are redeemable at the liquidation preference. The shares of Exchangeable
Preferred Stock are exchangeable, at the option of the Company, in whole but
not in part, for 12 3/4% Senior Subordinated Exchange Debentures due 2010.

   The Company's obligations with respect to the Exchangeable Preferred Stock
are subordinate to all indebtedness of the Company (including the Debt
Securities), and are effectively subordinate to all debt and liabilities of the
Company's subsidiaries (including the 2000 Credit Facility, the CCUK Credit
Facility, the

                                      89



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Crown Atlantic Credit Facility and the CCUK Bonds). The certificate of
designations governing the Exchangeable Preferred Stock places restrictions on
the Company's ability to, among other things, pay dividends and make capital
distributions, make investments, incur additional debt and liens, issue
additional preferred stock, dispose of assets and undertake transactions with
affiliates.

   8 1/4% Convertible Preferred Stock

   The Company issued 200,000 shares of its 8 1/4% Cumulative Convertible
Redeemable Preferred Stock (the "8 1/4% Convertible Preferred Stock") at a
price of $1,000 per share (the liquidation preference per share) to General
Electric Capital Corporation ("GECC"). GECC is entitled to receive cumulative
dividends at the rate of 8 1/4% per annum payable on March 15, June 15,
September 15 and December 15 of each year. The Company has the option to pay
dividends in cash or in shares of its common stock having a current market
value equal to the stated dividend amount. For the years ended December 31,
2000, 2001 and 2002, dividends were paid with 579,000, 1,400,000 and 4,290,000
shares of common stock, respectively. GECC also received warrants to purchase
1,000,000 shares of the Company's common stock at an exercise price of $26.875
per share. The warrants will be exercisable, in whole or in part, at any time
until November 2004.

   The Company is required to redeem all outstanding shares of the 8 1/4%
Convertible Preferred Stock on March 31, 2012 at a price equal to the
liquidation preference plus accumulated and unpaid dividends. The shares are
redeemable at the option of the Company, in whole or in part, at a price of
104.125% of the liquidation preference. The redemption price is reduced on an
annual basis until October 1, 2005, at which time the shares are redeemable at
the liquidation preference. The shares of 8 1/4% Convertible Preferred Stock
are convertible, at the option of GECC, in whole or in part at any time, into
shares of the Company's common stock at a conversion price of $26.875 per share
of common stock.

   The Company's obligations with respect to the 8 1/4% Convertible Preferred
Stock are subordinate to all indebtedness and the Exchangeable Preferred Stock
of the Company, and are effectively subordinate to all debt and liabilities of
the Company's subsidiaries. The certificate of designations governing the
Convertible Preferred Stock places restrictions on the Company similar to those
imposed by the Company's Debt Securities and the Exchangeable Preferred Stock.

   In June, September and December of 2002, the Company paid its quarterly
dividends on the 8 1/4% Convertible Preferred Stock by issuing a total of
3,745,000 shares of its common stock. As allowed by the Deposit Agreement
relating to dividend payments on the 8 1/4% Convertible Preferred Stock, the
Company repurchased the 3,745,000 shares of common stock from the dividend
paying agent for a total of $12,239,000 in cash. The Company utilized cash from
an Unrestricted investment subsidiary to effect the stock repurchases. The
Company may choose to continue such issuances and repurchases of stock in the
future in order to avoid further dilution caused by the issuance of common
stock as dividends on its preferred stock (see note 8).

   6.25% Convertible Preferred Stock

   On July 27, 2000, the Company sold shares of its common stock and preferred
stock in concurrent underwritten public offerings (the "July 2000 Offerings").
The Company had granted the underwriters for the July 2000 Offerings
over-allotment options to purchase additional shares in both offerings. On
August 1, 2000, the over-allotment option for the preferred stock offering was
exercised in full. As a result, the Company sold a total of 8,050,000 shares of
its 6.25% Convertible Preferred Stock at a price of $50.00 per share and
received proceeds of $388,412,000 (after underwriting discounts of
$14,088,000). The proceeds from the July 2000 Offerings are being used for
general corporate purposes. See Note 8.

                                      90



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The holders of the 6.25% Convertible Preferred Stock are entitled to receive
cumulative dividends at the rate of 6.25% per annum payable on February 15, May
15, August 15 and November 15 of each year. The Company has the option to pay
dividends in cash or in shares of its common stock (valued at 95% of the
current market value of the common stock, as defined). For the years ended
December 31, 2000, 2001 and 2002, dividends were paid with 281,968, 1,781,764
and 6,338,153 shares of common stock, respectively. The Company is required to
redeem all outstanding shares of the 6.25% Convertible Preferred Stock on
August 15, 2012 at a price equal to the liquidation preference plus accumulated
and unpaid dividends.

   The shares of 6.25% Convertible Preferred Stock are convertible, at the
option of the holder, in whole or in part at any time, into shares of the
Company's common stock at a conversion price of $36.875 per share of common
stock. Beginning on August 15, 2003, under certain circumstances, the Company
will have the right to convert the 6.25% Convertible Preferred Stock, in whole
or in part, into shares of the Company's common stock at the same conversion
price.

   The Company's obligations with respect to the 6.25% Convertible Preferred
Stock are subordinate to all indebtedness and the Exchangeable Preferred Stock
of the Company, and are effectively subordinate to all debt and liabilities of
the Company's subsidiaries. The 6.25% Convertible Preferred Stock ranks in
parity with the 8 1/4% Convertible Preferred Stock.

   Repurchases of the Company's Preferred Stock

   In August and September of 2002, the Company began repurchasing its stock
(both common and preferred) and debt securities in public market transactions
(see Notes 4 and 8). Through December 31, 2002, the Company repurchased shares
of preferred stock with an aggregate redemption amount of $162,853,000. Such
shares of preferred stock had an aggregate carrying value (net of unamortized
issue costs) of $160,413,000. The Company utilized $60,989,000 in cash from an
Unrestricted investment subsidiary to effect these preferred stock repurchases.
The preferred stock repurchases resulted in gains of $99,424,000. Such gains
are offset against dividends on preferred stock in determining the net loss
applicable to common stock for the calculation of loss per common share. The
Company's repurchases of its preferred stock in 2002 were as follows:



                                                                           Cash Paid
                                                                              From
                                                      Redemption Carrying Unrestricted  Gains on
                                             Shares     Amount    Value    Subsidiary  Repurchases
                                            --------- ---------- -------- ------------ -----------
                                                               (In thousands of dollars)
                                                                        
12 3/4% Senior Exchangeable Preferred Stock    78,403  $ 78,403  $ 78,403   $36,744      $41,659
6.25% Convertible Preferred Stock.......... 1,689,000    84,450    82,010    24,245       57,765
                                                       --------  --------   -------      -------
                                                       $162,853  $160,413   $60,989      $99,424
                                                       ========  ========   =======      =======


   Mandatory Redemptions

   Scheduled mandatory redemptions of redeemable preferred stock outstanding at
December 31, 2002 are $800,717,000 for years ending after December 31, 2007.

8. Stockholders' Equity

   Common Stock

   On July 5, 2000, TdF and an affiliate of TdF sold their remaining interests
in the Company to a third party. In connection with this disposition, the
Company issued 17,443,500 shares of its common stock in exchange for TdF's 20%
interest in CCUK (see Note 2).

   On July 27, 2000, the Company sold shares of its common stock in the July
2000 Offerings (see Note 7). On August 1, 2000, the over-allotment option for
the common stock offering was partially exercised. As a result, the

                                      91



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Company sold a total of 12,084,200 shares of its common stock at a price of
$29.50 per share and received proceeds of $342,225,000 (after underwriting
discounts of $14,259,000).

   On January 11, 2001, the Company sold shares of its common stock in an
underwritten public offering. The Company had granted the underwriters an
over-allotment option to purchase additional shares in the offering. On January
12, 2001, the over-allotment option was partially exercised. As a result, the
Company sold a total of 13,445,200 shares of its common stock at a price of
$26.25 per share and received proceeds of $342,853,000 (after underwriting
discounts of $10,084,000). The proceeds from this offering are being used for
general corporate purposes.

   In July of 2002, the Company repurchased 8,500,000 shares of its common
stock for $18,275,000 in cash. The shares purchased by the Company represented
all of the remaining shares previously owned by affiliates of France Telecom.
The purchase was conducted through a privately negotiated transaction. The
Company utilized cash from an Unrestricted investment subsidiary to effect the
stock repurchase.

   In August and September of 2002, the Company began repurchasing its stock
(both common and preferred) and debt securities in public market transactions
(see Notes 4 and 7). Through December 31, 2002, the Company repurchased a total
of 1,510,900 shares of common stock. The Company utilized $2,967,000 in cash
from an Unrestricted investment subsidiary to effect these common stock
repurchases.

   Class A Common Stock

   All of the outstanding shares of the Company's Class A Common Stock were
held by an affiliate of TdF. Each share of Class A Common Stock was
convertible, at the option of its holder at any time, into one share of Common
Stock. The holder of the Class A Common Stock was entitled to one vote per
share on all matters presented to a vote of the Company's shareholders, except
with respect to the election of directors. The holder of the Class A Common
Stock, voting as a separate class, had the right to elect up to two members of
the Company's Board of Directors. The shares of Class A Common Stock also
provided certain governance and anti-dilutive rights.

   In June 2000, the outstanding shares of the Company's Class A Common Stock
held by an affiliate of TdF were converted into 11,340,000 shares of the
Company's Common Stock in connection with the sale of a portion of TdF's shares
to a third party. Upon conversion of the Class A Common Stock, France Telecom
relinquished its governance rights with respect to the Company and its
subsidiaries.

   Compensation Charges Related to Stock Option Grants and Acquisitions

   The Company has recognized non-cash general and administrative compensation
charges related to certain stock options granted to employees and executives
prior to its initial public offering of common stock (the "IPO"). Such charges
amounted to approximately $1,361,000 for each of the three years ended December
31, 2002.

   In July 2000, the Company issued (1) 199,473 shares of its common stock and
(2) options to purchase 17,577 shares of its common stock with an exercise
price of $.01 per share in connection with an acquisition by CCUK. Such shares
and options were deemed to be compensation to the former shareholders of the
acquired company (who remained employed by the Company). As a result, CCUK will
recognize non-cash general and administrative compensation charges of
approximately $8,380,000 over five years.

                                      92



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   In September 2000, the Company issued 336,600 shares of its common stock in
connection with an acquisition by CCUSA. Of such shares, 170,710 were deemed to
be compensation to the former shareholders of the acquired company (who
remained employed by the Company). As a result, CCUSA will recognize non-cash
general and administrative compensation charges of approximately $5,889,000
over four years.

   Stock Options

   In 1995, the Company adopted the Crown Castle International Corp. 1995 Stock
Option Plan (as amended, the "1995 Stock Option Plan"). Up to 28,000,000 shares
of the Company's common stock have been reserved for awards granted to certain
employees, consultants and non-employee directors of the Company and its
subsidiaries or affiliates. These options generally vest over periods of up to
five years from the date of grant (as determined by the Company's Board of
Directors) and have a maximum term of 10 years from the date of grant.

   Upon consummation of a share exchange agreement with CCUK's shareholders in
1998, the Company adopted each of the various CCUK stock option plans. All
outstanding options to purchase shares of CCUK under such plans have been
converted into options to purchase shares of the Company's common stock. Up to
4,392,451 shares of the Company's common stock were reserved for awards granted
under the CCUK plans, and these options generally vest over periods of up to
three years from the date of grant.

   In 2001, the Company adopted the Crown Castle International Corp. 2001 Stock
Incentive Plan (the "2001 Stock Incentive Plan"). Up to 8,000,000 shares of the
Company's common stock have been reserved for awards granted to certain
employees, consultants and non-employee directors of the Company and its
subsidiaries or affiliates. These awards will vest over periods to be
determined by the Company's Board of Directors, and will have a maximum term of
10 years from the date of the grant.

   A summary of awards granted under the various stock option plans is as
follows for the years ended December 31, 2000, 2001 and 2002:



                                            2000                  2001                  2002
                                    --------------------- --------------------- ---------------------
                                                Weighted-             Weighted-             Weighted-
                                                 Average               Average               Average
                                     Number of  Exercise   Number of  Exercise   Number of  Exercise
                                      Shares      Price     Shares      Price     Shares      Price
                                    ----------  --------- ----------  --------- ----------  ---------
                                                                          
Options outstanding at beginning of
  year............................. 19,226,076   $ 9.89   21,183,816   $14.50   23,873,337   $15.45
Options granted....................  4,878,783    28.48    7,269,509    14.76    1,580,860     6.28
Options exercised.................. (2,540,569)    5.16   (3,200,901)    5.14     (306,678)    3.00
Options forfeited..................   (380,474)   22.62   (1,379,087)   21.29   (2,172,403)   18.30
                                    ----------            ----------            ----------
Options outstanding at end of year. 21,183,816    14.50   23,873,337    15.45   22,975,116    14.71
                                    ==========            ==========            ==========
Options exercisable at end of year. 13,692,081    10.21   13,569,588    14.06   14,588,588    15.18
                                    ==========            ==========            ==========


                                      93



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   A summary of options outstanding as of December 31, 2002 is as follows:



                             Number of  Weighted-Average  Number of
                              Options      Remaining       Options
            Exercise Prices Outstanding Contractual Life Exercisable
            --------------- ----------- ---------------- -----------
                                                
            $-0- to $2.00..    213,032     4.3 years        192,182
            2.01 to 4.00...    922,637     4.6 years        760,271
            4.01 to 6.00...    655,748     3.8 years        612,148
            6.01 to 8.00...  4,536,832     6.4 years      3,275,398
            8.01 to 10.00..  3,846,600     7.8 years         36,466
            10.01 to 15.00.  3,187,300     5.8 years      2,998,164
            15.01 to 20.00.  3,207,190     6.5 years      2,592,743
            20.01 to 30.00.  5,002,527     6.3 years      3,217,177
            30.01 to 39.75.  1,403,250     7.1 years        904,039
                            ----------                   ----------
                            22,975,116.                  14,588,588
                            ==========                   ==========


   The weighted-average fair value of options granted during the years ended
December 31, 2000, 2001 and 2002 was $11.39, $4.54 and $1.77, respectively. See
Note 1 for a tabular presentation of the pro forma effect on the Company's net
loss and loss per share as if compensation cost had been recognized for stock
options based on their fair value at the date of grant. The fair value of each
option was estimated on the date of grant using the Black-Scholes
option-pricing model and the following weighted-average assumptions about the
options:



                                        Years Ended December 31,
                                    --------------------------------
                                      2000      2001        2002
                                    --------- --------- ------------
                                               
            Risk-free interest rate     6.37%     4.22%        3.97%
            Expected life.......... 5.0 years 4.5 years    3.7 years
            Expected volatility....       30%       30%          30%
            Expected dividend yield        0%        0%           0%


   CCAL Share Option Scheme

   In 2000, CCAL adopted the Crown Castle Australia Holdings Pty Ltd. Director
and Employee Share Option Scheme (the "CCAL Share Option Scheme"). Under this
plan, CCAL may award options for the purchase of CCAL shares to its employees
and directors. These options generally vest over periods of up to five years
from the date of grant (as determined by CCAL's Board of Directors) and have a
maximum term of seven years from the date of grant. Through December 31, 2002,
all options granted under this plan have an exercise price of Australian $1.00
per share (approximately $0.56). A summary of awards granted under the CCAL
Share Option Scheme is as follows for the years ended December 31, 2000, 2001
and 2002:



                                               2000       2001       2002
                                             --------- ---------  ---------
                                                         
    Options outstanding at beginning of year        -- 3,218,000  4,509,062
    Options granted......................... 3,218,000 2,029,062  2,037,000
    Options forfeited.......................        --  (738,000)  (614,000)
                                             --------- ---------  ---------
    Options outstanding at end of year...... 3,218,000 4,509,062  5,932,062
                                             ========= =========  =========
    Options exercisable at end of year......        --   680,000  1,296,612
                                             ========= =========  =========


                                      94



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The estimated fair value of options granted under the CCAL Share Option
Scheme was approximately $0.14, $0.17 and $0.19 per share in 2000, 2001 and
2002, respectively, based on the Black-Scholes option pricing model using the
following weighted-average assumptions:



                                       Years Ended December 31,
                                    -------------------------------
                                      2000      2001       2002
                                    --------- --------- -----------
                                               
            Risk-free interest rate     5.88%     4.49%       3.84%
            Expected life.......... 5.0 years 4.7 years   5.0 years
            Expected volatility....       30%       30%         30%
            Expected dividend yield        0%        0%          0%


   Shares Reserved For Issuance

   At December 31, 2002, the Company had the following shares reserved for
future issuance:


                                                
                   Common Stock:
                      Convertible Preferred Stock. 16,066,944
                      Stock compensation plans.... 32,282,462
                      Warrants....................  1,639,990
                                                   ----------
                                                   49,989,396
                                                   ==========


                                      95



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


9. Employee Benefit Plans

   The Company and its subsidiaries have various defined contribution savings
plans covering substantially all employees. Employees may elect to contribute a
portion of their eligible compensation, subject to limits imposed by the
various plans. Certain of the plans provide for partial matching of such
contributions. The cost to the Company for these plans amounted to $1,951,000,
$3,678,000 and $4,047,000 for the years ended December 31, 2000, 2001 and 2002,
respectively.

   CCUK has a defined benefit plan which covers all of its employees hired on
or before March 1, 1997. Employees hired after that date are not eligible to
participate in this plan. A summary of information concerning the plan is as
follows:



                                                                    Years Ended
                                                                   December 31,
                                                                 ----------------
                                                                   2001     2002
                                                                 -------  -------
                                                                   (In thousands
                                                                    of dollars)
                                                                    
Change in projected benefit obligation:
   Projected benefit obligation at beginning of year............ $21,505  $28,970
   Service cost.................................................   2,621    3,020
   Interest cost................................................   1,267    1,818
   Participant contributions....................................     864      826
   Actuarial (gain) loss........................................   3,327   (4,462)
   Benefit payments.............................................    (101)    (240)
   Effect of exchange rate changes..............................    (513)   3,159
                                                                 -------  -------
   Projected benefit obligation at end of year..................  28,970   33,091
                                                                 -------  -------
Change in fair value of plan assets:
   Fair value of plan assets at beginning of year...............  23,599   23,240
   Actual return on plan assets.................................  (3,067)  (5,228)
   Employer contributions.......................................   2,592    2,629
   Participant contributions....................................     864      826
   Benefit payments.............................................    (101)    (240)
   Effect of exchange rate changes..............................    (647)   2,336
                                                                 -------  -------
   Fair value of plan assets at end of year.....................  23,240   23,563
                                                                 -------  -------
Funded status:
   Funded status at end of year.................................  (5,730)  (9,528)
   Unrecognized actuarial (gain) loss...........................   7,911   11,266
                                                                 -------  -------
   Net amount recognized........................................ $ 2,181  $ 1,738
                                                                 =======  =======

                                                                   December 31,
                                                                 ----------------
                                                                   2001     2002
                                                                 -------  -------
                                                                   (In thousands
                                                                    of dollars)
Amounts recognized in the consolidated balance sheet consist of:
   Prepaid pension cost......................................... $ 2,181  $ 1,738
   Minimum pension liability....................................      --   (8,418)
   Accumulated other comprehensive loss.........................      --    8,418
                                                                 -------  -------
   Net amount recognized........................................ $ 2,181  $ 1,738
                                                                 =======  =======


                                      96



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)




                                                  Years ended December 31,
                                                 -------------------------
                                                   2000     2001     2002
                                                 -------  -------  -------
                                                 (In thousands of dollars)
                                                          
     Components of net periodic pension cost:
        Service cost............................ $ 3,032  $ 2,808  $ 3,185
        Interest cost...........................   1,137    1,267    1,818
        Expected return on plan assets..........  (1,608)  (1,713)  (1,923)
        Amortization of actuarial (gain) loss...     (45)      --      345
                                                 -------  -------  -------
        Net periodic pension cost............... $ 2,516  $ 2,362  $ 3,425
                                                 =======  =======  =======
     Assumptions used:
        Discount rate...........................    6.00%    5.75%    5.75%
        Expected rate of return on plan assets..    7.00%    7.00%    7.50%
        Rate of increase in compensation levels.    4.00%    3.75%    3.75%


10. Related Party Transactions

   Included in other receivables at December 31, 2001 and 2002 are amounts due
from employees of the Company totaling $416,000 and $388,000, respectively.

   For the years ended December 31, 2000, 2001 and 2002, Crown Atlantic had
revenues from Verizon Communications of $44,053,000, $43,988,000 and
$45,513,000, respectively. For the years ended December 31, 2000, 2001 and
2002, Crown Castle GT had revenues from Verizon Communications of $46,163,000,
$61,793,000 and $67,599,000, respectively. Verizon Communications is the
Company's joint venture partner in both Crown Atlantic and Crown Castle GT (see
Note 2).

   For the years ended December 31, 2000, 2001 and 2002, CCUK had revenues from
the British Broadcasting Corporation ("BBC") of $96,083,000, $93,698,000 and
$101,374,000, respectively. For the year ended December 31, 2002, CCUK had
revenues from BSkyB of $2,487,000. The BBC and BSkyB are the Company's partners
in Digital TV Services Ltd, which was created to promote Freeview (see Note 14).

11. Commitments and Contingencies

   At December 31, 2002, minimum rental commitments under operating leases are
as follows: years ending December 31, 2003--$142,185,000; 2004--$135,155,000;
2005--$132,550,000; 2006--$131,397,000; 2007--$130,977,000;
thereafter--$615,100,000. Rental expense for operating leases was $92,101,000,
$96,113,000 and $144,069,000 for the years ended December 31, 2000, 2001 and
2002, respectively.

   The Company is involved in various claims, lawsuits and proceedings arising
in the ordinary course of business. While there are uncertainties inherent in
the ultimate outcome of such matters and it is impossible to presently
determine the ultimate costs that may be incurred, management believes the
resolution of such uncertainties and the incurrence of such costs should not
have a material adverse effect on the Company's consolidated financial position
or results of operations.

                                      97



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


12. Operating Segments and Concentrations of Credit Risk

   Operating Segments

   The Company's reportable operating segments for 2000, 2001 and 2002 are (1)
the domestic operations other than Crown Atlantic ("CCUSA"), (2) the Australian
operations of CCAL for periods subsequent to the purchase date (see Note 2),
(3) the United Kingdom operations of CCUK, and (4) the operations of Crown
Atlantic. Financial results for the Company are reported to management and the
Board of Directors in this manner, and much of the Company's current debt
financing is structured along these geographic and organizational lines. See
Note 1 for a description of the primary revenue sources from these segments.

   The measurement of profit or loss currently used to evaluate the results of
operations for the Company and its operating segments is earnings before
interest, taxes, depreciation and amortization, as adjusted ("Adjusted
EBITDA"). The Company defines Adjusted EBITDA as operating income (loss) plus
depreciation and amortization, non-cash general and administrative compensation
charges, asset write-down charges and restructuring charges. Adjusted EBITDA is
not intended as an alternative measure of operating results or cash flow from
operations (as determined in accordance with generally accepted accounting
principles), and the Company's measure of Adjusted EBITDA may not be comparable
to similarly titled measures of other companies. There are no significant
revenues resulting from transactions between the Company's operating segments.
Total assets for the Company's operating segments are determined based on the
separate consolidated balance sheets for CCUSA, CCAL, CCUK and Crown Atlantic.
The results of operations and financial position for CCUK and CCAL reflect
appropriate adjustments for their presentation in accordance with generally
accepted accounting principles in the United States. The financial results for
the Company's operating segments are as follows:



                                                                  Year Ended December 31, 2002
                                               ------------------------------------------------------------------
                                                                                           Corporate
                                                                                  Crown    Office and Consolidated
                                                  CCUSA      CCAL       CCUK     Atlantic    Other       Total
                                               ----------  --------  ----------  --------  ---------- ------------
                                                                    (In thousands of dollars)
                                                                                    
Net revenues:
    Site rental and broadcast transmission.... $  324,199  $ 23,542  $  236,342  $ 93,756  $      --   $  677,839
    Network services and other................    130,890     2,494      64,477    25,833         --      223,694
                                               ----------  --------  ----------  --------  ---------   ----------
                                                  455,089    26,036     300,819   119,589         --      901,533
                                               ----------  --------  ----------  --------  ---------   ----------

Costs of operations (exclusive of depreciation
 and amortization)............................    217,399    10,546     167,731    50,523         --      446,199
General and administrative....................     56,152     5,768       9,978     5,525     16,799       94,222
Corporate development.........................         --        --          --        --      7,483        7,483
                                               ----------  --------  ----------  --------  ---------   ----------
Adjusted EBITDA...............................    181,538     9,722     123,110    63,541    (24,282)     353,629
Restructuring charges.........................      4,294        --       8,482       910      3,461       17,147
Asset write-down charges......................     39,185        --       3,198    11,060      2,353       55,796
Non-cash general and administrative
 compensation charges.........................      2,127        --       1,861        --      1,361        5,349
Depreciation and amortization.................    183,465    13,696      61,480    41,394      1,893      301,928
                                               ----------  --------  ----------  --------  ---------   ----------
Operating income (loss).......................    (47,533)   (3,974)     48,089    10,177    (33,350)     (26,591)
Interest and other income (expense)...........     (1,176)      366       1,496       170     65,562       66,418
Interest expense and amortization of deferred
 financing costs..............................    (38,383)   (3,413)    (28,675)  (18,423)  (213,676)    (302,570)
Provision for income taxes....................         --      (407)    (11,869)       --         --      (12,276)
Minority interests............................      1,141     2,826          --    (1,469)        --        2,498
                                               ----------  --------  ----------  --------  ---------   ----------
Net income (loss)............................. $  (85,951) $ (4,602) $    9,041  $ (9,545) $(181,464)  $ (272,521)
                                               ==========  ========  ==========  ========  =========   ==========
Capital expenditures.......................... $   82,415  $  5,104  $  165,619  $ 23,474  $     650   $  277,262
                                               ==========  ========  ==========  ========  =========   ==========
Total assets (at year end).................... $3,299,769  $277,959  $1,972,209  $824,749  $ 517,915   $6,892,601
                                               ==========  ========  ==========  ========  =========   ==========


                                      98



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)




                                                                  Year Ended December 31, 2001
                                               ------------------------------------------------------------------
                                                                                           Corporate
                                                                                  Crown    Office and Consolidated
                                                  CCUSA      CCAL       CCUK     Atlantic    Other       Total
                                               ----------  --------  ----------  --------  ---------- ------------
                                                                    (In thousands of dollars)
                                                                                    
Net revenues:
    Site rental and broadcast transmission.... $  270,113  $ 18,341  $  205,523  $ 81,984  $      --   $  575,961
    Network services and other................    253,674     1,649      32,193    35,474         --      322,990
                                               ----------  --------  ----------  --------  ---------   ----------
                                                  523,787    19,990     237,716   117,458         --      898,951
                                               ----------  --------  ----------  --------  ---------   ----------
Costs of operations (exclusive of depreciation
 and amortization)............................    280,519     8,186     124,329    54,199         --      467,233
General and administrative....................     61,108     6,255      11,365     8,169     15,642      102,539
Corporate development.........................         --        --          48        --     12,289       12,337
                                               ----------  --------  ----------  --------  ---------   ----------
Adjusted EBITDA...............................    182,160     5,549     101,974    55,090    (27,931)     316,842
Restructuring charges.........................      7,142        --       1,839       969      9,466       19,416
Asset write-down charges......................      6,501        --      11,898       767      5,756       24,922
Non-cash general and administrative
 compensation charges.........................      2,127        --       2,624        --      1,361        6,112
Depreciation and amortization.................    177,999    11,091      93,453    44,277      1,671      328,491
                                               ----------  --------  ----------  --------  ---------   ----------
Operating income (loss).......................    (11,609)   (5,542)     (7,840)    9,077    (46,185)     (62,099)
Interest and other income (expense)...........      1,378       403       5,373       309      1,085        8,548
Interest expense and amortization of deferred
 financing costs..............................    (53,293)   (2,442)    (26,678)  (20,651)  (194,380)    (297,444)
Provision for income taxes....................        (33)     (432)    (16,013)       --         --      (16,478)
Minority interests............................       (316)    3,149          --    (1,527)        --        1,306
                                               ----------  --------  ----------  --------  ---------   ----------
Net loss...................................... $  (63,873) $ (4,864) $  (45,158) $(12,792) $(239,480)  $ (366,167)
                                               ==========  ========  ==========  ========  =========   ==========
Capital expenditures.......................... $  363,825  $  2,283  $  218,971  $ 94,194  $   3,829   $  683,102
                                               ==========  ========  ==========  ========  =========   ==========
Total assets (at year end).................... $3,534,495  $257,492  $1,793,746  $886,126  $ 903,599   $7,375,458
                                               ==========  ========  ==========  ========  =========   ==========

                                                                  Year Ended December 31, 2000
                                               ------------------------------------------------------------------
                                                                                           Corporate
                                                                                  Crown    Office and Consolidated
                                                  CCUSA      CCAL       CCUK     Atlantic    Other       Total
                                               ----------  --------  ----------  --------  ---------- ------------
                                                                    (In thousands of dollars)
Net revenues:
    Site rental and broadcast transmission.... $  183,475  $  6,810  $  192,211  $ 63,543  $      --   $  446,039
    Network services and other................    145,694        --      25,463    31,936         33      203,126
                                               ----------  --------  ----------  --------  ---------   ----------
                                                  329,169     6,810     217,674    95,479         33      649,165
                                               ----------  --------  ----------  --------  ---------   ----------
Costs of operations (exclusive of depreciation
 and amortization)............................    159,827     3,578     106,448    44,698         49      314,600
General and administrative....................     49,731     4,444       8,072     8,446      6,251       76,944
Corporate development.........................         --        --         783        --      9,706       10,489
                                               ----------  --------  ----------  --------  ---------   ----------
Adjusted EBITDA...............................    119,611    (1,212)    102,371    42,335    (15,973)     247,132
Non-cash general and administrative
 compensation charges.........................        792        --         974        --      1,361        3,127
Depreciation and amortization.................    121,667     5,219      77,190    33,402      1,318      238,796
                                               ----------  --------  ----------  --------  ---------   ----------
Operating income (loss).......................     (2,848)   (6,431)     24,207     8,933    (18,652)       5,209
Interest and other income (expense)...........      2,688       185         322       914     28,157       32,266
Interest expense and amortization of deferred
 financing costs..............................    (42,981)     (135)    (31,963)  (17,884)  (148,331)    (241,294)
Provision for income taxes....................        (97)       --         (21)     (128)        --         (246)
Minority interests............................        553     3,280      (2,333)   (2,221)        --         (721)
                                               ----------  --------  ----------  --------  ---------   ----------
Net loss...................................... $  (42,685) $ (3,101) $   (9,788) $(10,386) $(138,826)  $ (204,786)
                                               ==========  ========  ==========  ========  =========   ==========
Capital expenditures.......................... $  422,360  $  1,708  $  102,372  $ 99,127  $  10,939   $  636,506
                                               ==========  ========  ==========  ========  =========   ==========


                                      99



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Geographic Information

   A summary of net revenues by country, based on the location of the Company's
subsidiary, is as follows:



                                              Years Ended December 31,
                                             --------------------------
                                               2000     2001     2002
                                             -------- -------- --------
                                             (In thousands of dollars)
                                                      
         United States...................... $419,392 $632,779 $561,932
         Puerto Rico........................    5,256    8,466   12,746
                                             -------- -------- --------
            Total domestic operations.......  424,648  641,245  574,678
                                             -------- -------- --------
         Australia..........................    6,810   19,990   26,036
         United Kingdom.....................  217,570  237,616  300,794
         Other foreign countries............      137      100       25
                                             -------- -------- --------
            Total for all foreign countries.  224,517  257,706  326,855
                                             -------- -------- --------
                                             $649,165 $898,951 $901,533
                                             ======== ======== ========


   A summary of long-lived assets by country of location is as follows:



                                                      December 31, 2001
                             --------------------------------------------------------------------
                             United States                        Other     Total
                                  and                 United     Foreign   Foreign   Consolidated
                              Puerto Rico  Australia  Kingdom   Countries Countries     Total
                             ------------- --------- ---------- --------- ---------- ------------
                                                  (In thousands of dollars)
                                                                   
Property and equipment, net.  $3,909,100   $231,261  $  704,551  $   --   $  935,812  $4,844,912
Other long-lived assets, net     484,269        957     822,304   6,955      830,216   1,314,485
                              ----------   --------  ----------  ------   ----------  ----------
                              $4,393,369   $232,218  $1,526,855  $6,955   $1,766,028  $6,159,397
                              ==========   ========  ==========  ======   ==========  ==========

                                                      December 31, 2002
                             --------------------------------------------------------------------
                             United States                        Other     Total
                                  and                 United     Foreign   Foreign   Consolidated
                              Puerto Rico  Australia  Kingdom   Countries Countries     Total
                             ------------- --------- ---------- --------- ---------- ------------
                                                  (In thousands of dollars)
Property and equipment, net.  $3,704,434   $244,530  $  879,069  $   --   $1,123,599  $4,828,033
Other long-lived assets, net     338,464        768     858,255      --      859,023   1,197,487
                              ----------   --------  ----------  ------   ----------  ----------
                              $4,042,898   $245,298  $1,737,324  $   --   $1,982,622  $6,025,520
                              ==========   ========  ==========  ======   ==========  ==========


   Major Customers

   During 2000, a merger took place between two customers of CCUSA and Crown
Atlantic to form Verizon Communications; revenues from Verizon Communications
aggregated $99,070,000, $128,493,000 and $146,963,000 for the years ended
December 31, 2000, 2001 and 2002, respectively. For the years ended December
31, 2000, 2001, and 2002, consolidated net revenues include $96,083,000,
$93,698,000 and $101,374,000, respectively, from the BBC, a customer of CCUK.

   Concentrations of Credit Risk

   Financial instruments that potentially subject the Company to concentrations
of credit risk are primarily cash and cash equivalents, investments and trade
receivables. The Company mitigates its risk with respect to cash and cash
equivalents by maintaining such deposits at high credit quality financial
institutions and monitoring the credit ratings of those institutions.

                                      100



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The Company derives the largest portion of its revenues from customers in
the wireless telecommunications industry. In addition, the Company has
concentrations of operations in certain geographic areas (including the United
Kingdom and various regions in the United States). The Company mitigates its
concentrations of credit risk with respect to trade receivables by actively
monitoring the creditworthiness of its customers.

13. Restructuring Charges and Asset Write-Down Charges

   In July 2001, the Company announced a restructuring of its business in order
to increase operational efficiency and better align costs with anticipated
revenues. As part of the restructuring, the Company reduced its global staff by
approximately 312 full-time employees, closed five offices in the United States
and closed its development offices in Brazil and Europe. The actions taken for
the restructuring were substantially completed as of the end of 2001. In
connection with the restructuring, the Company recorded cash charges of
$19,416,000 during 2001 related to employee severance payments and costs of
office closures.

   For the year ended December 31, 2002, the Company recorded cash charges of
$8,482,000 in connection with a restructuring of its CCUK business announced in
March 2002. Such charges relate to staff reductions (approximately 212
employees) and the disposition of certain service lines. For the year ended
December 31, 2002, the Company also recorded cash charges of $3,073,000 related
primarily to additional employee severance payments at its corporate office in
connection with the July 2001 restructuring. In October 2002, the Company
announced a restructuring of its U.S. business in order to flatten its
organizational structure to better align with customer demand and enhance our
regional focus to improve customer service. As part of the restructuring, the
Company is reducing its U.S. workforce by approximately 230 employees and is
closing some smaller offices. The actions taken for this restructuring will be
substantially completed by the end of the first quarter of 2003. In connection
with this restructuring, the Company recorded cash charges of $6,070,000 in the
fourth quarter of 2002 related to employee severance payments and costs of
office closures. At December 31, 2001 and 2002, other accrued liabilities
includes $6,591,000 and $5,839,000, respectively, related to restructuring
charges. A summary of the restructuring charges by operating segment is as
follows:



                                                   Year Ended December 31, 2001
                                        -------------------------------------------------
                                                                   Corporate
                                                           Crown   Office and Consolidated
                                         CCUSA     CCUK   Atlantic   Other       Total
                                        -------  -------  -------- ---------- ------------
                                                    (In thousands of dollars)
                                                               
Amounts charged to expense:
   Employee severance.................. $ 2,672  $ 1,839   $ 665    $ 8,730     $ 13,906
   Costs of office closures and other..   4,470       --     304        736        5,510
                                        -------  -------   -----    -------     --------
       Total restructuring charges.....   7,142    1,839     969      9,466       19,416
                                        -------  -------   -----    -------     --------
Amounts paid:
   Employee severance..................  (1,546)  (1,482)   (435)    (5,162)      (8,625)
   Costs of office closures and other..  (3,395)      --     (69)      (736)      (4,200)
                                        -------  -------   -----    -------     --------
                                         (4,941)  (1,482)   (504)    (5,898)     (12,825)
                                        -------  -------   -----    -------     --------
Amounts accrued at end of year:
   Employee severance..................   1,126      357     230      3,568        5,281
   Costs of office closures and other..   1,075       --     235         --        1,310
                                        -------  -------   -----    -------     --------
                                        $ 2,201  $   357   $ 465    $ 3,568     $  6,591
                                        =======  =======   =====    =======     ========



                                      101



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)




                                                   Year Ended December 31, 2002
                                        -------------------------------------------------
                                                                   Corporate
                                                           Crown   Office and Consolidated
                                         CCUSA     CCUK   Atlantic   Other       Total
                                        -------  -------  -------- ---------- ------------
                                                    (In thousands of dollars)
                                                               
Amounts accrued at beginning of year:
   Employee severance.................. $ 1,126  $   357   $ 230    $ 3,568     $  5,281
   Costs of office closures and other..   1,075       --     235         --        1,310
                                        -------  -------   -----    -------     --------
                                          2,201      357     465      3,568        6,591
                                        -------  -------   -----    -------     --------
Amounts charged to expense:
   Employee severance..................   2,259    7,376     621      3,359       13,615
   Costs of office closures and other..   2,035    1,106     289        102        3,532
                                        -------  -------   -----    -------     --------
       Total restructuring charges.....   4,294    8,482     910      3,461       17,147
                                        -------  -------   -----    -------     --------
Amounts paid:
   Employee severance..................  (2,090)  (7,373)   (387)    (6,586)     (16,436)
   Costs of office closures and other..    (630)    (581)   (150)      (102)      (1,463)
                                        -------  -------   -----    -------     --------
                                         (2,720)  (7,954)   (537)    (6,688)     (17,899)
                                        -------  -------   -----    -------     --------
Amounts accrued at end of year:
   Employee severance..................   1,295      360     464        341        2,460
   Costs of office closures and other..   2,480      525     374         --        3,379
                                        -------  -------   -----    -------     --------
                                        $ 3,775  $   885   $ 838    $   341     $  5,839
                                        =======  =======   =====    =======     ========


   The Company recorded asset write-down charges of $24,922,000 during 2001 in
connection with the restructuring of its business announced in July 2001. Such
non-cash charges related to the write-down of certain inventories, property and
equipment, and other assets that were deemed to have no value as a result of
the restructuring. A summary of the asset write-down charges by operating
segment is as follows:



                                     Year Ended December 31, 2001
                            -----------------------------------------------
                                                    Corporate
                                            Crown   Office and Consolidated
                            CCUSA   CCUK   Atlantic   Other       Total
                            ------ ------- -------- ---------- ------------
                                       (In thousands of dollars)
                                                
     Inventories........... $   -- $11,898   $ --     $   --     $11,898
     Property and equipment  6,501      --    767      1,226       8,494
     Other assets..........     --      --     --      4,530       4,530
                            ------ -------   ----     ------     -------
                            $6,501 $11,898   $767     $5,756     $24,922
                            ====== =======   ====     ======     =======


                                      102



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   During the year ended December 31, 2002, the Company abandoned a portion of
its construction in process related to certain open projects, mutually agreed
to terminate certain build-to-suit agreements and wrote down the value of the
related construction in process, wrote down the value of certain inventories,
and wrote down the value of three office buildings. For the year ended December
31, 2002, the Company also recorded asset write-down charges for CCUK related
to certain inventories and property and equipment. A summary of the asset
write-down charges by operating segment is as follows:



                                     Year Ended December 31, 2002
                            -----------------------------------------------
                                                    Corporate
                                            Crown   Office and Consolidated
                             CCUSA   CCUK  Atlantic   Other       Total
                            ------- ------ -------- ---------- ------------
                                       (In thousands of dollars)
                                                
     Inventories........... $ 1,160 $  149 $    --    $   --     $ 1,309
     Property and equipment  38,025  3,049  11,060     2,353      54,487
                            ------- ------ -------    ------     -------
                            $39,185 $3,198 $11,060    $2,353     $55,796
                            ======= ====== =======    ======     =======


14. Digital Terrestrial Television Network

   From 1999 to March 2002, pursuant to a digital transmission contract with an
original term of twelve years, CCUK was responsible for the transmission of the
ITV Digital ("ITVD") signal through the CCUK-owned digital terrestrial
television ("DTT") network to approximately 1.2 million ITVD subscribers in the
U.K. In April 2002, ITVD announced plans to liquidate its assets and returned
its DTT multiplex licenses to the UK Independent Television Commission ("ITC").
CCUK had gross revenues of approximately $27,600,000 annually under the ITVD
transmission contract. ITVD represented approximately 12% of the 2001 gross
revenues of CCUK and approximately 3% of the 2001 consolidated gross revenues
of the Company.

   Following the return of the licenses by ITVD, the ITC conditionally awarded
the license for one multiplex to the BBC and the licenses for two multiplexes
to CCUK. No license fees were paid to the UK government with respect to the
award of the multiplex licenses other than an approximately $38,000 application
fee per multiplex. The licenses were formally granted on August 16, 2002 for a
term of twelve years, and CCUK has the right to renew the licenses for an
additional term of twelve years subject to satisfaction of certain performance
criteria. On October 30, 2002, the BBC, CCUK and British Sky Broadcasting
("BSkyB") launched their multi-channel digital TV and radio broadcasting
services, under the brand "Freeview". Digital TV Services Ltd ("DTVSL"), a
cost-sharing cooperative in which CCUK, the BBC and BSkyB are equal
shareholders, has been created specifically to promote Freeview. In addition to
being the licensed broadcast operator of the two multiplexes awarded to CCUK,
CCUK provides the transmission of the DTT program signals for the two CCUK and
two BBC multiplexes through the CCUK-owned DTT network.

   Following the award of the DTT licenses and in connection with the launch of
Freeview, in August 2002 CCUK entered into an agreement with the BBC to provide
transmission and distribution service for the multiplex awarded to the BBC.
Also in August 2002, CCUK entered into an agreement with BSkyB to provide
transmission, distribution and multiplexing service in relation to 75% of the
capacity of one of the CCUK multiplexes. Both of these agreements are for an
initial period of six years with an option by the BBC and BSkyB for an
additional six-year term. In addition, CCUK has entered into agreements to
provide transmission, distribution and multiplexing services to a number of TV
and radio content providers (EMAP, Flextech, Guardian Media Group, MTV (part of
Viacom), Oneword and UKTV) through the two multiplexes awarded to CCUK.
Agreements with the TV content providers are also for six-year terms, with
renewal options, while agreements with radio providers are generally for
shorter terms. Through such agreements, CCUK is currently transmitting content
for such customers with respect to approximately 90% of its licensed capacity
and is

                                      103



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

currently in negotiations with content providers with respect to the remaining
capacity. CCUK has contracted annual revenues of approximately $40,700,000 for
the provision of transmission, distribution and multiplexing services related
to the new multiplex licenses in 2003, which replaces the approximately
$27,600,000 in annual revenues previously earned from the ITVD transmission
contract.

   CCUK has invested, as a result of its previous contract with ITVD,
substantially all of the capital required to provide the services described
above. CCUK is already incurring, again by virtue of its previous contract with
ITVD, a large proportion of the operating costs required to provide these
services (including payments to British Telecom for distribution circuits and
payments to NTL for site rental). Since CCUK will offer a more complete
end-to-end service to content providers than was provided to ITVD, CCUK expects
to incur certain additional operating costs including (1) payments to BBC's
technology division for multiplexing services and (2) payments to DTVSL for
promotion and marketing of Freeview. CCUK will incur additional annual
operating expenses of approximately $8,500,000 above the costs incurred for the
provision of broadcast services to ITVD.

15. Quarterly Financial Information (Unaudited)

   Summary quarterly financial information for the years ended December 31,
2001 and 2002 is as follows:



                                                           Three Months Ended
                                              --------------------------------------------------
                                               March 31     June 30    September 30  December 31
                                               ---------    --------   ------------  -----------
                                              (In thousands of dollars, except per share amounts)
                                                                         
2001:
   Net revenues.............................. $ 212,953    $229,416     $ 218,396     $ 238,186
   Operating income (loss)...................    (5,076)    (16,321)      (18,302)      (22,400)
   Net loss..................................   (68,055)    (84,733)     (110,330)     (103,049)
   Loss per common share - basic and diluted.     (0.41)      (0.49)        (0.60)        (0.57)

2002:
   Net revenues.............................. $ 220,617    $225,531     $ 227,424     $ 227,961
   Operating income (loss)...................   (20,023)      4,910        (7,904)       (3,574)
   Net loss..................................  (103,393)    (68,598)      (65,628)      (34,902)
   Loss per common share - basic and diluted.     (0.56)      (0.41)        (0.16)        (0.02)


16. Subsequent Events (Unaudited)

   Stock-Based Compensation

   During the first quarter of 2003, the Company granted 5,805,187 shares of
restricted common stock to its executives and certain employees. These
restricted shares have a weighted-average grant-date fair value of $4.15 per
share. The restrictions on the shares will expire in various annual amounts
over the vesting period of five years, with provisions for accelerated vesting
based on the market performance of the Company's common stock. In connection
with these restricted shares, the Company will recognize non-cash general and
administrative compensation charges of approximately $24,106,000 over the
vesting period.

   In February 2003, the Company issued 105,000 shares of common stock to the
non-executive members of its Board of Directors. These shares have a grant-date
fair value of $3.95 per share. In connection with these shares, the Company
will recognize non-cash general and administrative compensation charges of
approximately $415,000 for the first quarter of 2003.


                                      104



               CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

   Repurchases of the Company's Preferred Stock

   In March of 2003, the Company repurchased shares of its preferred stock in a
public market transaction (see Note 7). Such shares of preferred stock had an
aggregate redemption amount and carrying value of $12,733,000. The Company
utilized $9,422,000 in cash from an Unrestricted investment subsidiary to
effect this March preferred stock repurchase. The March preferred stock
repurchase resulted in a gain of $3,311,000.

                                      105



ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

   None.

                                   PART III

ITEM 10. Directors and Executive Officers of the Registrant

   The information required to be furnished pursuant to this item will be set
forth in the 2003 Proxy Statement and is incorporated herein by reference.

ITEM 11. Executive Compensation

   The information required to be furnished pursuant to this item will be set
forth in the 2003 Proxy Statement and is incorporated herein by reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

   The information required to be furnished pursuant to this item will be set
forth in the 2003 Proxy Statement and is incorporated herein by reference.

   The following table summarizes information with respect to equity
compensation plans under which equity securities of the registrant are
authorized for issuance as of December 31, 2002:



                                                   Number of securities Weighted-average
                                                    to be issued upon   exercise price of Number of securities
                                                       exercise of         outstanding    remaining available
                                                   outstanding options, options, warrants      for future
               Plan category(1)(2)                 warrants and rights     and rights         issuance(3)
               -------------------                 -------------------- ----------------- --------------------
                                                                                 
Equity compensation plans approved by security
  holders.........................................      22,975,116           $14.71            9,307,346
Equity compensation plans not approved by security
  holders.........................................              --                                    --
                                                        ----------                             ---------
Total.............................................      22,975,116           $14.71            9,307,346
                                                        ==========           ======            =========

--------
(1) See Note 8 to the Consolidated Financial Statements for more detailed
    information regarding the registrant's equity compensation plans.
(2) Crown Castle Australia Holdings Pty Ltd. ("CCAL", a majority owned
    subsidiary of the registrant) has an equity compensation plan under which
    it awards options for the purchase of CCAL shares to its employees and
    directors. This plan has not been approved by the registrant's security
    holders. See Note 8 to the Consolidated Financial Statements for more
    detailed information regarding this plan.
(3) During the first quarter of 2003, the registrant granted 5,805,187 shares
    of restricted common stock to its executives and certain employees. In
    addition, in February 2003, the registrant issued 105,000 shares of common
    stock to the non-executive members of its Board of Directors. Both of these
    share awards were granted under an equity compensation plan which was
    approved by the registrant's security holders. See Note 16 to the
    Consolidated Financial Statements.

ITEM 13. Certain Relationships and Related Transactions

   The information required to be furnished pursuant to this item will be set
forth in the 2003 Proxy Statement and is incorporated herein by reference.

ITEM 14. Controls and Procedures

   Within 90 days prior to the filing date of this report, the Company
conducted an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based on this evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective in alerting them in
a timely manner to material information relating to the Company required to be
included in the Company's periodic SEC reports.

   Since the date of the Company's most recent evaluation, there were no
significant changes in the Company's internal controls or in other factors that
could significantly affect these controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.

                                      106



                                    PART IV

ITEM 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

  (a)(1) Financial Statements:

      The list of financial statements filed as part of this report is
   submitted as a separate section, the index to which is located on page 62.

  (a)(2) Financial Statement Schedules:

      Schedule I--Condensed Financial Information of Registrant and Schedule
   II--Valuation and Qualifying Accounts follow this Part IV. All other
   schedules are omitted because they are not applicable or because the
   required information is contained in the financial statements or notes
   thereto included in this Form 10-K.

  (a)(3) Exhibits:

      The Exhibits listed on the accompanying Index to Exhibits are filed as
   part of this Annual Report on Form 10-K.

  (b) Reports on Form 8-K:

      The Registrant filed a Current Report on Form 8-K dated October 11, 2002
   with the SEC on October 11, 2002 reporting under Item 5 a restructuring of
   the Company's U.S. business.

      The Registrant filed a Current Report on Form 8-K dated November 14, 2002
   with the SEC on November 15, 2002 furnishing under Item 9 revised guidance
   through 2004 as disclosed in a press release dated November 14, 2002 setting
   forth the Registrant's financial results for the third quarter 2002.

      The Registrant filed a Current Report on Form 8-K dated November 14, 2002
   with the SEC on November 15, 2002 furnishing under Item 9 the certification
   pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 with respect to
   the Company's Quarterly Report on Form 10-Q for the period ended
   September 30, 2002.

      The Registrant filed a Current Report on Form 8-K dated November 22, 2002
   with the SEC on November 26, 2002 reporting under Item 5 the completion of
   an amendment to the Company's UK revolving credit facility.

      The Registrant filed a Current Report on Form 8-K dated January 7, 2003
   with the SEC on January 8, 2003 reporting under Item 5 the granting of
   shares of restricted stock by the Company to certain of its employees and
   officers.

      The Registrant filed a Current Report on Form 8-K dated January 16, 2003
   with the SEC on January 17, 2003 furnishing under Item 9 a notice sent to
   the Company's directors regarding a trading blackout period as a result of a
   change in the Company's 401(k) provider.

      The Registrant filed a Current Report on Form 8-K dated February 7, 2003
   with the SEC on February 10, 2003 (as amended by a Form 8-K/A filed February
   10, 2003) furnishing under Item 9 a notice sent to the Company's directors
   regarding the end of the previously announced trading blackout period.

      The Registrant filed a Current Report on Form 8-K dated February 26, 2003
   with the SEC on February 27, 2002 furnishing under Item 9 a press release
   dated February 26, 2003 disclosing the Company's financial results for the
   fourth quarter and year-ended 2002.

                                      107



                         INDEPENDENT AUDITORS' REPORT

The Board of Directors
Crown Castle International Corp.:

   Under date of February 26, 2003, we reported on the consolidated balance
sheets of Crown Castle International Corp. and subsidiaries as of December 31,
2001 and 2002 and the related consolidated statements of operations and
comprehensive loss, cash flows and stockholders' equity for each of the years
in the three-year period ended December 31, 2002 as contained in the annual
report on Form 10-K for the year ended 2002. The audit report covering the
December 31, 2002 financial statements refers to the adoption of Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
and Statement of Financial Accounting Standards No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" on January 1, 2002, and a change in the method of accounting for
derivative instruments and hedging activities in 2001. In connection with our
audits of the aforementioned consolidated financial statements, we also audited
the related consolidated financial statement schedules as listed under Item
15(a)(2). These financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statement schedules based on our audits.

   In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.

                                          KPMG LLP

Houston, Texas
February 26, 2003

                                      108



                       CROWN CASTLE INTERNATIONAL CORP.

           SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                        BALANCE SHEET (Unconsolidated)

                (In thousands of dollars, except share amounts)



                                                                                      December 31,
                                                                                -----------------------
                                                                                   2001         2002
                                                                                ----------  -----------
                                                                                      
                                    ASSETS
Current assets:
   Cash and cash equivalents................................................... $  211,651  $   159,076
   Receivables and other current assets........................................      3,121        3,539
   Short-term investments......................................................     72,963      108,304
                                                                                ----------  -----------
       Total current assets....................................................    287,735      270,919
Property and equipment, net of accumulated depreciation of $4,349 and $5,649 at
  December 31, 2001 and 2002, respectively.....................................      2,757        1,944
Investments....................................................................    128,500           --
Investment in and net advances to subsidiaries.................................  4,873,891    4,632,069
Deferred financing costs and other assets, net of accumulated amortization of
  $11,994 and $16,219 at December 31, 2001 and 2002, respectively..............     82,198       43,052
                                                                                ----------  -----------
                                                                                $5,375,081  $ 4,947,984
                                                                                ==========  ===========
                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and other accrued liabilities.............................. $   10,982  $     7,247
   Accrued interest............................................................     46,944       45,308
                                                                                ----------  -----------
       Total current liabilities...............................................     57,926       52,555
Long-term debt.................................................................  2,073,646    1,930,917
                                                                                ----------  -----------
       Total liabilities.......................................................  2,131,572    1,983,472
                                                                                ----------  -----------
Redeemable preferred stock.....................................................    878,861      756,014
Stockholders' equity:
 Common stock, $.01 par value; 690,000,000 shares authorized; shares issued:
   December 31, 2001--218,804,363 and December 31, 2002--215,983,294...........      2,188        2,160
 Additional paid-in capital....................................................  3,301,023    3,315,215
 Accumulated other comprehensive income (loss).................................    (43,246)      39,323
 Accumulated deficit...........................................................   (895,317)  (1,148,200)
                                                                                ----------  -----------
       Total stockholders' equity..............................................  2,364,648    2,208,498
                                                                                ----------  -----------
                                                                                $5,375,081  $ 4,947,984
                                                                                ==========  ===========



    See notes to consolidated financial statements and accompanying notes.

                                      109



                       CROWN CASTLE INTERNATIONAL CORP.

     SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                   STATEMENT OF OPERATIONS (Unconsolidated)

                           (In thousands of dollars)



                                                                              Years Ended December 31,
                                                                          -------------------------------
                                                                             2000       2001       2002
                                                                          ---------  ---------  ---------
                                                                                       
Interest and other income (expense)...................................... $  28,216  $    (862) $  73,511
General and administrative expenses......................................    (6,234)   (15,370)   (14,337)
Corporate development expenses...........................................    (7,841)    (7,950)    (7,483)
Restructuring charges....................................................        --     (7,908)    (3,461)
Asset write-down charges.................................................        --     (3,067)        --
Non-cash general and administrative compensation charges.................    (1,361)    (1,361)    (1,361)
Depreciation and amortization............................................    (1,238)    (1,254)    (1,310)
Interest expense and amortization of deferred financing costs............  (148,331)  (194,380)  (213,676)
                                                                          ---------  ---------  ---------
Loss before income taxes and equity in earnings (losses) of subsidiaries.  (136,789)  (232,152)  (168,117)
Equity in earnings (losses) of subsidiaries..............................   (67,997)  (134,015)  (104,404)
                                                                          ---------  ---------  ---------
Net loss.................................................................  (204,786)  (366,167)  (272,521)
Dividends on preferred stock, net of gains on repurchases of preferred
  stock..................................................................   (59,469)   (79,028)    19,638
                                                                          ---------  ---------  ---------
Net loss after deduction of dividends on preferred stock, net of gains on
  repurchases of preferred stock......................................... $(264,255) $(445,195) $(252,883)
                                                                          =========  =========  =========



    See notes to consolidated financial statements and accompanying notes.

                                      110



                       CROWN CASTLE INTERNATIONAL CORP.

     SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                   STATEMENT OF CASH FLOWS (Unconsolidated)

                           (In thousands of dollars)



                                                                             Years Ended December 31,
                                                                        ---------------------------------
                                                                            2000        2001       2002
                                                                        -----------  ---------  ---------
                                                                                       
Cash flows from operating activities:
   Net loss............................................................ $  (204,786) $(366,167) $(272,521)
   Adjustments to reconcile net loss to net cash used for operating
     activities:
     Equity in losses of subsidiaries..................................      67,997    134,015    104,404
     Amortization of deferred financing costs and discounts on long-
       term debt.......................................................      76,764     86,164     89,423
     Equity in losses and write-downs of unconsolidated affiliates.....          --         --      8,271
     Non-cash general and administrative compensation charges..........       1,361      1,361      1,361
     Depreciation and amortization.....................................       1,238      1,254      1,311
     Gains on purchases of long-term debt..............................          --         --    (79,138)
     Asset write-down charges..........................................          --      3,067         --
     Decrease in receivables and other assets..........................       4,441      8,721      1,777
     Increase (decrease) in accounts payable and other accrued
       liabilities.....................................................        (874)     4,373     (3,075)
     Increase (decrease) in accrued interest...........................      27,687     12,350     (1,636)
                                                                        -----------  ---------  ---------
       Net cash used for operating activities..........................     (26,172)  (114,862)  (149,823)
                                                                        -----------  ---------  ---------

Cash flows from investing activities:
   Sale of investments.................................................          --    311,000    280,463
   Distributions from (investment in) subsidiaries.....................  (1,071,433)  (245,634)   176,437
   Net advances from (to) subsidiaries.................................    (181,611)  (421,980)    58,816
   Disposition of (investments in) affiliates..........................      (2,488)   (30,067)     5,582
   Purchase of investments.............................................    (175,000)  (337,463)  (187,304)
   Capital expenditures................................................      (1,158)      (593)      (488)
                                                                        -----------  ---------  ---------
       Net cash provided by (used for) investing activities............  (1,431,690)  (724,737)   333,506
                                                                        -----------  ---------  ---------

Cash flows from financing activities:
   Proceeds from issuance of capital stock.............................     743,290    358,207      1,032
   Purchases of long-term debt.........................................          --         --   (142,820)
   Purchases of capital stock..........................................          --         --    (94,470)
   Proceeds from issuance of long-term debt............................     500,000    450,000         --
   Incurrence of financing costs.......................................     (22,949)    (9,322)        --
                                                                        -----------  ---------  ---------
       Net cash provided by (used for) financing activities............   1,220,341    798,885   (236,258)
                                                                        -----------  ---------  ---------

Net increase (decrease) in cash and cash equivalents...................    (237,521)   (40,714)   (52,575)
Cash and cash equivalents at beginning of year.........................     489,886    252,365    211,651
                                                                        -----------  ---------  ---------
Cash and cash equivalents at end of year............................... $   252,365  $ 211,651  $ 159,076
                                                                        ===========  =========  =========

Supplementary schedule of non-cash investing and financing
  activities:
   Issuance of common stock in connection with acquisitions............ $   707,389  $   1,807  $      --

Supplemental disclosure of cash flow information:
   Interest paid....................................................... $    43,878  $  95,848  $ 125,888
   Income taxes paid...................................................          --         --         --



    See notes to consolidated financial statements and accompanying notes.

                                      111



                       CROWN CASTLE INTERNATIONAL CORP.

     SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                NOTES TO FINANCIAL STATEMENTS (Unconsolidated)

1. Investment in and Net Advances to Subsidiaries

   The Company's investment in subsidiaries is presented in the accompanying
unconsolidated financial statements using the equity method of accounting.
Under the terms of the 2000 Credit Facility, the CCUK Credit Facility, the
Crown Atlantic Credit Facility and the CCUK Bonds, the Company's subsidiaries
are limited in the amount of dividends which can be paid to the Company. Under
the 2000 Credit Facility, the amount of such dividends is generally limited to
(1) $17,500,000 per year; (2) an amount to pay income taxes attributable to
CCIC and the borrowers under the 2000 Credit Facility; and (3) an amount to pay
interest on certain of CCIC's indebtedness. CCUK and Crown Atlantic are
effectively precluded from paying dividends. The restricted net assets of the
Company's subsidiaries totaled approximately $3,616,466,000 at December 31,
2002.

2. Long-term Debt

   Long-term debt consists of the Company's Debt Securities.

3. Redeemable Preferred Stock

   Redeemable preferred stock consists of the Company's Exchangeable Preferred
Stock, 81/4% Convertible Preferred Stock and 6.25% Convertible Preferred Stock.

4. Income Taxes

   Income taxes reported in the accompanying unconsolidated financial
statements are determined by computing income tax assets and liabilities on a
consolidated basis, for the Company and members of its consolidated federal
income tax return group, and then reducing such consolidated amounts for the
amounts recorded by the Company's subsidiaries on a separate tax return basis.

                                      112



                       CROWN CASTLE INTERNATIONAL CORP.

                SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

                    YEARS ENDED DECEMBER 31, 2001 AND 2002

                           (In thousands of dollars)



                                                       Additions  Deductions
                                                       ---------- -----------
                                                        Amounts     Amounts   Effect of
                                            Balance at Charged to   Written   Exchange   Balance
                                            Beginning  Operating  Off Against   Rate    at End of
                Description                  of Year    Expenses  Receivables  Changes    Year
                -----------                 ---------- ---------- ----------- --------- ---------
                                                                         
Allowance for Doubtful Accounts Receivable:
   2001....................................  $18,722    $10,542    $ (4,446)    $(33)    $24,785
                                             =======    =======    ========     ====     =======
   2002....................................  $24,785    $ 6,242    $(16,222)    $504     $15,309
                                             =======    =======    ========     ====     =======



                                      113



                               INDEX TO EXHIBITS
                                Item 15 (a) (3)



Exhibit No. Description
----------- -----------
         
     *2.1   Formation Agreement, dated December 8, 1998, relating to the formation of Crown Atlantic
            Company LLC, Crown Atlantic Holding Sub LLC, and Crown Atlantic Holding Company LLC
    **2.2   Amendment Number 1 to Formation Agreement, dated March 31, 1999, among Crown Castle
            International Corp., Cellco Partnership, doing business as Bell Atlantic Mobile, certain
            Transferring Partnerships and CCA Investment Corp.
    **2.3   Crown Atlantic Company LLC Operating Agreement entered into as of March 31, 1999 by and
            between Cellco Partnership, doing business as Bell Atlantic Mobile, and Crown Atlantic Holding
            Sub LLC
   ***2.4   Agreement to Sublease dated June 1, 1999 by and among BellSouth Mobility Inc., BellSouth
            Telecommunications Inc., The Transferring Entities, Crown Castle International Corp. and Crown
            Castle South Inc.
   ***2.5   Sublease dated June 1, 1999 by and among BellSouth Mobility Inc., Certain BMI Affiliates,
            Crown Castle International Corp. and Crown Castle South Inc.
     +2.6   Agreement to Sublease dated August 1, 1999 by and among BellSouth Personal Communications,
            Inc., BellSouth Carolinas PCS, L.P., Crown Castle International Corp. and Crown Castle South
            Inc.
     +2.7   Sublease dated August 1, 1999 by and among BellSouth Personal Communications, Inc.,
            BellSouth Carolinas PCS, L.P., Crown Castle International Corp. and Crown Castle South Inc.
  ****2.8   Formation Agreement dated November 7, 1999 relating to the formation of Crown Castle GT
            Company LLC, Crown Castle GT Holding Sub LLC, and Crown Castle GT Holding Company
            LLC
  ****2.9   Letter Agreement dated November 7, 1999 between GTE Wireless Incorporated and Crown
            Castle International Corp.
    +2.10   Operating Agreement, dated January 31, 2000, by and between Crown Castle GT Corp. and
            affiliates of GTE Wireless Incorporated
   ###3.1   Restated Certificate of Incorporation of Crown Castle International Corp., dated August 21, 1998
   ###3.2   Amended and Restated By-laws of Crown Castle International Corp., dated August 21, 1998
   ###3.3   Certificate of Designations, Preferences and Relative, Participating, Optional and other Special
            Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of 12 3/4%
            Senior Exchangeable Preferred Stock Due 2010 and 12 3/4% Series B Senior Exchangeable
            Preferred Stock Due 2010 of Crown Castle International Corp. filed with the Secretary of State of
            the State of Delaware on December 18, 1998
 *****3.4   Certificate of Designations, Preferences and Relative, Participating, Optional and Other Special
            Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series A and
            Series B Cumulative Convertible Redeemable Preferred Stock of Crown Castle International
            Corp. filed with the Secretary of State of the State of Delaware on November 19, 1999
   +++3.5   Certificate of Designations, Preferences and Relative, Participating, Optional and Other Special
            Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of 6.25%
            Cumulative Convertible Redeemable Preferred Stock of Crown Castle International Corp. filed
            with the Secretary of State of the State of Delaware on August 2, 2000
     #4.1   Trust Deed related to (Pounds)125,000,000 9% Guaranteed Bonds Due 2007 among Castle
            Transmission (Finance) PLC, as Issuer, Castle Transmission International Ltd. and Castle
            Transmission Services (Holdings) Ltd., as Guarantors, and The Law Debenture Trust Corporation
            p.l.c., as Trustee, dated May 21, 1997


                                      114





Exhibit No.                                           Description
-----------                                           -----------
         
      #4.2  First Supplemental Trust Deed related to (Pounds)125,000,000 9% Guaranteed Bonds Due 2007
            among Castle Transmission (Finance) PLC, as Issuer, Castle Transmission International Ltd. and
            Castle Transmission Services (Holdings) Ltd., as Guarantors, and The Law Debenture Trust
            Corporation p.l.c., as Trustee, dated October 17, 1997

      #4.3  Indenture, dated as of November 25, 1997, between Crown Castle International Corp. and United
            States Trust Company of New York, as Trustee, relating to the 10 5/8% Senior Discount Notes
            Due 2007 (including exhibits)

       4.4  Supplemental Indenture, dated as of December 20, 1999, between Crown Castle International
            Corp. and United States Trust Company of New York, as Trustee, relating to the 10 5/8% Senior
            Discount Notes Due 2007

      #4.5  Article Fourth of Certificate of Incorporation of Castle Tower Holding Corp. (included in
            Exhibit 3.1)

     ##4.6  Specimen Certificate of Common Stock

    ###4.7  Indenture, dated as of December 21, 1998, between Crown Castle International Corp. and the
            United States Trust Company of Texas, N.A., as Trustee, relating to the 12 3/4% Senior
            Subordinated Exchange Debentures Due 2010 (including exhibits)

       4.8  Supplemental Indenture, dated as of December 20, 1999, between Crown Castle International
            Corp. and United States Trust Company of Texas, N.A., as Trustee, relating to the 12 3/4% Senior
            Subordinated Exchange Debentures Due 2010

   ####4.9  Indenture, dated as of May 17, 1999, between Crown Castle International Corp. and United States
            Trust Company of New York, as Trustee, relating to the 9% Senior Notes Due 2011 (including
            exhibits)

  ####4.10  Indenture, dated as of May 17, 1999, between Crown Castle International Corp. and United States
            Trust Company of New York, as Trustee, relating to the 10 3/8% Senior Discount Notes Due 2011
            (including exhibits)

   ***4.11  Registration Rights Agreement dated June 1, 1999 between BellSouth Mobility Inc. and Crown
            Castle International Corp.

  ####4.12  Indenture, dated as of August 3, 1999, between Crown Castle International Corp. and United
            States Trust Company of New York, as Trustee, relating to the 9 1/2% Senior Notes Due 2011
            (including exhibits)

  ####4.13  Indenture, dated as of August 3, 1999, between Crown Castle International Corp. and United
            States Trust Company of New York, as Trustee, relating to the 11 1/4% Senior Discount Notes
            Due 2011 (including exhibits)

 *****4.14  Deposit Agreement among Crown Castle International Corp. and the United States Trust
            Company of New York dated November 19, 1999

 *****4.15  Registration Rights Agreement among Crown Castle International Corp., the United States Trust
            Company of New York and SFG-P INC. dated November 19, 1999

 *****4.16  Warrant Agreement between Crown Castle International Corp. and the United States Trust
            Company of New York dated November 19, 1999

     @4.17  Indenture, dated as of June 26, 2000, between Crown Castle International Corp. and United States
            Trust Company of New York, as Trustee, relating to the 10 3/4% Senior Notes due 2011 (including
            exhibits)


                                      115





Exhibit No.                                            Description
-----------                                            -----------
         

   ##10.1   Site Sharing Agreement between National Transcommunications Limited and The British
            Broadcasting Corporation dated September 10, 1991

   ##10.2   Transmission Agreement between The British Broadcasting Corporation and Castle Transmission
            Services Limited dated February 27, 1997

   ##10.3   Digital Terrestrial Television Transmission Agreement between The British Broadcasting
            Corporation and Castle Transmission International Ltd. dated February 10, 1998

   ##10.4   Contract between British Telecommunications PLC and Castle Transmission International Inc. for
            the Provision of Digital Terrestrial Television Network Distribution Service dated May 13, 1998

   ##10.5   Amending Agreement between the British Broadcasting Corporation and Castle Transmission
            International Limited dated July 16, 1998

   **10.6   Global Lease Agreement dated March 31, 1999 between Crown Atlantic Company LLC and
            Cellco Partnership, doing business as Bell Atlantic Mobile

    #10.7   Castle Tower Holding Corp. 1995 Stock Option Plan (Third Restatement)

   ##10.8   Crown Castle International Corp. 1995 Stock Option Plan (Fourth Restatement)

   ##10.9   Castle Transmission Services (Holdings) Ltd. All Employee Share Option Scheme dated as of
            January 23, 1998

  ##10.10   Rules of the Castle Transmission Services (Holdings) Ltd. Bonus Share Plan

 ###10.11   Employee Benefit Trust between Castle Transmission Services (Holdings) Ltd. and Castle
            Transmission (Trustees) Limited

  ##10.12   Castle Transmission Services (Holdings) Ltd. Unapproved Share Option Scheme dated as of
            January 23, 1998

  ##10.13   Deed of Grant of Option between Castle Transmission Series (Holdings) Ltd. and George Reese
            dated January 23, 1998

  ##10.14   Deed of Grant of Option between Castle Transmission Services (Holdings) Ltd. and Ted B.
            Miller, Jr., dated April 23, 1998

  ##10.15   Deed of Grant of Option between Castle Transmission Services (Holdings) Ltd. and Ted B.
            Miller, Jr., dated January 23, 1998

 +++10.16   Termination Agreement dated as of July 5, 2000, by and between Crown Castle International
            Corp., Crown Castle UK Holdings Limited, France Telecom S.A., Telediffusion de France S.A.,
            and Transmission Future Networks B.V.

  ++10.17   Amended and Restated Rights Agreement dated as of September 18, 2000, between Crown Castle
            International Corp. and ChaseMellon Shareholder Services L.L.C.

  **10.18   Loan Agreement dated as of March 31, 1999 by and among Crown Atlantic HoldCo Sub LLC, as
            the Borrower, Key Corporate Capital Inc., as Agent, and the Financial Institutions listed therein

   +10.19   Amendment to Loan Amendment Agreement, dated June 18, 1999, by and among Castle
            Transmission International Ltd., Castle Transmission Services (Holdings) Ltd., Millennium
            Communications Limited and the various banks and lenders listed as parties thereto

   +10.20   Credit Agreement dated as of March 15, 2000 among Crown Castle Operating Company, Crown
            Castle International Corp., The Chase Manhattan Bank, Credit Suisse First Boston Corporation,
            Key Corporate Capital Inc. and The Bank of Nova Scotia, as Agents, and the several Lenders
            which are parties thereto


                                      116





Exhibit No.                                        Description
-----------                                        -----------
         

    +10.21  Amendment to Loan Amendment Agreement dated December 23, 1999 by and among Castle
            Transmission International, Ltd., Castle Transmission Services (Holdings) Ltd, Millennium
            Communications Limited and the various banks and lenders listed as parties thereto

    ^10.22  Crown Castle International Corp. 2001 Stock Incentive Plan

 ++++10.23  Form of Option Agreement pursuant to 2001 Stock Incentive Plan

   @@10.24  Amended and restated Loan Agreement dated November 22, 2002 by and among Crown Castle
            UK Limited, Crown Castle UK Holdings Limited, Crown Castle Communications Limited and
            the various banks and lenders listed as parties thereto

  @@@10.25  Form of Severance Agreement between Crown Castle International Corp. and each of John P.
            Kelly, W. Benjamin Moreland, E. Blake Hawk, Edward W. Wallander, Robert E. Giles and
            Michael T. Schueppert

  @@@10.26  Form of Restricted Stock Agreement

        11  Computation of Net Loss Per Common Share

        12  Computation of Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges
            and Preferred Stock Dividends

        21  Subsidiaries of Crown Castle International Corp.

        23  Consent of KPMG LLP

     99.1   Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002

--------
#     Incorporated by reference to the exhibits in the Registration Statement
      on Form S-4 previously filed by the Registrant (Registration No.
      333-43873).
##    Incorporated by reference to the exhibits in the Registration Statement
      on Form S-1 previously filed by the Registrant (Registration No.
      333-57283).
*     Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 0-24737) dated December 9, 1998.
**    Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 0-24737) dated March 31, 1999.
###   Incorporated by reference to the exhibits in the Registration Statement
      on Form S-4 previously filed by the Registrant (Registration No.
      333-71715).
***   Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 0-24737) dated June 9, 1999.
+     Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 10-K (Registration No. 000-24737) dated March 30, 2000.
####  Incorporated by reference to the exhibits in the Registration Statement
      on Form S-4 previously filed by the Registrant (Registration No.
      333-87765).
****  Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 0-24737) dated November 7, 1999.
***** Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 0-24737) dated November 19, 1999.
++    Incorporated by reference to the exhibit filed by the Registrant in the
      Registration Statement on Form 8-A12G/A (Registration No. 0-24737) dated
      September 19, 2000.
@     Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 0-24737) dated June 26, 2000.
+++   Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 10-Q (Registration No. 0-24737) dated August 11, 2000
^     Incorporated by reference to the exhibit previously filed by the
      Registrant as Appendix A to the Definitive Schedule 14A Proxy Statement
      (Registration No. 001-16441) filed on May 8, 2001.
++++  Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 10-Q (Registration No. 001-16441) dated September 30,
      2002.
@@    Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 001-16441) dated November 22,
      2002.
@@@   Incorporated by reference to the exhibit previously filed by the
      Registrant on Form 8-K (Registration No. 001-16441) dated January 7, 2003.

                                      117



                                  SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized, on this 26th day of March, 2003.

                                              CROWN CASTLE INTERNATIONAL CORP.

                                              By:   /s/  W. BENJAMIN MORELAND
                                                  -----------------------------
                                                      W. Benjamin Moreland
                                                  Senior Vice President, Chief
                                                            Financial
                                                      Officer and Treasurer

                               POWER OF ATTORNEY

   KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints W. Benjamin Moreland and Wesley D. Cunningham
and each of them, as his or her true and lawful attorneys-in-fact and agents
with full power of substitution and re-substitution for him or her and in his
or her name, place and stead, in any and all capacities, to sign any and all
documents relating to the Annual Report on Form 10-K, including any and all
amendments and supplements thereto, for the year ended December 31, 2002 and to
file the same with all exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or their substitute or substitutes may lawfully do or cause to be
done by virtue hereof.

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been
signed below by the following persons in the capacities indicated below on this
26th day of March, 2003.

            Name                           Title
            ----                           -----

     /s/  JOHN P. KELLY        President, Chief Executive
-----------------------------    Officer and Director
        John P. Kelly            (Principal Executive
                                 Officer)

  /s/  W. BENJAMIN MORELAND    Senior Vice President, Chief
-----------------------------    Financial Officer and
    W. Benjamin Moreland         Treasurer (Principal
                                 Financial Officer)

  /s/  WESLEY D. CUNNINGHAM    Senior Vice President, Chief
-----------------------------    Accounting Officer and
    Wesley D. Cunningham         Corporate Controller
                                 (Principal Accounting
                                 Officer)

     /s/  CARL FERENBACH       Director
-----------------------------
       Carl Ferenbach

   /s/  ARI Q. FITZGERALD      Director
-----------------------------
      Ari Q. Fitzgerald

                                      118



            Name                           Title
            ----                           -----

    /s/  RANDALL A. HACK       Director
-----------------------------
       Randall A. Hack

    /s/  DALE N. HATFIELD      Director
-----------------------------
      Dale N. Hatfield

      /s/  LEE W. HOGAN        Director
-----------------------------
        Lee W. Hogan

/s/  EDWARD C. HUTCHESON, JR.  Director
-----------------------------
  Edward C. Hutcheson, Jr.

    /s/  J. LANDIS MARTIN      Chairman of the Board
-----------------------------
      J. Landis Martin

   /s/  ROBERT F. MCKENZIE     Director
-----------------------------
     Robert F. McKenzie

/s/  WILLIAM D. STRITTMATTER   Director
-----------------------------
   William D. Strittmatter

                                      119



                                 Certification
                     For the Year Ended December 31, 2002

I, John Kelly, certify that:

1. I have reviewed this annual report on Form 10-K of Crown Castle
International Corp. ("registrant");

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

    a) designed such disclosure controls and procedures to ensure that material
       information relating to the registrant, including its consolidated
       subsidiaries, is made known to us by others within those entities,
       particularly during the period in which this annual report is being
       prepared;

    b) evaluated the effectiveness of the registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       annual report (the "Evaluation Date"); and

    c) presented in this annual report our conclusions about the effectiveness
       of the disclosure controls and procedures based on our evaluation as of
       the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

    a) all significant deficiencies in the design or operation of internal
       controls which could adversely affect the registrant's ability to
       record, process, summarize and report financial data and have identified
       for the registrant's auditors any material weaknesses in internal
       controls; and

    b) any fraud, whether or not material, that involves management or other
       employees who have a significant role in the registrant's internal
       controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: March 26, 2003
                                          /s/ JOHN P. KELLY
                                         --------------------------------------
                                          John P. Kelly
                                          President and Chief Executive Officer

                                      120



                                 Certification
                     For the Year Ended December 31, 2002

I, W. Benjamin Moreland, certify that:

1. I have reviewed this annual report on Form 10-K of Crown Castle
International Corp. ("registrant");

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

    a) designed such disclosure controls and procedures to ensure that material
       information relating to the registrant, including its consolidated
       subsidiaries, is made known to us by others within those entities,
       particularly during the period in which this annual report is being
       prepared;

    b) evaluated the effectiveness of the registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       annual report (the "Evaluation Date"); and

    c) presented in this annual report our conclusions about the effectiveness
       of the disclosure controls and procedures based on our evaluation as of
       the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

    a) all significant deficiencies in the design or operation of internal
       controls which could adversely affect the registrant's ability to
       record, process, summarize and report financial data and have identified
       for the registrant's auditors any material weaknesses in internal
       controls; and

    b) any fraud, whether or not material, that involves management or other
       employees who have a significant role in the registrant's internal
       controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: March 26, 2003
                                          /s/ W. BENJAMIN MORELAND
                                         --------------------------------------
                                          W. Benjamin Moreland
                                          Senior Vice President, Chief
                                            Financial Officer and Treasurer

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