Crown Castle
Annual Report 2011

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549___________________________________FORM 10-K __________________________xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2011or oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number 001-16441 __________________________CROWN CASTLE INTERNATIONAL CORP.(Exact name of registrant as specified in its charter) __________________________ Delaware 76-0470458(State or other jurisdictionof incorporation or organization) (I.R.S. EmployerIdentification No.) 1220 Augusta Drive, Suite 500, Houston Texas 77057-2261(Address of principal executive offices) (Zip Code)(713) 570-3000(Registrant's telephone number, including area code) Securities Registered Pursuant toSection 12(b) of the Act Name of Each Exchangeon Which RegisteredCommon Stock, $.01 par value New York Stock ExchangeRights to Purchase Series A ParticipatingCumulative Preferred Stock New York Stock ExchangeSecurities Registered Pursuant to Section 12(g) of the Act: NONE. ______________________________________Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Role 405 of the Securities Act. Yes x No oIndicated by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No xIndicate 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 12months (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 oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and postsuch files). Yes x No oIndicate 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 registrant'sknowledge, 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. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of a "largeaccelerated filer," "accelerated filer" and "smaller reporting company" in rule 12B-2 of the Exchange Act. Large accelerated filer x Accelerated filer o Non-acceleratedfiler o Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No xThe aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $11.4 billion as of June 30, 2011, the lastbusiness day of the registrant's most recently completed second fiscal quarter, based on the New York Stock Exchange closing price on that day of $40.79 per share.Applicable Only to Corporate RegistrantsAs of February 6, 2012 there were 284,470,327 shares of Common Stock outstanding.Documents Incorporated by ReferenceThe 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 statementfor the annual meeting of stockholders (the "2012 Proxy Statement"), which will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscalyear ended December 31, 2011.CROWN CASTLE INTERNATIONAL CORP.TABLE OF CONTENTS Page PART I Item 1. Business1Item 1A. Risk Factors7Item 1B. Unresolved Staff Comments12Item 2. Properties12Item 3. Legal Proceedings13Item 4. Mine Safety Disclosures13 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities14Item 6. Selected Financial Data16Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations18Item 7A. Quantitative and Qualitative Disclosures About Market Risk34Item 8. Financial Statements and Supplementary Data36Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure72Item 9A. Controls and Procedures72Item 9B. Other Information73 PART III Item 10. Directors and Executive Officers of the Registrant73Item 11. Executive Compensation73Item 12. Security Ownership of Certain Beneficial Owners and Management73Item 13. Certain Relationships and Related Transactions73Item 14. Principal Accountant Fees and Services73 PART IV Item 15. Exhibits, Financial Statement Schedules74 Signatures82Cautionary Language Regarding Forward-Looking StatementsThis Annual Report on Form 10-K contains forward-looking statements that are based on our management's expectations as of the filing date of thisreport with the Securities and Exchange Commission ("SEC"). Statements that are not historical facts are hereby identified as forward-looking statements. Inaddition, words such as "estimate," "anticipate," "project," "plan," "intend," "believe," "expect," "likely," "predicted," and similar expressions are intendedto identify forward-looking statements. Such statements include plans, projections and estimates contained in "Item 1. Business," "Item 3. LegalProceedings," "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") and "Item 7A.Quantitative and Qualitative Disclosures About Market Risk" herein. Such forward-looking statements include (1) expectations regarding anticipated growthin the wireless communication industry, carriers' investments in their networks, new tenant additions, cancellations of customer contracts and demand for ourtowers and distributed antenna systems, (2) availability of cash flows and liquidity for, and plans regarding, future discretionary investments includingcapital expenditures, (3) anticipated growth in future revenues, margins, Adjusted EBITDA and operating cash flows, (4) expectations regarding the creditmarkets, our availability and cost of capital, and our ability to service our debt and comply with debt covenants, and (5) the acquisition ("WCPacquisition")of certain subsidiaries of Wireless Capital Partners, LLC ("WCP") and the anticipated closing of the NextG Networks, Inc. ("NextG")acquisition ("NextG acquisition").Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including prevailing market conditions, the risk factorsdescribed under "Item 1A. Risk Factors" herein and other factors. Should one or more of these risks or uncertainties materialize, or should underlyingassumptions prove incorrect, actual results may vary materially from those expected.Unless this Form 10-K indicates otherwise or the context otherwise requires, the terms, "we," "our," "our company," "the company" or "us" as used in thisForm 10-K refer to Crown Castle International Corp. ("CCIC"), a Delaware corporation organized on April 20, 1995, and its subsidiaries. Unless this Form10-K indicates otherwise or the context otherwise requires, the terms "CCUSA" and "in the U.S." refer to our CCUSA segment while the terms "CCAL" and“in Australia” refer to our CCAL segment.PART I Item 1. BusinessOverviewWe own, operate and lease shared wireless infrastructure, including: (1) towers and other structures, such as rooftops (collectively, "towers"), (2)distributed antenna systems ("DAS")(each such system is a network of antennas for the benefit of wireless carriers and is connected by fiber tocommunication hubs designed to facilitate wireless communications), and (3) interests in land under third party towers in various forms ("third party landinterests") (unless the context otherwise suggests or requires, references herein to "wireless infrastructure" include towers, DAS and third party land interests).Our core business is renting space or physical capacity (collectively, "space") on our towers, DAS and, to a lesser extent, third party land interests(collectively, "site rental business") via long-term contracts in various forms, including license, sublease and lease agreements (collectively, "contracts"). Ourwireless infrastructure can accommodate multiple customers ("co-location") for antennas and other equipment necessary for the transmission of signals forwireless communication devices. We seek to increase our site rental revenues by adding more tenants on our wireless infrastructure, which we expect to resultin significant incremental cash flows due to our relatively fixed operating costs.Information concerning our site rental business as of December 31, 2011 is as follows:•We owned, leased or managed approximately 23,800 towers, approximately 800 DAS antenna locations ("nodes"), primarily located outdoors, andapproximately 150 third party land interests.•We have approximately 22,200 towers in the United States, including Puerto Rico ("U.S."), and approximately 1,600 towers in Australia.•Approximately 54% and 71% of our towers in the U.S. are located in the 50 and 100 largest U.S. basic trading areas ("BTAs"), respectively. Ourtowers have a significant presence in 92 of the top 100 BTAs in the U.S. In Australia, 58% of our towers are located in seven major metropolitanareas.•We owned in fee or had perpetual or long-term easements in the land and other property interests (collectively, "land") on which approximately 34%of our site rental gross margin is derived, and we leased, subleased or licensed (collectively, "leased") the land interests on which approximately65% of our site rental gross margin is derived. In addition, we managed approximately 600 towers owned by third parties. The leases for the landinterests under our towers had an average remaining life of approximately 31 years, weighted based on site rental gross margin.Information concerning our customers and site rental contracts as of December 31, 2011 is as follows:•Our customers include many of the world's major wireless communications companies. In the U.S., our four largest customers (Verizon Wireless,AT&T, Sprint Nextel ("Sprint") and T-Mobile) accounted for an aggregate 80% and 74% of our 2011 CCUSA and consolidated revenues,respectively. In Australia, our customers include Telstra, Optus and a joint venture between Vodafone and Hutchison ("VHA").•Revenues derived from our site rental business represented 91% of our 2011 consolidated revenues.•Our site rental revenues are of a recurring nature, and typically in excess of 90% have been contracted for in a prior year.•Our site rental revenues typically result from long-term contracts with (1) initial terms of five to 15 years, (2) multiple renewal periods at theoption of the tenant of five to ten years each, (3) limited termination rights for our customers, and (4) contractual escalations of the rental price.•Our customer contracts have a weighted-average remaining life of approximately nine years, exclusive of renewals at the customers' option, andrepresent $17 billion of expected future cash inflows.To a lesser extent, we also provide certain network services relating to our wireless infrastructure, primarily consisting of antenna installations andsubsequent augmentations, as well as additional site development services relating to existing and new antenna installations on our wireless infrastructure.1StrategyOur strategy is to increase long-term stockholder value by translating anticipated future growth in our core site rental business into growth of our resultsof operations on a per share basis. We believe our strategy is consistent with our mission to deliver the highest level of service to our customers at all times –striving to be their critical partner as we assist them in growing efficient, ubiquitous wireless networks. The key elements of our strategy are to:•Organically grow the revenues and cash flows from our wireless infrastructure. We seek to maximize the site rental revenues derived from ourwireless infrastructure by co-locating additional tenants on our wireless infrastructure through long-term contracts as our customers deploy andimprove their wireless networks. We seek to maximize new tenant additions or modifications of existing installations (collectively, "new tenantadditions") through our focus on customer service and deployment speed. Due to the relatively fixed nature of the costs to operate our wirelessinfrastructure (which tend to increase at approximately the rate of inflation), we expect the increased revenues from rent received from new tenantadditions and the related subsequent impact from contracted escalations to result in incremental site rental gross margin and growth in ouroperating cash flows. We believe there is considerable additional future demand for our existing wireless infrastructure assets based on theirlocation and the anticipated growth in the wireless communications industry.•Allocate capital efficiently. We seek to allocate our available capital, including the net cash provided by our operating activities, in a manner thatwill enhance per share operating results. Our discretionary investments have historically included those shown below (in no particular order):◦purchase shares of our common stock ("common stock") from time to time;◦acquire or construct wireless infrastructure;◦acquire land interests under our towers;◦make improvements and structural enhancements to our existing wireless infrastructure; and◦purchase or redeem our debt.Our long-term strategy is based on our belief that additional demand for our wireless infrastructure will be created by the expected continued growth inthe wireless communications industry, which is predominately driven by the demand for wireless voice and data services by consumers. We believe thatadditional demand for wireless infrastructure will create future growth opportunities for us. We believe that such demand for our wireless infrastructure willcontinue, will result in organic growth of our revenues due to new tenant additions on our existing wireless infrastructure and will create other growthopportunities for us, such as demand for new wireless infrastructure.During 2011, consumer demand for wireless data services continued to grow. As consumer demand for wireless devices such as smartphones, tabletsand laptops, increased, the growth rate of voice services slowed. This growth in wireless data services is driven by increased mobile video, internet usage andmachine-to-machine applications. The following is a discussion of certain recent events and actual and expected growth trends in the U.S. wirelesscommunications industry:•We expect that consumers' growing demands for network speed and quality will likely result in wireless carriers continuing their focus onimproving network quality and expanding capacity by adding additional antennas and other equipment for the transmission of their services towireless infrastructure or to their existing wireless networks in an effort to improve customer retention and satisfaction.•Our customers have introduced, and we believe they plan to continue to deploy, next generation wireless technologies, including 3G and 4G, inresponse to consumer demand for high speed networks. We expect these next generation technologies and others, including LTE, HSPA+ andWiMAX, to translate into additional demand for wireless infrastructure, although the timing and rate of this growth is difficult to predict.•We have seen, and anticipate there could be other, new entrants into the wireless communications industry that should deploy regional or nationalwireless networks for voice and data services.•Spectrum licensed by the Federal Communications Commission ("FCC") in 2006 and 2008 has enabled continued network development, and weexpect these and future auctions should enable continued network development in the U.S. Most recently, Verizon entered into a proposed $3.6billion agreement in December 2011 to purchase, subject to regulatory approval, spectrum originally auctioned in 2006 to SpectrumCo, a jointventure of cable companies.•Consumers are increasing their use of wireless data services according to recent U.S. wireless industry reports.◦Wireless data services grew in 2011 as consumers increased their wireless use of e-mail, internet, social networking, music and videosharing. Wireless data service revenues for 2011 are expected to reach $67 billion, which represents a 22% increase over 2010.(a) ◦The number of wireless subscriber connections in the U.S. now exceeds the total amount of the U.S. population. (b)2◦Wireless devices are trending toward more bandwidth intensive devices such as smartphones, laptops, netbooks, tablets and otheremerging and embedded devices. In particular smartphones are expected to represent over 60% of the devices sold in the U.S. for 2011.(b) ◦The number of smartphone subscribers using the mobile internet has grown by 45% since 2010. (c) ________________________(a)Source: Chetan Sharma Consulting(b)Source: RBC Capital Markets(c)Source: Neilsen2011 Highlights and Recent DevelopmentsSee "Item 7. MD&A" and our consolidated financial statements for a discussion of developments and activities occurring in 2011. In addition, see"Item 7. MD&A" and note 20 of our consolidated financial statements for a discussion of subsequent events occurring in 2012 through the date of this filing,including the definitive agreement to acquire NextG, the WCP acquisition, the refinancing of our credit facility in January 2012 ("January 2012 refinancing")and the exercise of our mandatory conversion right on our 6.25% redeemable convertible preferred stock ("preferred stock conversion").The CompanyVirtually all of our operations are located in the U.S. and Australia. We conduct our operations principally through subsidiaries of Crown CastleOperating Company ("CCOC"), including (1) certain subsidiaries which operate our wireless infrastructure portfolios in the U.S. and (2) a 77.6% ownedsubsidiary that operates our Australia tower portfolio. For more information about our operating segments, as well as financial information about thegeographic areas in which we operate, see note 16 to our consolidated financial statements and "Item 7. MD&A."CCUSASite Rental. The core business of CCUSA is the renting of space on our wireless infrastructure. We predominately rent space to wireless carriers underlong-term contracts for their antennas which transmit a variety of signals related to wireless voice and data. As a result, we believe our wireless infrastructureis integral to our customers' network and their ability to serve their customers.Most of our towers were acquired from the four largest wireless carriers (or their predecessors) through transactions consummated since 1999,including (1) approximately 10,700 towers from Global Signal Inc. ("Global Signal") in 2007, of which approximately 6,600 were originally acquired fromSprint, (2) approximately 4,800 towers during 1999 to 2000 from companies now part of Verizon Wireless, (3) approximately 2,700 towers during 1999 to2000 from companies now part of AT&T, as well as (4) other smaller acquisitions from companies now part of T-Mobile and other independent toweroperators.We generally receive monthly rental payments from tenants, payable under long-term contracts. We have existing master lease agreements with mostwireless carriers, including Verizon Wireless, AT&T, Sprint and T-Mobile; such agreements provide certain terms (including economic terms) that governcontracts on our towers entered into by such carriers during the term of their master lease agreements. Over the last several years, we have negotiated up to 15-year terms for both initial and renewal periods for certain of our customers, which often included fixed escalations. We continue to endeavor to negotiate withour existing customer base for longer contractual terms, which often may contain fixed escalation rates.Our customer contracts have a high renewal rate because of (1) the integral nature of our wireless infrastructure within our customers' networks,(2) customers' cost associated with relocation of their antennas and other equipment to another wireless infrastructure, and (3) zoning and other barriers,including the cost of capital, associated with the construction of new wireless infrastructure. With limited exceptions, the customer contracts may not beterminated prior to the end of their current term. In general, each customer contract which is renewable will automatically renew at the end of its term unless thecustomer provides prior notice of its intent not to renew. See note 15 to our consolidated financial statements for a tabular presentation of the minimum rentalcash payments due to us by tenants pursuant to contract agreements without consideration of tenant renewal options.The average monthly rental payment of a new tenant added to wireless infrastructure varies based on (1) the different regions in the U.S., (2) aggregatecustomer volume, and (3) the type of signal transmitted by the tenant, primarily as a result of the physical size of the antenna installation and relatedequipment. In addition, with respect to DAS, the amount of the rental payment can also be influenced by the cost of installation, including the related fiber. Wealso routinely receive rental payment increases in connection with contract amendments, pursuant to which our customers add additional antennas or otherequipment to wireless infrastructure on which they already have equipment pursuant to pre-existing contract agreements.Approximately two-thirds of our direct site operating expenses consist of ground lease expenses and the remainder includes property taxes, repairs andmaintenance, employee compensation and related benefit costs, and utilities. Our cash operating3expenses tend to escalate at approximately the rate of inflation, partially offset by reductions in cash ground lease expenses from our purchases of landinterests. As a result of the relatively fixed nature of these expenditures, the co-location of additional tenants is achieved at a low incremental operating cost,resulting in high incremental operating cash flows. Our wireless infrastructure portfolio requires minimal sustaining capital expenditures, includingmaintenance and other non-discretionary capital expenditures, and are typically less than 2% of site rental revenues or an annual average over the last threeyears of approximately $25 million. See note 15 to our consolidated financial statements for a tabular presentation of the rental cash payments owed by us tolandlords pursuant to our contractual agreements.Network Services. To a lesser extent, we also offer wireless communication companies and their agents certain network services relating to our wirelessinfrastructure. For 2011, 69% of network services and other revenues related to antenna installations and subsequent augmentation (collectively, "installationservices"), and the remainder related to the following additional site development services relating to existing and new antenna installations on our wirelessinfrastructure: site acquisition, architectural and engineering, zoning and permitting, fiber installations, other construction and other services related tonetwork development. We do not always provide the installation services on our wireless infrastructure as the customer may obtain a third party to completethese services. (see also "—Competition" below). We have grown our network services business over the last several years as a result of our focus on customerservice, increasing our market share for installation services on our wireless infrastructure, promoting site development services and expanding the scope ofservices. We have the capability and expertise to install, with the assistance of our network of subcontractors, equipment and antenna systems for ourcustomers. These activities are typically non-recurring and highly competitive, with a number of local competitors in most markets. Nearly all of our antennainstallation services are billed on a cost-plus profit basis.Customers. We work extensively with large national wireless carriers, and in general, our customers are primarily comprised of providers of wirelessvoice and data services who operate national or regional networks. The following table summarizes the net revenues from our four largest customers expressedas a percentage of our consolidated revenues for 2011. See "Item 1A. Risk Factors."Customer% of 2011CCUSANet Revenues % of 2011ConsolidatedNet RevenuesAT&T25% 23%Sprint22% 21%Verizon Wireless21% 19%T-Mobile12% 11%Total80% 74%Sales and Marketing. Our sales organization markets our wireless infrastructure within the wireless communications industry with the objectives ofrenting space on existing wireless infrastructure and on new wireless infrastructure prior to construction as well as obtaining network services related to ourwireless infrastructure. We seek to become the critical partner and preferred independent wireless infrastructure provider for our customers and increasecustomer satisfaction relative to our peers by leveraging our (1) technological tools, (2) process centric approach, and (3) customer relationships.We use public and proprietary databases to develop targeted marketing programs focused on carrier network expansions, including DAS, and relatednetwork services. We attempt to match specific wireless infrastructure in our portfolio with potential new site demand by obtaining and analyzing information,including our customers' existing antenna locations, tenant contracts, marketing strategies, capital spend plans, deployment status, and actual wireless carriersignal strength measurements taken in the field. We have developed a web-based tool that stores key wireless infrastructure information above and beyondnormal property management information, including data on actual customer signal strength, demographics, site readiness and competitive structures. Inaddition, the web-based tool assists us in estimating potential demand for our wireless infrastructure with greater speed and accuracy. We believe these andother tools we have developed assist our customers in their site selection and deployment of their wireless networks and provide us with an opportunity to haveproactive discussions with them regarding their wireless infrastructure deployment plans and the timing and location of their demand for our wirelessinfrastructure. A key aspect to our sales and marketing strategy is a continued emphasis on our process-centric approach to reduce cycle time related to newleasing and amendments, which helps provide our customers with faster deployment of their networks.A team of national account directors maintains our relationships with our largest customers. These directors work to develop wireless infrastructureleasing and network service opportunities, as well as to ensure that customers' wireless infrastructure needs are efficiently translated into new leases on ourwireless infrastructure. Sales personnel in our area offices develop and maintain local relationships with our customers that are expanding their networks,entering new markets, bringing new technologies to market or requiring maintenance or add-on business. In addition to our full-time sales and marketing staff,a number of senior managers and officers spend a significant portion of their time on sales and marketing activities and call on existing and prospective4customers.Competition. We compete with (1) other independent tower owners which also provide site rental and network services, (2) wireless carriers whichbuild, own and operate their own tower networks and lease space to other wireless communication companies, and (3) owners of alternative facilities,including rooftops, water towers, broadcast towers, DAS, and utility poles. Some of the larger independent tower companies with which we compete in theU.S. include American Tower Corporation and SBA Communications Corporation. Wireless carriers that own and operate their own tower networks generallysome of which are larger and have greater financial resources than we have. We believe that tower location and capacity, deployment speed, quality of serviceand price have been and will continue to be the most significant competitive factors affecting the leasing of wireless infrastructure.Competitors in the network services business include site acquisition consultants, zoning consultants, real estate firms, right-of-way consulting firms,construction companies, tower owners and managers, radio frequency engineering consultants, telecommunications equipment vendors who can provideturnkey site development services through multiple subcontractors, and our customers' internal staffs. We believe that our customers base their decisions onthe outsourcing of network services on criteria such as a company's experience, track record, local reputation, price and time for completion of a project.CCALOur primary business in Australia is the renting of antenna space on towers to our customers. CCAL is owned 77.6% by us and 22.4% by PermanentNominees (Aust) Ltd, acting on behalf of a group of professional and private investors led by Todd Capital Limited. CCAL is the largest independent toweroperator in Australia. As of December 31, 2011, CCAL had approximately 1,600 towers with 58% of such towers located in seven major metropolitan areas.The majority of CCAL's towers were acquired from Optus (in 2000) and Vodafone (in 2001). CCAL also provides a range of services including sitemaintenance and property management services for towers owned by third parties.For 2011, CCAL comprised 6% of our consolidated net revenues. CCAL's principal customers are Telstra, Optus and VHA, which collectivelyaccounted for approximately 94% of CCAL's 2011 revenues. During 2011, the Australian government entered into agreements with carriers to develop and rollout the National Broadband Network ("NBN"). NBN is a national high-speed open-access data network under development targeting nearly all Australianpremises. We believe that the development of NBN may result in additional future demand for new tenant additions on CCAL's existing towers andconstruction of new towers.In Australia, CCAL competes with wireless carriers, which own and operate their own tower networks; service companies that provide site maintenanceand property management services; and other site owners, such as broadcasters and building owners. The other significant tower owners in Australia areBroadcast Australia, an independent operator of broadcast towers, and Telstra and Optus, wireless carriers. We believe that tower location, capacity, quality ofservice, deployment speed and price within a geographic market are the most significant competitive factors affecting the leasing of wireless infrastructure inAustralia.EmployeesAt January 31, 2012, we employed approximately 1,300 people worldwide, including approximately 1,200 in the U.S. We are not a party to anycollective bargaining agreements. We have not experienced any strikes or work stoppages, and management believes that our employee relations are satisfactory.Regulatory and Environmental MattersTo 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 orinternational regulations. The summary below is based on regulations currently in effect, and such regulations are subject to review and modification by theapplicable governmental authority from time to time. If we fail to comply with applicable laws and regulations, we may be fined or even lose our rights toconduct some of our business.United StatesWe are required to comply with a variety of federal, state and local regulations and laws in the U.S., including FCC and Federal Aviation Administration("FAA") regulations and those discussed under "—Environmental" below.Federal Regulations. Both the FCC and the FAA regulate towers used for wireless communications, radio and television broadcasting. Such regulationscontrol the siting, lighting and marking of towers and may, depending on the characteristics of particular towers, require the registration of tower facilities withthe FCC and the issuance of determinations confirming no hazard to air traffic. Wireless communications devices operating on towers are separately regulatedand independently licensed based upon the particular frequency used. In addition, the FCC and the FAA have developed standards to consider proposals fornew or modified tower and antenna structures based upon the height and location, including proximity to airports. Proposals to construct5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 communicationsdevices 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 FAAregulation, tower owners bear the responsibility of notifying the FAA of any tower lighting outage and ensuring the timely restoration of such outages. Failure tocomply with the applicable requirements may lead to civil penalties.Local Regulations. The U.S. Telecommunications Act of 1996 amended the Communications Act of 1934 to preserve state and local zoning authorities'jurisdiction over the siting of communications towers and DAS. The law, however, limits local zoning authority by prohibiting actions by local authoritiesthat discriminate between different service providers of wireless services or ban altogether the provision of wireless services. Additionally, the law prohibitsstate and local restrictions based on the environmental effects of radio frequency emissions to the extent the facilities comply with FCC regulations.Local regulations include city and other local ordinances (including subdivision and zoning ordinances), approvals for construction, modification andremoval of towers and DAS, and restrictive covenants imposed by community developers. These regulations vary greatly, but typically require us to obtainapproval from local officials prior to tower construction. Local zoning authorities may render decisions that prevent the construction or modification of towersor place conditions on such construction or modifications that are responsive to community residents' concerns regarding the height, visibility and othercharacteristics of the towers. To expedite the deployment of wireless networks, the FCC issued a declaratory ruling in 2009 establishing timeframes for thereview of applications by local and state governments of 90 days for co-locations and 150 days for new tower construction. If a jurisdiction fails to act withinthese timeframes, the applicant may file a claim for relief in court. Notwithstanding this declaratory ruling, decisions of local zoning authorities may alsoadversely affect the timing and cost of tower construction and modification.Environmental. We are required to comply with a variety of federal, state and local environmental laws and regulations protecting environmental quality,including air and water quality and wildlife protection. To date, we have not incurred any material fines or penalties or experienced any material adverse effectsto our business as a result of any domestic or international environmental regulations or matters. See "Item 1A. Risk Factors."The construction of new towers and, in some cases, the modification of existing towers in the U.S. may be subject to environmental review under theNational Environmental Policy Act of 1969, as amended ("NEPA"), which requires federal agencies to evaluate the environmental impact of major federalactions. The FCC has promulgated regulations implementing NEPA which require applicants to investigate the potential environmental impact of the proposedtower construction. Should the proposed tower construction present a significant environmental impact, the FCC must prepare an environmental impactstatement, subject to public comment. If the proposed construction or modification of a tower may have a significant impact on the environment, the FCC'sapproval of the construction or modification could be significantly delayed.Our operations are subject to federal, state and local laws and regulations relating to the management, use, storage, disposal, emission, and remediationof, and exposure to, hazardous and non-hazardous substances, materials and wastes. As an owner, lessee or operator of real property, we are subject to certainenvironmental 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. In general, our customer contracts prohibit ourcustomers from using or storing any hazardous substances on our tower sites in violation of applicable environmental laws and require our customers toprovide notice of certain environmental conditions caused by them.As licensees and wireless infrastructure owners, we are also subject to regulations and guidelines that impose a variety of operational requirementsrelating to radio frequency emissions. As employers, we are subject to Occupational Safety and Health Administration (and similar occupational health andsafety legislation in Australia) and similar guidelines regarding employee protection from radio frequency exposure. The potential connection between radiofrequency emissions and certain negative health effects, including some forms of cancer, has been the subject of substantial study by the scientificcommunity in recent years.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 us.Other Regulations. We hold, through certain of our subsidiaries, licenses for common carrier microwave service, which are subject to additionalregulation by the FCC. Our FCC license relating to our 1670-1675 MHz U.S. nationwide spectrum license ("Spectrum") contains certain conditions related tothe services that may be provided thereunder, the technical equipment used in connection therewith and the circumstances under which it may be renewed. In2007, after receiving FCC approval, we entered into a long-term lease of the Spectrum with an initial term through 2013.6AustraliaFederal Regulations. Carrier licenses and nominated carrier declarations issued under the Australian Telecommunications Act 1997 authorize the useof network units for the supply of telecommunications services to the public. The definition of “network units” includes line links and base stations used forwireless voice services but does not include tower infrastructure. Accordingly, CCAL as a tower owner and operator does not require a carrier license under theAustralian Telecommunications Act 1997. Similarly, because CCAL does not own any transmitters or spectrum, it does not currently require any apparatusor spectrum licenses issued under the Australian Radiocommunications Act 1992.Carriers have a statutory obligation to provide other carriers with access to towers, and if there is a dispute (including a pricing dispute), the matter maybe referred to the Australian Competition and Consumer Commission for resolution. As a non-carrier, CCAL is not subject to this requirement, and ourcustomers negotiate site access on a commercial basis.While the Australian Telecommunications Act 1997 grants certain exemptions from planning laws for the installation of "low impact facilities," newlyconstructed towers are expressly excluded from the definition of "low impact facilities." Accordingly, in connection with the construction of towers, CCAL issubject to state and local planning laws that vary on a site by site basis, typically requiring us to obtain approval from local government agencies prior totower construction, subject to certain exceptions. Structural enhancements may be undertaken on behalf of a carrier without state and local planning approvalunder the general "maintenance power" under the Australian Telecommunications Act 1997, although these enhancements may be subject to state and localplanning laws if CCAL is unable to obtain carrier cooperation to use such power. For a limited number of towers, CCAL is also required to install aircraftwarning lighting in compliance with federal aviation regulations. In Australia, a carrier may arguably be able to utilize the "maintenance power" under theAustralian Telecommunications Act 1997 to remain as a tenant on a tower after the expiration of a site license or sublease; however, CCAL's customer accessagreements generally limit the ability of customers to do this, and, even if a carrier did utilize this power, the carrier would be required to pay for CCAL'sfinancial loss, which would roughly equal the site rental revenues that would have otherwise been payable.Local Regulations. In Australia there are various local, state and territory laws and regulations which relate to, among other things, town planning andzoning 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 governmental bodies prior to tower construction and to comply withenvironmental laws on an ongoing basis.Item 1A. Risk FactorsYou should carefully consider all of the risks described below, as well as the other information contained in this document, when evaluating yourinvestment in our securities.Our business depends on the demand for wireless communications and wireless infrastructure, and we may be adversely affected by anyslowdown in such demand. Additionally, a reduction in carrier network investment may materially and adversely affect our business (includingreducing demand for new tenant additions and network services).Demand for our wireless infrastructure depends on the demand for antenna space from our customers, which, in turn, depends on the demand forwireless voice and data services by their customers. The willingness of our customers to utilize our wireless infrastructure, or renew or extend existingcontracts on our wireless infrastructure, is affected by numerous factors, including:•consumer demand for wireless services;•availability and capacity of our wireless infrastructure and associated land interests;•location of our wireless infrastructure;•financial condition of our customers, including their availability and cost of capital;•willingness of our customers to maintain or increase their capital expenditures;•increased use of network sharing, roaming, joint development, or resale agreements by our customers;•mergers or consolidations among our customers;•changes in, or success of, our customers' business models;•governmental regulations, including local and state restrictions on the proliferation of wireless infrastructure;•cost of constructing wireless infrastructure;•technological changes, including those affecting (1) the number or type of wireless infrastructure or other communications sites needed to providewireless communications services to a given geographic area and (2) the obsolescence of certain existing wireless networks; and•our ability to efficiently satisfy our customers' service requirements.A slowdown in demand for wireless communications or our wireless infrastructure may negatively impact our growth or7otherwise have a material adverse effect on us. Over the last several years, new entrants in the marketplace, such as those providing wireless data technologies,have accounted for a significant portion of our new tenant additions. Our expectations for future demand for our wireless infrastructure are based in part onnew entrants into the wireless communications industry with unproven business models. The success of new entrants can be influenced by numerous factors,including the items described above, particularly the availability and cost of capital and the success of their business models. If our customers or potentialcustomers are unable to raise adequate capital to fund their business plans, as a result of disruptions in the financial and credit markets or otherwise, theymay reduce their spending, which could adversely affect our anticipated growth and the demand for our wireless infrastructure and network services.Historically, the amount of our customers' network investment is cyclical and has varied based upon the various matters described in these risk factors.Changes in carrier network investment typically impact the demand for our wireless infrastructure. As a result, changes in carrier plans such as delays in theimplementation of new systems, new technologies or plans to expand coverage or capacity may reduce demand for our wireless infrastructure. Furthermore, thewireless communication industry could experience a slowdown or slowing growth rates as a result of numerous factors, including a reduction in consumerdemand for wireless services and general economic conditions. There can be no assurances that the weakness and uncertainty in the current economicenvironment will not adversely impact the wireless communications industry, which may materially and adversely affect our business, including by reducingdemand for our wireless infrastructure and network services. In addition, such a slowdown may increase competition for site rental customers and networkservices. A wireless communications industry slowdown or a reduction in carrier network investment may materially and adversely affect our business.A substantial portion of our revenues is derived from a small number of customers, and the loss, consolidation or financial instability of any ofour limited number of customers may materially decrease revenues and reduce demand for our wireless infrastructure and network services.For 2011, approximately 74% of our consolidated revenues were derived from AT&T, Sprint, Verizon Wireless and T-Mobile, which represented 23%,21%, 19% and 11%, respectively, of our consolidated net revenues. The loss of any one of our large customers as a result of bankruptcy, insolvency,consolidation, network sharing, roaming, joint development, resale agreements by our customers, merger with other customers of ours or otherwise may resultin (1) a material decrease in our revenues, (2) uncollectible account receivables, (3) an impairment of our deferred site rental receivables, wireless infrastructureassets, site rental contracts and customer relationships intangible assets, and (4) other adverse effects to our business. We cannot guarantee that contracts withour major customers will not be terminated or that these customers will renew their contracts with us. In addition to our four largest customers in the U.S., wealso derive a portion of our revenues and anticipated future growth from customers offering or contemplating offering emerging wireless services; suchcustomers are smaller and have less financial resources than our four largest customers, have business models which may not be successful, and may requireadditional capital. See also "Item 1. Business—The Company."Consolidation among our customers will likely result in duplicate or overlapping parts of networks, which may result in a reduction of wirelessinfrastructure and impact revenues from our wireless infrastructure. In addition, consolidation may result in a reduction in such customers' future capitalexpenditures in the aggregate because their expansion plans may be similar. Wireless carrier consolidation could decrease the demand for our wirelessinfrastructure, which in turn may result in a reduction in our revenues and cash flows.Recent examples of consolidation include Verizon Wireless acquiring Alltel in 2009. Also, Sprint merged with Nextel in August 2005, resulting in theiruse of two separate wireless technologies. During 2010, Sprint announced Network Vision, a multi-year network enhancement to improve network speed,quality and efficiency and consolidate their multiple network technologies, including the elimination of their narrow-band push-to-talk network, referred to asiDEN. Sprint expects the Network Vision deployment to reach 250 million people by the end of 2013. Sprint's plan will likely result in Sprint not renewingcertain contracts with us.Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instrumentslimit 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 tocomply with our covenants, our debt could be accelerated.As a result of our substantial indebtedness:•we may be more vulnerable to general adverse economic and industry conditions;•we may find it more difficult to obtain additional financing to fund discretionary investments and other general corporate requirements or torefinance our existing indebtedness;•we are or will be required to dedicate a substantial portion of our cash flows from operations to the payment of principal and interest on our debt,thereby reducing the available cash flows to fund other projects, including the discretionary investments discussed in "Item 1. Business;"8•we may have limited flexibility in planning for, or reacting to, changes in our business and in the industry;•we may have a competitive disadvantage relative to other companies in our industry with less debt;•we may be required to issue equity securities or securities convertible into equity or sell some of our assets, possibly on unfavorable terms, inorder to meet payment obligations; and•we may be limited in our ability to take advantage of strategic business opportunities, including wireless infrastructure development and mergersand acquisitions.Currently we have debt instruments in place that limit in certain circumstances our ability to incur indebtedness, pay dividends, create liens, sell assetsand engage in certain mergers and acquisitions. Our subsidiaries, under their debt instruments, are also required to maintain specific financial ratios. Ourability to comply with the financial ratio covenants under these instruments and to satisfy our debt obligations will depend on our future operatingperformance. If we fail to comply with the debt restrictions, we will be in default under those instruments, which would cause the maturity of a substantialportion of our long-term indebtedness to be accelerated. If our operating subsidiaries were to default on the debt, the trustee could seek to foreclose the collateralsecuring the debt, in which case we could lose the wireless infrastructure and the revenues associated with the wireless infrastructure. We are currently incompliance with our debt service coverage and leverage ratios. See "Item 7. MD&A—Liquidity and Capital Resources—Debt Covenants" for a furtherdiscussion of our debt covenants.CCIC and CCOC are holding companies that conduct all of their operations through their subsidiaries. Accordingly, CCIC's and CCOC's respectivesources of cash to pay interest and principal on their outstanding indebtedness are distributions relating to their respective ownership interests in theirsubsidiaries from the net earnings and cash flows generated by such subsidiaries or from proceeds of debt or equity offerings. Earnings and cash flowsgenerated by their subsidiaries are first applied by such subsidiaries to conduct their operations, including servicing their respective debt obligations, afterwhich any excess cash flows generally may be paid to such holding company, in the absence of any special conditions such as a continuing event of default.However, their subsidiaries are legally distinct from the holding companies and, unless they guarantee such debt, have no obligation to pay amounts due ontheir debt or to make funds available to us for such payment.We have a substantial amount of indebtedness. In the event we do not repay or refinance such indebtedness, we could face substantial liquidityissues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets to meet our debtpayment obligations.We have a substantial amount of indebtedness (approximately $8.0 billion as of December 31, 2011), after giving effect to the WCP acquisition and ourJanuary 2012 refinancing which we will need to refinance or repay. See "Item 7. MD&A—Liquidity and Capital Resources" for a tabular presentation of ourcontractual debt maturities. There can be no assurances we will be able to refinance our indebtedness on commercially reasonable terms, or terms, includingwith respect to interest rates, as favorable as our current debt, or at all.Economic conditions and the credit markets continue to experience a period of volatility, uncertainty and weakness due to, among other things, theimpact of uncertainty around European sovereign debt. Any renewed financial turmoil, worsening credit environment, European sovereign debt crisis,weakening of the general economy and further uncertainty could impact the availability and cost of debt financing, including with respect to any refinancingof the obligations described above and on our ability to draw the full amount of our $500.0 million delayed draw term loan and our $1.0 billion revolvingcredit facility.If we are unable to refinance or renegotiate our debt, we cannot guarantee that we will be able to generate enough cash flows from operations or that we willbe able to obtain enough capital to service our debt or fund our planned capital expenditures. In such an event, we could face substantial liquidity issues andmight be required to issue equity securities or securities convertible into equity securities, or sell some of our assets to meet our debt payment obligations.Failure to refinance indebtedness when required could result in a default under such indebtedness. Assuming we meet certain financial ratios, we have theability under our debt instruments to incur additional indebtedness, and any additional indebtedness we incur could exacerbate the risks described above.Sales or issuances of a substantial number of shares of our common stock may adversely affect the market price of our common stock.Future sales or issuances of a substantial number of shares of our common stock or other equity related securities may adversely affect the market priceof our common stock. As of February 6, 2012, we had 284.5 million shares of common stock outstanding, and we reserved 8.1 million shares of commonstock for future issuance under our various stock compensation plans. We also expect to issue 8.3 million shares of our common stock in connection withpreferred stock conversion in February 2012.In addition, a small number of stockholders own a significant percentage of our outstanding common stock. If any one of these stockholders, or anygroup of our stockholders, sells a large quantity of shares of our common stock, or the public market perceives that existing stockholders might sell a largequantity of shares of our common stock, the market price of our common9stock may significantly decline.As a result of competition in our industry, including from some competitors with significantly more resources or less debt than we have, we mayfind it more difficult to achieve favorable rental rates on our new or renewing customer contracts.Our growth is dependent on entering into new customer contracts as well as renewing or renegotiating customer contracts when existing customercontracts terminate. We face competition for site rental customers from various sources, including:•other independent wireless infrastructure owners or operators, including towers, rooftops, water towers, DAS, broadcast towers and utility poles;•wireless carriers that own and operate their own wireless infrastructure and lease antenna space to other wireless communication companies; and•new alternative deployment methods in the wireless communication industry.Wireless carriers that own and operate their own wireless infrastructure portfolios are generally substantially larger and have greater financial resourcesthan we have. Competition in our industry may make it more difficult for us to attract new customers, maintain or increase our gross margins or maintain orincrease our market share.New technologies may significantly reduce demand for our wireless infrastructure and negatively impact our revenues.Improvements in the efficiency of wireless networks could reduce the demand for our wireless infrastructure. For example, signal combining technologiesthat permit one antenna to service multiple frequencies and, thereby, multiple customers may reduce the need for our wireless infrastructure. In addition, othertechnologies, such as femtocells and satellite transmission systems (such as low earth orbiting) may, in the future, serve as substitutes for or alternatives toleasing that might otherwise be anticipated or expected on wireless infrastructure had such technologies not existed. Any significant reduction in wirelessinfrastructure leasing demand resulting from the previously mentioned technologies or other technologies may negatively impact our revenues or otherwise havea material adverse effect on us.New wireless technologies may not deploy or be adopted by customers as rapidly or in the manner projected.There can be no assurances that new wireless services and technologies will be introduced or deployed as rapidly or in the manner projected by thewireless or broadcast industries. In addition, demand and customer adoption rates for such new technologies may be lower or slower than anticipated fornumerous reasons. As a result, growth opportunities and demand for our wireless infrastructure as a result of such technologies may not be realized at thetimes or to the extent anticipated.If we fail to retain rights to our wireless infrastructure, including the land interests under our towers, our business may be adversely affected.Our property interests relating to the land interests on which our towers reside consist primarily of leasehold and sub-leasehold interests, fee interests,easements, licenses and rights-of-way. A loss of these interests may interfere with our ability to conduct our business and generate revenues. For variousreasons, we may not always have the ability to access, analyze and verify all information regarding titles and other issues prior to purchasing wirelessinfrastructure. Further, we may not be able to renew ground leases on commercially viable terms. Our ability to retain rights to the land interests on which ourtowers reside depends on our ability to purchase such land or to renegotiate and extend the terms of the leases relating to such land. Approximately 11% of oursite rental gross margins for the year ended December 31, 2011 are derived from towers where the leases for the land interests under such towers have finalexpiration dates of less than ten years. If we are unable to retain rights to the land interests on which our towers reside, our business may be adversely affected.Approximately 6,500 of our towers are leased or operated for an initial period of 32 years (through May 2037) under master leases and subleases withSprint ("Sprint Towers"). We have the option to purchase in 2037 all (but not less than all) of the Sprint Towers from Sprint for approximately $2.3 billion.We may not have the required available capital to exercise our right to purchase these towers at the end of the applicable period. Even if we do have availablecapital, we may choose not to exercise our right to purchase the Sprint Towers for business or other reasons. In the event that we do not exercise these purchaserights, or are otherwise unable to acquire an interest that would allow us to continue to operate these towers after the applicable period, we will lose the cashflows derived from such towers, which may have a material adverse effect on our business. In the event that we decide to exercise these purchase rights, thebenefits of the acquisition of the Sprint Towers may not exceed the costs, which could adversely affect our business.Our network services business has historically experienced significant volatility in demand, which reduces the predictability of our results.The operating results of our network services business for any particular period may vary significantly and should not10necessarily be considered indicative of longer-term results for this activity. Our network services business may be adversely impacted by various factorsincluding competition, economic weakness and uncertainty, our market share, and changes in the type and volume of work performed.If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose ourright to conduct some of our business.A variety of federal, state, local and foreign laws and regulations apply to our business, including those discussed in "Item 1. Business." Failure tocomply with applicable requirements may lead to civil penalties or require us to assume indemnification obligations or breach contractual provisions. Wecannot guarantee that existing or future laws or regulations, including state and local tax laws, will not adversely affect our business, increase delays or resultin additional costs. These factors may have a material adverse effect on us.If radio frequency emissions from wireless handsets or equipment on our wireless infrastructure are demonstrated to cause negative healtheffects, potential future claims could adversely affect our operations, costs and revenues.The potential connection between radio frequency emissions and certain negative health effects, including some forms of cancer, has been the subject ofsubstantial study by the scientific community in recent years. We cannot guarantee that claims relating to radio frequency emissions will not arise in the futureor that the results of such studies will not be adverse to us.Public perception of possible health risks associated with cellular and other wireless communications may slow or diminish the growth of wirelesscompanies, which may in turn slow or diminish our growth. In particular, negative public perception of, and regulations regarding, these perceived healthrisks may slow or diminish the market acceptance of wireless communications services. If a connection between radio emissions and possible negative healtheffects were established, our operations, costs and revenues may be materially and adversely affected. We currently do not maintain any significant insurancewith respect to these matters.Certain provisions of our certificate of incorporation, by-laws and operative agreements and domestic and international competition laws maymake 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 wouldbe beneficial to our stockholders.We have a number of anti-takeover devices in place that will hinder takeover attempts and may reduce the market value of our common stock. Our anti-takeover provisions include:•a staggered board of directors;•the authority of the board of directors to issue preferred stock without approval of the holders of our common stock; and;•advance notice requirements for director nominations and actions to be taken at annual meetings.Our by-laws permit special meetings of the stockholders to be called only upon the request of our Chief Executive Officer or a majority of the board ofdirectors, and deny stockholders the ability to call such meetings. Such provisions, as well as the provisions of Section 203 of the Delaware GeneralCorporation Law, may impede a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offeror otherwise attempting to obtain control of us.In addition, domestic and international competition laws may prevent or discourage us from acquiring wireless infrastructure in certain geographicalareas or impede a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer or otherwiseattempting to obtain control of us.We may be adversely effected by exposure to changes in foreign currency exchange rates relating to our operations in Australia.Our Australian operations expose us to fluctuations in foreign currency exchange rates. For 2011, approximately 6% of our consolidated net revenueswere denominated in Australian dollars. Over the past five years, the Australian dollar has strengthened by 29% against the U.S. dollar. We have nothistorically engaged in significant hedging activities relating to our Australian operations, and we may suffer future losses as a result of changes in currencyexchange rates.Available Information and CertificationsWe maintain an internet website at www.crowncastle.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports onForm 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 madeavailable, free of charge, through the investor relations section of our internet website at http://investor.crowncastle.com as soon as reasonably practicable afterwe electronically file such material with, or11furnish it to, the SEC.In addition, our corporate governance guidelines, business practices and ethics policy and the charters of our Audit Committee, CompensationCommittee and Nominating & Corporate Governance Committee are available through the investor relations section of our internet website athttp://www.crowncastle.com/investor/corpgovernance.asp, and such information is also available in print to any stockholder who requests it.We submitted the Chief Executive Officer certification required by Section 303A.12(a) of the New York Stock Exchange ("NYSE") Listed CompanyManual, relating to compliance with the NYSE's corporate governance listing standards, to the NYSE on June 17, 2011 with no qualifications. We haveincluded the certifications of our Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 and relatedrules as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K.Item 1B. Unresolved Staff CommentsNone.Item 2. PropertiesOfficesOur principal corporate headquarters is owned and located in Houston, Texas. In the U.S., we own or lease area offices located in (1) Canonsburg,Pennsylvania, (2) Charlotte, North Carolina, (3) Alpharetta, Georgia, and (4) Phoenix, Arizona. The principal responsibilities of these area offices are tomanage the renting of wireless infrastructure space on a local basis, maintain the wireless infrastructure already located in the area and service our customersin the area. In addition, general and administrative functions are also performed at the Canonsburg, Pennsylvania location. In addition, we lease additional,smaller offices in locations with high wireless infrastructure concentrations. In Australia, we lease an office in Sydney.Wireless InfrastructureTowers are vertical metal structures generally ranging in height from 50 to 500 feet. In addition, wireless communications equipment may also be placedon building rooftops and other structures. Our towers are located on tracts of land with an average size of approximately 20,000 square feet. These tracts ofland support the towers, equipment shelters and, where applicable, guyed wires to stabilize the structure. DAS are typically located in areas in which zoningrestrictions or other barriers may prevent or delay the deployment of a tower and often are attached to public right-of-way infrastructure such as utility polesand street lights.See "Item 1. Business—Overview" for information regarding our wireless infrastructure portfolio including with respect to our land interests and for adiscussion of the location of our towers in the U.S. and Australia, including the percentage of our U.S. towers in the top 50 and 100 BTAs. See "Item 7.MD&A—Liquidity and Capital Resources—Contractual Cash Obligations" for a tabular presentation of the remaining terms to final expiration of theleases for the land interests which we do not own and on which our towers are located as of December 31, 2011.Approximately 15,700 towers (66% of our total) and their related cash flows effectively secure $4.6 billion of our debt. Governing documents relating toanother approximately 4,900 towers prevent liens from being granted on those towers without approval of a subsidiary of Verizon; however, distributions paidfrom the entities that own those towers also service our tower revenue notes. See note 6 to our consolidated financial statements.Approximately 6,500 of our towers are leased or operated for an initial period of 32 years (through May 2037) under master leases and subleases withSprint. We have the option to purchase in 2037 all (but not less than all) of these Sprint Towers from Sprint for approximately $2.3 billion.Substantially all of our wireless infrastructure can accommodate another tenant either as currently constructed or with appropriate modifications to thestructure. Additionally, if so inclined as a result of a customer request for a new co-location or amendment of an existing installation, we could generallyreplace an existing tower with another tower in its place providing additional capacity, subject to certain restrictions. As of December 31, 2011, the averagenumber of tenants (defined as a unique license and any related amendments thereto for count purposes) per tower is approximately 3 on our towers. Thefollowing is a summary of the number of existing tenants per tower as of December 31, 2011 (see "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" for a discussion of our impairment evaluation and our towers with no tenants).12 Number of Tenants Percent of TowersGreater than five 8%Five 7%Four 12%Three 19%Two 25%Less than two 29%Total 100%Item 3. Legal ProceedingsWe are periodically involved in legal proceedings that arise in the ordinary course of business. Most of these proceedings arising in the ordinary course ofbusiness involve disputes with landlords, vendors, collection matters involving bankrupt customers, zoning and variance matters, condemnation or wrongfultermination claims. While the outcome of these matters cannot be predicted with certainty, management does not expect any pending matters to have a materialadverse effect on us.Item 4. Mine Safety DisclosuresN/A13PART II Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesPrice Range of Common StockOur common stock is listed and traded on the NYSE under the symbol "CCI". The following table sets forth for the calendar periods indicated the highand low sales prices per share of our common stock as reported by the NYSE. High Low2011: First Quarter$46.27 $36.38Second Quarter44.49 39.74Third Quarter44.80 37.53Fourth Quarter44.92 38.702010: First Quarter$40.49 $34.12Second Quarter40.00 34.25Third Quarter44.46 36.01Fourth Quarter44.45 41.10As of February 6, 2012, there were approximately 810 holders of record of our common stock.Dividend PolicyWe have never declared or paid cash dividends on our common stock. It is our current policy to utilize our net cash provided by operating activities toengage in discretionary investments such as those discussed in "Item 1. Business." Periodically, our board of directors assesses the advisability of declaringand paying cash dividends at some point in the future, based on the then-current and anticipated future conditions, including our earnings, net cash providedby operating activities, capital requirements, financial condition, our relative market capitalization, taxable income, taxpayer status, and other factors deemedrelevant by the board of directors. In addition, our ability to pay dividends is limited by the terms of our debt instruments under certain circumstances.In 2011 and 2010, dividends on our 6.25% redeemable convertible preferred stock were paid utilizing approximately $19.5 million and $19.9 millionin cash, respectively. In January 2012, we exercised our right to convert all of the outstanding 6.25% redeemable convertible preferred stock. The conversionof such preferred stock into 8.3 million shares of common stock is expected to occur in February 2012. See note 20 to our consolidated financial statements.Equity Compensation PlansCertain information with respect to our equity compensation plans is set forth in Item 12 herein.14Performance GraphThe following performance graph is a comparison of the five year cumulative stockholder return on our common stock against the cumulative totalreturn of the NYSE Market Index and the Dow Jones Telecommunication Equipment Index for the period commencing December 31, 2006 and endingDecember 31, 2011. The performance graph assumes an initial investment of $100.0 in our common stock and in each of the indices. The performance graphand related text are based on historical data and are not necessarily indicative of future performance. Years Ended December 31,Company/Index/Market 2006 2007 2008 2009 2010 2011Crown Castle International Corp. $100.00 $128.79 $54.44 $120.88 $135.72 $138.72NYSE Market Index 100.00 108.87 66.13 84.83 96.19 92.63DJ Telecommunication Equipment Index 100.00 103.28 61.39 92.59 95.65 88.09The performance graph above and related text are being furnished solely to accompany this annual report on Form 10-K pursuant to Item 201(e) ofRegulation S-K, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated byreference into any filing of ours, whether made before or after the date hereof, regardless of any general incorporation language in such filing.15Item 6. Selected Financial DataOur selected historical consolidated financial and other data set forth below for each of the five years in the period ended December 31, 2011, and as ofDecember 31, 2011, 2010, 2009, 2008 and 2007 have been derived from our consolidated financial statements. The information set forth below should be readin conjunction with "Item 1. Business," "Item 7. MD&A" and our consolidated financial statements. Years Ended December 31, 2011 2010 2009 2008 2007 (In thousands of dollars, except per share amounts)Statement of Operations Data: Net revenues: Site rental$1,853,550 $1,700,761 $1,543,192 $1,402,559 $1,286,468Network services and other179,179 177,897 142,215 123,945 99,018Net revenues2,032,729 1,878,658 1,685,407 1,526,504 1,385,486Operating expenses: Costs of operations(a): Site rental481,398 467,136 456,560 456,123 443,342Network services and other106,987 114,241 92,808 82,452 65,742Total costs of operations588,385 581,377 549,368 538,575 509,084General and administrative173,493 165,356 153,072 149,586 142,846Restructuring charges (credits)— — — — 3,191Asset write-down charges(b)22,285 13,687 19,237 16,888 65,515Acquisition and integration costs3,310 2,102 — 2,504 25,418Depreciation, amortization and accretion552,951 540,771 529,739 526,442 539,904Operating income (loss)692,305 575,365 433,991 292,509 99,528Interest expense and amortization of deferred financing costs(c)(507,587) (490,269) (445,882) (354,114) (350,259)Impairment of available-for-sale securities(d)(4,216) — — (55,869) (75,623)Gains (losses) on retirement of long-term obligations(c)— (138,367) (91,079) 42 —Net gain (loss) on interest rate swaps(e)— (286,435) (92,966) (37,888) —Interest income666 2,204 2,967 8,336 14,172Other income (expense)(1,361) (603) 2,446 (6,235) (4,821)Income (loss) before income taxes179,807 (338,105) (190,523) (153,219) (317,003)Benefit (provision) for income taxes(f)(8,347) 26,846 76,400 104,361 94,039Net income (loss)(g)171,460 (311,259) (114,123) (48,858) (222,964)Less: Net income (loss) attributable to the noncontrolling interest383 (319) 209 — (151)Net income (loss) attributable to CCIC stockholders171,077 (310,940) (114,332) (48,858) (222,813)Dividends on preferred stock and losses on purchases of preferred stock(22,940) (20,806) (20,806) (20,806) (20,805)Net income (loss) attributable to CCIC stockholders after deduction of dividends onpreferred stock and losses on purchases of preferred stock$148,137 $(331,746) $(135,138) $(69,664) $(243,618)Net income (loss) attributable to CCIC common stockholders, after deduction ofdividends on preferred stock and losses of purchases of preferred stock, percommon share - basic and diluted$0.52 $(1.16) $(0.47) $(0.25) $(0.87)Weighted-average common shares outstanding (in thousands): Basic283,821 286,764 286,622 282,007 279,937Diluted285,947 286,764 286,622 282,007 279,93716 Years Ended December 31, 2011 2010 2009 2008 2007 (In thousands of dollars, except per share amounts)Other Data: Summary cash flow information: Net cash provided by (used for) operating activities$643,454 $603,430 $571,256 $513,001 $350,355Net cash provided by (used for) investing activities(399,865) (390,949) (172,145) (476,613) (791,448)Net cash provided by (used for) financing activities(275,712) (866,624) 214,396 47,717 (77,782)Ratio of earnings to fixed charges(h)1.3 — — — —Balance Sheet Data (at period end): Cash and cash equivalents$80,120 $112,531 $766,146 $155,219 $75,245Property and equipment, net4,861,227 4,893,651 4,895,983 5,060,126 5,051,055Total assets10,545,096 10,469,529 10,956,606 10,361,722 10,488,133Total debt and other long-term obligations(c)6,885,699 6,778,894 6,579,150 6,102,189 6,072,103Total CCIC stockholders' equity2,386,245 2,445,373 2,936,241 2,715,865 3,166,911____________________(a)Exclusive of depreciation, amortization and accretion shown separately.(b)2007 is inclusive of $57.6 million related to the write-off of substantially all of the assets other than the Spectrum from our former mobile television business. For 2011, 2010, 2009and 2008, the asset write-down charges relate predominately to the abandonment or disposal of wireless infrastructure and the write-off of site acquisition and permitting costs forwireless infrastructure that was not completed. See note 17 to our consolidated financial statements.(c)Over the last five years, we have used debt to refinance other debt and fund discretionary investments such as acquisitions and purchases of common stock. We maintain debtleverage at levels that we believe optimize our weighted-average cost of capital. The following is a discussion of our debt activity for each of the last five years. See also "Item 7.MD&A—Liquidity and Capital Resources—Contractual Cash Obligations" and notes 6 and 20 to our consolidated financial statements for additional information regarding ourdebt, including the January 2012 refinancing.•During 2010 and 2009, we issued $3.5 billion and $2.9 billion face value of debt, respectively, and purchased and repaid $3.4 billion and $2.4 billion face value of debt,respectfully. These refinancings extended the maturities of our debt portfolio and increased our weighted-average cost of debt. We incurred losses on the purchase andrepayment of this debt.•During 2007, $1.8 billion of mortgage loans remained outstanding as a result of the merger of Global Signal with and into a subsidiary of ours ("Global Signal Merger"). Weborrowed an aggregate of $725.0 million of term and revolving loans and predominately used the proceeds to purchase common stock.(d)In 2011, 2008 and 2007, we recorded impairment charges related to an other-than-temporary decline in the value of our investment in FiberTower Corporation.(e)The 2010 and 2009 amounts are predominately losses on various interest rate swaps that no longer qualified for hedge accounting and included swaps that were no longer economichedges. The 2008 amount predominately represents losses on our former interest rate swaps with a subsidiary of Lehman Brothers Holdings Inc. that no longer qualified for hedgeaccounting. As of December 31, 2011, we had no interest rate swaps outstanding.(f)As a result of a deferred tax liability recorded in connection with the Global Signal Merger, we recorded partial tax benefits for our losses in 2010 and full tax benefits for all of 2009,2008 and 2007. 2008 includes tax benefits of $74.9 million resulting from the completion of the Internal Revenue Service ("IRS") examination of our federal tax return for 2004.See note 9 to our consolidated financial statements regarding our tax position as of and for the years ended December 31, 2011 and 2010 and our ability to recognize tax benefits inthe future.(g)No cash dividends on our common stock were declared or paid in 2011, 2010, 2009, 2008 or 2007.(h)For purposes of computing the ratio of earnings to fixed charges, earnings represent income (loss) before income taxes and fixed charges. Fixed charges consist of interest expense,the interest component of operating leases, amortization of deferred financing costs and dividends on preferred stock classified as liabilities. For 2010, 2009, 2008 and 2007 earningswere insufficient to cover fixed charges by $338.1 million, $190.5 million, $153.2 million and $318.4 million, respectively.17Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsGeneral OverviewOverviewWe own, lease or manage approximately 23,800 towers, approximately 800 nodes, primarily located outdoors and approximately 150 third party landinterests. Revenues generated from our core site rental business represented 91% of our 2011 consolidated net revenues. CCUSA, our largest operatingsegment, accounted for 94% of our 2011 site rental revenues. See "Item 1. Business" for a further discussion of our business, including our long-termstrategy, certain key terms of our lease agreements and growth trends in the wireless communications industry.The following are certain highlights of our business fundamentals as of and for the year ended December 31, 2011:•Potential growth resulting from wireless network expansion and new entrants◦We expect wireless carriers will continue their focus on improving network quality and expanding capacity by adding additionalantennas and other equipment on our wireless infrastructure.◦We expect existing and potential new wireless carrier demand for our wireless infrastructure will result from (1) next generationtechnologies, (2) continued development of mobile internet applications, (3) adoption of other emerging and embedded wireless devices,(4) increasing smartphone penetration, and (5) wireless carrier focus on expanding coverage.◦Substantially all of our wireless infrastructure can accommodate another tenant, either as currently constructed or with appropriatemodifications to the structure.◦U.S. wireless carriers continue to invest in their networks.◦We expect our site rental revenues will grow approximately 5% from the full year 2011 to 2012. We expect our new tenant additions,inclusive of the estimated impact from Sprint as it deploys network enhancements (referred to as Network Vision), will result in anapproximately 5% year-over-year growth in site rental revenues from 2011 to 2012, exclusive of the impact of the WCP acquisitionand the anticipated closing of the NextG acquisition. Our 2012 site rental revenue growth expectations do not assume any netcontribution to growth from the existing base of business (which have historically averaged approximately 4% per annum) as theincrease attributable to lease escalations and straight-line impact of renewals is expected to be offset by the timing of expectedcancellations of customer contracts due to prior wireless carrier consolidation.•Site rental revenues under long-term customer contracts with contractual escalations◦Initial terms of five to 15 years with multiple renewal periods at the option of the tenant of five to ten years each.◦Weighted-average remaining term of approximately nine years, exclusive of renewals at the customer's option, representingapproximately $17 billion of expected future cash inflows.•Revenues predominately from large wireless carriers◦Verizon Wireless, AT&T, Sprint and T-Mobile accounted for 74% of consolidated revenues.•Majority of land interests under our towers under long-term control◦Approximately 89% and 73% of our site rental gross margin is derived from towers that we own or control for greater than ten and 20years, respectively. The aforementioned percentages include towers that reside on land interests that are owned in fee or where we haveperpetual or long-term easements, which represent approximately 34% of our site rental gross margin.•Relatively fixed wireless infrastructure operating costs with high incremental margins and cash flows on organic revenue growth◦Our wireless infrastructure operating costs tend to increase at approximately the rate of inflation and are not typically influenced bynew tenant additions.◦Our incremental margin on additional site rental revenues represents 91% of the related increase in site rental revenues.•Minimal sustaining capital expenditure requirements◦Sustaining capital expenditures were $23.4 million, which represented less than 2% of net revenues.•Debt portfolio with long-dated maturities extended over multiple years with the vast majority of such debt having a fixed rate (see "Item 7A.Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt)◦80% of our debt has fixed rate coupons, after giving effect to the WCP acquisition and the January 2012 refinancing.◦Our debt service coverage and leverage ratios were comfortably within our respective covenant requirements. See "Item 7. MD&A—Liquidity and Capital Resources" for a further discussion of our debt covenants.18•Significant cash flows from operations◦Net cash provided by operating activities was $643.5 million.◦We believe our site rental business can be characterized as a stable cash flow stream, which we expect to grow as a result of futuredemand for our wireless infrastructure.•Capital allocated to drive long-term stockholder value (per share) (see also "Item 7. MD&A—Liquidity and Capital Resources" )◦Historical discretionary investments include (in no particular order): purchasing our common stock, acquiring or constructingwireless infrastructure, acquiring land interests under our towers, improving and structurally enhancing our existing wirelessinfrastructure, and purchasing or redeeming our debt.◦Discretionary investments during 2011 included: (1) the purchase of 7.4 million shares of common stock for $303.4 million; and (2)$324.6 million in capital expenditures, including $196.4 million for land interests.◦In December 2011, we entered into a definitive agreement to acquire NextG for approximately $1.0 billion in cash, subject to certainadjustments. NextG has over 7,000 nodes on-air and approximately 1,500 nodes under construction. Our acquisition of NextG isexpected to close in the second quarter of 2012.◦In January 2012, we acquired certain subsidiaries of WCP for a gross purchase price of approximately $500 million, exclusive ofpurchase price adjustments . Upon closing in January 2012, WCP held various contracts with wireless site owners, includingapproximately 2,300 ground lease related assets, of which 150 related to our wireless infrastructure.◦In January 2012, we refinanced and repaid our credit facility and term loans with the proceeds of a $3.1 billion senior secured creditfacility, which funded the January 2012 WCP acquisition and is expected to be used to fund the NextG acquisition.Results of OperationsThe following discussion of our results of operations should be read in conjunction with "Item 1. Business," "Item 7. MD&A—Liquidity and CapitalResources" and our consolidated financial statements. The following discussion of our results of operations is based on our consolidated financial statementsprepared in accordance with generally accepted accounting principles in the U.S. which require us to make estimates and judgments that affect the reportedamounts (see "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 2 to our consolidated financialstatements).19Comparison of Consolidated ResultsThe following is a comparison of our 2011, 2010 and 2009 consolidated results of operations: Years Ended December 31, Percent Change(b) 2011 2010 2009 2011vs.2010 2010vs.2009 (In thousands of dollars) Net revenues: Site rental$1,853,550 $1,700,761 $1,543,192 9 % 10%Network services and other179,179 177,897 142,215 1 25Net revenues2,032,729 1,878,658 1,685,407 8 11Operating expenses: Costs of operations(a): Site rental481,398 467,136 456,560 3 2Network services and other106,987 114,241 92,808 (6) 23Total costs of operations588,385 581,377 549,368 1 6General and administrative173,493 165,356 153,072 5 8Asset write-down charges22,285 13,687 19,237 * *Acquisition and integration costs3,310 2,102 — * *Depreciation, amortization and accretion552,951 540,771 529,739 2 2Total operating expenses1,340,424 1,303,293 1,251,416 3 4Operating income (loss)692,305 575,365 433,991 20 33Interest expense and amortization of deferred financingcosts(507,587) (490,269) (445,882) * *Gains (losses) on retirement of long-term obligations— (138,367) (91,079) * *Net gain (loss) on interest rate swaps— (286,435) (92,966) * *Interest income666 2,204 2,967 * *Other income (expense)(5,577) (603) 2,446 * *Income (loss) before income taxes179,807 (338,105) (190,523) * *Benefit (provision) for income taxes(8,347) 26,846 76,400 * *Net income (loss)171,460 (311,259) (114,123) * *Less: Net income (loss) attributable to thenoncontrolling interest383 (319) 209 * *Net income (loss) attributable to CCIC stockholders$171,077 $(310,940) $(114,332) * *____________________*Percentage is not meaningful(a)Exclusive of depreciation, amortization and accretion shown separately.(b)Inclusive of the impact of foreign exchange fluctuations. See "Item 7. MD&A—Results of Operations—Comparison of Operating Segments—CCAL."2011 and 2010. Our consolidated results of operations for 2011 and 2010, respectively, predominately consist of our CCUSA segment, whichaccounted for (1) 94% and 95% of consolidated net revenues, (2) 94% and 95% of consolidated gross margins, and (3) 98% and 100% of consolidated netincome (loss) attributable to CCIC stockholders. Virtually all of the increase in site rental revenues resulted from wireless infrastructure we owned as ofJanuary 1, 2010. Our operating segment results for 2011 and 2010, including CCUSA, are discussed below (see "Item 7. MD&A—Results of Operations—Comparison of Operating Segments").202010 and 2009. Our consolidated results of operations for 2010 and 2009, respectively, predominately consist of our CCUSA segment, whichaccounted for (1) 95% and 95% of consolidated net revenues, (2) 95% and 95% of consolidated gross margins, and (3) 100% and 101% of consolidated netincome (loss) attributable to CCIC stockholders. Virtually all of the increase in site rental revenues resulted from wireless infrastructure we owned as ofJanuary 1, 2009. Our operating segment results for 2010 and 2009, including CCUSA, are discussed below (see "Item 7. MD&A—Results of Operations—Comparison of Operating Segments").Comparison of Operating SegmentsOur reportable operating segments for 2011 are (1) CCUSA, primarily consisting of our U.S. operations, and (2) CCAL, our Australian operations.Our financial results are reported to management and the board of directors in this manner.See note 16 to our consolidated financial statements for segment results and a reconciliation of net income (loss) to Adjusted EBITDA (defined below).Our measurement of profit or loss currently used to evaluate our operating performance and operating segments is earnings before interest, taxes,depreciation, amortization and accretion, as adjusted ("Adjusted EBITDA"). Our measure of Adjusted EBITDA may not be comparable to similarly titledmeasures of other companies, including companies in the tower sector and other similar providers of wireless infrastructure, and is not a measure ofperformance calculated in accordance with U.S. generally accepted accounting principles ("GAAP").We define Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs,depreciation, amortization and accretion, interest expense and amortization of deferred financing costs, gains (losses) on retirement of long-term obligations, netgain (loss) on interest rate swaps, impairment of available-for-sale securities, interest income, other income (expense), benefit (provision) for income taxes,cumulative effect of a change in accounting principle, income (loss) from discontinued operations and stock-based compensation expense (see note 12 to ourconsolidated financial statements). The reconciliation of Adjusted EBITDA to our net income (loss) is set forth in note 16 to our consolidated financialstatements. Adjusted EBITDA is not intended as an alternative measure of operating results or cash flows from operations as determined in accordance withGAAP, and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is discussed further under "Item 7.MD&A—Accounting and Reporting Matters—Non-GAAP Financial Measures."CCUSA—2011 and 2010. Net revenues for 2011 increased by $130.3 million, or 7%, from 2010. This increase in net revenues resulted from anincrease in site rental revenues of $136.9 million, or 9%, for the same periods. This increase in site rental revenues was impacted by the following items,inclusive of straight-line accounting, in no particular order: new tenant additions across our entire portfolio, renewals or extensions of customer contracts,escalations and cancellations of customer contracts. See "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies andEstimates" for a further discussion of our revenue recognition policies. Tenant additions were influenced by the previously mentioned growth in the wirelesscommunications industry. See also "Item 1. Business—The Company—CCUSA."Site rental gross margins for 2011 increased by $127.8 million, or 11%, from 2010. The increase in the site rental gross margins was related to thepreviously mentioned 9% increase in site rental revenues. Site rental gross margins for 2011 increased primarily as a result of the high incremental marginsassociated with tenant additions given the relatively fixed costs to operate wireless infrastructure. The $127.8 million incremental margin represents 93% of therelated increase in site rental revenues.Network services and other revenues for 2011 decreased by $6.6 million, or 4%, from 2010, and the related gross margin increased by $5.0 million, or8%, from 2010. The increase in our gross margin from our network services and other revenues is a reflection of the general volatility in the volume and mix ofsuch work. Our network services business is of a variable nature as these revenues are not under long-term contracts.General and administrative expenses for 2011 increased by $3.4 million, or 2%, from 2010. General and administrative expenses are inclusive of stock-based compensation charges, as discussed further in note 12 to our consolidated financial statements. General and administrative expenses increased primarilyas a result of DAS operations, driven by our acquisition of NewPath in 2010. General and administrative expenses were 8% of net revenues for both 2011 and2010. Typically, our general and administrative expenses do not significantly increase as a result of new tenant additions on our wireless infrastructure.Adjusted EBITDA for 2011 increased by $125.5 million, or 11%, from 2010. Adjusted EBITDA was positively impacted by the growth in our siterental business, including the high incremental site rental margin on the tenant additions.Depreciation, amortization and accretion for 2011 increased by $9.2 million, or 2%, from 2010. This increase is consistent with the insignificantmovement in our fixed assets and intangible assets, which did not materially change between 2010 and 2011.21During 2010, we repaid or purchased $3.4 billion of face value of debt using cash from our issuances of debt in order to extend the maturities of our debtportfolio. As a result of purchasing and early retiring certain of our debt, we incurred a net loss of $138.4 million for 2010, inclusive of make wholepayments. During 2010, we realized losses on interest rate swaps of $286.4 million, which predominately resulted from an increase in the liability for thoseswaps not subject to hedge accounting due to changes in the LIBOR yield curve. All of our forward-starting swaps were settled during 2010, so no further cashoutflows associated with these swaps will occur. The increase in interest expense and amortization of deferred financing costs of $18.4 million, or 4%, in 2011resulted predominately from a $17.5 million increase in the amortization of interest rate swaps primarily related to the loss realized in 2010 on the swapshedging the refinancing of the 2006 tower revenue notes. For a further discussion of the debt refinancings and the interest rate swaps see notes 6 and 7 to ourconsolidated financial statements, "Item 7. MD&A—Liquidity and Capital Resources" and "Item 7A. Quantitative and Qualitative Disclosures AboutMarket Risk."Benefit (provision) for income taxes for 2011 was a provision of $6.1 million compared to a benefit of $28.8 million for 2010. For 2010 and 2011, theeffective tax rate differs from the statutory rate predominately due to our federal deferred valuation allowances. In addition, 2010 included $19.8 million offederal tax benefits recorded predominately as a result of discrete events, including acquisitions.Net income (loss) attributable to CCIC stockholders for 2011 was income of $168.1 million. Net income (loss) attributable to CCIC stockholders for2010 was a loss of $310.2 million inclusive of (1) net losses from interest rate swaps of $286.4 million and (2) net losses from repayments and purchasesand early retirement of debt of $138.4 million. The change from net loss to net income was predominately due to (1) the previously mentioned charges and (2)growth in our site rental and service businesses.CCAL—2011 and 2010. The increases and decreases between 2011 and 2010 were inclusive of exchange rate fluctuations. The average exchange rate ofAustralian dollars expressed in U.S dollars for 2011 was approximately 1.03, an increase of 12% from approximately 0.92 for the same period in the prioryear. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk."Total net revenues for 2011 increased by $23.8 million, or 23%, from 2010. Site rental revenues for 2011 increased by $15.9 million, or 17%, from2010. The increase in the exchange rate positively impacted net revenues and site rental revenues by approximately $13.9 million and $11.9 million,respectively, and accounted for an increase of 14% and 13%, respectively, for 2011 from 2010. Site rental revenues were also impacted by various otherfactors, inclusive of straight-line accounting, including, in no particular order: tenant additions on our wireless infrastructure, renewals of customer contracts,escalations and cancellations of customer contracts. Net revenues were also impacted by a $7.9 million increase in network services and other revenues.Site rental gross margins increased by $10.7 million, or 17%, for 2011 from $63.3 million and Adjusted EBITDA for 2011 increased by $9.4 million,or 18%, from $53.0 million. The increase in the site rental gross margin and Adjusted EBITDA were primarily due to exchange rate fluctuations.Net income (loss) attributable to CCIC stockholders for 2011 was a net income of $3.0 million, compared to net loss of $0.7 million for 2010. Thechange from net loss to net income was primarily related to the previously mentioned increase in net revenues.CCUSA—2010 and 2009. Net revenues for 2010 increased by $175.1 million, or 11%, from 2009. This increase in net revenues resulted from anincrease in site rental revenues of $141.6 million, or 10%, for the same periods. This increase in site rental revenues was impacted by the following items,inclusive of straight-line accounting, in no particular order: new tenant additions across our entire portfolio, renewals or extensions of customer contracts,escalations and cancellations of customer contracts. See "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies andEstimates" for a further discussion of our revenue recognition policies. Tenant additions were influenced by the previously mentioned growth in the wirelesscommunications industry. We amended a site rental contract with one of our four largest customers during 2010 to provide the customer with the ability to addequipment to its existing antennas on our wireless infrastructure without the need to pay additional rent on individual amendments at each tower, with limitedexceptions, in exchange for an increase in rent on the customer's existing contracts. During 2010, we continued to derive a large portion of our site rentalrevenues from the four largest wireless carriers in the U.S., although a significant portion of our new tenant additions were from customers offering emergingwireless services, such as those offering wireless data only technologies, including Clearwire, a provider of wireless mobile internet services. See also "Item 1.Business—The Company—CCUSA."Site rental gross margins for 2010 increased by $137.3 million, or 13%, from 2009. The increase in site rental gross margins was related to thepreviously mentioned 10% increase in site rental revenues. Site rental gross margins for 2010 increased primarily as a result of the high incremental marginsassociated with tenant additions given the relatively fixed costs to operate wireless infrastructure. The $137.3 million incremental margin represents 97% of therelated increase in site rental revenues.Network services and other revenues for 2010 increased by $33.6 million, or 25%, from 2009, and the related gross margin increased by $14.3 million,or 31%, from 2009. Our network services business is of a variable nature as these revenues are not22under long-term contracts. The increase in our network services and other revenues reflect our increased market share, as well as the general volatility in thevolume and mix of such work. We were able to achieve this growth in revenues while modestly expanding our related gross margin.General and administrative expenses for 2010 increased by $7.2 million, or 5%, from 2009 but decreased to 8% of net revenues from 9%. General andadministrative expenses are inclusive of stock-based compensation charges, which increased by $6.8 million from 2009 to 2010, as discussed further in note12 to our consolidated financial statements. The increase in stock-based compensation was driven by the furthered emphasis on the long-term incentivecompensation component of total compensation for senior management, which we believe further aligns compensation with stockholder value. Typically, ourgeneral and administrative expenses do not significantly increase as a result of new tenant additions on our wireless infrastructure.Adjusted EBITDA for 2010 increased by $151.6 million, or 16%, from 2009. Adjusted EBITDA was positively impacted by the growth in our siterental and services businesses, including the high incremental site rental margin on the new tenant additions.Depreciation, amortization and accretion for 2010 increased by $11.4 million, or 2%, from 2009. The small increase is consistent with the movement inour fixed assets and intangible assets, which did not materially change between 2009 and 2010.During 2009 and 2010, we refinanced the vast majority of our debt in order to extend and ladder the maturities of our debt portfolio. This refinancingactivity included purchasing and early retiring certain of our debt, resulting in a net loss of $138.4 million for 2010, inclusive of make whole payments. Theincrease in interest expense and amortization of deferred financing costs of $44.9 million, or 10%, in 2010 resulted predominately from (1) a $35.4 millionincrease in the amortization of interest rate swaps primarily related to the loss on the swaps hedging the refinancing of the 2005 tower revenue notes and the2006 tower revenue notes and (2) the net impact of our various refinancings. During 2010, we realized losses on interest rate swaps of $286.4 million, whichpredominately resulted from an increase in the liability due to changes in the LIBOR yield curve for those swaps not subject to hedge accounting. As ofDecember 31, 2010, all of our forward-starting interest rate swaps are settled. For a further discussion of the debt refinancings and the interest rate swaps seenotes 6 and 7 to our consolidated financial statements, "Item 7. MD&A—Liquidity and Capital Resources" and "Item 7A. Quantitative and QualitativeDisclosures About Market Risk."Benefit (provision) for income taxes for 2010 was a benefit of $28.8 million compared to a benefit of $77.7 million for 2009. As further discussed innote 9 to our consolidated financial statements, we were limited in our ability to recognize federal tax benefits on our losses during 2010, except for $19.8million of federal tax benefits recorded predominately as a result of discrete events, including acquisitions. As of December 31, 2010, we are unable torecognize additional federal tax benefits in future periods unless discrete events allow us to record additional deferred tax liabilities. Tax benefits for 2010predominately reflect our recognition of federal tax benefits on our losses and a reversal of $20.6 million of state tax valuation allowance.Net income (loss) attributable to CCIC stockholders for 2010 was a loss of $310.2 million, inclusive of (1) net losses from interest rate swaps of $286.4million and (2) net losses from repayments and purchases and early retirement of debt of $138.4 million. Net income (loss) attributable to CCIC stockholdersfor 2009 was a loss of $115.4 million, inclusive of (1) net losses from repayments and purchases and early retirement of debt of $91.1 million and (2) netlosses from interest rate swaps of $93.0 million. The increase in net loss was predominately due to (1) the previously mentioned charges and benefits and (2)the previously mentioned increase in interest expense of $44.9 million, partially offset by (3) growth in our site rental and service businesses.CCAL—2010 and 2009. The increases and decreases between 2010 and 2009 are inclusive of exchange rate fluctuations. The average exchange rate ofAustralian dollars to U.S dollars for 2010 was approximately 0.92, an increase of 16% from approximately 0.79 for the same period in the prior year. See"Item 7A. Quantitative and Qualitative Disclosures About Market Risk."Total net revenues for 2010 increased by $18.1 million, or 21%, from 2009. Site rental revenues for 2010 increased by $16.0 million, or 21%, from2009. The increase in the exchange rate positively impacted net revenues and site rental revenues by approximately $14.3 million and $12.9 million,respectively, and accounted for an increase of 17% in both net revenues and site rental revenues for 2010 from 2009. Site rental revenues were also impactedby various other factors inclusive of straight-line accounting, including, in no particular order: new tenant additions on our wireless infrastructure, renewalsof customer contracts, escalations and cancellations of customer contracts.Site rental gross margins increased by $9.7 million, or 18%, for 2010 from $53.6 million, and Adjusted EBITDA for 2010 increased by $7.0 million,or 15%, from 2010. The increase in the site rental gross margin and Adjusted EBITDA were predominately due to exchange rate fluctuations.Net income (loss) attributable to CCIC stockholders for 2010 was a net loss of $0.7 million, compared to a net income of $1.1 million for 2009. Thechange from net income to net loss was predominately due to the following, exclusive of the impact23from exchange rate fluctuations: (1) an increase in interest expense and amortization of deferred financing costs, the majority of which was due to an increasein the variable interest rate of our intercompany debt, (2) an increase in general and administrative expenses due to an increase in stock-based compensation,and (3) lower depreciation expense for 2011, as a result of recording depreciation expense for towers that were acquired in 2008 with short useful lives foraccounting purposes driven by the short term of the underlying ground lease.Liquidity and Capital ResourcesOverviewGeneral. We believe our site rental business can be characterized as a stable cash flow stream, generated by revenues under long-term contracts (see"Item 7. MD&A—General Overview—Overview"). Since we became a public company in 1998, our cumulative net cash provided by operating activities(net of cash interest payments) has exceeded our capital expenditures and provided us with cash available for discretionary investments. For the foreseeablefuture, we expect to continue to generate net cash provided by operating activities that exceeds our capital expenditures and will be available for discretionaryinvestments. In addition to investing net cash provided by operating activities, in certain circumstances, we may also use debt financings and issuances ofequity or equity related securities to fund discretionary investments.We seek to allocate the net cash provided by our operating activities in a manner that will enhance per share operating results. Our historicaldiscretionary investments include (in no particular order): purchasing our common stock, acquiring or constructing wireless infrastructure, acquiring landinterests under our towers, improving and structurally enhancing our existing wireless infrastructure, and purchasing or redeeming our debt.We seek to maintain a capital structure that we believe drives long-term stockholder value and optimizes our weighted-average cost of capital. We target aleverage ratio of approximately four to six times Adjusted EBITDA and interest coverage of approximately three times Adjusted EBITDA, subject to variousfactors such as the availability and cost of capital and the potential long-term return on our discretionary investments. We may choose to increase or decreaseour leverage and coverage from these targets for various periods of time.We have never declared or paid cash dividends on our common stock. Currently we endeavor to utilize our net cash provided by operating activities toengage in discretionary investments. We seek to maintain flexibility in our discretionary investments with both net cash provided by operating activities andcash available from financing capacity. Periodically, our board of directors assesses the advisability of declaring and paying cash dividends at some point inthe future, based on the then-current and anticipated future conditions, including our earnings, net cash provided by operating activities, capital requirements,financial condition, our relative market capitalization, taxable income, taxpayer status, and other factors deemed relevant by the board of directors.We pay minimal cash income taxes as a result of our net operating loss carryforwards. We may generate taxable income in the future, and if so, we mayutilize all or a portion of our $2.5 billion of federal net operating losses to offset such income. If we were to approach the exhaustion of our net operating losscarryforwards or if there were relevant tax law changes, we would evaluate our options with respect to appropriately managing our tax position . These optionsmay include a conversion to a real estate investment trust ("REIT"), which would require the payment of dividends on our common stock. If we were toconvert to a REIT, we expect that certain subsidiaries would not qualify as a REIT and would continue to be subject to corporate income taxes.Liquidity Position. The following is a summary of our capitalization and liquidity position after giving effect to the WCP acquisition, the January 2012refinancing and the preferred stock conversion expected to occur in February 2012. See "Item 7A. Quantitative and Qualitative Disclosures About MarketRisk" and notes 6 and 8 to our consolidated financial statements for additional information regarding our debt. December 31, 2011 (In thousands of dollars)Cash and cash equivalents(a)(c)$563,951Undrawn revolving credit facility availability(b)1,000,000Debt and other long-term obligations(c)7,935,673Stockholders' equity2,688,557____________________(a)Exclusive of restricted cash.(b)Availability at any point in time is subject to reaffirmation of the representations and warranties in, and there being no default under, our credit agreement. See "Item 7. MD&A—Liquidity and Capital Resources—Financing Activities" and "Item 7. MD&A—Liquidity and Capital Resources—Debt Covenants."(c)Exclusive of the $500.0 million delayed draw term loan.24During January 2012, we refinanced our credit facility through (1) a $500.0 million undrawn delayed draw term loan due in 2017, (2) a $1.6 billionterm loan due in 2019, and (3) a $1.0 billion undrawn revolving credit facility due in 2017. This refinancing effectively extended the maturity of our creditfacility and provided funding for the WCP acquisition and the anticipated acquisition of the NextG (for approximately $1.0 billion of cash, subject toadjustment), which is expected to close in the second quarter of 2012. See notes 6 and 20 to our consolidated financial statements.Over the next 12 months:•we expect that our cash on hand, undrawn revolving credit facility availability, the proceeds of our $500.0 million delayed-draw credit facility andnet cash provided by operating activities (net of cash interest payments) should be sufficient to cover our expected (1) debt service obligations of$32.5 million (principal payments), (2) capital expenditures of roughly $350 million (sustaining and discretionary) and (3) NextG acquisition. AsCCIC and CCOC are holding companies, this cash flow from operations is generated by our operating subsidiaries.•we have no debt maturities other than principal payments on amortizing debt. We do not anticipate the need to access the capital markets to refinanceour existing debt until at least 2015. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a tabular presentation of ourdebt maturities as of December 31, 2011.Summary Cash Flows Information Years Ended December 31, 2011 2010 2009 (In thousands of dollars)Net cash provided by (used for): Operating activities$643,454 $603,430 $571,256Investing activities(399,865) (390,949) (172,145)Financing activities(275,712) (866,624) 214,396Effect of exchange rate changes on cash(288) 528 (2,580)Net increase (decrease) in cash and cash equivalents$(32,411) $(653,615) $610,927Operating ActivitiesThe increase in net cash provided by operating activities for 2011 from 2010 and 2009 was due primarily to growth in our core site rental business,partially offset by changes in working capital. The year-over-year decrease in working capital from 2010 to 2011 of $86.3 million resulted primarily fromchanges in deferred site rental receivables and deferred revenues. Changes in working capital, and particularly changes in deferred site rental receivables,deferred rental revenues, prepaid ground leases, restricted cash and accrued interest, can have a significant impact on net cash provided by operatingactivities, largely due to the timing of prepayments and receipts. We expect net cash provided by operating activities for the year ended December 31, 2011 willbe sufficient to cover the next 12 months of our expected debt service obligations and capital expenditures. We expect to grow our net cash provided byoperating activities in the future (exclusive of movements in working capital) if we realize expected growth in our site rental business.Investing ActivitiesCapital Expenditures. We categorize our capital expenditures as sustaining or discretionary. Sustaining capital expenditures include capitalized costsrelated to (1) maintenance activities on our wireless infrastructure, which are generally related to replacements and upgrades that extend the life of the asset,(2) vehicles, (3) information technology equipment, and (4) office equipment. Discretionary capital expenditures, which we also commonly refer to as"revenue-generating capital expenditures," include (1) purchases of land interests under towers, (2) wireless infrastructure improvements in order to supportadditional site rentals, and (3) the construction of wireless infrastructure.A summary of our capital expenditures for the last three years is as follows: 25 For Years Ended December 31, 2011 2010 2009 (In thousands of dollars)Discretionary: Purchases of land interests$196,380 $109,097 $25,495Wireless infrastructure improvements and other82,780 73,917 101,298Construction of wireless infrastructure45,391 20,718 18,683Sustaining23,391 24,326 28,059Total$347,942 $228,058 $173,535Other than sustaining capital expenditures, which we expect to be approximately $22 million to $27 million for the year ended December 31, 2012, ourcapital expenditures are discretionary and are made with respect to activities which we believe exhibit sufficient potential to improve our long-term results ofoperations on a per share basis. We expect to use roughly $350 million of our cash flows on capital expenditures (sustaining and discretionary) for full year2012, with less than one-fourth of our total capital expenditures targeted for our existing wireless infrastructure assets related to customer installations andrelated capacity improvement. Our decisions regarding capital expenditures are influenced by the availability and cost of capital and expected returns onalternative investments. The following is a discussion of certain aspects of our capital expenditures.•We increased our purchases of land interests from 2010 to 2011 as a result of our focus on maintaining long-term control of our assets. We expectto retain long-term control of our towers by continuing to supplement land interest purchases with extensions of the terms of ground leases for landunder our towers. Purchases of land interests for 2011 included $87.7 million for perpetual easements and other interests purchased in a singletransaction. Total consideration for this single transaction was $89.3 million.•Wireless infrastructure improvement capital expenditures typically vary based on (1) the type of work performed on the wireless infrastructure,with the installation of a new antenna typically requiring greater capital expenditures than a modification to an existing installation, (2) the existingcapacity of the wireless structure prior to installation and (3) changes in structural engineering regulations and our internal structural standards.Acquisitions. See note 20 for a discussion of the definitive agreement to acquire NextG and the WCP acquisition. See note 3 for a discussion of theacquisition of NewPath in 2010.Financing ActivitiesWe seek to allocate cash generated by our operations in a manner that will enhance per share operating results, which may include various financingactivities, such as (in no particular order) purchasing our common stock and purchasing or redeeming our debt. During 2010 and 2009, we extended thematurities of our debt by issuing an aggregate $6.3 billion face value of debt and purchased and repaid $5.8 billion face value of debt. Since the beginning of2009, we have purchased an aggregate of 11.6 million shares of common stock for $465.9 million, which we believe is consistent with our objective to driveper share operating results. In the beginning of 2012, our financing activities predominately related to refinancing our credit facility, which effectively extendedthe maturity of our credit facility as well as provided funding for the WCP acquisition and the expected closing of the NextG acquisition. See "Item 7. MD&A—Liquidity and Capital Resources—Overview" and note 20 to our consolidated financial statements for additional information regarding the January 2012refinancing.Incurrence of Debt. See note 6 to our consolidated financial statements for a discussion of our issuances of debt during 2009 and 2010, which extendedthe maturities of our debt portfolio. As of December 31, 2011, 71% of our CCUSA towers and the cash flows from these towers effectively secure $4.6 billionof our debt. In addition, distributions paid from our entities that hold approximately 4,900 towers will also service this secured debt. In addition, nearly all ofthe third party land interests and other assets acquired in the WCP acquisition and the cash flows derived therefrom are effectively pledged as security on thedebt assumed in connection with the WCP acquisition. See "Item 7. MD&A—Liquidity and Capital Resources—Overview—Liquidity Position" and note20 to our consolidated financial statements for a further discussion on the refinancing of our credit facility in January 2012.Debt Purchases and Repayments. See note 6 to our consolidated financial statements for a summary of our purchases and repayments of debt during2009 and 2010, including the gains (losses) on retirement of long-term obligations. See note 20 to our consolidated financial statements for a discussion of therefinancing of our credit facility in January 2012.Interest Rate Swaps. During 2010, we settled all of our forward-starting interest rate swaps. See note 7 to our consolidated financial statements for afurther discussion of interest rate swaps.26Common Stock and Preferred Stock Activity. As of December 31, 2011, 2010 and 2009, we had 284.4 million, 290.8 million and 292.7 millioncommon shares outstanding, respectively. During 2011, we purchased 7.4 million shares of common stock at an average price of $41.12 per share utilizing$303.4 million in cash. We may continue to purchase our common stock in the future as we seek to allocate capital to discretionary investments in a mannerthat we believe will enhance per share results. During 2011, we paid $15.0 million to purchase a portion of our 6.25% redeemable convertible preferred stock,thereby reducing the number of common shares issuable upon conversion of such preferred stock by 0.3 million. In January 2012, we exercised our right toconvert all of the outstanding 6.25% redeemable convertible preferred stock into 8.3 million shares of common stock. See "Item 1. Business—Strategy" andnote 20 to our consolidated financial statements.Revolving Credit Facility. The proceeds of our revolving credit facility may be used for general corporate purposes, which may include the financing ofcapital expenditures, acquisitions and purchases of our common stock. Typically, we use our revolving credit facility to fund discretionary investments andnot for operating activities, such as working capital, which are typically funded by net cash provided by operating activities. As of February 6, 2012, therewere no amounts outstanding under our revolving credit facility. See "Item 7. MD&A—Liquidity and Capital Resources—Overview" and note 20 to ourconsolidated financial statements for additional information regarding our January 2012 refinancing.Restricted Cash. Pursuant to the indentures governing our operating companies' debt securities, all rental cash receipts of the issuers of these debtinstruments and their subsidiaries are restricted and held by an indenture trustee. The restricted cash in excess of required reserve balances is subsequentlyreleased to us in accordance with the terms of the indentures. See also notes 2 and 6 to our consolidated financial statements.Contractual Cash ObligationsThe following table summarizes our contractual cash obligations as of December 31, 2011 after giving effect to the WCP acquisition, the January 2012refinancing and the preferred stock conversion. These contractual cash obligations relate primarily to our outstanding borrowings and lease obligations forland interests under our towers. The debt maturities reflect contractual maturity dates and do not consider the impact of the principal payments that willcommence following the anticipated repayment dates on the tower revenue notes (see footnote (c)). Years Ending December 31,Contractual Obligations (a)2012 2013 2014 2015 2016 Thereafter Totals (In thousands of dollars)Debt and other long-term obligations(b)(c)(d)$49,864 $60,313 $60,806 $927,537 $59,712 $6,850,047 $8,008,279Interest payments on debt and other long-termobligations(c)(d)(e)461,796 465,976 463,091 446,096 419,272 8,262,405 10,518,636Lease obligations(f)301,264 305,278 307,267 308,801 311,242 3,907,901 5,441,753Definitive acquisition agreements(g)1,009,865 — — — — — 1,009,865Other6,555 1,489 1,981 1,147 871 — 12,043Total contractual obligations$1,829,344 $833,056 $833,145 $1,683,581 $791,097 $19,020,353 $24,990,576____________________ (a)The following items are in addition to the obligations disclosed in the above table:•We have a legal obligation to perform certain asset retirement activities, including requirements upon lease and easement terminations to remove wireless infrastructure orremediate the land upon which our wireless infrastructure resides. The cash obligations disclosed in the above table, as of December 31, 2011, are exclusive of estimatedundiscounted future cash outlays for asset retirement obligations of approximately $1.4 billion. As of December 31, 2011, the net present value of these asset retirementobligations was approximately $68.5 million.•We are contractually obligated under letters of credit to various landlords, insurers and other parties in connection with certain contingent retirement obligations under variouswireless infrastructure land interest leases and certain other contractual obligations. The letters of credit were issued through one of CCUSA's lenders in amounts aggregating$10.8 million and expire on various dates through December 2012.•We are contractually obligated to pay or reimburse others for property taxes related to our wireless infrastructure. See note 14 to our consolidated financial statements.(b)Inclusive of $47.8 million related in installment purchases of land interests.(c)The impact of principal payments that will commence following the anticipated repayment dates of our tower revenue notes are not considered. The anticipated repayment dates forthe tower revenue notes are in 2015, 2017 and 2020. If the tower revenue notes are not repaid in full by the applicable anticipated repayment dates, the applicable interest rateincreases by approximately 5% per annum and monthly principal payments commence using the Excess Cash Flow of the issuers of the tower revenue notes. The tower revenuenotes are presented based on their contractual maturity dates ranging from 2035 to 2040 and include the impact of an assumed 5% increase in interest rate that would occur followingthe anticipated repayment dates but exclude the impact of monthly principal payments that would commence using Excess Cash Flow of the issuers of the tower revenue notes. Thefull year 2011 Excess Cash Flow of the issuers of the tower revenue notes was approximately $456 million. The anticipated repayment date is 2015 for each class of the debtassumed in connection with the WCP acquisition ("WCP securitized notes").(d)If the WCP securitized notes are not repaid in full by their anticipated repayment dates, the applicable interest rate increases by an additional approximately 5% per annum. If theWCP securitized notes are not repaid in full by their rapid amortization date of 2017, monthly principal payments commence using the Excess Cash Flow of the issuers of the WCPsecuritized notes. The WCP securitized notes are presented based on their contractual maturity dates in272040. The full year 2011 Excess Cash Flow of the issuers of the WCP securitized notes was approximately $17 million. In connection with the WCP acquisition, we acquiredrestricted cash of $29.5 million that if not spent on towers or third party land interests by November 2012 will be required to be used to repay principal amounts outstanding on theWCP securitized notes.(e)Interest payments on the floating rate debt are based on estimated rates currently in effect.(f)Amounts relate primarily to lease obligations for the land interests on which our wireless infrastructure resides, and are based on the assumption that payments will be made throughthe end of the period for which we hold renewal rights. See table below summarizing remaining terms to expiration.(g)In December 2011, we entered into a definitive agreement to acquire NextG for approximately $1.0 billion in cash, subject to certain adjustments.The following table summarizes our rights to the land interests under our towers, including renewal terms at our option, as of December 31, 2011. As ofDecember 31, 2011, the leases for land interests under our towers had an average remaining life of approximately 31 years, weighted based on site rental grossmargin. See "Item 1A. Risk Factors." Remaining Term, In Years(c) Percent of Total Towers Percent of Total Site RentalGross Margins(a)(b)Owned in fee or perpetual or long-term easements 27% 34%20+ years 40% 39%10 years to less than 20 years 20% 16%5 years to less than 10 years 9% 8%1 year to less than 5 years 3% 2%0 to less than 1 year 1% 1%Total 100% 100%____________________ (a)For the year ended December 31, 2011.(b)Without consideration of the term of the customer contract agreement.(c)Inclusive of renewal terms at our option.Debt CovenantsOur debt obligations contain certain financial covenants with which CCIC or our subsidiaries must maintain compliance in order to avoid theimposition of certain restrictions. Various of our debt obligations also place other restrictions on CCIC or our subsidiaries, which may include the ability toincur debt and liens, purchase our securities, make capital expenditures, dispose of assets, undertake transactions with affiliates, make other investments andpay dividends. We are permitted to issue additional indebtedness at CCIC and at our operating subsidiaries subject to compliance with the covenantsgoverning our debt (including the below mentioned restrictive covenants) and meeting certain other requirements, which may include obtaining rating agencyconfirmations. See note 6 to our consolidated financial statements for further discussion of our debt covenants.Factors that are likely to determine our subsidiaries' ability to comply with their current and future debt covenants include their (1) financialperformance, (2) levels of indebtedness, and (3) debt service requirements. Given the current level of indebtedness and debt services requirements of oursubsidiaries, the primary risk of a debt covenant violation would be from a deterioration of a subsidiary's financial performance. Should a covenant violationoccur 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 thancurrently scheduled and may not have access to additional borrowings under these debt instruments as long as the covenant violation continues. If we fail tocomply with the debt restrictions, we will be in default under those instruments, which could cause the maturity of a substantial portion of our long-termindebtedness to be accelerated. If our operating subsidiaries were to default on the debt, the trustee could seek to pursue the collateral securing the debt, inwhich case we could lose the wireless infrastructure and the future revenues associated with such wireless infrastructure. We currently have no financialcovenant violations; and based upon our current expectations, we believe our operating results will be sufficient to comply with our debt covenants over thenear and long-term. See "Item 1A. Risk Factors."The following are the ratios applicable to the financial maintenance, restrictive and cash trap reserve covenants under our debt agreements, after givingeffect to the WCP acquisition and the January 2012 refinancing.28 Type Debt CurrentCovenantRequirement As ofDecember 31,2011 Latest IssuanceDateCCIC: Leverage ratioRestrictive(f)9% Senior Notes ≤7.00 5.9 6.7Leverage ratioRestrictive(f)7.125% Senior Notes ≤7.00 5.9 6.3CCOC: Net leverage ratio(a)Maintenance(g)Credit Agreement ≤6.0 4.8 4.8Interest coverage ratio(b)Maintenance(g)Credit Agreement ≥2.5 3.9 3.9Tower and third party land interestcompanies: Debt service coverage ratio(c)(d)Cash Trap(h)2010 Tower Revenue Notes >1.75 3.6 3.1Debt service coverage ratio(c)(d)Cash Trap(h)2009 Securitized Notes >1.30 3.0 2.4Fixed charge coverage ratio(c)(d)Cash Trap(h)7.75% Secured Notes >1.35 3.1 2.5Debt service coverage ratio(e)Cash Trap(h)WCP Securitized Notes ≥1.30 2.0 N/A____________________(a)The Total Net Leverage Ratio for CCOC is calculated as the ratio of Total Indebtedness (excluding debt held by CCIC) less Unrestricted Cash (as defined in the credit agreementand calculated in accordance with GAAP) to Consolidated EBITDA (as defined in the credit agreement) for the most recently completed quarter multiplied by four. In March 2014,the covenant requirement decreases to a maximum Total Net Leverage Ratio of 5.50 to 1.00. Consolidated EBITDA is calculated in substantially the same manner as AdjustedEBITDA used in our segment reporting, which is discussed further in "Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP Financial Measures" and note 16 to ourconsolidated financial statements.(b)The Consolidated Interest Coverage Ratio for CCOC is calculated as the ratio of Consolidated EBITDA for the most recently completed quarter multiplied by four to ConsolidatedPro forma Debt Service (as defined in the credit agreement). Consolidated Pro forma Debt Service is calculated as interest to be paid over the succeeding 12 months on the principalbalance of debt (excluding debt held by CCIC, CCOC or any restricted subsidiary) then outstanding based on the then current interest rate for such debt.(c)The 2009 securitized notes and 2010 tower revenue notes also have amortization coverage thresholds of 1.15 and 1.45, respectively, which could result in applying current andfuture cash in the reserve account to prepay the debt with applicable prepayment consideration. For the 7.75% secured notes, if the Consolidated Fixed Charge Coverage Ratio isequal to or less than 1.20 and the aggregate amount of cash deposited in the Cash Trap Reserve Sub-account (as defined in the indenture) exceeds $100.0 million, the issuingsubsidiaries will be required to commence an offer to purchase the 7.75% secured notes using the cash in such account. See note (d) below for a discussion of the calculation of theDebt Service Coverage Ratio and Consolidated Fixed Charge Coverage Ratio.(d)The Debt Service Coverage Ratio and Consolidated Fixed Charge Coverage Ratio are both calculated as site rental revenue (in accordance with GAAP), less: (1) cost of operations(in accordance with GAAP), (2) straight-line rental revenues, (3) straight-line ground lease expenses, (4) management fees, and (5) sustaining capital expenditures, using theresults for the previous 12 months then ended to the amount of interest to be paid over the succeeding 12 months per the terms of the respective agreement.(e)In connection with the WCP acquisition, we assumed WCP's debt of approximately $320 million . The Debt Service Coverage Ratio on the WCP securitized debt is calculated asNet Cash Flow (as defined in the indenture) less: (1) the Series 2010-1 Class A Targeted Amortization Amounts (as defined in the indenture) for the immediately succeeding 12payment dates and (2) the Unpaid Series 2010-1 Class A Monthly Amortization Amount (as defined in the indenture) to the payments of interest that the issuers of such debt willbe required to pay on the succeeding 12 payment dates on the principal balance of the WCP securitized notes. The WCP securitized debt also has an amortization threshold of 1.15,which could result in applying all Excess Cash Flow (as defined in the indenture) to prepay principal amounts with applicable prepayment consideration. In addition, if the Non-Performing Wireless Site Contract Ratio (as defined in the indenture) on the WCP securitized notes is greater than 10%, it could result in applying all Excess Cash Flow to prepayprincipal amounts with applicable prepayment consideration.(f)The 9% senior notes and 7.125% senior notes contain restrictive covenants with which CCIC and our restricted subsidiaries must comply, subject to a number of exceptions andqualifications, including restrictions on our ability to incur incremental debt, issue preferred stock, guarantee debt, pay dividends, repurchase our capital stock, use assets assecurity in other transactions, sell assets or merge with or into other companies, and make certain investments. Certain of these covenants are not applicable if there is no event ofdefault and if the ratio of our Consolidated Debt (as defined in the senior notes indenture) to our Adjusted Consolidated Cash Flows (as defined in the senior notes indenture) isless than 7.0 to 1.(g)Failure to comply with the ratios applicable to the financial maintenance could result in default under our credit agreement.(h)Failure to comply with the cash trap reserve covenants would require the cash flows generated by the issuers and their subsidiaries to be deposited in a reserve account and notreleased to us.Off-balance Sheet ArrangementsWe have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.Accounting and Reporting MattersCritical Accounting Policies and EstimatesThe following is a discussion of the accounting policies and estimates that we believe (1) are most important to the portrayal of our financial conditionand 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 ofmatters that are inherently uncertain. The critical accounting policies and estimates for 2011 are not intended to be a comprehensive list of our accountingpolicies and estimates. See note 2 to our consolidated financial statements for a summary of our significant accounting policies. In many cases, the accountingtreatment of a particular29transaction is specifically dictated by GAAP, with no need for management's judgment. In other cases, management is required to exercise judgment in theapplication of accounting principles with respect to particular transactions.Revenue Recognition. Over 91% of our total revenue for 2011 consists of site rental revenues, which are recognized on a monthly basis over the fixed,non-cancelable term of the relevant contract (generally ranging from five to 15 years), regardless of whether the payments from the customer are received inequal monthly amounts. If the payment terms call for fixed escalations (as in fixed dollar or fixed percentage increases) or rent free periods, the effect isrecognized on a straight-line basis over the fixed, non-cancelable term of the contract. When calculating our straight-line rental revenues, we consider all fixedelements of tenant contractual escalation provisions, even if such escalation provisions contain a variable element (such as an escalator tied to an inflation-based index) in addition to a minimum. Any up-front billings to customers for their negotiated share of the cost of wireless infrastructure modificationsrequired to accommodate the installation of customer equipment are initially deferred and recognized over the term of the applicable site rental contract. Sincewe recognize revenue on a straight-line basis, a portion of the site rental revenue in a given period represents cash collected or contractually collectible in otherperiods. We record a deferred site rental receivable for the difference between the straight-lined amount and the rent billed. We record an allowance foruncollectible deferred site rental revenues for which increases or reversals of this allowance impact our site rental revenues. See note 2 to our consolidatedfinancial statements.We provide network services relating to our wireless infrastructure, which represent less than 9% of our total revenues for 2011. Network services andother revenue relate to installation services, as well as the following additional site development services relating to existing and new antenna installations on ourwireless infrastructure: site acquisition, architectural and engineering, zoning and permitting, fiber installations, other construction and other services relatedto network development. Network services revenues are recognized after completion of the applicable service. We account for network services separately fromthe customer's subsequent site rental.See "Item 1. Business—CCUSA" for a further discussion of our site rental and network services business.Accounting for Long-Lived Assets — Valuation. As of December 31, 2011, our largest asset was our telecommunications towers (representingapproximately $3.6 billion, or 73%, of our $4.9 billion in net book value of property and equipment), followed by intangible assets and goodwill(approximately $2.2 billion and $2.0 billion in net book value, respectively, resulting predominately from the Global Signal Merger in 2007 and otheracquisitions of large tower portfolios). Nearly all (approximately $2.1 billion net book value at December 31, 2011) of our identifiable intangibles relate to thesite rental contracts and customer relationships intangible assets. See note 2 to our consolidated financial statements for further information regarding thenature and composition of the site rental contracts and customer relationships intangible assets.For our business combinations, we allocate the purchase price to the assets acquired and liabilities assumed based on their estimated fair value at thedate of acquisition. Any purchase price in excess of the net fair value of the assets acquired and liabilities assumed is allocated to goodwill. The fair value ofthe vast majority of our assets and liabilities is determined by using either:(1)estimates of replacement costs (for tangible fixed assets such as towers) or(2)discounted cash flow valuation methods (for estimating identifiable intangibles such as site rental contracts and customer relationships and above-market and below-market leases).The purchase price allocation requires subjective estimates that, if incorrectly estimated, could be material to our consolidated financial statements,including the amount of depreciation, amortization and accretion expense. The most important estimates for measurement of tangible fixed assets are (1) thecost to replace the asset with a new asset and (2) the economic useful life after giving effect to age, quality and condition. The most important estimates formeasurement of intangible assets are (1) discount rates and (2) timing and amount of cash flows including estimates regarding customer renewals andcancellations. The determination of the final purchase price allocation could extend over several quarters resulting in the use of preliminary estimates that aresubject to adjustment until finalized.We record the fair value of obligations to perform certain asset retirement activities, including requirements, pursuant to our ground leases andeasements, to remove wireless infrastructure or remediate the land upon which our wireless infrastructure resides. In determining the fair value of these assetretirement obligations we must make several subjective and highly judgmental estimates such as those related to: (1) timing of cash flows, (2) future costs,(3) discount rates and (4) the probability of enforcement to remove the wireless infrastructure or remediate the land. See note 2 to our consolidated financialstatements.Accounting for Long-Lived Assets — Useful Lives. We are required to make subjective assessments as to the useful lives of our tangible and intangibleassets for purposes of determining depreciation, amortization and accretion expense that, if incorrectly estimated, could be material to our consolidatedfinancial statements. Depreciation expense for our property and equipment is computed using the straight-line method over the estimated useful lives of ourvarious classes of tangible assets. The substantial portion of our property and equipment represents the cost of our wireless infrastructure which is depreciatedwith an estimated30useful life equal to the shorter of (1) 20 years or (2) the term of the lease (including optional renewals) for the land interests under the wireless infrastructure.The useful life of our intangible assets are estimated based on the period over which the intangible asset is expected to benefit us and gives considerationto the expected useful life of other assets to which the useful life may relate. Amortization expense for intangible assets is computed using the straight-linemethod over the estimated useful life of each of the intangible assets. The useful life of the site rental contracts and customer relationships intangible assets islimited by the maximum depreciable life of the wireless infrastructure (20 years), as a result of the interdependency of the wireless infrastructure and site rentalcontracts and customer relationships. In contrast, the site rental contracts and customer relationships are estimated to provide economic benefits for severaldecades because of the low rate of customer cancellations and high rate of renewals experienced to date. Thus, while site rental contracts and customerrelationships are valued based upon the fair value of the site rental contracts and customer relationships which includes assumptions regarding both(1) customers' exercise of optional renewals contained in the acquired contracts and (2) renewals of the acquired contracts past the contractual term includingexercisable options, the site rental contracts are amortized over a period not to exceed 20 years as a result of the useful life being limited by the depreciable life ofthe wireless infrastructure.Accounting for Long-Lived Assets — Impairment Evaluation — Intangibles. We review the carrying values of property and equipment, intangibleassets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Weutilize the following dual grouping policy for purposes of determining the unit of account for testing impairment of the site rental contracts and customerrelationships:(1)we pool site rental contracts and customer relationships intangible assets and property and equipment into portfolio groups and(2)we separately pool site rental contracts and customer relationships by significant customer or by customer grouping for individually insignificantcustomers, as appropriate.We first pool site rental contracts and customer relationships intangible assets and property and equipment into portfolio groups for purposes ofdetermining the unit of account for impairment testing, because we view wireless infrastructure as portfolios and wireless infrastructure in a given portfolioand its related customer contracts are not largely independent of the other wireless infrastructure in the portfolio. We re-evaluate the appropriateness of thepooled groups at least annually. This use of grouping is based in part on (1) our limitations regarding disposal of wireless infrastructure, (2) theinterdependencies of wireless infrastructure portfolios and (3) the manner in which wireless infrastructure is traded in the marketplace. The vast majority ofour site rental contracts and customer relationships intangible assets and property and equipment are pooled into the U.S. owned wireless infrastructure group.Secondly, and separately, we pool site rental contracts and customer relationships by significant customer or by customer grouping for individuallyinsignificant customers, as appropriate, for purposes of determining the unit of account for impairment testing because we associate the value ascribed to siterental contracts and customer relationships intangible assets to the underlying contracts and related customer relationships acquired.Our determination that an adverse event or change in circumstance has occurred that indicates that the carrying amounts may not be recoverable willgenerally involve (1) a deterioration in an asset's financial performance compared to historical results, (2) a shortfall in an asset's financial performancecompared to forecasted results, or (3) changes affecting the utility and estimated future demands for the asset. When considering the utility of our assets, weconsider events that would meaningfully impact (1) our wireless infrastructure or (2) our customer relationships. For example, consideration would be given toevents that impact (1) the structural integrity and longevity of our wireless infrastructure or (2) our ability to derive benefit from our existing customerrelationships, including events such as bankruptcy or insolvency or loss of a significant customer. During 2011, there were no events or circumstances thatcaused us to review the carrying value of our intangible assets and property and equipment due in part to our assets performing consistently with or better thanour expectations.If the sum of the estimated future cash flows (undiscounted) from an asset, or portfolio group, significant customer or customer group (for individuallyinsignificant customers), as applicable, is less than its carrying amount, an impairment loss may be recognized. If the carrying value were to exceed theundiscounted cash flows, measurement of an impairment loss would be based on the fair value of the asset, which is based on an estimate of discountedfuture cash flows. The most important estimates for such calculations of undiscounted cash flows are (1) the expected additions of new tenants and equipmenton our wireless infrastructure and (2) estimates regarding customer cancellations and renewals of contracts. We could record impairments in the future ifchanges in long-term market conditions, expected future operating results or the utility of the assets results in changes for our impairment test calculationswhich negatively impact the fair value of our property and equipment and intangible assets, or if we changed our unit of account in the future.When grouping assets into pools for purposes of impairment evaluation, we also consider individual towers, nodes and third party land interests withina grouping for which we currently have no tenants. Approximately 3% of our total towers currently31have no tenants. We continue to pay operating expenses on these towers in anticipation of obtaining tenants on these towers in the future, primarily because ofthe individual tower site demographics. In fact, we have current visibility to potential tenants on approximately half of these towers. To the extent we do notbelieve there are long-term prospects of obtaining tenants on an individual tower, node or third party land interest and all other possible avenues for recoveringthe carrying value has been exhausted, including sale of the asset, we appropriately reduce the carrying value of such assets.Accounting for Long-Lived Assets — Impairment Evaluation — Goodwill. Nearly all of our goodwill is recorded at CCUSA. We test goodwill forimpairment on an annual basis, regardless of whether adverse events or changes in circumstances have occurred. The annual test begins with goodwill and allintangible assets being allocated to applicable reporting units. We then perform a qualitative assessment to determine whether it is "more likely than not" thatthe fair value of the reporting unit is less than its carrying amount. If it is concluded that it is "more likely than not" that the fair value of a reporting unit isless than its carrying amount, it is necessary to perform the two-step goodwill impairment test. Otherwise the two-step goodwill impairment test is not required.Our reporting units are the operating segments since segment management operates their respective wireless infrastructure portfolios as a single network.We performed our annual goodwill impairment test as of October 1, 2011 utilizing the qualitative assessment. We determined that the "more likely thannot" threshold was achieved and no further testing of goodwill was required. This assessment was based in part on the fair value of our net assets as measuredby our market capitalization exceeding by over five times the aggregate carrying amount of the reporting units as of December 31, 2011.Deferred Income Taxes. We record deferred income tax assets and liabilities on our consolidated balance sheet related to events that impact our financialstatements and tax returns in different periods. In order to compute these deferred tax balances, we first analyze the differences between the book basis and taxbasis of our assets and liabilities (referred to as "temporary differences"). These temporary differences are then multiplied by current tax rates to arrive at thebalances for the deferred income tax assets and liabilities. A valuation allowance is provided on deferred tax assets that do not meet the "more likely than not"realization threshold. We recognize a tax position if it is more likely than not it will be sustained upon examination. The tax position is measured at the largestamount that is greater than 50 percent likely of being realized upon ultimate settlement. If our expectations about the future tax consequences of past eventsshould prove to be inaccurate, the balances of our deferred income tax assets and liabilities could require significant adjustments in future periods. Suchadjustments could cause a material effect on our results of operations for the period of the adjustment.Before giving effect to any valuation allowances, we are in an overall net deferred tax asset position in the U.S. and Australia. During 2011, in ourjudgment, the deferred tax assets did not meet the "more likely than not" realization threshold under GAAP principally due to our recent history of substantiallosses, and as a result, we continued to record a valuation allowance fully offsetting our net deferred tax assets. Our U.S. federal and Australia valuationallowances comprise the majority of the total allowance and amounted to $130.2 million and $64.1 million, respectively, as of December 31, 2011. Althoughwe reported pre-tax earnings in 2011, because of the fully reserved deferred position, the impact of taxes on our net income for 2011 is immaterial. See note 9 toour consolidated financial statements.We intend to review our conclusion about the appropriate amount of our deferred income tax asset valuation allowance in light of circumstances existingin future periods. Should we continue to generate earnings at the level generated in 2011, this positive evidence would likely change our conclusion as to therealizability of the deferred tax assets which would result in a reversal of some or all of the valuation allowance. Given the importance of future annual earningsto this assessment, management's consideration would likely extend to late 2012 unless events or changes in circumstances lead to a change in our conclusionbefore then. One potential transaction that could result in adjustment of our valuation allowance is the consummation of our recently announced agreement toacquire NextG (see note 20 to the our consolidated financial statements). If the NextG acquisition is consummated, because of the expected significant deferredtax liabilities that would be recorded in purchase accounting related to the target company, we would likely be required to reverse a substantial portion of ourexisting U.S. federal valuation allowance to earnings as the acquired deferred tax liabilities would serve to offset our deferred tax assets eliminating the need forsome or all of the related valuation allowance.Any future reversal of the valuation allowance would have a favorable impact on our net income but would have no effect on our cash flows. While areversal, if any, of the valuation allowance would have a positive effect on the Company's net income in the period of reversal, our net income in periods aftersuch reversal would be reduced as a result of an increase in the provision for income taxes to approximately the statutory rate.Impact of Accounting Standards Issued But Not Yet Adopted and Those Adopted in 2011In October 2009, Financial Accounting Standards Board ("FASB") issued guidance that addressed how to recognize revenue for transactions withmultiple deliverables. This guidance revises the criteria for separating, measuring and allocating arrangement consideration to each consideration deliverable,which must be estimated if there is not a history of selling the deliverable on a32stand-alone basis or third-party evidence of selling price. The provisions of this guidance were effective for us as of January 1, 2011 and were appliedprospectively. The adoption of this guidance did not have a material impact on our consolidated financial statements and did not result in a change to thepattern and timing of our revenue recognition.In September 2011, the FASB issued an amendment to the guidance on goodwill impairment testing. The amended guidance permits an entity to firstperform a qualitative assessment to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount. If it isconcluded that it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount, it is then necessary to perform the two-stepgoodwill impairment test, which is discussed further in note 2 to our consolidated financial statements. Otherwise, the two-step goodwill impairment test is notrequired. We have adopted this amended guidance effective during 2011. See "Item 7. MD&A—Accounting and Reporting Matters—Critical AccountingPolicies and Estimates—Accounting for Long-Lived Assets—Impairment Evaluation—Goodwill."Non-GAAP Financial MeasuresOur measurement of profit or loss currently used to evaluate the operating performance of our operating segments is earnings before interest, taxes,depreciation, amortization and accretion, as adjusted, or Adjusted EBITDA. Our definition of Adjusted EBITDA is set forth in "Item 7. MD&A—Results ofOperations—Comparison of Operating Segments." Our measure of Adjusted EBITDA may not be comparable to similarly titled measures of othercompanies, including companies in the tower sector and other similar providers of wireless infrastructure, and is not a measure of performance calculated inaccordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income or loss, net income or loss, net cashprovided by (used for) operating, investing and financing activities or other income statement or cash flow statement data prepared in accordance with GAAP.We believe Adjusted EBITDA is useful to an investor in evaluating our operating performance because:•it is the primary measure used by our management to evaluate the economic productivity of our operations, including the efficiency of ouremployees and the profitability associated with their performance, the realization of contract revenue under our long-term contracts, our ability toobtain and maintain our customers and our ability to operate our site rental business effectively;•it is the primary measure of profit and loss used by management for purposes of making decisions about allocating resources to, and assessing theperformance of, our operating segments;•it is similar to the measure of current financial performance generally used in our debt covenant calculations;•although specific definitions may vary, it is widely used in the tower sector and other similar providers of wireless infrastructure to measureoperating performance without regard to items such as depreciation, amortization and accretion, which can vary depending upon accountingmethods and the book value of assets; and•we believe it helps investors meaningfully evaluate and compare the results of our operations from (1) period to period and (2) to our competitorsby removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation,amortization and accretion) from our operating results.Our management uses Adjusted EBITDA:•with respect to compliance with our debt covenants, which require us to maintain certain financial ratios including, or similar to, AdjustedEBITDA;•as the primary measure of profit and loss for purposes of making decisions about allocating resources to, and assessing the performance of, ouroperating segments;•as a performance goal in employee annual incentive compensation;•as a measurement of operating performance because it assists us in comparing our operating performance on a consistent basis as it removes theimpact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization andaccretion) from our operating results;•in presentations to our board of directors to enable it to have the same measurement of operating performance used by management;•for planning purposes, including preparation of our annual operating budget;•as a valuation measure in strategic analyses in connection with the purchase and sale of assets; and•in determining self-imposed limits on our debt levels, including the evaluation of our leverage ratio and interest coverage ratio.There are material limitations to using a measure such as Adjusted EBITDA, including the difficulty associated with comparing results among morethan one company, including our competitors, and the inability to analyze certain significant items, including depreciation and interest expense, that directlyaffect our net income or loss. Management compensates for these limitations by considering the economic effect of the excluded expense items independently aswell as in connection with their analysis of net income (loss).33Item 7A. Quantitative and Qualitative Disclosures About Market RiskOur primary exposures to market risks are related to changes in interest rates and foreign currency exchange rates which may adversely affect our resultsof operations and financial position. We seek to manage exposure to changes in interest rates where economically prudent to do so by utilizing fixed rate debt.We do not currently hedge against foreign currency exchange risks.Interest Rate RiskOur interest rate risk relates primarily to the impact of interest rate movements on the following, after giving effect to the WCP acquisition and theJanuary 2012 refinancing:•the potential refinancing of our existing debt ($8.0 billion and $6.9 billion of debt outstanding at December 31, 2011 and 2010, respectively);•our $1.6 billion of floating rate debt representing approximately 20% of total debt compared to 11% in the prior year; and•potential future borrowings of incremental debt.Potential Refinancing of Existing DebtOver the next 12 months we have no debt maturities other than principal payments on amortizing debt. We do not anticipate the need to access the capitalmarkets to refinance our existing debt until at least 2015, which reflects the impact of refinancings that extended our debt maturities. As of December 31,2011, we have no interest rate swaps hedging any refinancings. See "Item 7. MD&A—Liquidity and Capital Resources—Overview."Floating Rate DebtWe manage our exposure to market interest rates on our existing debt by controlling the mix of fixed and floating rate debt. As of December 31, 2011,after giving effect to the January 2012 refinancing and the WCP acquisition, we had $1.6 billion of floating rate debt. As a result, a hypothetical unfavorablefluctuation in market interest rates on our existing debt of two percentage points over a 12 month period would increase our interest expense by approximately$32 million.Potential Future Borrowings of Incremental DebtWe typically do not hedge our exposure to interest rates on potential future borrowings of incremental debt for a substantial period prior to issuance. See"Item 7. MD&A—Liquidity and Capital Resources" regarding our short-term liquidity strategy and note 20 to our consolidated financial statementsregarding our January 2012 refinancing, including our undrawn revolving credit facility and delayed draw term loan.34The following table provides information about our market risk related to changes in interest rates. The future principal payments and weighted-averageinterest rates are presented as of December 31, 2011 and are after giving effect to the January 2012 refinancing and the WCP acquisition. These debt maturitiesreflect contractual maturity dates, and do not consider the impact of the principal payments that will commence following the anticipated repayment dates ofcertain notes (see footnote (c)). See note 6 to our consolidated financial statements for additional information regarding our debt. Future Principal Payments and Interest Rates by the Debt Instruments' Contractual Year of Maturity 2012 2013 2014 2015 2016 Thereafter Total Fair Value(a) (Dollars in thousands)Fixed rate debt (c)$33,864 $44,313 $44,806 $911,537 $43,712 $5,330,047(c)$6,408,279(c)$6,820,344Average interest rate(b)(c)5.0% 4.9% 5.0% 8.8% 5.1% 9.2%(c)9.0%(c) Variable rate debt$16,000 $16,000 $16,000 $16,000 $16,000 $1,520,000 $1,600,000 $1,600,000Average interest rate4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% ____________________(a)The fair value of our debt is based on indicative quotes (that is, non-binding quotes) from brokers that require judgment to interpret market information, including implied creditspreads for similar borrowings on recent trades or bid/ask offers. These fair values are not necessarily indicative of the amount, which could be realized in a current market exchange.(b)The average interest rate represents the weighted-average stated coupon rate (see footnote (c)).(c)The impact of principal payments that will commence following the anticipated repayment dates are not considered. The anticipated repayment dates are 2015, 2017 and 2020, asapplicable for the 2010 tower revenue notes. As previously discussed, if the tower revenue notes are not repaid in full by the applicable anticipated repayment dates, the applicableinterest rate increases by approximately 5% per annum and monthly principal payments commence using the Excess Cash Flow of the issuers of the tower revenue notes. The towerrevenue notes are presented based on their contractual maturity dates ranging from 2035 to 2040 and include the impact of an assumed 5% increase in interest rate that would occurfollowing the anticipated repayment dates but exclude the impact of monthly principal payments that would commence using Excess Cash Flow of the issuers of the tower revenuenotes. The full year 2011 Excess Cash Flow of the issuers of the tower revenue notes was approximately $456 million. The anticipated repayment date is 2015 for each class of theWCP securitized notes. If the WCP securitized notes are not repaid in full by their anticipated repayment dates, the applicable interest rate increases by an additional approximately5% per annum. If the WCP securitized notes are not repaid in full by their rapid amortization date of 2017, monthly principal payments commence using the Excess Cash Flow ofthe issuers of the WCP securitized notes, The WCP securitized notes are presented based on their contractual maturity dates in 2040. The full year 2011 Excess Cash Flow of theissuers of the WCP securitized notes was approximately $17 million. We acquired restricted cash of $29.5 million that if not spent on third party land interests by November 2012will be required to be used to repay principal amounts outstanding on the WCP securitized debt.35Foreign Currency RiskThe vast majority of our foreign currency risk is related to the Australian dollar which is the functional currency of CCAL. CCAL represented 6% ofour consolidated revenues and 4% of our consolidated operating income for 2011. As of December 31, 2011, the Australian dollar exchange rate hadstrengthened compared to the U.S. dollar by approximately 12% from the average rate for 2010. See "Item 7. MD&A—Results of Operations—Comparisonof Operating Segments."Foreign exchange markets have recently been volatile, and we expect foreign exchange markets to continue to be volatile over the near term. We believe therisk related to our financial instruments (exclusive of inter-company financing deemed a long-term investment) denominated in Australian dollars is notsignificant to our financial condition. A hypothetical increase or decrease of 25% in Australian dollar exchange rate would increase or decrease the fair value ofour financial instruments by approximately $8 million.Item 8. Financial Statements and Supplementary DataCrown Castle International Corp. and SubsidiariesIndex to Consolidated Financial Statements PageReport of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm37Report of KPMG LLP, Independent Registered Public Accounting Firm38Consolidated Balance Sheet as of December 31, 2011 and 201039Consolidated Statement of Operations and Comprehensive Income (Loss) for each of the three years in the period ended December 31, 201140Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, 201141Consolidated Statement of Equity for each of the three years in the period ended December 31, 201142Notes to Consolidated Financial Statements4436REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofCrown Castle International Corp.:In our opinion, the consolidated balance sheet as of December 31, 2011 and the related consolidated statements of operations and comprehensive income(loss), of redeemable convertible preferred stock and equity and of cash flows for the year then ended present fairly, in all material respects, the financialposition of Crown Castle International Corp. and its subsidiaries at December 31, 2011, and the results of their operations and their cash flows for the yearthen ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statementschedule for the year ended December 31, 2011 listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information setforth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all materialrespects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financialstatements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Ourresponsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financialreporting based on our integrated audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (UnitedStates). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the financial statementsincluded examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles usedand significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financialreporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal controlover financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ PricewaterhouseCoopers LLPPittsburgh, PennsylvaniaFebruary 13, 201237REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Board of Directors and StockholdersCrown Castle International Corp.:We have audited the accompanying consolidated balance sheet of Crown Castle International Corp. and subsidiaries (the Company) as of December 31,2010, and the related consolidated statements of operations and comprehensive income (loss), cash flows, and redeemable convertible preferred stock andequity for each of the years in the two-year period ended December 31, 2010. In connection with our audits of the consolidated financial statements, we alsohave audited the 2010 and 2009 information in financial statement schedule II. These consolidated financial statements and the financial statement scheduleare the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and the financialstatement schedule based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe thatour 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 CastleInternational Corp. and subsidiaries as of December 31, 2010, and the results of their operations and their cash flows for each of the years in the two-yearperiod ended December 31, 2010, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statementschedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the informationset forth therein./s/ KPMG LLPPittsburgh, PennsylvaniaFebruary 15, 201138CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEET(In thousands of dollars, except share amounts) December 31, 2011 2010ASSETS Current assets: Cash and cash equivalents$80,120 $112,531Restricted cash252,368 221,015Receivables net of allowance of $5,891 and $5,683, respectively77,258 59,912Prepaid expenses80,529 65,856Deferred income tax assets85,385 59,098Deferred site rental receivables and other current assets, net23,492 26,733Total current assets599,152 545,145Deferred site rental receivables, net621,103 421,304Property and equipment, net4,861,227 4,893,651Goodwill2,035,390 2,029,296Site rental contracts and customer relationships, net2,074,982 2,197,378Other intangible assets, net103,200 116,551Long-term prepaid rent, deferred financing costs and other assets, net250,042 266,204Total assets$10,545,096 $10,469,529LIABILITIES AND EQUITY Current liabilities: Accounts payable$32,055 $39,649Accrued interest65,392 65,191Deferred revenues167,238 202,123Other accrued liabilities104,904 105,235Current maturities of debt and other obligations32,517 28,687Total current liabilities402,106 440,885Debt and other long-term obligations6,853,182 6,750,207Deferred income tax liabilities97,562 66,686Deferred ground lease payable and other liabilities500,350 450,176Total liabilities7,853,200 7,707,954Commitments and contingencies (note 14) Redeemable convertible preferred stock, $0.1 par value; 20,000,000 shares authorized; shares issued and outstanding:December 31, 2011—6,111,000 and December 31, 2010—6,361,000; stated net of unamortized issue costs; mandatoryredemption and aggregate liquidation value: December 31, 2011—$305,550 and December 31, 2010—$318,050305,032 316,581CCIC stockholders' equity: Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: December 31, 2011—284,449,372 and December 31, 2010—290,826,2842,844 2,908Additional paid-in capital5,312,342 5,581,525Accumulated other comprehensive income (loss)(116,996) (178,978)Accumulated deficit(2,811,945) (2,960,082)Total CCIC stockholders' equity2,386,245 2,445,373Noncontrolling interest619 (379)Total equity2,386,864 2,444,994Total liabilities and equity$10,545,096 $10,469,529See accompanying notes to consolidated financial statements.39CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)(In thousands of dollars, except per share amounts) Years Ended December 31, 2011 2010 2009Net revenues: Site rental$1,853,550 $1,700,761 $1,543,192Network services and other179,179 177,897 142,215 2,032,729 1,878,658 1,685,407Operating expenses: Costs of operations(a): Site rental481,398 467,136 456,560Network services and other106,987 114,241 92,808General and administrative173,493 165,356 153,072Asset write-down charges22,285 13,687 19,237Acquisition and integration costs3,310 2,102 —Depreciation, amortization and accretion552,951 540,771 529,739Total operating expenses1,340,424 1,303,293 1,251,416Operating income (loss)692,305 575,365 433,991Interest expense and amortization of deferred financing costs(507,587) (490,269) (445,882)Gains (losses) on retirement of long-term obligations— (138,367) (91,079)Net gain (loss) on interest rate swaps— (286,435) (92,966)Interest income666 2,204 2,967Other income (expense)(5,577) (603) 2,446Income (loss) before income taxes179,807 (338,105) (190,523)Benefit (provision) for income taxes(8,347) 26,846 76,400Net income (loss)171,460 (311,259) (114,123)Less: Net income (loss) attributable to the noncontrolling interest383 (319) 209Net income (loss) attributable to CCIC stockholders171,077 (310,940) (114,332)Dividends on preferred stock and losses on purchases of preferred stock(22,940) (20,806) (20,806)Net income (loss) attributable to CCIC stockholders after deduction of dividends on preferred stock andlosses on purchases of preferred stock$148,137 $(331,746) $(135,138)Net income (loss)$171,460 $(311,259) $(114,123)Other comprehensive income (loss): Available-for-sale securities, net of taxes of $0, $0, and $0: Unrealized gains (losses), net of taxes(7,537) 738 6,799Derivative instruments, net of taxes of $0, $(14,997) and $60,324: Net change in fair value of cash flow hedging instruments, net of taxes(973) (140,194) 80,789Amounts reclassified into results of operations, net of taxes71,707 56,890 154,891Foreign currency translation adjustments(848) 27,908 41,399Total other comprehensive income (loss)62,349 (54,658) 283,878Comprehensive income (loss)233,809 (365,917) 169,755Less: Comprehensive income (loss) attributable to the noncontrolling interest750 (223) (18)Comprehensive income (loss) attributable to CCIC stockholders$233,059 $(365,694) $169,773Net income (loss) attributable to CCIC common stockholders, after deduction of dividends on preferredstock and losses of purchases of preferred stock, per common share: Basic0.52 (1.16) (0.47)Diluted0.52 (1.16) (0.47)Weighted-average common shares outstanding (in thousands): Basic283,821 286,764 286,622Diluted285,947 286,764 286,622____________________(a)Exclusive of depreciation, amortization and accretion shown separately. See accompanying notes to consolidated financial statements.40CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENT OF CASH FLOWS(In thousands of dollars) Years Ended December 31, 2011 2010 2009Cash flows from operating activities: Net income (loss)$171,460 $(311,259) $(114,123)Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation, amortization and accretion552,951 540,771 529,739Gains (losses) on retirement of long-term obligations— 138,367 91,079Amortization of deferred financing costs and other non-cash interest102,943 85,454 61,357Stock-based compensation expense32,610 36,540 29,225Asset write-down charges22,285 13,687 19,237Deferred income tax benefit (provision)4,626 (26,196) (74,410)Income (expense) from forward-starting interest rate swaps— 286,435 90,302Other adjustments4,122 857 821Changes in assets and liabilities, excluding the effects of acquisitions: Increase (decrease) in accrued interest201 (4,285) 52,705Increase (decrease) in accounts payable(7,497) 1,702 (1,703)Increase (decrease) in deferred revenues, deferred ground lease payables, otheraccrued liabilities and other liabilities19,606 39,012 9,317Decrease (increase) in receivables(17,407) (11,653) (4,830)Decrease (increase) in prepaid expenses, deferred site rental receivables, long-termprepaid rent, restricted cash and other assets(242,446) (186,002) (117,460)Net cash provided by (used for) operating activities643,454 603,430 571,256Cash flows from investing activities: Payment for acquisitions of businesses, net of cash acquired(37,551) (139,158) (2,598)Capital expenditures(347,942) (228,058) (173,535)Other investing activities, net(14,372) (23,733) 3,988Net cash provided by (used for) investing activities(399,865) (390,949) (172,145)Cash flows from financing activities: Proceeds from issuance of long-term debt— 3,450,000 2,726,348Proceeds from issuance of capital stock1,557 18,731 45,049Principal payments on debt and other long-term obligations(35,345) (26,398) (6,500)Purchases and redemptions of long-term debt— (3,541,312) (2,191,719)Purchases of capital stock(303,414) (159,639) (3,003)Purchases of preferred stock(15,002) — —Borrowings under revolving credit facility283,000 157,000 50,000Payments under revolving credit facility(189,000) — (219,400)Payments for financing costs— (59,259) (67,760)Payments for forward-starting interest rate swap settlements— (697,821) (36,670)Net (increase) decrease in restricted cash1,979 11,953 (62,071)Dividends on preferred stock(19,487) (19,879) (19,878)Net cash provided by (used for) financing activities(275,712) (866,624) 214,396Effect of exchange rate changes on cash(288) 528 (2,580)Net increase (decrease) in cash and cash equivalents(32,411) (653,615) 610,927Cash and cash equivalents at beginning of year112,531 766,146 155,219Cash and cash equivalents at end of year$80,120 $112,531 $766,146See accompanying notes to consolidated financial statements.41CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENT OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY(In thousands of dollars, except share amounts) CCIC Stockholders' Equity Redeemable ConvertiblePreferred Stock Common Stock Accumulated Other Comprehensive Income (Loss) ("AOCI") Shares Amount Shares ($.01 Par) AdditionalPaid-InCapital ForeignCurrencyTranslationAdjustments DerivativeInstruments UnrealizedGains(Losses) onAvailable-for-saleSecurities AccumulatedDeficit NoncontrollingInterest TotalBalance, January 1, 20096,361,000 $314,726 288,464,431 $2,885 $5,614,507 $26,821 $(435,150) $— $(2,493,198) $— $2,715,865Stock-based compensationrelated activity, net offorfeitures— — 4,381,128 43 74,231 — — — — — 74,274Purchases and retirement ofcapital stock— — (115,875) (1) (2,864) — — — — (138) (3,003)Foreign currency translationadjustments— — — — — 41,626 — — — (227) 41,399Available-for-sale securities: Unrealized gain(loss), net of tax— — — — — — — 6,799 — — 6,799Derivative instruments: Net change in fairvalue of cash flowhedginginstruments, net oftax— — — — — — 80,789 — — — 80,789Amounts reclassifiedinto results ofoperations, net oftax— — — — — — 154,891 — — — 154,891Dividends on preferred stockand amortization of issuecosts— 928 — — — — — — (20,806) — (20,806)Net income (loss)— — — — — — — — (114,332) 209 (114,123)Balance, December 31, 20096,361,000$315,654292,729,684$2,927$5,685,874$68,447$(199,470)$6,799$(2,628,336)$(156)$2,936,08542 CCIC Stockholders’ Equity Redeemable ConvertiblePreferred Stock Common Stock AOCI Shares Amount Shares ($.01 Par) AdditionalPaid-InCapital ForeignCurrencyTranslationAdjustments DerivativeInstruments UnrealizedGains(Losses) onAvailable-for-saleSecurities AccumulatedDeficit NoncontrollingInterest TotalBalance, December 31, 20096,361,000$315,654292,729,684$2,927$5,685,874$68,447$(199,470)$6,799$(2,628,336)$(156)$2,936,085Stock-based compensationrelated activity, net offorfeitures— — 2,230,458 22 55,249 — — — — — 55,271Purchases and retirement ofcapital stock— — (4,133,858) (41) (159,598) — — — — — (159,639)Foreign currency translationadjustments— — — — — 27,812 — — — 96 27,908Available-for-sale securities: — Unrealized gain (loss),net of tax— — — — — — — 738 — — 738Derivative instruments: Net change in fairvalue of cash flowhedginginstruments, net oftax— — — — — — (140,194) — — — (140,194)Amounts reclassifiedinto results ofoperations, net oftax— — — — — — 56,890 — — — 56,890Dividends on preferred stockand amortization of issuecosts— 927 — — — — — — (20,806) — (20,806)Net income (loss)— — — — — — — (310,940) (319) (311,259)Balance, December 31, 20106,361,000 $316,581 290,826,284 $2,908 $5,581,525 $96,259 $(282,774) $7,537 $(2,960,082) $(379) $2,444,994Stock-based compensationrelated activity, net of forfeitures— — 1,000,891 10 34,157 — — — — — 34,167Purchases and retirement ofcapital stock— — (7,377,803) (74) (303,340) — — — — — (303,414)Purchases and retirement ofpreferred stock and losseson purchases of preferredstock(250,000) (12,464) — — — — — — (2,538) — (2,538)Foreign currency translationadjustments— — — — — (1,215) — — — 367 (848)Available-for-sale securities: Unrealized gain (loss),net of tax— — — — — — — (7,537) — — (7,537)Derivative instruments: Net change in fairvalue of cash flowhedginginstruments, net oftax— — — — — — (973) — — — (973)Amounts reclassifiedinto results ofoperations, net oftax— — — — — — 71,707 — — — 71,707Dividends on preferred stockand amortization of issuecosts— 915 — — — — — — (20,402) — (20,402)Acquisition of noncontrollinginterest— — — — — — — — — 248 248Net income (loss)— — — — — — — — 171,077 383 171,460Balance, December 31, 20116,111,000 $305,032 284,449,372 $2,844 $5,312,342 $95,044 $(212,040) $— $(2,811,945) $619 $2,386,864See accompanying notes to consolidated financial statements.43NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Tabular dollars in thousands, except per share amounts)1. Basis of PresentationThe consolidated financial statements include the accounts of Crown Castle International Corp. ("CCIC") and its majority and wholly-ownedsubsidiaries, collectively referred to herein as the "Company." All significant intercompany balances and transactions have been eliminated in consolidation.The Company owns, operates and leases shared wireless infrastructure, including: (1) towers and other structures, such as rooftops (collectively,"towers"), (2) distributed antenna systems ("DAS")(each such system is a network of antennas for the benefit wireless carriers which is connected by fiber tocommunication hubs designed to facilitate wireless communications), and (3) interests in land under third party towers in various forms (collectively, "thirdparty land interests") (unless the context otherwise suggests or requires references, herein to "wireless infrastructure" include towers, DAS and third party landinterests). The Company's primary business is renting space or physical capacity (collectively, "space") on its towers, DAS and, to a lesser extent, third partyland interests (collectively, "site rental business") to wireless communications companies via long-term contracts in various forms, including licenses,subleases and lease agreements (collectively, "contracts"). To a lesser extent, the Company also provides certain network services relating to its wirelessinfrastructure, primarily consisting of antenna installation and subsequent augmentation services (collectively, "installation services"), as well as the followingadditional site development services relating to existing and new antenna installations on its wireless infrastructure: site acquisition, architectural andengineering, zoning and permitting, fiber installation, other construction and other services related network development. The Company conducts itsoperations through wireless infrastructure portfolios in the United States, including Puerto Rico ("U.S." or "CCUSA") and Australia (referred to as "CCAL").The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of thefinancial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.2. Summary of Significant Accounting PoliciesCash EquivalentsCash equivalents consist of highly liquid investments with original maturities of three months or less.Restricted CashRestricted cash represents (1) the cash held in reserve by the indenture trustees pursuant to the indenture governing certain of the Company's debtinstruments, (2) cash securing performance obligations such as letters of credit, as well as (3) any other cash whose use is limited by contractual provisions.The restriction of all rental cash receipts is a critical feature of the Company's debt instruments, due to the applicable indenture trustee's ability to utilize therestricted cash for the payment of (1) debt service costs, (2) ground rents, (3) real estate and personal property taxes, (4) insurance premiums related to towers,(5) other assessments by governmental authorities and potential environmental remediation costs, and (6) a portion of advance rents from customers. Therestricted cash in excess of required reserve balances is subsequently released to the Company in accordance with the terms of the indentures. The Companyhas classified the increases and decreases in restricted cash as (1) cash provided by financing activities for cash held by indenture trustees based onconsideration of the terms of the related indebtedness, although the cash flows have aspects of both financing activities and operating activities, (2) cashprovided by investing activities for cash securing performance obligations, and (3) cash provided by operating activities for the other remaining restrictedcash. Cash flows from operating activities on the consolidated statement of cash flows related to restricted cash was an inflow of $17.9 million, $18.9 millionand $3.6 million for the years ending December 31, 2011, 2010 and 2009, respectively. Cash provided by investing activities on the consolidated statement ofcash flows related to restricted cash was an inflow of $15.4 million, $-0- and $-0- for the years ending December 31, 2011, 2010 and 2009, respectively.44NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)Receivables AllowanceAn allowance for doubtful accounts is recorded as an offset to accounts receivable in order to present a net balance that the Company believes will becollected. An allowance for uncollectible amounts is recorded to offset the deferred site rental receivables that arise from site rental revenues recognized in excessof amounts currently due under the contract. The Company uses judgment in estimating these allowances and considers historical collections, current creditstatus and contractual provisions. Additions to the allowance for doubtful accounts are charged either to "site rental costs of operations" or to "networkservices and other costs of operations," as appropriate; and deductions from the allowance are recorded when specific accounts receivable are written off asuncollectible. Additions or reversals to the allowance for uncollectible deferred site rental receivables are charged to site rental revenues, and deductions from theallowance are recorded as contracts terminate. The allowance for uncollectible deferred site rental receivables was $-0- and $5.1 million as of December 31,2011 and 2010, respectively.Property and EquipmentProperty and equipment is stated at cost, net of accumulated depreciation. Property and equipment includes land owned in fee and perpetual easementsfor land which have no definite life. Land owned in fee and perpetual easements for land are recorded as "property and equipment, net." When the Companypurchases fee ownership or perpetual easements for the land previously subject to ground lease, the Company reduces the value recorded as land by theamount of the deferred ground lease payable and unamortized above-market leases. Depreciation is computed utilizing the straight-line method at rates basedupon the estimated useful lives of the various classes of assets. Depreciation of wireless infrastructure is computed with a useful life equal to the shorter of 20years or the term of the underlying ground lease (including optional renewal periods). Additions, renewals and improvements are capitalized, whilemaintenance and repairs are expensed. Upon the sale or retirement of an asset, the related cost and accumulated depreciation are removed from the accountsand any gain or loss is recognized. The carrying value of property and equipment will be reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the estimated future cash flows (undiscounted) expected toresult from the use and eventual disposition of the asset group is less than the carrying amount of the asset group, an impairment loss is recognized.Measurement of an impairment loss is based on the fair value of the asset. Construction in process is impaired when projects are abandoned or terminated.Asset Retirement ObligationsPursuant to its ground lease and easement agreements, the Company records obligations to perform asset retirement activities, including requirements toremove wireless infrastructure or remediate the land upon which the Company's wireless infrastructure resides. The fair value of the liability for assetretirement obligations, which represents the net present value of the estimated expected future cash outlay, is recognized in the period in which it is incurredand the fair value of the liability can reasonably be estimated. Changes subsequent to initial measurement resulting from revisions to the timing or amount ofthe original estimate of undiscounted cash flows are recognized as an increase or decrease in the carrying amount of the liability and related carrying amount ofthe capitalized asset. Asset retirement obligations are included in "deferred ground lease payable and other liabilities" on the Company's consolidated balancesheet. The liability accretes as a result of the passage of time and the related accretion expense is included in "depreciation, amortization and accretion expense"on the Company's consolidated statement of operations and comprehensive income (loss). The associated asset retirement costs are capitalized as an additionalcarrying amount of the related long-lived asset and depreciated over the useful life of such asset.GoodwillGoodwill represents the excess of the purchase price for an acquired business over the allocated value of the related net assets. The Company testsgoodwill for impairment on an annual basis, regardless of whether adverse events or changes in circumstances have occurred. The annual test begins withgoodwill and all intangible assets being allocated to applicable reporting units. The Company then performs a qualitative assessment to determine whether it is"more likely than not" that the fair value of the reporting units is less than its carrying amount. If it is concluded that it is "more likely than not" that the fairvalue of a reporting until is less than its carrying amount, it is necessary to perform the two-step goodwill impairment test. The two-step goodwill impairmenttest begins with an estimation of fair value of the reporting unit using an income approach, which looks to the present value of expected future cash flows. Thefirst step, commonly referred to as a "step-one impairment test," is a screen for potential impairment while the second step measures the amount of impairmentif there is an indication from the first step that one exists. The Company's measurement of the fair value for goodwill is based on an estimate of discountedfuture cash flows of the reporting unit. The Company performed its annual goodwill impairment test as of October 1, 2011 utilizing the qualitative assessmentand determined that the "more likely than not" threshold was achieved and no further testing of goodwill was required.45NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)Intangible AssetsIntangible assets are included in "site rental contracts and customer relationships, net" and "other intangible assets, net" on the Company's consolidatedbalance sheet and predominately consist of the estimated fair value of the following items recorded in conjunction with acquisitions: (1) site rental contractsand customer relationships, (2) below-market leases for land interest under the acquired wireless infrastructure, (3) term easement rights for land interest underthe acquired wireless infrastructure, and (4) trademarks. The site rental contracts and customer relationships intangible assets are comprised of (1) the currentterm of the existing contracts, (2) the expected exercise of the renewal provisions contained within the existing contracts, which automatically occur undercontractual provisions, and (3) any associated relationships that are expected to generate value following the expiration of all renewal periods under existingcontracts. Deferred credits related to above-market leases for land interests under the Company's wireless infrastructure recorded in conjunction withacquisitions are recorded at their estimated fair value and are included in "deferred ground lease payable and other liabilities" on the Company's consolidatedbalance sheet.The useful lives of intangible assets are estimated based on the period over which the intangible asset is expected to benefit the Company and givesconsideration to the expected useful life of other assets to which the useful life may relate. Amortization expense for intangible assets is computed using thestraight-line method over the estimated useful life of each of the intangible assets. The useful life of the site rental contracts and customer relationshipsintangible asset is limited by the maximum depreciable life of the wireless infrastructure (20 years), as a result of the interdependency of the wirelessinfrastructure and site rental contracts and customer relationships. In contrast, the site rental contracts and customer relationships are estimated to provideeconomic benefits for several decades because of the low rate of customer cancellations and high rate of renewals experienced to date. Thus, while site rentalcontracts and customer relationships are valued based upon the fair value, which includes assumptions regarding both (1) customers' exercise of optionalrenewals contained in the acquired contracts and (2) renewals of the acquired contracts past the contractual term including exercisable options, the site rentalcontracts and customer relationships are amortized over a period not to exceed 20 years as a result of the useful life being limited by the depreciable life of thewireless infrastructure.The carrying value of other intangible assets with finite useful lives will be reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of the assets may not be recoverable. The Company has a dual grouping policy for purposes of determining the unit ofaccount for testing impairment of the site rental contracts and customer relationships intangible assets. First, the Company pools the site rental contracts andcustomer relationships with the related wireless infrastructure assets into portfolio groups for purposes of determining the unit of account for impairmenttesting. Second and separately, the Company evaluates the site rental contracts and customer relationships by significant customer or by customer groupingfor individually insignificant customers, as appropriate. If the sum of the estimated future cash flows (undiscounted) expected to result from the use andeventual disposition of an asset is less than the carrying amount of the asset, an impairment loss is recognized. Measurement of an impairment loss is basedon the fair value of the asset.Deferred Financing CostsCosts incurred to obtain financing are deferred and amortized over the term of the related borrowing using the effective yield method. Deferred financingcosts are included in "long-term prepaid rent, deferred financing costs and other assets" on the Company's consolidated balance sheet.Accrued Estimated Property TaxesThe accrual for estimated property tax obligations is based on assessments currently in effect and estimates of additional taxes. The Company recognizesthe benefit of tax appeals upon ultimate resolution of the appeal.Revenue RecognitionSite rental revenues are recognized on a monthly basis over the fixed, non-cancelable term of the relevant contract (generally ranging from five to 15years), regardless of whether the payments from the customer are received in equal monthly amounts. The Company's contracts contain fixed escalationclauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the consumer price index ("CPI")). If thepayment terms call for fixed escalations or rent free periods, the effect is recognized on a straight-line basis over the fixed, non-cancelable term of the agreement.When calculating straight-line rental revenues, the Company considers all fixed elements of tenant contractual escalation provisions, even if such escalationprovisions contain a variable element in addition to a minimum. The Company's assets related to straight-line site rental revenues are included in "deferred siterental receivables and other current assets, net" and "deferred site rental receivables, net" and amounts received in advance are recorded as "deferred revenues."Network services revenues are recognized after completion of the applicable service. Nearly all of the antenna installation46NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)services are billed on a cost-plus profit basis.Sales taxes and value-added taxes collected from customers and remitted to governmental authorities are presented on a net basis.Costs of OperationsApproximately two-thirds of the Company's site rental costs of operations expenses consist of ground lease expenses, and the remainder includesproperty taxes, repairs and maintenance expenses, employee compensation and related benefit costs, and utilities. Network services and other costs ofoperations predominately consist of third party service providers such as contractors and professional service firms.Generally, the ground lease agreements are specific to each site and are for an initial term of five years and are renewable for pre-determined periods. TheCompany also enters into term easements and ground leases in which it prepays the entire term in advance. Ground lease expense is recognized on a monthlybasis, regardless of whether the lease agreement payment terms require the Company to make payments annually, quarterly, monthly, or for the entire term inadvance. The Company's ground leases contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalationclauses (such as those tied to the CPI). If the payment terms include fixed escalation provisions, the effect of such increases is recognized on a straight-linebasis. The Company calculates the straight-line ground lease expense using a time period that equals or exceeds the remaining depreciable life of the wirelessinfrastructure asset. Further, when a tenant has exercisable renewal options that would compel the Company to exercise existing ground lease renewal options,the Company has straight-lined the ground lease expense over a sufficient portion of such ground lease renewals to coincide with the final termination of thetenant's renewal options. The Company's liability related to straight-line ground lease expense is included in "deferred ground lease payable and otherliabilities" on the Company's consolidated balance sheet. The Company's asset related to prepaid ground leases is included in "prepaid expenses" and "long-term prepaid rent, deferred financing costs and other assets, net" on the Company's consolidated balance sheet.Acquisition and Integration CostsAll direct or incremental costs related to a business combination are expensed as incurred. These business combination costs are included in "acquisitionand integration costs" on the Company's consolidated statement of operations and comprehensive income (loss).Stock-Based CompensationRestricted Stock Awards. The Company records stock-based compensation expense only for those nonvested stock awards ("restricted stock awards")for which the requisite service is expected to be rendered. The cumulative effect of a change in the estimated number of restricted stock awards for which therequisite service is expected to be or has been rendered is recognized in the period of the change in the estimate. To the extent that the requisite service isrendered, compensation cost for accounting purposes is not reversed; rather, it is recognized regardless of whether or not the awards vest. A discussion of theCompany's valuation techniques and related assumptions and estimates used to measure the Company's stock-based compensation is as follows:Valuation. The fair value of restricted stock awards without market conditions is determined based on the number of shares granted and the quotedprice of the Company's stock at the date of grant. The Company estimates the fair value of restricted stock awards with market conditions granted using aMonte Carlo simulation. The Company's determination of the fair value of restricted stock awards with market conditions on the date of grant is affected byits stock price as well as assumptions regarding a number of highly complex and subjective variables. The determination of fair value using a Monte Carlosimulation requires the input of highly subjective assumptions, and other reasonable assumptions could provide differing results.Amortization Method. The Company amortizes the fair value of all restricted stock awards on a straight-line basis for each separately vesting tranche ofthe award (graded vesting schedule) over the requisite service periods. In the case of accelerated vesting based on the market performance of the Company'scommon stock, the compensation costs related to the vested awards that have not previously been amortized are recognized upon vesting.Expected Volatility. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stockand implied volatility on publicly traded options on the Company's common stock.Risk-Free Rate. The Company bases the risk-free rate on the implied yield currently available on U.S. Treasury issues with an equivalent remainingterm equal to the expected life of the award.47NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)Forfeitures. The Company uses historical data and management's judgment about the future employee turnover rates to estimate the number of sharesfor which the requisite service period will not be rendered.Interest Expense and Amortization of Deferred Financing CostsThe components of interest expense and amortization of deferred financing costs are as follows: Years Ended December 31, 2011 2010 2009Interest expense on debt obligations$404,644 $404,815 $384,525Amortization of deferred financing costs15,086 15,397 26,953Amortization of discounts on long-term debt16,090 14,481 12,219Amortization of interest rate swaps71,707 54,169 18,818Other, net of capitalized interest60 1,407 3,367Total$507,587 $490,269 $445,882The Company amortizes discounts on long-term debt over the term of the related borrowing using the effective interest yield method. Discounts arepresented as a reduction to the related debt obligation on the Company's consolidated balance sheet. Income TaxesThe Company accounts for income taxes using an asset and liability approach, which requires the recognition of deferred income tax assets andliabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. Deferred income taxassets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted taxrates. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the asset will not be realized.The Company records a valuation allowance against deferred tax assets when it is "more likely than not" that some portion or all of the deferred tax assetwill not be realized. The Company reviews the recoverability of deferred tax assets each quarter and based upon projections of future taxable income, reversingdeferred tax liabilities and other known events that are expected to affect future taxable income, records a valuation allowance for assets that do not meet the"more likely than not" realization threshold. Valuation allowances may be reversed if related deferred tax assets are deemed realizable based upon changes infacts and circumstances that impact the recoverability of the asset.The Company recognizes a tax position if it is more likely than not that it will be sustained upon examination. The tax position is measured at the largestamount that is greater than 50 percent likely of being realized upon ultimate settlement. The Company reports penalties and tax-related interest expense as acomponent of the benefit (provision) for income taxes. As of December 31, 2011 and 2010, the Company has not recorded any penalties related to incometaxes.Per Share InformationBasic net income (loss) attributable to CCIC common stockholders, after deduction of dividends on preferred stock and losses on purchases of preferredstock, per common share excludes dilution and is computed by dividing net income (loss) attributable to CCIC stockholders after deduction of dividends onpreferred stock and losses on purchases of preferred stock by the weighted-average number of common shares outstanding during the period. Diluted income(loss) attributable to CCIC common stockholders after deduction of dividends on preferred stock and losses on purchases of preferred stock, per commonshare is computed by dividing net income (loss) attributable to CCIC stockholders after deduction of dividends on preferred stock and losses on purchases ofpreferred stock by the weighted-average number of common shares outstanding during the period plus any potential dilutive common share equivalents,including shares issuable (1) upon exercise of stock options and the vesting of restricted stock awards as determined under the treasury stock method and(2) upon conversion of the Company's preferred stock, as determined under the if-converted method. The Company's restricted stock awards are consideredparticipating securities and may be included in the computation of earnings pursuant to the two-class. However, the Company does not present the two-classmethod when there is no difference between the per share amount under the two-class method and the treasury stock method.48NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)A reconciliation of the numerators and denominators of the basic and diluted per share computations is as follows: Years Ended December 31, 2011 2010 2009Net income (loss) attributable to CCIC stockholders$171,077 $(310,940) $(114,332)Dividends on preferred stock and losses on purchases of preferred stock(22,940) (20,806) (20,806)Net income (loss) attributable to CCIC common stockholders after deduction ofdividends on preferred stock and losses on purchases of preferred stock$148,137 $(331,746) $(135,138)Weighted-average number of common shares outstanding (in thousands): Basic weighted-average number of common stock outstanding283,821 286,764 286,622Effect of assumed dilution from potential common shares relating to stock optionsand restricted stock awards2,126 — —Diluted weighted-average number of common shares outstanding285,947 286,764 286,622Net income (loss) attributable to CCIC common stockholders, after deduction ofdividends on preferred stock, per common share: Basic$0.52 $(1.16) $(0.47)Diluted$0.52 $(1.16) $(0.47)For the year ended December 31, 2011, 0.9 million restricted stock awards were excluded from the dilutive common shares because certain stock pricehurdles would not have been achieved assuming that December 31, 2011 was the end of the contingency period. For the years ended December 31, 2010 and2009, all of the CCIC stock options and unvested restricted stock awards are excluded from dilutive common shares because the net impact is anti-dilutive. Inaddition, for the years ended 2011, 2010 and 2009, 8.3 million, 8.6 million, and 8.6 million shares, respectively, reserved for issuance upon conversion ofthe 6.25% Redeemable Convertible Preferred Stock are excluded from dilutive common shares in 2011, 2010, and 2009 as well because the impact of suchconversion would be anti-dilutive. See notes 10, 12 and 20.Foreign Currency TranslationThe Company's international operations use the local currency as their functional currency. The Company translates the results of these internationaloperations using the applicable average exchange rate for the period, and translates the assets and liabilities using the applicable exchange rate at the end of theperiod. The cumulative effect of changes in the exchange rate is recorded as "foreign currency translation adjustments" in other comprehensive income (loss).See note 16.Fair ValuesThe Company's assets and liabilities recorded at fair value are categorized based upon a fair value hierarchy that ranks the quality and reliability of theinformation used to determine fair value. The three levels of the fair value hierarchy are (1) Level 1 — quoted prices (unadjusted) in active and accessiblemarkets, (2) Level 2 — observable prices that are based on inputs not quoted in active markets but corroborated by market data, and (3) Level 3 —unobservable inputs and are not corroborated by market data. The Company evaluates level classifications quarterly, and transfers between levels are effectiveat the end of the quarterly period.The fair value of cash and cash equivalents and restricted cash approximate the carrying value. The Company determines fair value of its debt securitiesbased on indicative quotes (that is non-binding quotes) from brokers that require judgment to interpret market information including implied credit spreads forsimilar borrowings on recent trades or bid/ask prices or quotes from active markets if applicable. The fair value of interest rate swaps is determined using theincome approach and is predominately based on observable interest rates and yield curves and, to a lesser extent, the Company's and the contractcounterparty's credit risk. There were no changes since December 31, 2010 in the Company's valuation techniques used to measure fair values.See note 8 for a further discussion of fair values. Derivative InstrumentsThe Company enters into interest rate swaps, to manage and reduce its interest rate risk. Derivative financial instruments are entered into for periods thatmatch the related underlying exposures and do not constitute positions independent of these exposures. The Company can designate derivative financialinstruments as hedges. The Company can also enter into derivative49NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)financial instruments that are not designated as accounting hedges.Derivatives are recognized on the consolidated balance sheet at fair value. If the derivative is designated as a cash flow hedge, the effective portion of thechange in the fair value of the derivative is recorded as a separate component of stockholders' equity, captioned "accumulated other comprehensive income(loss)," and recognized as increases or decreases to "interest expense and amortization of deferred financing costs" when the hedged item affects earnings. Anyhedge ineffectiveness is included in "net gain (loss) on interest rate swaps" on the consolidated statement of operations and comprehensive income (loss). If ahedge ceases to qualify for hedge accounting, any change in the fair value of the derivative since the date it ceased to qualify is recorded to "net gain (loss) oninterest rate swaps." However, any amounts previously recorded to "accumulated other comprehensive income (loss)" would remain there until the originalforecasted transaction affects earnings. In a situation where it becomes probable that the hedged forecasted transaction will not occur, any gains or losses thathave been recorded to "accumulated other comprehensive income (loss)" are immediately reclassified to earnings. Derivatives that do not meet the requirementsfor hedge accounting are marked to market through "net gain (loss) on interest rate swaps" on the consolidated statement of operations and comprehensiveincome (loss). Forward-starting interest rate swaps with an other-than-insignificant financing element at inception are classified as cash provided by financingactivities, while other interest rate swaps are classified as cash provided by operating activities.To qualify for hedge accounting, the details of the hedging relationship must be formally documented at the inception of the arrangement, including therisk management objective, hedging strategy, hedged item, specific risks that are being hedged, the derivative instrument, how effectiveness is being assessedand how ineffectiveness will be measured. The derivative must be highly effective in offsetting changes in cash flows for the risk being hedged. In the contextof hedging relationships, effectiveness refers to the degree to which fair value changes in the hedging instrument offset the corresponding expected earningseffects of the hedged item. The Company assesses the effectiveness of hedging relationships using regression analysis both at the inception of the hedge and onan on-going basis. In measuring ineffectiveness, the Company uses the hypothetical derivative method which compares the change in fair value of the actualswap with the change in fair value of a hypothetical swap that would have terms that would identically match the critical terms of the hedged floating rateliability.Recent Accounting PronouncementsIn October 2009, Financial Accounting Standards Board ("FASB") issued guidance that addressed how to recognize revenue for transactions withmultiple deliverables. This guidance revises the criteria for separating, measuring and allocating arrangement consideration to each consideration deliverable,which must be estimated if there is not a history of selling the deliverable on a stand-alone basis or third-party evidence of selling price. The provisions of thisguidance were effective for the Company as of January 1, 2011 and were applied prospectively. The adoption of this guidance did not have a material impacton the Company's consolidated financial statements and did not result in a change to the pattern and timing of its revenue recognition.In September 2011, the FASB issued amended guidance on goodwill impairment testing. The amended guidance permits an entity to first perform aqualitative assessment to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount. If it is concludedthat it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount, it is then necessary to perform the two-step goodwillimpairment test. Otherwise, the two-step goodwill impairment test is not required. The Company adopted this amended guidance during 2011. The Companyperformed the qualitative assessment as of October 1, 2011 and determined that no additional testing of goodwill is required.3. AcquisitionsNewPath AcquisitionIn September 2010, the Company acquired NewPath Networks, Inc. ("NewPath") for cash consideration of $128 million through a merger with andinto a subsidiary of the Company. NewPath's assets included 35 DAS in operation or under construction. The final purchase price was predominatelyallocated to (1) property and equipment, (2) intangible assets consisting of site rental contracts and customer relationships, (3) goodwill, (4) deferred taxliabilities, and (5) other working capital, all of which are based on estimated fair values at the date of acquisition. The Company paid a purchase price thatresulted in goodwill due to (1) the expected growth in the DAS business and (2) opportunities to construct and lease future DAS.See note 20.50NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)4. Property and EquipmentThe major classes of property and equipment are as follows: Estimated Useful Lives December 31, 2011 2010Land owned in fee and perpetual easements— $960,191 $753,988Buildings40 years 37,454 37,165Wireless infrastructure1-20 years 7,329,889 7,242,887Furniture, transportation, and other equipment2-10 years 181,583 164,077Construction in process— 176,246 147,009Total gross property and equipment 8,685,363 8,345,126Less: accumulated depreciation (3,824,136) (3,451,475)Total property and equipment, net $4,861,227 $4,893,651 Depreciation expense for the years ended December 31, 2011, 2010 and 2009 was $387.8 million, $379.3 million and $379.6 million, respectively. Seenote 2.5. Intangible Assets and Deferred CreditsFor the years ended December 31, 2011 and 2010, the Company recorded $23.4 million and $39.1 million, respectively, of site rental contracts andcustomer relationships. The following is a summary of the Company's intangible assets. As of December 31, 2011 As of December 31, 2010 Gross CarryingValue AccumulatedAmortization Net Book Value Gross CarryingValue AccumulatedAmortization Net Book ValueSite rental contracts and customerrelationships$2,823,832 $(748,850) $2,074,982 $2,799,804 $(602,426) $2,197,378Other intangible assets152,375 (49,175) 103,200 150,558 (34,007) 116,551Total$2,976,207 $(798,025) $2,178,182 $2,950,362 $(636,433) $2,313,929Amortization expense related to intangible assets is classified as follows on the Company's consolidated statement of operations and comprehensiveincome (loss): For Years Ended December 31,Classification2011 2010 2009Depreciation, amortization and accretion$159,478 $156,150 $145,192Site rental costs of operations3,709 3,764 4,051Total amortization expense$163,187 $159,914 $149,243The estimated annual amortization expense related to intangible assets (inclusive of those recorded to "site rental costs of operations") for the years endedDecember 31, 2012 to 2016 is as follows: Years Ending December 31, 2012 2013 2014 2015 2016Estimated annual amortization$159,509 $151,288 $145,761 $140,146 $140,139See note 2 for a further discussion of deferred credits related to above-market leases for land interests under the Company's towers recorded in connectionwith acquisitions. For the years ended December 31, 2011, 2010 and 2009, the Company recorded $3.8 million, $4.4 million and $4.5 million, respectively,as a decrease to "site rental costs of operations." The following is a51NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)summary of the Company's above-market leases. As of December 31, 2011 As of December 31, 2010 Gross CarryingValue AccumulatedAmortization Net Book Value Gross CarryingValue AccumulatedAmortization Net Book ValueAbove-market leases$67,132 $(17,816) $49,316 $70,331 $(17,669) $52,662The estimated annual amortization expense related to above-market leases for land interests under the Company's towers for the years ended December31, 2012 to 2016 is as follows: Years Ending December 31, 2012 2013 2014 2015 2016Estimated annual amortization$3,504 $3,434 $3,410 $3,386 $3,46952NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)6. Debt and Other ObligationsThe following is a summary of the Company's indebtedness. OriginalIssue Date ContractualMaturityDate OutstandingBalance as ofDecember 31,2011 OutstandingBalance as ofDecember 31,2010 StatedInterest Rateas ofDecember 31,2011(a) Bank debt – variable rate: RevolverJan. 2007 Sept. 2013(b)$251,000(b)$157,000 2.4%(c) 2007 Term LoansJan./March 2007 March 2014(b)619,125 625,625 1.7%(c)Total bank debt 870,125 782,625 Securitized debt – fixed rate: January 2010 Tower Revenue NotesJan. 2010 2035 - 2040(d) 1,900,000 1,900,000 5.8%(d)August 2010 Tower Revenue NotesAug. 2010 2035 - 2040(d) 1,550,000 1,550,000 4.5%(d)2009 Securitized NotesJuly 2009 2019/2029(e) 216,431 233,085 7.0% Total securitized debt 3,666,431 3,683,085 High yield bonds – fixed rate: 9% Senior NotesJan. 2009 Jan. 2015 817,799 804,971 9.0%(f)7.75% Secured NotesApril 2009 May 2017 978,983 975,913 7.8%(g)7.125% Senior NotesOct. 2009 Nov. 2019 497,904 497,712 7.1%(h)7.5% Senior NotesDec. 2003 Dec. 2013 51 51 7.5% Total high yield bonds 2,294,737 2,278,647 Other: Capital leases and other obligationsVarious Various(i) 54,406 34,537 Various(i) Total debt and other obligations 6,885,699 6,778,894 Less: current maturities and short-term debtand other current obligations 32,517 28,687 Non-current portion of long-term debt andother long-term obligations $6,853,182 $6,750,207 ____________________(a)Represents the weighted-average stated interest rate.(b)As of December 31, 2011, the undrawn availability under the senior secured revolving credit facility ("Revolver") is $199.0 million. See note 20 for information regarding the $3.1billion senior credit facility issued in January 2012 ("January 2012 refinancing").(c)The Revolver bears interest at a rate per annum, at the election of Crown Castle Operating Company ("CCOC"), equal to (i) the greater of the prime rate of The Royal Bank ofScotland plc and the Federal Funds Effective Rate plus 0.5%, plus a credit spread ranging from 1.0% to 1.4% or (ii) LIBOR plus a credit spread ranging from 2.0% to 2.4%, ineach case based on the Company’s consolidated leverage ratio. The 2007 term loans ("2007 Term Loans") bear interest at a rate per annum, at CCOC's election, equal to (i) thegreater of the prime rate of The Royal Bank of Scotland plc and the Federal Funds Effective Rate plus 0.5%, or (ii) LIBOR plus 1.5%. See note 20.(d)If the respective series of the January 2010 Tower Revenue Notes and August 2010 Tower Revenue Notes (collectively, "2010 Tower Revenue Notes") are not paid in full on orprior to 2015, 2017 and 2020, as applicable, then Excess Cash Flow (as defined in the indenture) of the issuers (of such notes) will be used to repay principal of the applicableseries and class of the 2010 Tower Revenue Notes, and additional interest (of an additional approximately 5% per annum) will accrue on the respective 2010 Tower Revenue Notes.The January 2010 Tower Revenue Notes consist of three series of notes with principal amounts of $300.0 million, $350.0 million and $1.3 billion, having anticipated repayment datesin 2015, 2017 and 2020, respectively. The August 2010 Tower Revenue Notes consist of three series of notes with principal amounts of $250.0 million, $300.0 million and $1.0billion, having anticipated repayment dates in 2015, 2017 and 2020, respectively.(e)The 2009 Securitized Notes consist of $146.4 million of principal as of December 31, 2011 that amortizes through 2019, and $70.0 million of principal as of December 31, 2011 thatamortizes during the period beginning in 2019 and ending in 2029.(f)The effective yield is approximately 11.3%, inclusive of the discount.(g)The effective yield is approximately 8.2%, inclusive of the discount.(h)The effective yield is approximately 7.2%, inclusive of the discount.(i)The Company's capital leases and other obligations bear interest rates ranging up to 10% and mature in periods ranging from less than one year to approximately 20 years.The Company's debt obligations contain certain financial covenants with which CCIC or its subsidiaries must comply. Failure to comply with suchcovenants may result in the imposition of restrictions. As of and for the year ended December 31, 2011, CCIC53NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)and its subsidiaries had no financial covenant violations. Various of the Company's debt obligations also place other restrictions on CCIC or its subsidiariesincluding the ability to incur debt and liens, purchase Company securities, make capital expenditures, dispose of assets, undertake transactions withaffiliates, make other investments and pay dividends.Bank DebtIn January 2007, CCOC entered into a credit agreement (as amended, supplemented or otherwise modified, "2007 Credit Agreement") with a syndicate oflenders pursuant to which such lenders agreed to provide CCOC with a senior secured revolving credit facility. In December 2009, the Revolver was amendedeffective January 2010 to extend the maturity to September 2013 and increase the total revolving commitment to $400.0 million. In June 2011, the Revolver wasamended to increase the aggregate revolving commitment availability by $50.0 million to a total revolving commitment availability of $450.0 million, subjectto certain restrictions based on the maintenance of financial covenants in the 2007 Credit Agreement. In January 2007, CCOC entered into a term loan joinderpursuant to which the lenders agreed to provide CCOC with a $600.0 million senior secured term loan under the 2007 Credit Agreement. In March 2007,CCOC also entered into a second term loan joinder pursuant to which the lenders agreed to provide CCOC with an additional $50.0 million senior securedterm loan under the 2007 Credit Agreement.The Revolver and 2007 Term Loans are secured by a pledge of certain equity interests of certain subsidiaries of CCIC, as well as a security interest inCCOC's deposit accounts ($47.8 million as of December 31, 2011) and securities accounts. The Revolver and 2007 Term Loans are guaranteed by CCIC andcertain of its subsidiaries.The proceeds of the Revolver may be used for general corporate purposes, including the financing of capital expenditures, acquisitions and purchases ofthe Company's securities. The borrowings on the Revolver in December 2010 were used to settle a portion of the previously outstanding forward-startinginterest rate swaps (see note 7). The proceeds from the term loans were used to purchase shares of the Company's common stock (see note 11). The Companypays a commitment fee of 0.4% per annum on the undrawn available amount under the Revolver.See note 20 for a discussion of the January 2012 refinancing.Securitized DebtThe 2010 Tower Revenue Notes and the 2009 Securitized Notes (collectively, "Securitized Debt") are obligations of special purpose entities and theirdirect and indirect subsidiaries (each an "issuer"), all of which are wholly-owned indirect subsidiaries of the Company. The 2010 Tower Revenue Notes and2009 Securitized Notes are governed by separate indentures. The 2010 Tower Revenue Notes are governed by one indenture and consist of multiple series ofnotes, each with its own anticipated repayment date. The net proceeds of the January 2010 Tower Revenue Notes and August 2010 Tower Revenue Notes wereprimarily used to repay the portion of the 2005 Tower Revenue Notes not previously purchased and 2006 Tower Revenue Notes not previously purchased,respectively. The net proceeds of the 2009 Securitized Notes were used to repay the portion of the Commercial Mortgage Pass-through Certificates, Series 2004-2 ("2004 Mortgage Loan") not previously purchased. Interest is paid monthly on the Securitized Debt.The Securitized Debt is paid solely from the cash flows generated by the operation of the towers held directly and indirectly by the issuers of therespective Securitized Debt. The Securitized Debt is secured by, among other things, (1) a security interest in substantially all of the applicable issuers'assignable personal property, (2) a pledge of the equity interests in each applicable issuer, and (3) a security interest in the applicable issuers' contracts withcustomers to lease space on their towers (space licenses). The governing instruments of two indirect subsidiaries ("Crown Atlantic" and "Crown GT") of theissuers of the 2010 Tower Revenue Notes generally prevent them from issuing debt and granting liens on their assets without the approval of a subsidiary ofVerizon Communications. Consequently, while distributions paid by Crown Atlantic and Crown GT will service the 2010 Tower Revenue Notes, the 2010Tower Revenue Notes are not obligations of, nor are the 2010 Tower Revenue Notes secured by the cash flows or any other assets of, Crown Atlantic andCrown GT. As of December 31, 2011, the Securitized Debt was collateralized with personal property and equipment with a net book value of an aggregateapproximately $1.7 billion, exclusive of Crown Atlantic and Crown GT personal property and equipment.The excess cash flows from the issuers of the Securitized Debt, after the payment of principal, interest, reserves, expenses, and management fees aredistributed to the Company in accordance with the terms of the indentures. If the Debt Service Coverage Ratio ("DSCR") (as defined in the applicablegoverning loan agreement) as of the end of any calendar quarter falls to a certain level, then all excess cash flow of the issuers of the applicable debt instrumentwill be deposited into a reserve account instead of being released to the Company. The funds in the reserve account will not be released to the Company untilthe DSCR exceeds a certain level for two consecutive calendar quarters. If the DSCR falls below a certain level as of the end of any calendar quarter, then allcash on deposit in the reserve account along with future excess cash flows of the issuers will be applied to prepay the debt54NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)with applicable prepayment consideration.The Company may repay the 2010 Tower Revenue Notes and the 2009 Securitized Notes in whole or in part at any time after the second anniversary ofthe applicable issuance date, provided such prepayment is accompanied by any applicable prepayment consideration. The Securitized Debt has covenants andrestrictions customary for rated securitizations, including provisions prohibiting the issuers from incurring additional indebtedness or further encumberingtheir assets. The 2010 Tower Revenue Notes contain the same financial covenants as the previously outstanding 2005 and 2006 Tower Revenue Notes.High Yield Bonds—Senior NotesThe 9% Senior Notes and 7.125% Senior Notes (collectively, "Senior Notes") are public offerings and are general obligations of CCIC, which rankequally with all existing and future senior debt of CCIC. The Senior Notes are effectively subordinated to all liabilities (including trade payables) of eachsubsidiary of the Company and rank pari passu with the other respective high yield bonds of the Company. As discussed below, the Company has used thenet proceeds from the 9% Senior Notes to (1) purchase portions of its previously existing 2004 Mortgage Loan, (2) repay and purchase portions of itspreviously existing Commercial Mortgage Pass-through Certificates, Series 2006-1 ("2006 Mortgage Loan"), and (3) repay outstanding amounts under theRevolver. The Company used the net proceeds from the 7.125% Senior Notes to purchase certain indebtedness of its subsidiaries.The Senior Notes contain restrictive covenants with which the Company and its restricted subsidiaries must comply, subject to a number of exceptionsand qualifications, including restrictions on its ability to incur incremental debt, issue preferred stock, guarantee debt, pay dividends, repurchase its capitalstock, use assets as security in other transactions, sell assets or merge with or into other companies, and make certain investments. Certain of theserestrictions are not applicable if there is no event of default and if the ratio of the Company's Consolidated Debt (as defined in the 9% Senior Notes and7.125% Senior Notes indenture) to its Adjusted Consolidated Cash Flows (as defined in the 9% Senior Notes and 7.125% Senior Notes indenture) is lessthan or equal to 7.0 to 1.0. The Senior Notes do not contain any financial maintenance covenants.Prior to January 2013 and November 2014, the Company may redeem the 9% Senior Notes and 7.125% Senior Notes, respectively, at a price equal to100% of the principal amount, plus a make whole premium, and accrued and unpaid interest, if any. After January 2013 and November 2014, respectively,the 9% Senior Notes and 7.125% Senior Notes may be redeemed at the redemption prices set forth in the respective indenture.High Yield Bonds—Secured NotesThe 7.75% Secured Notes were issued and guaranteed by certain subsidiaries of the Company that are special purpose entities and that were obligorsunder the 2006 Mortgage Loan. These 7.75% Secured Notes are secured on a first priority basis by a pledge of the equity interests of such subsidiaries and bycertain other assets of such subsidiaries. The 7.75% Secured Notes are obligations of the subsidiaries that were obligated under the 2006 Mortgage Loan,which was repaid in part through the proceeds from the 7.75% Secured Notes. The 7.75% Secured Notes are not guaranteed by and are not obligations ofCCIC or any of its subsidiaries other than the issuers and guarantors of the 7.75% Notes. The 7.75% Secured Notes will be paid solely from the cash flowsgenerated from operations of the towers held directly and indirectly by the issuers and the guarantors of such notes. As of December 31, 2011, the 7.75%Secured Notes were collateralized with personal property and equipment with a net book value of an aggregate approximately $1.2 billion. The Company usedthe net proceeds of the issuance of the 7.75% Secured Notes, along with other cash, to repay the 2006 Mortgage Loan.The 7.75% Secured Notes contain restrictive covenants with which the issuing subsidiaries and the guarantors of such notes must comply, subject to anumber of exceptions and qualifications, including restrictions on their ability to incur debt, make restricted payments, incur liens, enter into certain merger orchange of control transactions, enter into related party transactions and engage in certain other activities as set forth in the indenture. The 7.75% Secured Notescontain financial covenants that could result in cash being deposited in a reserve account and require the Company to offer to purchase the 7.75% SecuredNotes.Prior to May 2013 the Company may redeem the 7.75% Secured Notes at a price equal to 100% of the principal amount, plus a make whole premium,and accrued and unpaid interest, if any. After May 2013, the debt may be redeemed at the redemption prices set forth in the indenture.Previously Outstanding Indebtedness2005 Tower Revenue Notes and 2006 Tower Revenue Notes. In 2010, the Company purchased and repaid the outstanding portions of the 2005 TowerRevenue Notes and the 2006 Tower Revenue Notes. The 2005 Tower Revenue Notes were repaid in part through the proceeds of the January 2010 TowerRevenue Notes. The 2006 Tower Revenue Notes were repaid in part through the proceeds of the August 2010 Tower Revenue Notes. See below for the net losseson these retirements.55NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)2004 Mortgage Loan and 2006 Mortgage Loan. The 2004 Mortgage Loan and 2006 Mortgage Loan (collectively, "Mortgage Loans") remainedoutstanding as obligations of the subsidiaries of Global Signal upon the Global Signal Merger. In 2009, the Company purchased and repaid the outstandingportions of the Mortgage Loans. The 2004 Mortgage Loan was repaid in part through proceeds of the 2009 Securitized Notes. The 2006 Mortgage Loan wasrepaid in part through the proceeds of the 7.75% Secured Notes. A portion of the net proceeds of the 9% Senior Notes was also used to retire part of theMortgage Loans. See below for the net losses on these retirements.See note 20.Contractual MaturitiesThe following are the scheduled contractual maturities of the total debt and other long-term obligations outstanding at December 31, 2011, exclusive ofthe 6.25% Redeemable Convertible Preferred Stock. These maturities reflect contractual maturity dates and do not consider the principal payments that willcommence following the anticipated repayment dates on the Tower Revenue Notes. If the Tower Revenue Notes are not paid in full on or prior to 2015, 2017and 2020, as applicable, then the Excess Cash Flow (as defined in the indenture) of the issuers of such notes will be used to repay principal of the applicableseries and class of the Tower Revenue Notes, and additional interest (of an additional approximately 5% per annum) will accrue on the Tower Revenue Notes.See note 20. Years Ending December 31, 2012 2013 2014 2015 2016 Thereafter Total CashObligations UnamortizedDiscounts Total Debt and OtherObligationsOutstandingScheduledcontractualmaturities$32,684 $283,434 $631,662 $892,276 $23,711 $5,094,539 $6,958,306 $(72,607) $6,885,699Debt Purchases and RepaymentsThe following is a summary of the partial purchases and repayments of debt during the years ended December 31, 2010 and December 31, 2009. Year Ending December 31, 2010 Principal Amount Cash Paid(a) Gains (losses) 2005 Tower Revenue Notes$1,638,616 $1,651,255 $(15,718) 2006 Tower Revenue Notes1,550,000 1,629,920 (87,755) 2009 Securitized Notes(b)5,000 5,250 (393) 9% Senior Notes33,115 36,116 (6,425) 7.75% Secured Notes(b)199,593 218,771 (28,076) Total$3,426,324 $3,541,312 $(138,367)(c)____________________(a)Exclusive of accrued interest.(b)These debt purchases were made by CCIC, rather than by the subsidiaries issuing the debt, because of restrictions upon the subsidiaries issuing the debt; as a result, the debtremains outstanding at the Company's subsidiaries.(c)Inclusive of $23.4 million related to the write-off of deferred financing costs and discounts. Year Ending December 31, 2009 Principal Amount Cash Paid(a) Gains (losses) 2004 Mortgage Loan(b)$293,505 $293,716 $(2,128) 2006 Mortgage Loan(b)1,550,000 1,634,184 (85,659) 2005 Tower Revenue Notes261,384 263,819 (3,292) Revolver219,400 219,400 — Total$2,324,289 $2,411,119 $(91,079)(c)____________________(a)Exclusive of accrued interest.(b)Includes purchases and repayments.(c)Inclusive of $4.2 million related to the write-off of deferred financing costs and other non-cash adjustments.56NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)7. Interest Rate SwapsThe Company has entered into interest rate swaps only to manage and reduce its interest rate risk, including the use of (1) forward-starting interest rateswaps to hedge its exposure to variability in future cash flows attributable to changes in LIBOR on anticipated financings, including refinancings andpotential future borrowings and (2) interest rate swaps to hedge the interest rate variability on a portion of the Company's floating rate debt. The Company doesnot enter into interest rate swaps for speculative or trading purposes.During the years ended December 31, 2006 and 2007, the Company entered into an aggregate $5.3 billion notional value of forward-starting interest rateswaps hedging certain anticipated refinancings, all of which were settled during the years ended December 31, 2010 and 2009. The forward-starting interestrate swaps fixed LIBOR for five years relating to the anticipated refinancings at a weighted-average rate of 5.2%, while the actual five-year LIBOR swap rateupon issuance of the anticipated refinancings was a weighted-average of 2.4%. In certain circumstances, these forward-starting interest rate swaps wereoutstanding following the refinancing of the respective debt which they hedged. Refinancings that qualified as the respective hedged forecasted transactionresulted in $3.9 million of ineffectiveness for the year ended December 31, 2009, and the interest rate swaps were no longer economic hedges of the Company'sexposure to LIBOR on the anticipated refinancing of its existing debt. As a result, changes in the fair value of such non-economic swaps were prospectivelyrecorded in earnings until settlement in "net gain (loss) on interest rate swaps" on the consolidated statement of operations and comprehensive income (loss).For refinancings that did not qualify as the respective hedged forecasted transaction, the Company discontinued hedge accounting and reclassified the entireloss from accumulated other comprehensive income (loss) to earnings. During 2010, the Company paid $697.8 million to settle its previously outstandingforward-starting interest rate swaps. As of December 31, 2011, all of the interest rate swaps have been settled.The following table shows the effect of interest rate swaps on the consolidated statement of operations and comprehensive income (loss). The estimatednet amount, pre-tax, loss that is expected to be reclassified into earnings from accumulated other comprehensive income (loss) is approximately $65 millionfor the year ended December 31, 2012. See also note 8. Interest Rate Swaps Designated asHedging Instruments(a) Years Ended December 31, Classification 2011 2010 2009 Gain (loss) recognized in other comprehensive income("OCI") (effective portion) $(973) $(125,850) $140,056 OCIGain (loss) reclassified from accumulated OCI intoincome (effective portion) (71,707) (54,169) (19,158) Interest expense and amortization of deferredfinancing costsAmount of gain (loss) recognized in income(ineffective portion and excluded from effectivenesstesting) — — (3,920) Net gain (loss) on interest rate swapsInterest Rate Swaps Not Designated asHedging Instruments(a) Years Ended December 31, Classification 2011 2010 2009 Gain (loss) recognized in income $— $(286,435)(b)$(89,046)(c)Net gain (loss) on interest rate swaps____________________(a)Exclusive of benefit (provision) for income taxes.(b)Inclusive of $3.4 million related to the discontinuation of amortization into interest expense of an interest rate swap that previously qualified for hedge accounting as a result of earlyrepayment of debt in 2010 and the remainder is related to losses due to the decrease in fair value of interest rate swaps not designated as hedging instruments.(c)Inclusive of losses of $132.9 million related to the hedged forecasted transaction not occurring with respect to the refinancing of 2006 Mortgage Loan, partially offset by gains relatedto the increase in the fair value of interest rate swaps not designated as hedging instruments.57NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)8. Fair Value DisclosuresThe following table shows the estimated fair values of the Company's financial instruments, along with the carrying amounts of the related assets(liabilities). December 31, 2011 December 31, 2010 CarryingAmount FairValue CarryingAmount FairValueAssets: Cash and cash equivalents$80,120 $80,120 $112,531 $112,531Restricted cash257,368 257,368 226,015 226,015Liabilities: Debt and other obligations$6,885,699 $7,355,652 $6,778,894 $7,121,156As of December 31, 2011, the fair value of the Company's cash and cash equivalents and restricted cash is measured on a recurring basis based onLevel 1, as defined by the fair value hierarchy (see note 2). The following table shows a summary of the activity for fair value classified as Level 3 during theyear ended December 31, 2010: Fair Value Measurements UsingSignificant Unobservable Inputs (Level 3) Interest Rate Swap, Net December 31, 2010Beginning balance$300,040 Settlements(703,754)Less: total (gains) loss: Included in earnings (a)283,062 Included in other comprehensive income (loss)125,850 Transfers out of Level 3 (b)(5,198)Ending balance$— ____________________(a)As of December 31, 2010, there were no unrealized gains or losses relating to liabilities still held at the reporting date.(b)As of December 31, 2010, the interest rate swaps were transferred from Level 3 to Level 2 because of a decrease in the magnitude of unobservable inputs in relation to theobservable inputs, including settlement value.9. Income TaxesIncome (loss) before income taxes by geographic area is as follows: Years Ended December 31, 2011 2010 2009Domestic$168,804 $(342,333) $(193,055)Foreign (a)11,003 4,228 2,532 $179,807 $(338,105) $(190,523)____________________(a)Inclusive of income (loss) before income taxes from Australia and Puerto Rico.58NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)The benefit (provision) for income taxes consists of the following: Years Ended December 31, 2011 2010 2009Current: Federal$3,213 $4,038 $5,803Foreign(3,377) (2,187) (1,904)State(3,557) (1,201) (1,909)Total current(3,721) 650 1,990Deferred: Federal1,054 30,770 56,152Foreign(694) (298) —State(4,986) (4,276) 18,258Total deferred(4,626) 26,196 74,410Total tax benefit (provision)$(8,347) $26,846 $76,400For the year ended December 31, 2010, the Company received a $9.6 million alternative minimum tax carryback refund, of which $5.6 million wasrecorded in 2009, and $4.0 million reduced its alternative minimum tax credit carryforward. The alternative minimum tax credit has an indefinitecarryforward period.A reconciliation between the benefit (provision) for income taxes and the amount computed by applying the federal statutory income tax rate to the lossbefore income taxes is as follows: Years Ended December 31, 2011 2010 2009Benefit (provision) for income taxes at statutory rate$(62,932) $118,337 $66,683Tax effect of foreign income (losses)3,851 1,480 886Expenses for which no federal tax benefit was recognized(5,433) (3,657) (803)Valuation allowances61,921 (85,605) —State tax (provision) benefit, net of federal(4,565) (3,560) 10,627Foreign tax(4,071) (2,485) (1,904)Change in unrecognized tax benefits1,693 — —Other1,189 2,336 911 $(8,347) $26,846 $76,40059NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)The components of the net deferred income tax assets and liabilities are as follows: December 31, 2011 2010Deferred income tax liabilities: Property and equipment$511,205 $486,577Deferred site rental receivable238,203 164,867Intangible assets655,512 689,597Total deferred income tax liabilities1,404,920 1,341,041Deferred income tax assets: Net operating loss carryforwards908,747 926,444Deferred ground lease payable109,948 104,324Alternate minimum tax credit carryforward3,591 3,591Accrued liabilities81,719 78,752Receivables allowance2,253 2,175Prepaid lease405,993 430,558Derivative instruments74,214 75,960Available-for-sale securities29,402 25,289Other5,293 4,415Valuation allowances(228,417) (318,055)Total deferred income tax assets, net1,392,743 1,333,453Net deferred income tax asset (liabilities)$(12,177) $(7,588)Before giving effect to any valuation allowances, the Company is in an overall net deferred tax asset position. Due to the Company's history of operatinglosses, it has recorded a valuation allowance on its net deferred tax assets that do not meet the "more likely than not" realization threshold. As a result, during2011 the Company was limited in its ability to recognize tax benefits in its results of operations. During 2010, the Company continued to incur taxable lossesfor which recognition of the federal tax benefits were unable to be recorded, except for $19.8 million of federal tax benefit recorded predominately as a result ofdiscrete events, including the acquisition of NewPath (see note 3). If the NextG Networks, Inc. ("NextG") acquisition is consummated, the Company expectsto record a federal deferred tax liability in connection with the purchase accounting. In that event, the Company would expect to reverse its federal valuationallowance, except for the portion related to equity investments, as an income tax benefit in the quarter that the NextG acquisition closes. If the Companycontinues to record income before income taxes, as it has for each quarter since the fourth quarter of 2010, the Company would expect to reverse a portion of itsfederal valuation allowance during late 2012, if not previously reversed as a result of the NextG acquisition.The components of the net deferred income tax assets (liabilities) are as follows: December 31, 2011 December 31, 2010ClassificationGross ValuationAllowance Net Gross ValuationAllowance NetFederal$33,103 $(55,980) $(22,877) $93,970 $(117,901) $(23,931)State45,813 (34,156) 11,657 51,799 (35,155) 16,644Foreign63,110 (64,067) (957) 68,365 (68,666) (301)Other comprehensive income (loss)74,214 (74,214) — 96,333 (96,333) —Total$216,240 $(228,417) $(12,177) $310,467 $(318,055) $(7,588)60NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)The valuation allowance recorded in other comprehensive income relates to the changes in the Company's overall deferred tax position due to the deferredtax asset recorded in conjunction with the decline in the fair market value of the Company's interest rate swaps and change in unrealized gain (loss) onavailable-for-sale securities. The Company's deferred tax assets as of December 31, 2011 and 2010 in the table above do not include $55.3 million and $42.7million, respectively, of excess tax benefits relating to stock-based compensation that are a component of net operating losses. Total stockholders' equity as ofDecember 31, 2011 will be increased by $55.3 million if and when any such excess tax benefits are ultimately realized.At December 31, 2011, the Company had U.S. federal and state net operating loss carryforwards of approximately$2.5 billion and $1.1 billion,respectively, which are available to offset future taxable income. These amounts include $0.1 billion of losses related to stock-based compensation. TheCompany also had foreign net operating loss carryforwards of $0.1 billion. If not utilized, the Company's U.S. federal net operating loss carryforwards expirestarting in 2021 and ending in 2030, and the state net operating carryforwards expire starting in 2012 and ending in 2031. The foreign net operating losscarryforwards predominately remain available indefinitely provided certain continuity of business requirements is met. The utilization of the losscarryforwards is subject to certain limitations. The Company's U.S. federal and state income tax returns generally remain open to examination by taxingauthorities until three years after the applicable loss carryforwards have been used or expired.As of December 31, 2011, the total amount of unrecognized tax benefits that would impact the effective tax rate, if recognized, was $8.4 million. Theaggregate changes in the balance of unrecognized tax benefits are as follows: Years Ended December 31, 2011 2010Balance at beginning of year$9,255 $3,213Additions based on current year tax positions2,334 6,042Reductions as a result of the lapse of statute limitations(3,213) —Balance at end of year$8,376 $9,255From time to time, the Company is subject to examinations by various tax authorities in jurisdictions in which the Company has business operations.The Company regularly assesses the likelihood of additional assessments in each of the tax jurisdictions resulting from these examinations. During 2011, theIRS completed an examination of the Company's U.S. federal tax return for the 2009 tax year with no material adjustments. The Company reversed itspreviously unrecognized federal tax benefit of $3.2 million during 2011, as a result of both the completion of the IRS examination and the expiration of thestatute of limitations for 2007. As of December 31, 2011, there were unrecognized state tax benefits of $8.4 million.10. Redeemable Convertible Preferred StockThe Company originally issued 8.1 million shares of its 6.25% Redeemable Convertible Preferred Stock at a price of $50.00 per share (the liquidationpreference per share). The holders of the 6.25% Redeemable Convertible Preferred Stock are entitled to receive cumulative dividends at the rate of 6.25% perannum payable on February 15, May 15, August 15 and November 15 of each year. The dividends were paid with approximately $19.5 million, $19.9million and $19.9 million of cash for the years ended December 31, 2011, 2010 and 2009, respectively. The amortization of the issue costs on the 6.25%Redeemable Convertible Preferred Stock recorded in "dividends on preferred stock" was $0.9 million for each of the years ended December 31, 2011, 2010and 2009. In January 2012, the Company exercised its right to convert all of the outstanding 6.25% Redeemable Convertible Preferred Stock. The conversionof such preferred stock into 8.3 million shares of common stock is expected to occur in February 2012. As of December 31, 2011 and 2010, the outstandingbalance of the 6.25% Redeemable Convertible Preferred Stock was $305.0 million and $316.6 million, respectively. See note 20.11. Stockholders' EquityPurchases of the Company's Common StockFor the years ended December 31, 2011, 2010 and 2009, the Company purchased 7.4 million, 4.1 million and 0.1 million shares of common stock,respectively, utilizing $303.4 million, $159.6 million and $2.9 million in cash, respectively.Issuances of Common StockFor the years ended December 31, 2011, 2010 and 2009, the Company issued 29,213; 34,428; and 59,500 shares, respectively,61NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)of common stock to the non-employee members of its board of directors. In connection with these shares, the Company recognized stock-based compensationexpense for the years ended December 31, 2011, 2010 and 2009 of $1.3 million, $1.3 million and $1.0 million, respectively.Stock Options and Restricted Stock AwardsSee note 12 for a discussion of the stock option and restricted stock awards activity.12. Stock-based CompensationStock Compensation PlansThe Crown Castle International Corp. 2001 Stock Incentive Plan ("2001 Stock Incentive Plan") and the Crown Castle International Corp. 2004 StockIncentive Plan ("2004 Stock Incentive Plan"), which are both stockholder-approved, permit the grant of stock-based awards to certain employees, consultantsand non-employee directors of the Company and its subsidiaries or affiliates. As of December 31, 2011, the Company has 8.1 million shares available forfuture issuance pursuant to its stock compensation plans.Restricted Stock AwardsThe Company's restricted stock awards to certain executives and employees include (1) annual performance awards that often include provisions forforfeiture by the employee if certain market performance of the Company's common stock is not achieved, (2) new hire or promotional awards that generallycontain only service conditions, and (3) other awards related to specific business initiatives or compensation objectives including retention and mergerintegration. Such restricted stock awards vest over periods of up to five years.The following is a summary of the restricted stock award activity during the year ended December 31, 2011. Number of Shares Weighted-AverageGrant-DateFair Value (In thousands of shares) (In dollars per share)Shares outstanding at the beginning of year4,297 $20.2Shares granted886 37.1Shares vested(1,717) 27.3Shares forfeited(63) 19.4Shares outstanding at end of year3,403 $21.1____________________For the years ended December 31, 2011, 2010 and 2009, the Company granted 0.9 million shares, 1.1 million shares and 2.2 million shares,respectively, of restricted stock awards to the Company's executives and certain other employees. The weighted-average grant-date fair value per share of thegrants for the years ended December 31, 2011, 2010 and 2009 was $37.05, $31.13 and $10.08 per share, respectively. The weighted-average requisite serviceperiod for the restricted stock awards granted during 2011 was 2.5 years.During the year ended December 31, 2011, the Company granted 0.5 million shares of restricted stock awards that time vest over a three-year or five-year period. During the year ended December 31, 2011, the Company granted 0.4 million shares of restricted stock awards ("2011 performance awards") tothe Company's executives and certain other employees which may vest on the third anniversary of the grant date based upon achieving a price appreciationhurdle along a price range continuum using the highest average closing price per share of common stock for 20 consecutive trading days during the last 180days of the performance period.Certain restricted stock awards contain provisions that result in forfeiture by the employee of any unvested shares in the event that the Company'scommon stock does not achieve certain price targets. To the extent that the requisite service is rendered, compensation cost for accounting purposes is notreversed; rather, it is recognized regardless of whether or not the market performance target is achieved.The following table summarizes the assumptions used in the Monte Carlo simulation to determine the grant-date fair value62NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)for the awards granted during the years ended December 31, 2011, 2010 and 2009, respectively, with market conditions. Years Ended December 31, 2011 2010 2009Risk-free rate1.4% 1.5% 1.3%Expected volatility48% 49% 46%Expected dividend rate—% —% —%The Company recognized stock-based compensation expense from continuing operations related to restricted stock awards of $31.3 million, $35.2million and $28.2 million for the years ended December 31, 2011, 2010 and 2009, respectively. The unrecognized compensation (net of estimated forfeitures)related to restricted stock awards at December 31, 2011 is $25.1 million and is estimated to be recognized over a weighted-average period of less than one year.The following table is a summary of the restricted stock awards vested during the years ended December 31, 2011 to 2009. Years Ended December 31, Total SharesVested Fair Value onVesting Date (In thousandsof shares) 2011 1,717 $74,7542010 891 34,8132009 366 9,190Other AwardsAt December 31, 2011 and 2010, there were 0.1 million and 0.2 million options outstanding, respectively. The intrinsic value of CCIC stock optionsexercised during the years ended December 31, 2011, 2010 and 2009 was $4.8 million, $28.2 million and $38.2 million, respectively. The intrinsic value ofCCIC stock options outstanding and exercisable at December 31, 2011 was $2.6 million. The Company received cash from the exercise of CCIC stockoptions during the years ended December 31, 2011, 2010 and 2009 of $1.6 million, $18.7 million and $44.7 million, respectively. As of December 31, 2011,the stock options outstanding and exercisable have a weighted-average exercise price of $4.09 and have a weighted-average remaining contractual term of lessthan one year.CCAL may award to its employees and directors restricted units settled in cash. The CCAL vested options for the purchase of CCAL shares, vestedrestricted units and CCAL shares may be periodically settled in cash. As of December 31, 2011 and 2010, the liability for the CCAL options and restrictedunits was $8.9 million and $6.4 million, respectively.Stock-based Compensation by SegmentThe following table discloses the components of stock-based compensation expense. No amounts have been included in the carrying value of assetsduring the years ended December 31, 2011, 2010 and 2009. For the years ended December 31, 2011, 2010 and 2009, the Company recorded tax benefits,exclusive of the change in the valuation allowance, of $11.4 million, $12.8 million and $10.2 million, respectively, related to stock-based compensationexpense (see note 9). 63NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts) Year Ended December 31, 2011 CCUSA CCAL ConsolidatedTotalStock-based compensation expense: Site rental costs of operations$942 $— $942Network services and other costs of operations1,555 — 1,555General and administrative expenses30,113 3,381 33,494Total stock-based compensation$32,610 $3,381 $35,991 Year Ended December 31, 2010 CCUSA CCAL ConsolidatedTotalStock-based compensation expense: Site rental costs of operations$1,131 $— $1,131Network services and other costs of operations1,568 — 1,568General and administrative expenses33,841 3,425 37,266Total stock-based compensation$36,540 $3,425 $39,965 Year Ended December 31, 2009 CCUSA CCAL ConsolidatedTotalStock-based compensation expense: Site rental costs of operations$967 $— $967Network services and other costs of operations1,207 — 1,207General and administrative expenses27,051 1,080 28,131Total stock-based compensation$29,225 $1,080 $30,30513. Employee Benefit PlansThe Company and its subsidiaries have various defined contribution savings plans covering substantially all employees. Employees may elect tocontribute a portion of their eligible compensation, subject to limits imposed by the various plans. Certain of the plans provide for partial matching of suchcontributions. The cost to the Company for these plans amounted to $6.1 million, $5.5 million and $5.2 million for the years ended December 31, 2011,2010 and 2009, respectively.14. Commitments and ContingenciesThe Company is involved in various claims, lawsuits and proceedings arising in the ordinary course of business. While there are uncertainties inherentin the ultimate outcome of such matters, and it is impossible to presently determine the ultimate costs or losses that may be incurred, if any, managementbelieves the resolution of such uncertainties and the incurrence of such costs should not have a material adverse effect on the Company's consolidated financialposition or results of operations.Asset Retirement ObligationsPursuant to its ground lease and easement agreements, the Company has the obligation to perform certain asset retirement activities, includingrequirements upon lease and easement termination to remove wireless infrastructure or remediate the land upon which its wireless infrastructure resides.Accretion expense related to liabilities for retirement obligations amounted to $5.6 million, $5.3 million and $4.9 million for the years ended December 31,2011, 2010 and 2009, respectively. As of December 31, 2011 and 2010, liabilities for retirement obligations were $68.5 million and $63.8 million,respectively, representing the net present value of the estimated expected future cash outlay. As of December 31, 2011, the estimated undiscounted future cashoutlay for asset retirement obligations was approximately $1.4 billion. See note 2.Property Tax CommitmentsThe Company is obligated to pay, or reimburse others for, property taxes related to the Company's wireless infrastructure64NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)pursuant to operating leases with landlords and other contractual agreements. The property taxes for the year ended December 31, 2012 and future periods arecontingent upon new assessments of the wireless infrastructure and the Company's appeals of assessments. The Company has an obligation to reimburseSprint Nextel ("Sprint") for property taxes it pays on the Company's behalf related to certain towers the Company leases from Sprint. The Company paid$15.4 million for the year ended December 31, 2011 and expects to pay $15.8 million for the year ended December 31, 2012. The amount per tower to be paidto Sprint increases by 3% each successive year through 2037, the expiration of the lease term.Letters of CreditThe Company has issued letters of credit to various landlords, insurers and other parties in connection with certain contingent retirement obligationsunder various tower land interest leases and certain other contractual obligations. The letters of credit were issued through the Company's lenders in amountsaggregating $10.8 million and expire on various dates through December 2012.Operating Lease CommitmentsSee note 15 for a discussion of the operating lease commitments.15. LeasesTenant ContractsThe following table is a summary of the rental cash payments owed to the Company, as a lessor, by tenants pursuant to contractual agreements in effectas of December 31, 2011. Generally, the Company's contracts with its tenants provide for (1) annual escalations and multiple renewal periods at the tenant'soption and (2) only limited termination rights at the applicable tenant's option through the current term. As of December 31, 2011, the weighted-averageremaining term of tenant contracts is approximately nine years, exclusive of renewals at the tenant's option. The tenants' rental payments included in the tablebelow are through the current terms with a maximum current term of 20 years and do not assume exercise of tenant renewal options. Years Ending December 31, 2012 2013 2014 2015 2016 Thereafter TotalTenant leases$1,661,458 $1,666,996 $1,631,813 $1,575,337 $1,468,813 $9,185,611 $17,190,028Operating LeasesThe following table is a summary of rental cash payments owed by the Company, as lessee, to landlords pursuant to contractual agreements in effect asof December 31, 2011. The Company is obligated under non-cancelable operating contracts for land interests under 71% of its towers, office space andequipment. In addition, the Company manages 600 towers owned by third parties. The majority of these operating lease agreements have certain terminationrights that provide for cancellation after a notice period. The majority of the land interests and managed tower leases have multiple renewal options at theCompany's option and annual escalations. Lease agreements may also contain provisions for a contingent payment based on revenues or the gross marginderived from the wireless infrastructure located on the leased land interest. Approximately 73% and 89% of the Company's site rental gross margins for theyear ended December 31, 2011, are derived from towers where the land interest under the tower is owned or leased with final expiration dates of greater than 20years and ten years, respectively, inclusive of renewals at the Company's option. The operating lease payments included in the table below include paymentsfor certain renewal periods at the Company's option up to the estimated wireless infrastructure useful life of 20 years and an estimate of contingent paymentsbased on revenues and gross margins derived from existing tenant leases. Years Ending December 31, 2012 2013 2014 2015 2016 Thereafter TotalOperating leases$301,264 $305,278 $307,267 $308,801 $311,242 $3,907,901 $5,441,753Rental expense from operating leases was $338.3 million, $330.1 million and $316.2 million, respectively, for the years ended December 31, 2011, 2010and 2009. The rental expense was inclusive of contingent payments based on revenues or gross margin derived from the wireless infrastructure located on theleased land interests of $56.4 million, $55.1 million and $53.1 million, respectively, for the years ended December 31, 2011, 2010 and 2009.65NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)16. Operating Segments and Concentrations of Credit RiskOperating SegmentsThe Company's reportable operating segments are (1) CCUSA, primarily consisting of the Company's U.S. operations, and (2) CCAL, the Company'sAustralian operations. Financial results for the Company are reported to management and the board of directors in this manner.The measurement of profit or loss currently used by management to evaluate the results of operations for the Company and its operating segments isearnings before interest, taxes, depreciation, amortization and accretion, as adjusted ("Adjusted EBITDA"). The Company defines Adjusted EBITDA as netincome (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion,interest expense and amortization of deferred financing costs, gains (losses) on retirement of long-term obligations, net gain (loss) on interest rate swaps,impairment of available-for-sale securities, interest income, other income (expense), benefit (provision) for income taxes, cumulative effect of change inaccounting principle, income (loss) from discontinued operations and stock-based compensation expense. Adjusted EBITDA is not intended as an alternativemeasure of operating results or cash flows from operations (as determined in accordance with GAAP), and the Company's measure of Adjusted EBITDA maynot be comparable to similarly titled measures of other companies. There are no significant revenues resulting from transactions between the Company'soperating segments. Inter-company borrowings and related interest between segments are eliminated to reconcile segment results and assets to the consolidatedbasis. Noncontrolling interests primarily represent the noncontrolling shareholders' 22.4% interests in CCAL, the Company's 77.6% majority-ownedsubsidiary.66NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)The financial results for the Company's operating segments are as follows: Year Ended December 31, 2011 Year Ended December 31, 2010 Year Ended December 31, 2009 CCUSA CCAL Elim(a) ConsolidatedTotal CCUSA CCAL Elim(a) ConsolidatedTotal CCUSA CCAL Elim(a) ConsolidatedTotalNet revenues: Site rental$1,744,993 $108,557 $— $1,853,550 $1,608,141 $92,620 $— $1,700,761 $1,466,552 $76,640 $— $1,543,192Network servicesand other161,522 17,657 — 179,179 168,101 9,796 — 177,897 134,545 7,670 — 142,215Net revenues1,906,515 126,214 — 2,032,729 1,776,242 102,416 — 1,878,658 1,601,097 84,310 — 1,685,407Operating expenses: Costs ofoperations(b): Site rental446,868 34,530 — 481,398 437,812 29,324 — 467,136 433,481 23,079 — 456,560Networkservices andother96,057 10,930 — 106,987 107,668 6,573 — 114,241 88,393 4,415 — 92,808General andadministrative151,737 21,756 — 173,493 148,374 16,982 — 165,356 141,149 11,923 — 153,072Asset write-downcharges21,986 299 — 22,285 13,243 444 — 13,687 18,611 626 — 19,237Acquisition andintegration costs3,310 — — 3,310 2,102 — — 2,102 — — — —Depreciation,amortizationand accretion522,681 30,270 — 552,951 513,433 27,338 — 540,771 502,017 27,722 — 529,739Total operatingexpenses1,242,639 97,785 — 1,340,424 1,222,632 80,661 — 1,303,293 1,183,651 67,765 — 1,251,416Operating income (loss)663,876 28,429 — 692,305 553,610 21,755 — 575,365 417,446 16,545 — 433,991Interest expense andamortization ofdeferred financingcosts(507,264) (22,974) 22,651 (507,587) (488,863) (21,381) 19,975 (490,269) (443,960) (15,403) 13,481 (445,882)Gains (losses) onretirement of long-term obligations— — — — (138,367) — — (138,367) (91,079) — — (91,079)Net gain (loss) on interestrate swaps— — — — (286,435) — — (286,435) (92,966) — — (92,966)Interest income187 479 — 666 1,888 316 — 2,204 2,810 157 — 2,967Other income (expense)17,048 26 (22,651) (5,577) 19,151 221 (19,975) (603) 14,619 1,308 (13,481) 2,446Benefit (provision) forincome taxes(6,126) (2,221) — (8,347) 28,808 (1,962) — 26,846 77,718 (1,318) — 76,400Net income (loss)167,721 3,739 — 171,460 (310,208) (1,051) — (311,259) (115,412) 1,289 — (114,123)Less: Net income (loss)attributable to thenoncontrolling interest(348) 731 — 383 — (319) — (319) — 209 — 209Net income (loss)attributable to CCICstockholders$168,069 $3,008 $— $171,077 $(310,208) $(732) $— $(310,940) $(115,412) $1,080 $— $(114,332)Capital expenditures$333,862 $14,080 $— $347,942 $216,556 $11,502 $— $228,058 $166,883 $6,652 $— $173,535Total assets (at year end)$10,497,387 $341,852 $(294,143) $10,545,096 $10,439,827 $339,093 $(309,391) $10,469,529 Goodwill$2,034,683 $707 $— $2,035,390 $2,028,590 $706 $— $2,029,296 ____________________(a)Elimination of inter-company borrowings and related interest expense.(b)Exclusive of depreciation, amortization and accretion shown separately.67NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)The following are reconciliations of net income (loss) to Adjusted EBITDA for the years ended December 31, 2011, 2010 and 2009: Year Ended December 31, 2011 Year Ended December 31, 2010 Year Ended December 31, 2009 CCUSA CCAL Elim(a) ConsolidatedTotal CCUSA CCAL Elim(a) ConsolidatedTotal CCUSA CCAL Elim(a) ConsolidatedTotalNet income (loss)$167,721 $3,739 $— $171,460 $(310,208) $(1,051) $— $(311,259) $(115,412) $1,289 $— $(114,123)Adjustments to increase(decrease) net income (loss): Asset write-down charges21,986 299 — 22,285 13,243 444 — 13,687 18,611 626 — 19,237Acquisition and integrationcosts3,310 — — 3,310 2,102 — — 2,102 — — — —Depreciation, amortizationand accretion522,681 30,270 — 552,951 513,433 27,338 — 540,771 502,017 27,722 — 529,739Interest expense andamortization of deferredfinancing costs507,264 22,974 (22,651) 507,587 488,863 21,381 (19,975) 490,269 443,960 15,403 (13,481) 445,882Gains (losses) on retirementof long-term obligations— — — — 138,367 — — 138,367 91,079 — — 91,079Net gain (loss) on interestrate swaps— — — — 286,435 — — 286,435 92,966 — — 92,966Interest income(187) (479) — (666) (1,888) (316) — (2,204) (2,810) (157) — (2,967)Other income (expense)(17,048) (26) 22,651 5,577 (19,151) (221) 19,975 603 (14,619) (1,308) 13,481 (2,446)Benefit (provision) forincome taxes6,126 2,221 — 8,347 (28,808) 1,962 — (26,846) (77,718) 1,318 — (76,400)Stock-based compensationexpense32,610 3,381 — 35,991 36,540 3,425 — 39,965 29,225 1,080 — 30,305AdjustedEBITDA$1,244,463 $62,379 $— $1,306,842 $1,118,928 $52,962 $— $1,171,890 $967,299 $45,973 $— $1,013,272____________________(a)Elimination of inter-company borrowings and related interest expense.68NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)Geographic InformationA summary of net revenues by country, based on the location of the Company's subsidiaries, is as follows: Years Ended December 31, 2011 2010 2009United States$1,902,536 $1,772,793 $1,597,790Australia126,214 102,416 84,310Other countries3,979 3,449 3,307Total net revenues$2,032,729 $1,878,658 $1,685,407A summary of long-lived assets (property and equipment, goodwill and other intangible assets) by country of location is as follows: December 31, 2011 2010United States$8,847,161 $8,997,016Australia212,067 222,938Other countries15,571 16,922Total long-lived assets$9,074,799 $9,236,876Major CustomersThe following table summarizes the percentage of the consolidated revenues for those customers accounting for more than 10% of the consolidatedrevenues, all of which relates to CCUSA. Years Ended December 31, 2011 2010 2009AT&T23% 21% 20%Sprint21% 20% 22%Verizon Wireless19% 21% 19%T-Mobile11% 11% 13%Total74% 73% 74%Concentrations of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, restricted cash andtrade receivables. The Company mitigates its risk with respect to cash and cash equivalents by maintaining such deposits at high credit quality financialinstitutions and monitoring the credit ratings of those institutions. The Company's restricted cash is predominately held and directed by a trustee (see note 2).The Company derives the largest portion of its revenues from customers in the wireless communications industry. The Company also has aconcentration in its volume of business with AT&T, Sprint, Verizon Wireless and T-Mobile that accounts for a significant portion of the Company'srevenues, receivables and deferred site rental receivables. The Company mitigates its concentrations of credit risk with respect to trade receivables by activelymonitoring the creditworthiness of its customers, the use of customer leases with contractually determinable payment terms and proactive management of pastdue balances.69NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)17. Asset Write-Down ChargesWireless Infrastructure Write-Down ChargesDuring the years ended December 31, 2011, 2010, and 2009, the Company abandoned or disposed of wireless infrastructure and wrote-off siteacquisition and permitting costs for wireless infrastructure that would not be completed. For the years ended December 31, 2011, 2010, and 2009, theCompany recorded related wireless infrastructure asset write-down charges at CCUSA of $15.8 million, $8.6 million and $18.3 million, respectively.18. Supplemental Cash Flow Information The following table is a summary of the supplemental cash flow information during the years ended December 31, 2011, 2010 and 2009. Years Ended December 31, 2011 2010 2009Supplemental disclosure of cash flow information: Interest paid$404,443 $409,293 $331,681Income taxes paid (refund)4,340 (5,935) 5,597Supplemental disclosure of non-cash investing and financing activities: Increase (decrease) in the fair value of forward-starting interest rate swaps (note 7)— (114,157) (140,397)Assets acquired through capital leases and installment sales27,094 18,682 17,351 19. Quarterly Financial Information (Unaudited)Summary quarterly financial information for the years ended December 31, 2011 and 2010 is as follows: Three Months Ended March 31 June 30 September 30 December 312011: Net revenues$499,039 $500,336 $513,883 $519,471Operating income (loss)166,428 167,142 181,889 176,846Net income (loss) attributable to CCIC stockholders40,017 30,871 51,278 48,911Net income (loss) attributable to CCIC common stockholders,after deduction of dividends on preferred stock and losses onpurchases of preferred stock, per common share: Basic0.12 0.09 0.16 0.16Diluted0.12 0.09 0.15 0.16 Three Months Ended March 31 June 30 September 30 December 312010: Net revenues$444,327 $456,127 $481,890 $496,314Operating income (loss)130,373 132,884 155,956 156,152Gains (losses) on retirement of long-term obligations(66,434) — (71,933) —Net gain (loss) on interest rate swaps(73,276) (114,598) (104,421) 5,860Net income (loss) attributable to CCIC stockholders(119,275) (97,529) (135,009) 40,873Net income (loss) attributable to CCIC common stockholders,after deduction of dividends on preferred stock and losses onpurchases of preferred stock, per common share – basic anddiluted(0.43) (0.36) (0.49) 0.1270NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Tabular dollars in thousands, except per share amounts)20. Subsequent EventsNextG Networks AcquisitionIn December 2011, the Company entered into a definitive agreement to acquire NextG for approximately $1.0 billion in cash, subject to certainadjustments. NextG has over 7,000 DAS antenna locations ("nodes") on-air and approximately 1,500 nodes under construction in the U.S. In addition, NextGhas rights to over 4,600 miles of fiber. NextG is the largest provider of outdoor DAS", each system is a network of antennas connected by fiber to acommunications hub designed to facilitate wireless communications. Approximately 80% of NextG's nodes are located in the 10 largest U.S. basic tradingareas in the U.S. The acquisition is expected to close in the second quarter of 2012.WCP AcquisitionOn January 12, 2012, the Company announced a definitive agreement to acquire certain subsidiaries of Wireless Capital Partners, LLC ("WCP") andon January 31, 2012 the Company closed the acquisition. Upon closing in January 2012, WCP held various contracts with wireless site owners, includingapproximately 2,300 ground lease related assets, including over 150 related to the Company's towers. The gross purchase price was approximately $500million, exclusive of purchase price adjustments. WCP has approximately $320 million of secured debt that remains outstanding at closing.January 2012 RefinancingIn January 2012, the Company refinanced and repaid the Revolver and 2007 Term Loans with the proceeds of a $3.1 billion senior credit facility ("2012Credit Facility") issued by CCOC. The 2012 Credit Facility consists of (1) a $1.0 billion senior secured revolving credit facility ("Revolving CreditFacility"), which will mature in January 2017, (2) a $500.0 million delayed-draw senior secured term loan facility ("Term Loan A"), which will mature inJanuary 2017, and (3) a $1.6 billion senior secured term loan facility ("Term Loan B"), which will mature in January 2019. The proceeds of the Term LoanB were used in part to repay the existing Revolver and 2007 Term Loans and to fund the cash consideration of the WCP acquisition. The balance of theproceeds of the Term Loan B and the proceeds of the Term Loan A may be used for general corporate purposes, including to fund the expected acquisition ofNextG and the financing of capital expenditures, acquisitions and purchases of the Company's securities. The Revolving Credit Facility and the Term Loan Abear interest at a per annum rate equal to LIBOR plus 2.0% to 2.75%, based on CCOC's total net leverage ratio; and the Term Loan B bears interest at a perannum rate equal to LIBOR plus 3.0% (with LIBOR subject to a floor of 1% per annum).Mandatory Conversion of 6.25% Redeemable Convertible Preferred StockIn January 2012, the Company exercised its right to convert all of the outstanding 6.25% Redeemable Convertible Preferred Stock. The conversion ofsuch preferred stock into 8.3 million shares of common stock is expected to occur in February 2012. The Company will pay cash in lieu of fractional sharesof common stock.71Item 9. Changes in and Disagreements With Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and Procedures(a) Conclusion Regarding the Effectiveness of Disclosure Controls and ProceduresIn connection with the preparation of this Annual Report on Form 10-K, as of December 31, 2011, the Company's management conducted an evaluation, under the supervisionand with the participation of the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company'sdisclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")). Based upontheir evaluation, the CEO and CFO concluded that the Company's disclosure controls and procedures, as of December 31, 2011, were effective to providereasonable assurance that information required to be disclosed by the Company in the reports filed or submitted by it under the Exchange Act is recorded,processed, summarized and reported within the time periods specified in the SEC's rules and forms, and to provide reasonable assurance that informationrequired to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including its CEO and CFO, asappropriate to allow timely decisions regarding required disclosure.(b) Management's Report on Internal Control Over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for the Company. Under the supervision and with the participation of the Company's CEO and CFO, management assessed theeffectiveness of the Company's internal control over financial reporting based on the framework described in "Internal Control – Integrated Framework,"issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's internal control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with U.S. generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and proceduresthat:•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of theCompany;•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizationof management and directors of the Company; and•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company's assetsthat could have a material effect on the financial statements.Management has assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2011. Based on theCompany's assessment, management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2011. toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes inaccordance with U.S. generally accepted accounting principles.The effectiveness of the Company's internal control over financial reporting as of December 31, 2011 has been audited by PricewaterhouseCoopers LLP,an independent registered public accounting firm, as stated in their report which appears herein.(c) Changes in Internal Control Over Financial ReportingThere have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) ofthe Exchange Act) during the most recent fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control overfinancial reporting.(d) Limitations on the Effectiveness of ControlsBecause of its inherent limitations, the Company's internal control over financial reporting may not prevent or detect misstatements. Also, projections ofany evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies and procedures may deteriorate.72Item 9B. Other InformationNone.PART IIIItem 10. Directors and Executive Officers of the RegistrantThe information required to be furnished pursuant to this item will be set forth in the 2012 Proxy Statement and is incorporated herein by reference.Item 11. Executive CompensationThe information required to be furnished pursuant to this item will be set forth in the 2012 Proxy Statement and is incorporated herein by reference.Item 12. Security Ownership of Certain Beneficial Owners and ManagementThe information required to be furnished pursuant to this item will be set forth in the 2012 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 forissuance as of December 31, 2011: Plan category(a)(b)Number of securities to beissued upon exercise ofoutstanding options,warrants and rights Weighted-average exerciseprice of outstanding options,warrants and rights Number of securitiesremaining available forfuture issuance (In shares) (In dollarsper share) (In shares)Equity compensation plans approved by security holders63,180 $4.09 8,061,803Equity compensation plans not approved by security holders— — —Total63,180 $4.09 8,061,803____________________ (a)See note 12 to the consolidated financial statements for more detailed information regarding the registrant's equity compensation plans.(b)CCAL has an equity compensation plan under which it awards restricted units settled in cash to its employees and directors. This plan has not been approved by the registrant'ssecurity holders. Item 13. Certain Relationships and Related TransactionsThe information required to be furnished pursuant to this item will be set forth in the 2012 Proxy Statement and is incorporated herein by reference.Item 14. Principal Accountant Fees and ServicesThe information required to be furnished pursuant to this item will be set forth in the 2012 Proxy Statement and is incorporated herein by reference.73PART IVItem 15. Exhibits, Financial Statement Schedules(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 36.(a)(2) Financial Statement Schedules:Schedule II—Valuation and Qualifying Accounts follows this Part IV. All other schedules are omitted because they are not applicable or because therequired 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.74CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIESSCHEDULE II—VALUATION AND QUALIFYING ACCOUNTSYEARS ENDED DECEMBER 31, 2011, 2010 AND 2009(In thousands of dollars) Additions Deductions Balance atBeginningof Year Charged toOperations Acquired Credited toOperations Written Off Effect ofExchange RateChanges Balance atEnd ofYearAllowance for DoubtfulAccounts Receivable: 2011$5,683 $1,819 $— $— $(1,611) $— $5,8912010$5,497 $1,829 $— $— $(1,669) $26 $5,6832009$6,267 $998 $— $— $(1,802) $34 $5,497 Additions Deductions Balance atBeginningof Year Charged toOperations Acquired Credited toOperations Written Off Effect ofExchange RateChanges Balance atEnd ofYearAllowance for Deferred SiteRental Receivables: 2011$5,080 $— $— $(5,080) $— $— $—2010$3,600 $7,200 $— $(5,720) $— $— $5,0802009$— $3,600 $— $— $— $— $3,600 Additions Deductions Balance atBeginningof Year ChargedtoOperations Charged toAdditionalPaid-in Capitaland OtherComprehensiveIncome Credited toOperations Credited toAdditionalPaid-in Capitaland OtherComprehensiveIncome OtherAdjustments(a) Balance atEnd ofYearDeferred Tax ValuationAllowance: 2011$318,055 $— $— $(83,115) $(22,119) $15,596 $228,4172010$190,848 $76,125 $38,646 $— $— $12,436 $318,0552009$256,325 $— $— $(32,761) $(45,657) $12,941 $190,848____________________(a)Inclusive of the effects of exchange rate changes.75INDEX TO EXHIBITSItem 15 (a) (3) Exhibit Number Exhibit Description(c)2.1 Formation Agreement, dated December 8, 1998, relating to the formation of Crown Atlantic Company LLC, Crown AtlanticHolding Sub LLC, and Crown Atlantic Holding Company LLC(d)2.2 Amendment Number 1 to Formation Agreement, dated March 31, 1999, among Crown Castle International Corp., CellcoPartnership, doing business as Bell Atlantic Mobile, certain Transferring Partnerships and CCA Investment Corp.(l)2.3 Crown Atlantic Holding Company LLC Amended and Restated Operating Agreement, dated May 1, 2003, by and between BellAtlantic Mobile, Inc. and CCA Investment Corp.(d)2.4 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(l)2.5 Crown Atlantic Company LLC First Amendment to Operating Agreement, dated May 1, 2003, by Crown Atlantic CompanyLLC, and each of Bell Atlantic Mobile, Inc. and Crown Atlantic Holding Sub LLC(e)2.6 Agreement to Sublease dated June 1, 1999 by and among BellSouth Mobility Inc., BellSouth Telecommunications Inc., TheTransferring Entities, Crown Castle International Corp. and Crown Castle South Inc.(e)2.7 Sublease dated June 1, 1999 by and among BellSouth Mobility Inc., Certain BMI Affiliates, Crown Castle International Corp.and Crown Castle South Inc.(g)2.8 Agreement to Sublease dated August 1, 1999 by and among BellSouth Personal Communications, Inc., BellSouth CarolinasPCS, L.P., Crown Castle International Corp. and Crown Castle South Inc.(g)2.9 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.(f)2.10 Formation Agreement dated November 7, 1999 relating to the formation of Crown Castle GT Company LLC, Crown Castle GTHolding Sub LLC and Crown Castle GT Holding Company LLC(g)2.11 Operating Agreement, dated January 31, 2000 by and between Crown Castle GT Corp. and affiliates of GTE WirelessIncorporated(r)3.1 Amended and Restated Certificate of Incorporation of Crown Castle International Corp., dated May 24, 2007(ee)3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Crown Castle International Corp., effectiveMay 24, 2011(r)3.3 Amended and Restated By-laws of Crown Castle International Corp., dated May 24, 2007(ee)3.4 Amendment to Amended and Restated By-Laws of Crown Castle International Corp., effective May 24, 2011(b)4.1 Specimen Certificate of Common Stock(k)4.2 Indenture, dated as of December 2, 2003, between Crown Castle International Corp. and The Bank of New York, as Trustee,relating to the 7.5% Senior Notes due 2013 (including exhibits)(o)4.3 First Supplemental Indenture, dated as of June 1, 2005, between Crown Castle International Corp. and The Bank of New York,as Trustee, relating to the 7.5% Notes(n)4.4 Indenture, dated as of June 1, 2005, relating to the Senior Secured Tower Revenue Notes, by and among JPMorgan Chase Bank,N.A., as Indenture Trustee, and Crown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., CrownCastle PT Inc., Crown Communication New York, Inc. and Crown Castle International Corp. de Puerto Rico, collectively asIssuers76Exhibit Number Exhibit Description(bb)4.6 Indenture Supplement, dated as of January 15, 2010, relating to the Senior Secured Tower Revenue Notes, Series 2010-1, by andamong The Bank of New York Mellon (as successor to The Bank of New York as successor to J.P. Morgan Chase Bank,N.A.), as Indenture Trustee, and Crown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., CrownCastle PT Inc., Crown Communication New York, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle Towers05 LLC, Crown Castle PR LLC, Crown Castle MU LLC and Crown Castle MUPA LLC, collectively as Issuers(bb)4.7 Indenture Supplement, dated as of January 15, 2010, relating to the Senior Secured Tower Revenue Notes, Series 2010-2, by andamong The Bank of New York Mellon (as successor to The Bank of New York as successor to JPMorgan Chase Bank, N.A.),as Indenture Trustee, and Crown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., Crown CastlePT Inc., Crown Communication New York, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle Towers 05LLC, Crown Castle PR LLC, Crown Castle MU LLC and Crown Castle MUPA LLC, collectively as Issuers(bb)4.8 Indenture Supplement, dated as of January 15, 2010, relating to the Senior Secured Tower Revenue Notes, Series 2010-3, by andamong The Bank of New York Mellon (as successor to The Bank of New York as successor to JPMorgan Chase Bank, N.A.),as Indenture Trustee, and Crown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., Crown CastlePT Inc., Crown Communication New York, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle Towers 05LLC, Crown Castle PR LLC, Crown Castle MU LLC and Crown Castle MUPA LLC, collectively as Issuers(cc)4.9 Indenture Supplement, dated as of August 16, 2010, relating to the Senior Secured Tower Revenue Notes, Series 2010-4, by andamong The Bank of New York Mellon (as successor to The Bank of New York as sucessor to JPMorgan Chase Bank, N.A.),as Indenture Trustee, and Crown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., Crown CastlePT Inc., Crown Communication New York, Inc., Crown Castel International Corp. de Puerto Rico, Crown Castle Towers 05LLC, Crown Castle PR LLC, Crown Castle MU LLC and Crown Castle MPUPA LLC, collectively as Issuers(cc)4.10 Indenture Supplement, dated as of August 16, 2010, relating to the Senior Secured Tower Revenue Notes, Series 2010-5, by andamong The Bank of New York Mellon (as successor to The Bank of New York as successor to JPMorgan Chase Bank, N.A.),as Indenture Trustee, and Crown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., Crown CastlePT Inc., Crown Communication New York, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle Towers 05LLC, Crown Castle PR LLC, Crown Castle MU LLC and Crown Castle MUPA LLC, collectively as Issuers(cc)4.11 Indenture Supplement, dated as of August 16, 2010, relating to the Senior Secured Tower Revenue Notes, Series 2010-6, by andamong The Bank of New York Mellon (as successor to The Bank of New York as successor to JPMorgan Chase Bank, N.A.),as Indenture Trustee, and Crown Castle Towers LLC, CRown Castle South LLC, Crown Communication Inc., Crown CastlePT Inc., Crown Communication New York, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle Towers 05LLC, Crown Castle PR LLC, Crown Castle MU LLC and Crown Castle MUPA LLC, collectively as Issuers(u)4.12 Indenture dated January 27, 2009, between Crown Castle International Corp. and Bank of New York Mellon Trust Company,N.A., as trustee(u)4.13 Supplemental Indenture dated January 27, 2009, between Crown Castle International Corp. and Bank of New York MellonTrust Company, N.A., as trustee, relating to 9% Senior Notes due 2015(y)4.14 Indenture dated April 30, 2009, relating to the 7.750% Senior Secured Notes due 2017, by and among CC Holdings GS V LLC,Crown Castle GS III Corp., the Guarantors named therein and Bank of New York Mellon Trust Company, N.A., as trustee(z)4.15 Indenture dated July 31, 2009, relating to Senior Secured Notes, between Pinnacle Towers Acquisition Holdings LLC, GSSavings Inc., GoldenState Towers, LLC, Pinnacle Towers Acquisition LLC, Tower Ventures III, LLC and TVHT, LLC, asIssuers, Global Signal Holdings III, LLC, as Guarantor, and The Bank of New York Mellon Trust Company, N.A., asIndenture Trustee(z)4.16 Indenture Supplement dated July 31, 2009, relating to Senior Secured Notes, Series 2009-1, between Pinnacle TowersAcquisition Holdings LLC, GS Savings Inc., GoldenState Towers, LLC, Pinnacle Towers Acquisition LLC, Tower Ventures III,LLC and TVHT, LLC, as Issuers, Global Signal Holdings III, LLC, as Guarantor, and The Bank of New York Mellon TrustCompany, N.A., as Indenture Trustee77Exhibit Number Exhibit Description(aa)4.17 Second Supplemental Indenture dated October 23, 2009, relating to 7.125% Senior Notes due 2019, between Crown CastleInternational Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee(ff)4.18 Indenture dated as of November 9, 2010, between WCP Wireless Site Funding LLC, WCP Wireless Site RE Funding LLC,WCP Wireless Site Non-RE Funding LLC, WCP Wireless Lease Subsidiary, LLC, MW Cell REIT 1 LLC and MW Cell TRS1 LLC, and Deutsche Bank Trust Company Americas, as indenture trustee(ff)4.19 Series 2010-1 Indenture Supplement dated as of November 9, 2010, between WCP Wireless Site Funding LLC, WCP WirelessSite RE Funding LLC, WCP Wireless Site Non-RE Funding LLC, WCP Wireless Lease Subsidiary, LLC, MW Cell REIT 1LLC and MW Cell TRS 1 LLC, and Deutsche Bank Trust Company Americas, as indenture trustee(a)10.1 Castle Tower Holding Corp. 1995 Stock Option Plan (Third Restatement)(b)10.2 Crown Castle International Corp. 1995 Stock Option Plan (Fourth Restatement)(d)10.3 Global Lease Agreement dated March 31, 1999 between Crown Atlantic Company LLC and Cellco Partnership, doing businessas Bell Atlantic Mobile(h)10.4 Crown Castle International Corp. 2001 Stock Incentive Plan(i)10.5 Form of Option Agreement pursuant to 2001 Stock Incentive Plan(j)10.6 Form of Severance Agreement between Crown Castle International Corp. and each of John P. Kelly, W. Benjamin Moreland andE. Blake Hawk(s)10.7 Form of First Amendment to Severance Agreement between Crown Castle International Corp. and each of John P. Kelly, W.Benjamin Moreland and E. Blake Hawk(x)10.8 Form of Amendment to Severance Agreement between Crown Castle International Corp. and each of John P. Kelly, W. BenjaminMoreland and E. Blake Hawk, effective April 6, 2009(j)10.9 Form of Restricted Stock Agreement pursuant to 2001 Stock Incentive Plan(r)10.10 Crown Castle International Corp. 2004 Stock Incentive Plan, as amended(m)10.11 Form of Restricted Stock Agreement pursuant to 2001 Stock Incentive Plan(m)10.12 Form of Restricted Stock Agreement pursuant to 2004 Stock Incentive Plan(m)10.13 Form of Severance Agreement between Crown Castle International Corp. and James D. Young(s)10.14 Form of First Amendment to Severance Agreement between Crown Castle International Corp and certain senior officers, includingJames D. Young(t)10.15 Form of Severance Agreement between Crown Castle International Corp. and each of Jay A. Brown and Philip M. Kelley(x)10.16 Form of Amendment to Severance Agreement between Crown Castle International Corp. and certain senior officers, including JayA. Brown, James D. Young and Philip M. Kelley, effective April 6, 2009(dd)10.17 Crown Castle International Corp. 2011 EMT Annual Incentive Plan(dd)10.18 Summary of Non-Employee Director Compensation(n)10.19 Management Agreement, dated as of June 8, 2005, by and among Crown Castle USA Inc., as Manager, and Crown CastleTowers LLC, Crown Castle South LLC, Crown Communication Inc., Crown Castle PT Inc., Crown Communication NewYork, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle GT Holding Sub LLC and Crown Castle AtlanticLLC, collectively as Owners(p)10.20 Management Agreement Amendment, dated September 26, 2006, by and among Crown Castle USA Inc., as Manager, andCrown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., Crown Castle PT Inc., CrownCommunication New York, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle GT Holding Sub LLC andCrown Castle Atlantic LLC, collectively, as Owners(q)10.21 Joinder and Amendment to Management Agreement, dated as of November 29, 2006, by and among Crown Castle USA Inc., asManager, and Crown Castle Towers LLC, Crown Castle South LLC, Crown Communication Inc., Crown Castle PT Inc.,Crown Communication New York, Inc., Crown Castle International Corp. de Puerto Rico, Crown Castle Towers 05 LLC,Crown Castle PR LLC, Crown Castle MU LLC, Crown Castle MUPA LLC, Crown Castle GT Holding Sub LLC and CrownCastle Atlantic LLC, collectively as Owners(n)10.22 Cash Management Agreement, dated as of June 8, 2005, by and among Crown Castle Towers LLC, Crown Castle South LLC,Crown Communication Inc., Crown Castle PT Inc., Crown Communication New York, Inc. and Crown Castle InternationalCorp. de Puerto Rico, as Issuers, JPMorgan Chase Bank, N.A., as Indenture Trustee, Crown Castle USA Inc., as Manager,Crown Castle GT Holding Sub LLC, as Member of Crown Castle GT Company LLC, and Crown Castle Atlantic LLC, asMember of Crown Atlantic Company LLC78Exhibit Number Exhibit Description(q)10.23 Joinder to Cash Management Agreement, dated as of November 29, 2006, by and among Crown Castle Towers LLC, CrownCastle South LLC, Crown Communication Inc., Crown Castle PT Inc., Crown Communication New York, Inc. and CrownCastle International Corp. de Puerto Rico, Crown Castle Towers 05 LLC, Crown Castle PR LLC, Crown Castle MU LLC,Crown Castle MUPA LLC, as Issuers, The Bank of New York (as successor to JPMorgan Chase Bank, N.A.), as IndentureTrustee, Crown Castle USA Inc., as Manager, Crown Castle GT Holding Sub LLC, as Member of Crown Castle GT CompanyLLC, and Crown Castle Atlantic LLC, as Member of Crown Atlantic Company LLC(n)10.24 Servicing Agreement, dated as of June 8, 2005, by and among Midland Loan Services, Inc., as Servicer, and JPMorgan ChaseBank, N.A., as Indenture Trustee(v)10.25 Agreement to Contribute, Lease and Sublease, dated as of February 14, 2005 among Sprint Corporation, the Sprint subsidiariesnamed therein and Global Signal Inc.(w)10.26 Master Lease and Sublease, dated as of May 26, 2005, by and among STC One LLC, as lessor, Sprint Telephony PCS L.P.,as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.(w)10.27 Master Lease and Sublease, dated as of May 26, 2005, by and among STC Two LLC, as lessor, SprintCom, Inc., as SprintCollocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.(w)10.28 Master Lease and Sublease, dated as of May 26, 2005, by and among STC Three LLC, as lessor, American PCSCommunications, LLC, as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.(w)10.29 Master Lease and Sublease, dated as of May 26, 2005, by and among STC Four LLC, as lessor, PhillieCo, L.P., as SprintCollocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.(w)10.30 Master Lease and Sublease, dated as of May 26, 2005, by and among STC Five LLC, as lessor, Sprint Spectrum L.P., asSprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.(w)10.31 Master Lease and Sublease, dated as of May 26, 2005, by and among STC Six Company, Sprint Spectrum L.P., as SprintCollocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.(y)10.32 Management Agreement, dated as of April 30, 2009, by and among Crown Castle USA Inc., as Manager, and Global SignalAcquisitions LLC, Global Signal Acquisitions II LLC, Pinnacle Towers LLC, and the direct and indirect subsidiaries ofPinnacle Towers LLC, collectively, as Owners(y)10.33 Cash Management Agreement, dated as of April 30, 2009, by and among CC Holdings GS V LLC, as Issuer, Global SignalAcquisitions LLC, Global Signal Acquisitions II LLC, Pinnacle Towers LLC, the Guarantors named therein, The Bank of NewYork Mellon Trust Company, N.A., as Trustee, and Crown Castle USA Inc., as Manager(z)10.34 Management Agreement, dated as of July 31, 2009, by and among Crown Castle USA Inc., as Manager, and Pinnacle TowersAcquisition Holdings LLC, and the direct and indirect subsidiaries of Pinnacle Towers Acquisition Holdings LLC, collectively,as Owners(z)10.35 Cash Management Agreement, dated as of July 31, 2009, by and among Pinnacle Towers Acquisition Holdings LLC, PinnacleTowers Acquisition LLC, GS Savings Inc., GoldenState Towers, LLC, Tower Ventures III, LLC and TVHT, LLC, as Issuers,The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee, and Crown Castle USA Inc., as Manager(z)10.36 Servicing Agreement, dated as of July 31, 2009, by and among Midland Loan Services, Inc., as Servicer, and The Bank ofNew York Mellon Trust Company, N.A., as Indenture Trustee*10.37 Agreement and Plan of Merger, dated as of December 15, 2011, by and among Crown Castle International Corp., Crown CastleNG Acquisitions Corp., NextG Networks, Inc. and Madison Dearborn Capital Partners V-A, L.P., solely in its capacity as theRepresentative(ff)10.38 Credit Agreement dated as of January 31, 2012, among Crown Castle International Corp., Crown Castle Operating Company, asborrower, the lenders and issuing banks party thereto, The Royal Bank of Scotland plc, as administrative agent, and MorganStanley Senior Funding Inc., as co-documentation agent*11 Computation of Net Income (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.*23.1 Consent of PricewaterhouseCoopers LLP*23.2 Consent of KPMG LLP79Exhibit Number Exhibit Description*24 Powers of Attorney (included in the signatures page of this Annual Report on Form 10-K)*31.1 Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002*31.2 Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002*32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002*101.INS XBRL Instance Document*101.SCH XBRL Taxonomy Extension Schema Document*101.DEF XBRL Taxonomy Extension Definition Linkbase*101.CAL XBRL Taxonomy Extension Calculation Linkbase Document*101.LAB XBRL Taxonomy Extension Label Linkbase Document*101.PRE XBRL Taxonomy Extension Presentation Linkbase Document____________________* Filed herewith.(a)Incorporated by reference to the exhibits in the Registration Statement on Form S-4 previously filed by the Registrant (Registration No. 333-43873).(b)Incorporated by reference to the exhibits in the Registration Statement on Form S-1 previously filed by the Registrant (Registration No. 333-57283).(c)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 000-24737) on December 10, 1998.(d)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 000-24737) on April 12, 1999.(e)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 000-24737) on June 9, 1999.(f)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 000-24737) on November 12, 1999.(g)Incorporated by reference to the exhibit previously filed by the Registrant on Form 10-K (Registration No. 000-24737) for the year ended December 31,1999.(h)Incorporated by reference to the exhibit previously filed by the Registrant as Appendix A to the Definitive Schedule 14A Proxy Statement (RegistrationNo. 001-16441) on May 8, 2001.(i)Incorporated by reference to the exhibit previously filed by the Registrant on Form 10-Q (Registration No. 001-16441) for the quarter endedSeptember 30, 2002.(j)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on January 8, 2003.(k)Incorporated by reference to the exhibits in the Registration Statement on Form S-4 previously filed by the Registrant (Registration No. 333-112176).(l)Incorporated by reference to the exhibit previously filed by the Registrant on Form 10-K (Registration No. 001-16441) for the year ended December 31,2003.(m)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on March 2, 2005.(n)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on June 9, 2005.(o)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on June 2, 2005.(p)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on September 29, 2006.(q)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on December 5, 2006.(r)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on May 30, 2007.(s)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on December 7, 2007.(t)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on July 15, 200880(u)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on January 29, 2009(v)Incorporated by reference to the exhibit previously filed by Global Signal Inc. on Form 8-K (Registration No. 001-32168) on February 17, 2005.(w)Incorporated by reference to the exhibit previously filed by Global Signal Inc. on Form 8-K (Registration No. 001-32168) on May 27, 2005.(x)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on April 8, 2009.(y)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on May 5, 2009.(z)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on August 4, 2009.(aa)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on October 28, 2009.(bb)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on January 20, 2010.(cc)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on August 26, 2010.(dd)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on February 16, 2011.(ee)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on May 26, 2011.(ff)Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (Registration No. 001-16441) on February 3, 2012.81SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this AnnualReport on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on this 13th day of February, 2012. CROWN CASTLE INTERNATIONAL CORP. By: /s/ JAY A. BROWN Jay A. BrownSenior Vice President, Chief Financial Officerand TreasurerPOWER OF ATTORNEYKNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints W. Benjamin Moreland and E.Blake Hawk 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 andin 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 andall amendments and supplements thereto, for the year ended December 31, 2011 and to file the same with all exhibits thereto and other documents inconnection therewith with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents full power and authority to do and performeach 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 coulddo 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 doneby 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 beensigned below by the following persons on behalf of the Registrant and in the capacities indicated below on this 13th day of February, 2012. 82Name Title /s/ W. BENJAMIN MORELAND President, Chief Executive Officer and DirectorW. Benjamin Moreland (Principal Executive Officer) /s/ JAY A. BROWN Senior Vice President, Chief Financial Officer andJay A. Brown Treasurer (Principal Executive Officer) /s/ ROB A. FISHER Vice President and ControllerRob A. Fisher (Principal Accounting Officer) /s/ J. LANDIS MARTIN Chairman of the Board of DirectorsJ. Landis Martin /s/ DAVID C. ABRAMS DirectorDavid C. Abrams /s/ CINDY CHRISTY DirectorCindy Christy /s/ ARI Q. FITZGERALD DirectorAri Q. Fitzgerald /s/ ROBERT E. GARRISON II DirectorRobert E. Garrison II /s/ DALE N. HATFIELD DirectorDale N. Hatfield /s/ LEE W. HOGAN DirectorLee W. Hogan /s/ EDWARD C. HUTCHESON, JR. DirectorEdward C. Hutcheson, Jr. /s/ JOHN P. KELLY DirectorJohn P. Kelly /s/ ROBERT F. MCKENZIE DirectorRobert F. McKenzie 83AGREEMENT AND PLAN OF MERGERby and amongCROWN CASTLE INTERNATIONAL CORP.,CROWN CASTLE NG ACQUISITIONS CORP.,NEXTG NETWORKS, INC.,andMADISON DEARBORN CAPITAL PARTNERS V-A, L.P., as the REPRESENTATIVEDecember 15, 2011TABLE OF CONTENTSARTICLE I THE MERGER 1.01The Merger 1.02Consummation of the Merger 1.03Effect of the Merger 1.04Certificate of Incorporation and By-Laws 1.05Directors and Officers 1.06Conversion of Shares 1.07Dissenting Shares 1.08Conversion of Options 1.09Calculation of the Per Share Price 1.10The Closing 1.11Distributions to Stockholders 1.12Closing Consideration Adjustment ARTICLE II CONDITIONS TO CLOSING 2.01Mutual Conditions 2.02Conditions to the Buyer's Obligations 2.03Conditions to the Company's Obligations 2.04Frustration of Closing Conditions ARTICLE III PRE‑CLOSING COVENANTS 3.01Conduct of Business 3.02Access to Books and Records, Financing Cooperation 3.03Regulatory Filings; Closing Conditions 3.04Notices to Stockholders 3.05Exclusive Dealing 3.06Certain Supplemental Disclosures ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY 4.01Organization and Corporate Power 4.02Due Execution and Delivery; Valid and Binding Agreement 4.03Required Filings and Consents 4.04Non Contravention 4.05Capitalization of the Company 4.06Subsidiaries 4.07Financial Statements; Internal Controls 4.08Undisclosed Liabilities 4.09Absence of Company MAE 4.10Properties 4.11Company Material Contracts 4.12Intellectual Property 4.13Tax Matters 4.14Litigation 4.15Compliance with Laws; Permits 4.16Employee Benefit Plans 4.17Environmental Matters 4.18Insurance 4.19Affiliate Transactions i 4.20Brokers' Fees 4.21Labor Relations 4.22Illegal Payments ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE MERGER SUB 5.01Organization and Corporate Power 5.02Due Execution and Delivery; Valid and Binding Agreement 5.03Required Filings and Consents 5.04Non Contravention 5.05Litigation 5.06Sufficient Funds 5.07Investment Intent 5.08Brokers' Fees ARTICLE VI OTHER COVENANTS AND AGREEMENTS 6.01Continuing Access to Information 6.02Director and Officer Liability and Indemnification 6.03Employee Benefits Matters 6.04Public Announcements 6.05Fees and Expenses 6.06Transfer Taxes 6.07FIRPTA Certificate 6.08Tax Shelter 6.09The Representative 6.10Conflicts and Privileges 6.11No Additional Representations 6.12Section 280G ARTICLE VII TERMINATION 7.01Termination 7.02Effect of Termination 7.03Continuing Confidentiality ARTICLE VIII SURVIVAL; INDEMNIFICATION 8.01Non-Survival 8.02Indemnification 8.03Control of Claims; Cooperation 8.04Limitations 8.05Tax-Related Matters 8.06Escrowed Funds 8.07Settlement of Certain Actions 8.08Exclusive Remedy 8.09Adjustment to Purchase Price ARTICLE IX MISCELLANEOUS 9.01Amendment and Waiver 9.02Notices 9.03Assignment 9.04Severability ii 9.05No Strict Construction 9.06Captions 9.07Complete Agreement 9.08Company Disclosure Letter 9.09Counterparts 9.10Specific Performance 9.11Third Party Beneficiaries 9.12GOVERNING LAW 9.13CONSENT TO JURISDICTION 9.14WAIVER OF JURY TRIAL ExhibitsExhibit A - Form of Certificate of MergerExhibit B - Form of Closing CertificateSchedulesSchedule 1.05 - Directors and Officers of the Surviving CorporationiiiAGREEMENT AND PLAN OF MERGERThis AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of December 15, 2011 by and among Crown CastleInternational Corp., a Delaware corporation (the "Buyer"), Crown Castle NG Acquisitions Corp., a Delaware corporation and a wholly-owned Subsidiary ofthe Buyer (the "Merger Sub"), NextG Networks, Inc., a Delaware corporation (the "Company" and together with the Merger Sub, the "ConstituentCorporations"), and Madison Dearborn Capital Partners V-A, L.P., a Delaware limited partnership, solely in its capacity as the Representative. Capitalizedterms used and not otherwise defined herein have the meanings set forth in Annex A attached hereto.WHEREAS, the boards of directors of the Buyer, the Merger Sub, and the Company have approved this Agreement and the merger of theMerger Sub with and into the Company upon the terms and conditions set forth in this Agreement and in accordance with the Delaware Corporation Law (the"Merger") and the board of directors of the Company has declared that it is advisable that this Agreement be adopted by the stockholders of the Company;WHEREAS, the board of directors of the Company has recommended to the stockholders of the Company that they adopt this Agreement;andWHEREAS, certain stockholders of the Company holding approximately eighty-eight percent (88%) of the outstanding shares of CompanyCommon Stock have indicated an intent to provide written consents confirming the adoption of this Agreement immediately following the execution of thisAgreement.NOW, THEREFORE, in consideration of the premises, representations, warranties, and mutual covenants contained herein and of othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:ARTICLE ITHE MERGER1.01 The Merger. On and subject to the terms and conditions contained herein, at the Effective Time, the Merger Sub shall be merged with and intothe Company, with the Company continuing as the surviving corporation in the Merger (the Company, as the surviving corporation after the Merger, issometimes referred to herein as the "Surviving Corporation").1.02 Consummation of the Merger. On the Closing Date, subject to satisfaction or, to the extent permitted by applicable Law, waiver of theconditions specified in Article II hereof (a) the Company shall execute a certificate of merger in the form of Exhibit A attached hereto (the "Certificate ofMerger") in accordance with the relevant provisions of the Delaware Corporation Law and (b) the Company and the Merger Sub shall, and the Buyer shallcause Merger Sub to, cause such executed Certificate of Merger to be filed with the Secretary of State of the State of Delaware, and the Merger shall be effectiveat such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such subsequent time as the Buyer and theCompany shall agree and specify in the Certificate of Merger (the date and time the Merger becomes effective being the "Effective Time").1.03 Effect of the Merger. The Merger shall have the effect as provided in the Delaware Corporation Law, including that upon the effectiveness ofthe Merger (a) the separate existence of the Merger Sub shall cease (except as may be continued by operation of applicable Law), (b) the Company shall be thesurviving corporation in the Merger, (c) the Surviving Corporation shall possess all of the rights, privileges, powers, and franchises of each of the ConstituentCorporations, and all property (real, personal, and mixed) and all debts due to any of the Constituent Corporations on whatever account, as well as all otherthings in action or belonging to each of the Constituent Corporations, shall be vested in the Surviving Corporation, (d) all property, rights, privileges, powers,and franchises and each and every other interest shall be thereafter as effectively the property of the Surviving Corporation as they were of the ConstituentCorporations, and the title to any real estate vested by deed or otherwise in any of the Constituent Corporations shall not revert or be in any way impaired byreason of the Merger, and (e) all rights of creditors and all Liens upon any property of any of the Constituent Corporations shall be preserved unimpaired, andall Indebtedness, Liabilities, and duties of the Constituent Corporations shall henceforth attach to the Surviving Corporation and may be enforced against1it to the same extent as if such Indebtedness, Liabilities, and duties had been incurred or contracted by it.1.04 Certificate of Incorporation and By-Laws. Subject to compliance with Section 6.02(a), (a) the Certificate of Merger shall provide that, at theEffective Time, the certificate of incorporation of the Surviving Corporation as in effect immediately prior to the Effective Time shall be amended as of theEffective Time so as to contain the provisions, and only the provisions, contained in the exhibit attached to the Certificate of Merger and, as so amended, suchcertificate of incorporation shall be the certificate of incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or byapplicable Law and (b) the by-laws of the Merger Sub, as in effect at the Effective Time, shall be the by-laws of the Surviving Corporation until changed oramended in accordance with the provisions thereof, the certificate of incorporation of the Surviving Corporation, and applicable Law.1.05 Directors and Officers. From and after the Effective Time, the individuals set forth on Schedule 1.05 hereto shall hold the directorships andoffices set forth thereon with respect to the Surviving Corporation until their respective successors are duly elected and qualified in the manner provided in thecertificate of incorporation and by-laws of the Surviving Corporation or until their earlier resignation or removal or as otherwise provided by applicable Law.1.06 Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of the Buyer, the Merger Sub, theCompany, or the holders of any of the securities described below:(a) Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into one(1) validly issued, fully paid, and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.(b) Each share of Company Common Stock held in the treasury of the Company and each share of Company Common Stock owned orheld, directly or indirectly, by the Company or any of its Subsidiaries or by the Buyer, the Merger Sub, or any of their respective Subsidiaries, in each caseimmediately prior to the Effective Time, shall be cancelled and retired and shall cease to exist without any conversion thereof and no payment of cash or anyother consideration or distribution shall be made with respect thereto.(c) Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than (x) shares ofCompany Common Stock cancelled pursuant to Section 1.06(b) and (y) Dissenting Shares) shall be converted into the right to receive (i) an amount in cashequal to the Per Share Price, (ii) an amount in cash equal to the Per Share Adjustment Distribution, (iii) an amount in cash equal to the Per ShareRepresentative Amount Distribution, and (iv) an amount in cash equal to the Per Share Escrow Distribution, in each case without interest and subject toSection 1.11(g). At the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be cancelled andretired and shall cease to exist, and each holder thereof shall cease to have any rights with respect thereto, except the right to receive the consideration set forth inthis Section 1.06(c) with respect thereto.1.07 Dissenting Shares. Notwithstanding any provision of this Agreement to the contrary, shares of Company Common Stock issued andoutstanding immediately prior to the Effective Time that are held by any Person who is entitled to demand and properly exercises and demands appraisal ofsuch shares under the Delaware Corporation Law and is in compliance with all of the provisions of the Delaware Corporation Law concerning the right of suchholder to demand appraisal of such shares in connection with the Merger shall not be converted into the right to receive the consideration set forth in Section1.06(c) with respect to such shares, and shall instead be converted into the right to receive an amount in cash equal to the fair value of such shares as may bedetermined to be due to such holder as provided in the Delaware Corporation Law. Notwithstanding the foregoing, if the holder of any such shares shall havefailed to perfect or shall have effectively withdrawn or lost his, her, or its right to appraisal and payment under the Delaware Corporation Law, such sharesshall thereupon be deemed, as of the Effective Time, to have been cancelled and retired and to have ceased to exist and been converted into the right to receivethe consideration set forth in Section 1.06(c) with respect to such shares, without interest thereon, upon surrender of the Certificate formerly representing suchshares in accordance with Section 1.11. From and after the Effective Time, no holder of shares of Company Common Stock who has demanded appraisalrights shall be entitled to vote his, her, or its shares of Company Common2Stock for any purpose or to receive payment of dividends or other distributions on his, her, or its shares (except dividends or other distributions payable tostockholders of record at a date prior to the Effective Time, or dividends that accrued thereon prior to the Effective Time). The Company shall give the Buyerreasonably prompt notice of any demands for appraisal of shares of Company Common Stock, withdrawals of such demands, and any other relatedinstruments received by the Company, and the Buyer shall have the right to participate in all negotiations and proceedings with respect to such demands at itsexpense; provided, that the Company shall direct all such negotiations and proceedings. The Company may settle, or propose to settle, any such demands inaccordance with the provisions of Section 8.07. Any shares of Company Common Stock for which appraisal rights have been properly exercised anddemanded, and not subsequently withdrawn, lost, or failed to be perfected, are referred to herein as "Dissenting Shares".1.08 Conversion of Options. Immediately prior to the Effective Time, each then outstanding and unexercised option to purchase shares ofCompany Common Stock under the Company's 2009 Stock Award Plan (the "Company Options") shall become fully vested and exercisable. At the EffectiveTime, by virtue of the Merger and without any action on the part of the Buyer, the Merger Sub, the Company, or the holders of any Company Options, eachCompany Option outstanding and unexercised immediately prior to the Effective Time shall be converted into the right to receive (a) an amount in cash equalto (i) (A) the Per Share Price, minus (B) the exercise price per share of such Company Option, multiplied by (ii) the total number of shares of CompanyCommon Stock issuable upon the exercise of such Company Option, (b) an amount in cash equal to (i) the Per Share Adjustment Distribution, multiplied by(ii) the total number of shares of Company Common Stock issuable upon the exercise of such Company Option, (c) an amount in cash equal to (i) the PerShare Representative Amount Distribution, multiplied by (ii) the total number of shares of Company Common Stock issuable upon the exercise of suchCompany Option, and (d) an amount in cash equal to (i) the Per Share Escrow Distribution, multiplied by (ii) the total number of shares of CompanyCommon Stock issuable upon the exercise of such Company Option, in each case without interest and subject to Section 1.11(g). From and after the EffectiveTime, the Company Options shall no longer be exercisable by the former holders thereof, but shall only entitle such holders to the payment of the considerationset forth in this Section 1.08 with respect thereto.1.09 Calculation of the Per Share Price.(a) The "Per Share Price" shall mean an amount determined by dividing (i) the Estimated Closing Consideration, by (ii) the Total Shares.(b) The "Estimated Closing Consideration" shall mean the Company's good faith estimate of the Closing Consideration (including goodfaith estimates and reasonably detailed supporting documentation of (i) the Option Exercise Proceeds, (ii) the Closing Cash, (iii) the Closing Indebtedness, (iv)the Capex Adjustment, and (v) the Transaction Expenses, and, in each case the components thereof), which the Company shall provide to the Buyer no laterthan three (3) Business Days prior to the Closing Date and which shall be based on the Company's books and records and other information available at thetime. The "Closing Consideration" shall mean an amount equal to (i) $1,000,000,000.00, plus (ii) the Option Exercise Proceeds, plus (iii) the Closing Cash,minus (iv) the Closing Indebtedness, plus or minus (as applicable) (v) the Capex Adjustment, minus (vi) the Transaction Expenses, minus (vii) the EscrowAmount, and minus (viii) the Representative Amount. Prior to the Closing, the Buyer shall have a reasonable opportunity to consult with the Company withrespect to the Estimated Closing Consideration and the Company's estimates of the Option Exercise Proceeds, the Closing Cash, the Closing Indebtedness, theCapex Adjustment, and the Transaction Expenses and, in each case, the components thereof.1.10 The Closing. The closing of the Merger and the other transactions contemplated by this Agreement (the "Closing") shall take place at theoffices of Kirkland & Ellis LLP, 300 N. LaSalle, Chicago, Illinois, at 10:00 a.m. local time on the second (2nd) Business Day following the date on whicheach of the conditions set forth in Article II hereof is satisfied or, to the extent permitted by applicable Law, waived (other than those conditions which, by theirterms, will only be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or at such other place, time, and date as shall beagreed between the Company and the Buyer (the "Closing Date"). At the Closing:(a) The Company shall deliver to the Buyer:(i) a certificate, in the form attached hereto as Exhibit B, dated as of the Closing Date,3duly executed on behalf of the Company by an authorized officer of the Company, and stating that the conditions set forth in Sections 2.02(a) and(b) have been satisfied; and(ii) an executed copy of the Certificate of Merger in accordance with the provisions of Section 1.02.(b) The Buyer shall deposit with the Paying Agent, by wire transfer of immediately available funds to the account or accounts specifiedby the Paying Agent, an amount in cash equal to (i) the Per Share Price, multiplied by (ii) the number of shares of Company Common Stock converted intothe right to receive a payment of an amount equal to the Per Share Price pursuant to Section 1.06(c).(c) The Buyer shall pay to the Company, by wire transfer of immediately available funds to the account or accounts specified by theCompany at least two (2) Business Days prior to the Closing Date, an amount in cash equal to the aggregate consideration payable to holders of CompanyOptions pursuant to Section 1.08(a) (and promptly following the Effective Time (and in any event not less than two (2) Business Days following the EffectiveTime), the Surviving Corporation shall, and the Buyer shall cause the Surviving Corporation to, promptly pay over to each holder of Company Options theamount that such holder is entitled to pursuant to Section 1.08(a), if any, less any applicable withholding Taxes pursuant to Section 1.11(g); provided, that itis acknowledged and agreed that the Surviving Corporation shall have the option to make such payments to holders of Company Options through its regularpayroll provider.(d) The Buyer shall deposit with the Escrow Agent, pursuant to the terms of the escrow agreement, in a form reasonably acceptable to theparties and the Escrow Agent prior to the Closing Date (the "Escrow Agreement"), by wire transfer of immediately available funds to the account or accountsspecified by the Escrow Agent (the "Escrow Account"), an amount in cash equal to the Escrow Amount.(e) The Buyer shall pay to the Representative, by wire transfer of immediately available funds to the account or accounts specified by theRepresentative at least two (2) Business Days prior to the Closing Date, an amount in cash equal to the Representative Amount.(f) The Buyer shall pay, on behalf of the Company and by wire transfer of immediately available funds to the account or accountsspecified by the Company at least two (2) Business Days prior to the Closing Date, the Transaction Expenses.(g) The Buyer shall deliver to the Representative:(i) a certificate, in the form attached hereto as Exhibit B, dated as of the Closing Date, duly executed on behalf of the Buyer byan authorized officer of the Buyer, and stating that the conditions set forth in Sections 2.03(a) and (b) have been satisfied; and(ii) the Escrow Agreement, duly executed by the Buyer.(h) The Representative shall deliver the Escrow Agreement, duly executed by the Representative, to the Buyer.1.11 Distributions to Stockholders.(a) As soon as reasonably practicable after the date hereof, the Company shall mail to the holders of Company Common Stock (i) a letterof transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificatesto the Paying Agent and shall be in such form and have such other provisions as the Buyer and the Company may reasonably agree upon) (the "Letter ofTransmittal") and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Per Share Price. Upon the proper surrender of aCertificate and delivery of a duly executed and completed Letter of Transmittal, as well as such other documents as may reasonably be required by the PayingAgent and specified in the Letter of4Transmittal, the holder of such Certificate shall be entitled to receive in exchange therefor the Per Share Price into which the shares formerly represented bysuch Certificate shall have been converted pursuant to Section 1.06(c), less any applicable withholding Taxes pursuant to Section 1.11(g) and the Certificateso surrendered shall forthwith be cancelled. The provisions of this Section 1.11 shall not be applicable to Dissenting Shares.(b) The consideration payable to a holder of Company Common Stock shall be made by wire transfer of immediately available funds toan account designated in writing by such holder in the Letter of Transmittal, unless alternative arrangements are specified by such holder in the Letter ofTransmittal, to the extent permitted by the Letter of Transmittal. The Buyer shall instruct the Paying Agent to pay the amount that such holder is entitledpursuant to Section 1.06(c) to (i) each such holder that makes the deliveries to the Paying Agent required by this Agreement and the agreement pursuant towhich the Paying Agent is retained prior to the Closing Date its consideration on the Closing Date, or as soon as possible thereafter (but in any event no laterthan one (1) Business Day after the Closing Date), and (ii) each such holder that makes the deliveries to the Paying Agent required by this Agreement and theagreement pursuant to which the Paying Agent is retained on or after the Closing Date its consideration on the same Business Day as delivery thereof is made,or as soon as possible thereafter (but in any event no later than two (2) Business Days after such delivery). The Buyer shall cause the Paying Agent to complywith the terms of the agreement between the Paying Agent and the Buyer pursuant to which the Paying Agent has agreed to act as paying agent for the Merger.(c) If payment of any consideration in respect of Company Common Stock is to be made to a Person other than the Person in whose namea surrendered Certificate is registered, it shall be a condition to such payment that the Certificate so surrendered shall be properly endorsed or shall beotherwise in proper form for transfer and that the Person requesting such payment shall have paid any transfer and other Taxes required by reason of suchpayment in a name other than that of the registered holder of the Certificate surrendered or shall have established to the reasonable satisfaction of the SurvivingCorporation that such Taxes either have been paid or are not applicable. No interest shall be paid or shall accrue on the cash payable upon surrender of anyCertificate.(d) At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transferson the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the EffectiveTime. If, after the Effective Time, Company Common Stock is presented to the Surviving Corporation or the Paying Agent for transfer or any other reason, itshall be cancelled and exchanged as provided in this Section 1.11.(e) If any Certificate has been or is claimed to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by thePerson claiming that a Certificate has been lost, stolen, or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond insuch amount as the Surviving Corporation may reasonably direct or the delivery of an indemnity by such Person as is reasonably satisfactory to theSurviving Corporation, the Paying Agent shall deliver to such Person in respect of such lost, stolen or destroyed Certificate the Per Share Price into which theshares formerly represented by such Certificate shall have been converted pursuant to Section 1.06(c), subject to the other deliveries required by thisSection 1.11.(f) At any time that is more than six (6) months after the Effective Time, the Buyer may cause the Paying Agent to pay over to theSurviving Corporation any portion of the funds (including any earnings thereon) that had been delivered to the Paying Agent and that has not been disbursedto holders of Company Common Stock as of such date. Thereafter, all former holders of Company Common Stock shall be entitled to look only to theSurviving Corporation (subject to abandoned property, escheat, and other similar applicable Laws) as general creditors thereof with respect to the Per SharePrice payable upon surrender of their Certificates pursuant to this Agreement and the Paying Agent shall have no further obligation under this Agreement in itscapacity as such.(g) Notwithstanding anything in this Agreement to the contrary, each of the Buyer, the Merger Sub, the Surviving Corporation, theRepresentative, the Escrow Agent, and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any Personpursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision ofapplicable Law. To the extent the Buyer, the Merger Sub, the Surviving Corporation or the Paying Agent, as the case may be, withholds any such amounts,such amounts shall be (i) timely paid to the appropriate Governmental Entity and (ii) to the extent5timely paid to the appropriate Governmental Entity, shall be treated for all purposes of this Agreement as having been paid to the applicable Person in respect ofwhich such deduction and withholding was made. Except if withholding is due to a failure to provide a certificate under Section 6.07, each of the Buyer, theMerger Sub, the Surviving Corporation, the Escrow Agent, and the Paying Agent shall (or shall be instructed to, as applicable) inform the Representative, atleast ten (10) Business Days in advance, of its intention to withhold any Taxes hereunder and shall reasonably cooperate with the Representative in minimizingor eliminating such Taxes.1.12 Closing Consideration Adjustment.(a) Within sixty (60) days following the Closing Date, the Surviving Corporation shall, and the Buyer shall cause the SurvivingCorporation to, prepare and deliver to the Representative a statement setting forth the Surviving Corporation's calculation of the Closing Consideration(including calculations, and reasonably detailed supporting documentation, of (i) the Option Exercise Proceeds, (ii) the Closing Cash, (iii) the ClosingIndebtedness, (iv) the Capex Adjustment, and (v) the Transaction Expenses, and, in each case the components thereof) (the "Closing Statement"). The ClosingStatement shall be prepared in accordance with the Agreed Accounting Principles and the applicable terms and provisions of this Agreement.(b) During the thirty (30) days immediately following the Representative's receipt of the Closing Statement, the Buyer shall, and shallcause the Surviving Corporation and its Subsidiaries to, provide the Representative and its representatives with reasonable access during normal businesshours to the books, records (including work papers), facilities, employees, and independent accountants of the Surviving Corporation and its Subsidiaries tothe extent relevant to, and for purposes of, their review of the Closing Statement and the preparation of any Notice of Disagreement.(c) The Closing Statement, and the calculation of the Option Exercise Proceeds, the Closing Cash, the Closing Indebtedness, the CapexAdjustment, the Transaction Expenses, and the Closing Consideration included therein, shall become final and binding upon the parties thirty (30) daysfollowing the Representative's receipt thereof, unless the Representative gives written notice of its disagreement with the Closing Statement or the calculation ofthe Closing Consideration (a "Notice of Disagreement") to the Buyer on or prior to such date. Any Notice of Disagreement shall specify in reasonable detail thenature and amount of any disagreement so asserted and shall set forth the Representative's calculation of such amount, together in each case with reasonablydetailed supporting documentation; provided, that the Representative need not provide such reasonable detail, such calculation, or such supportingdocumentation to the extent that the Surviving Corporation and its Subsidiaries have not provided the Representative with the access required by Section1.12(b). Any Notice of Disagreement shall only include disagreements that are based on mathematical errors or the Closing Consideration not being calculatedin accordance with the definition thereof and the other applicable terms and provisions of this Agreement, and the Representative shall be deemed to have agreedwith all amounts contained in the Closing Statement which are not disputed in a Notice of Disagreement. The Representative may deliver only one (1) Notice ofDisagreement during the thirty (30)-day period referred to in this Section 1.12(c).(d) If a timely Notice of Disagreement is delivered to the Buyer pursuant to Section 1.12(c), then the Closing Statement and thecalculation of the Option Exercise Proceeds, the Closing Cash, the Closing Indebtedness, the Capex Adjustment, the Transaction Expenses, and the ClosingConsideration (in each case as revised in accordance with this Section 1.12) shall become final and binding upon the parties on the earlier of (i) the date anyand all matters specified in the Notice of Disagreement are finally resolved in writing by the Representative and the Buyer, and (ii) the date any and all mattersspecified in the Notice of Disagreement not resolved by the Representative and the Buyer are finally resolved in writing by the Arbiter. The Closing Statementand the calculation of the Option Exercise Proceeds, the Closing Cash, the Closing Indebtedness, the Capex Adjustment, the Transaction Expenses, and theClosing Consideration shall be revised by the Buyer to the extent necessary to reflect any resolution by the Representative and the Buyer and any finalresolution made by the Arbiter in accordance with this Section 1.12. During the fifteen (15) days immediately following the delivery of a Notice ofDisagreement, or such longer period as the Representative and the Buyer may agree in writing, the Representative and the Buyer shall seek in good faith toresolve in writing any differences which they may have with respect to any matter specified in the Notice of Disagreement, and all such discussions relatedthereto shall (unless otherwise agreed by the Buyer and the Representative) be governed6by Rule 408 of the Federal Rules of Evidence and any applicable similar state rule. At the end of such fifteen (15) day period, the Representative and the Buyershall submit to the Arbiter for review and resolution any and all matters (but only such matters) which remain in dispute and which were included in theNotice of Disagreement.(e) The Buyer and the Representative shall instruct the Arbiter to, and the Arbiter shall, make a final determination of all matters (butonly such matters) which remain in dispute and which were included in the Notice of Disagreement. Such determination shall be made in accordance with theAgreed Accounting Principles and the applicable terms and provisions of this Agreement. The Buyer and the Representative shall cooperate (and the Buyershall cause the Surviving Corporation and its Subsidiaries to cooperate) with the Arbiter during the term of its engagement. The Buyer and the Representativeshall instruct the Arbiter not to, and the Arbiter shall not, assign a value to any item in dispute greater than the greatest value for such item assigned by theBuyer, on the one hand, or the Representative, on the other hand, or less than the smallest value for such item assigned by the Buyer, on the one hand, or theRepresentative, on the other hand. The Buyer and the Representative shall also instruct the Arbiter to, and the Arbiter shall, make its determination basedsolely on presentations by the Buyer and the Representative that are in accordance with the Agreed Accounting Principles and the applicable terms andprovisions of this Agreement, and not on the basis of an independent review. The Buyer and the Representative shall request the Arbiter to deliver its finaldetermination in writing and within fifteen (15) days following submission of the disputed matters to it. The fees and expenses of the Arbiter shall be borne bythe Buyer, on the one hand, and the Representative (on behalf of the Company Equityholders), on the other hand, based upon the percentage which theaggregate portion of the contested amount not awarded to each party bears to the aggregate amount actually contested by such party.(f) The Closing Consideration, as finally determined pursuant to this Section 1.12, shall be the "Adjusted Closing Consideration". If theAdjusted Closing Consideration is greater than the Estimated Closing Consideration, then the Buyer shall pay over to the Representative (for distribution toeach Company Equityholder according to such Company Equityholder's Percentage Interest) an amount equal to (i) the amount by which the Adjusted ClosingConsideration is greater than the Estimated Closing Consideration, multiplied by (ii) such Company Equityholder's Percentage Interest; provided, that theaggregate obligation of the Buyer pursuant to the foregoing clause shall not exceed an amount equal to the Escrow Amount. If the Adjusted ClosingConsideration is less than the Estimated Closing Consideration, then the Buyer and the Representative shall deliver joint written instructions to the EscrowAgent instructing the Escrow Agent to pay over to the Buyer an amount equal to such shortfall from the amount held by the Escrow Agent pursuant to theEscrow Agreement.(g) Any payments required to be made pursuant to Section 1.12(f) shall be made (and, as applicable, the Buyer and the Representativeshall instruct the Escrow Agent in writing to make any payments to be made by it) within two (2) Business Days after the date on which the Adjusted ClosingConsideration is finally determined pursuant to this Section 1.12. The amount distributable pursuant to Section 1.12(f) with respect to a share of CompanyCommon Stock is the "Per Share Adjustment Distribution."(h) The Buyer agrees and acknowledges that its sole and exclusive remedy for the payment of any amount by which the Adjusted ClosingConsideration is less than the Estimated Closing Consideration shall be its right to receive amounts from the Escrow Account and that if the Escrow Accountcontains insufficient funds the Buyer shall have no rights whatsoever to seek or receive payment for any such insufficiency from the Representative or anyCompany Equityholder. The parties hereto agree and acknowledge that the adjustment and dispute resolution provisions set forth in this Section 1.12 shall bethe exclusive remedies for the matters addressed or that could be addressed therein.ARTICLE IICONDITIONS TO CLOSING2.01 Mutual Conditions. The obligations of each of the parties hereto to consummate the Merger are subject to the satisfaction (or, to the extentpermitted by applicable Law, waiver in writing by the Company and by the Buyer) of the following conditions:(a) No Law or Order of any Governmental Entity of competent jurisdiction which would prevent7or prohibit the consummation of the Merger or the other transactions contemplated hereby shall be in effect;(b) Any applicable waiting period (and any extension thereof) under the HSR Act relating to the Merger shall have expired or beenterminated;(c) The consent required from the Federal Communications Commission for the consummation of the Merger and the other transactionscontemplated hereby shall have been received;(d) This Agreement shall have been adopted by the Requisite Stockholder Approval; and(e) The Escrow Agreement shall have been duly executed and delivered by the Escrow Agent.2.02 Conditions to the Buyer's Obligations. The obligation of the Buyer and the Merger Sub to consummate the Merger is subject to the satisfaction(or, to the extent permitted by applicable Law, waiver in writing by the Buyer) of the following conditions as of immediately prior to the Closing:(a) (i) The representations and warranties of the Company contained in Sections 4.01, 4.02, and 4.05 shall be true and correct, in the caseof Sections 4.01 and 4.02 as of the date hereof, and in each case as of the Closing Date (except to the extent any such representations or warranties are made asof an earlier date, in which case as of such earlier date), (ii) the representations and warranties of the Company contained in Section 4.20 shall be true andcorrect in all material respects, in each case as of the date of this Agreement and as of the Closing Date (except to the extent any such representations orwarranties are made as of an earlier date, in which case as of such earlier date), and (iii) all other representations and warranties of the Company contained inArticle IV of this Agreement (disregarding all materiality and Company Material Adverse Effect qualifications contained therein) shall be true and correct, ineach case as of the date of this Agreement and as of the Closing Date (except to the extent any such representations or warranties are made as of an earlier date,in which case as of such earlier date), except for any failure of any such representations or warranties to be true and correct, individually or in the aggregate,as would not have a Company Material Adverse Effect;(b) The Company shall have performed in all material respects all of the covenants and agreements required to be performed by it underthis Agreement prior to the Closing;(c) The material consents from Governmental Entities shall have been received;(d) There shall not be threatened in writing or pending any Action that has resulted in, or would reasonably be expected to result in, theissuance of an MAE Order;(e) The number of shares held by holders of shares of Company Common Stock who have properly demanded appraisal for such sharesin accordance with the Delaware Corporate Law shall not exceed an amount equal to five percent (5%) of the total number of shares of Company CommonStock outstanding; and(f) The Rollover Stockholders Agreement, the Principal Stockholders Agreement, and the Registration Rights Agreement, in each casedated as of August 27, 2009 and by and among the Company and certain of the Company Equityholders and their respective Affiliates, shall each have beenterminated in a manner such that none of the terms or conditions of such Contracts shall survive the Effective Time.2.03 Conditions to the Company's Obligations. The obligation of the Company to consummate the Merger is subject to the satisfaction (or waiver inwriting by the Company) of the following conditions as of immediately prior to the Closing:(a) (i) The representations and warranties of the Buyer and the Merger Sub contained in Sections 5.01 and 5.02 shall be true and correct,in each case as of the date of this Agreement and as of the Closing Date (except to the extent any such representations or warranties are made as of an earlierdate, in which case as of such earlier date), (ii) the representations and warranties of the Buyer and the Merger Sub contained in Section 5.08 shall be true and8correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date (except to the extent any such representations orwarranties are made as of an earlier date, in which case as of such earlier date), and (iii) all other representations and warranties of the Buyer and the MergerSub contained in Article V of this Agreement (disregarding all materiality and Buyer Material Adverse Effect qualifications contained therein) shall be true andcorrect, in each case as of the date of this Agreement and as of the Closing Date (except to the extent any such representations or warranties are made as of anearlier date, in which case as of such earlier date), except for any failure of any such representations or warranties to be true and correct, individually or in theaggregate, as would not have a Buyer Material Adverse Effect; and(b) The Buyer and the Merger Sub shall have performed in all material respects all of the covenants and agreements required to beperformed by them under this Agreement prior to the Closing.2.04 Frustration of Closing Conditions. None of the Company, the Buyer, or the Merger Sub may rely on the failure of any condition set forth inSection 2.01, 2.02 or 2.03, as the case may be, to be satisfied if such failure was caused by such party's failure to comply with the terms of this Agreement,including Section 3.03.ARTICLE IIIPRE‑CLOSING COVENANTS3.01 Conduct of Business.(a) During the period from the date of this Agreement to the earlier of the Effective Time and the date that this Agreement is terminated inaccordance with its terms, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to:(i) operate its business only in the ordinary course in substantially the same manner as previously conducted (including withrespect to capital expenditures, accounts payable and accounts receivable);(ii) preserve its present relationships with Persons with whom it has material business dealings and keep available the currentservices of its present officers and senior employees;(iii) take those actions reasonably necessary to construct DAS Networks ordered from it, in each case in accordance with theterms of the applicable Contract therefor and in the ordinary course of business;(iv) maintain all of its assets and properties in good operating condition, ordinary wear and tear excepted;(v) maintain insurance on its properties and assets in such amounts and of such kind comparable to the insurance maintainedby it as of the date hereof;(vi) maintain in effect, and comply in all material respects with, all of the Permits held by it as of the date hereof; and(vii) comply in all material respects with all applicable Laws and the requirements of all Company Material Contracts.(b) During the period from the date of this Agreement to the earlier of the Effective Time and the date that this Agreement is terminated inaccordance with its terms, except as (i) set forth in Section 3.01 of the Company Disclosure Letter, (ii) otherwise consented to in writing by the Buyer (whichconsent shall not be unreasonably withheld, conditioned or delayed), (iii) otherwise expressly contemplated by this Agreement, or (iv) would constitute aviolation of applicable Law, the Company shall not, and shall cause each of its Subsidiaries not to:(i) declare or pay any dividend or distribution on the Company Common Stock9(whether in cash, securities, or other property), or redeem or otherwise acquire any shares of Company Common Stock (other than redemptions fromemployees in connection with a termination of service as required by a Plan in effect as of the date hereof);(ii) amend its Organizational Documents;(iii) effect any liquidation or dissolution;(iv) other than issuances or sales by any Subsidiary of the Company to the Company or a Subsidiary of the Company orissuances of Company Common Stock upon exercise of Company Options pursuant to the Company's 2009 Stock Award Plan in effect as of thedate hereof, subdivide, reclassify, recapitalize, split, combine, exchange, issue or sell any of its equity securities, securities convertible into its equitysecurities, or any options, warrants or other rights to purchase its equity securities;(v) other than in the ordinary course of business, amend, modify, or terminate (other than a termination in accordance with itsterms), in each case in any material respect, any Company Material Contract;(vi) directly or indirectly acquire by merging or consolidating with, or agreeing to merge or consolidate with, or purchasesubstantially all the assets of, or otherwise acquire, any corporation, partnership, limited liability company, joint venture, or other businessorganization or any interest therein;(vii) other than in the ordinary course of business, make any loan, advance, or capital contribution to, or any investment in,any Person other than the Company or any of its Subsidiaries;(viii) other than in the ordinary course of business with respect to DAS Networks or obsolete, damaged, or surplus equipment,sell, assign, license, lease, sublease, transfer, mortgage, pledge, or otherwise encumber or dispose of any of its assets or properties (includingIntellectual Property), except for assets or properties which, individually or in the aggregate, have a fair market value less than $250,000;(ix) other than as required by changes in GAAP, make any change in its accounting principles or practices;(x) other than in the ordinary course of business or as may be required by applicable Law, file any amended material TaxReturn, make or revoke any material Tax election, or settle or compromise any material Tax Liability;(xi) other than in the ordinary course of business with respect to Actions instituted by the Company or any of its Subsidiaries orto enforce the provisions of this Agreement, institute or settle any Action or knowingly waive or release any rights or claims (A) for amounts which,individually or in the aggregate, exceed $250,000 (net of any amounts covered under the Company's insurance policies, other than self insurance), or(B) where the settlement, waiver, or release involves injunctive or equitable relief against the Company or any of its Subsidiaries (other than anyimmaterial injunctive or equitable relief that is merely incidental to a primary obligation for monetary damages);(xii) other than in the ordinary course of business, amend, modify, or terminate, in any material respect, any of the Permits heldby it as of the date hereof;(xiii) other than as required by applicable Law, this Agreement, or the terms of any Contract or Plan in effect as of the datehereof, (A) increase in any material manner the compensation or benefits of, or enter into any new bonus, incentive, employee benefit, severance, ortermination Contract with, any of its Employees, (B) take any action to accelerate the time of payment or vesting of any compensation or benefits ofany Employee under any Plan, (C) establish, adopt, enter into, modify, amend or terminate any Plan or collective bargaining or other labor Contract,or (D) grant to any Employee any increase in severance,10change in control, or termination pay;(xiv) directly or indirectly incur any Indebtedness;(xv) make any capital expenditure or incur any obligations or liabilities in connection therewith, which, individually or in theaggregate, exceed an amount equal to ten percent (10%) of the total capital expenditure plan set forth in Section 3.01(b)(xv) of the Company DisclosureLetter, other than in accordance with the Company's capital expenditure plan set forth in Section 3.01(b)(xv) of the Company Disclosure Letter andother than capital expenditures made in the ordinary course of business with respect to the construction of DAS Networks first ordered after the datehereof;(xvi) enter into any Contract between the Company or its Subsidiaries, on the one hand, and any Affiliate of the Company(other than the Company or its Subsidiaries) or any officer or director of the Company, on the other hand;(xvii) engage in (A) any practice which would have the effect of accelerating to pre-Closing periods collections of receivables thatwould otherwise be expected (based on past practice) to be made in post-Closing periods, (B) any practice which would have the effect of postponingto post-Closing periods payments by the Company or any of its Subsidiaries with respect to accounts payable that would otherwise be expected(based on past practice) to be made in pre-Closing periods or (C) any other discount activity or deferred revenue activity, in each case in this clause(C) in a manner outside the ordinary course of business or inconsistent with past practice; or(xviii) agree or commit to do any of the foregoing.3.02 Access to Books and Records; Financing Cooperation.(a) During the period from the date of this Agreement to the earlier of the Effective Time and the date that this Agreement is terminated inaccordance with its terms, the Company shall, and shall cause its Subsidiaries to, grant to the Buyer, the Merger Sub, and their authorized representativesreasonable access, during normal business hours and upon reasonable advance notice, to the premises, personnel, auditors, properties (including informationtechnology systems), books, records (including Tax records), Contracts, and documents of or pertaining to the Company and its Subsidiaries; provided,that:(i) such access does not unreasonably interfere with the normal operations of the Company and its Subsidiaries;(ii) all such access shall be coordinated by the Chief Executive Officer or General Counsel of the Company, or such otherPerson as either of them may designate in writing from time to time (the "Designated Contacts");(iii) nothing herein shall require the Company to provide access to, or to disclose, any information to the Buyer or the MergerSub if such access or disclosure:(A) would result in the disclosure to the Buyer, the Merger Sub, or any of their authorized representatives ofinformation regarding the Company's and its Subsidiaries' plans or intentions to enter into Contracts to construct DAS Networks after thedate hereof or any other information reasonably related thereto;(B) would be in violation of any Law (including the HSR Act or any other antitrust Laws or other Laws regardingrestraint of competition); or(C) would cause the Company or any of its Subsidiaries to waive attorney-client privilege, or any other similarprivilege against disclosure; and11(iv) in no event shall the Buyer, the Merger Sub, or any of their authorized representatives be entitled to conduct any invasiveenvironmental testing or sampling without the prior written consent of the Company (which consent shall not be unreasonably withheld, conditionedor delayed, it being understood that it shall be reasonable for the Company to withhold consent in circumstances where the Company does not own,and is not authorized to grant access to, the property proposed to be tested or sampled, to the extent the Company first uses commercially reasonableefforts to request such access from the owner of such property).Notwithstanding the generality of the foregoing, the Company shall make reasonable and appropriate substitute disclosure arrangements which would allow itto disclose to the Buyer information of the types described in paragraphs (iii)(B) or (iii)(C) above without violating any Law or waiving any privilege. Anysuch access provided to the Buyer, the Merger Sub, or any of their authorized representatives shall be subject to the terms and provisions of that certainConfidentiality Agreement, dated as of September 21, 2011, by and between the Company and the Buyer (the "Confidentiality Agreement"), and the Buyerand the Merger Sub shall, and shall cause each of their authorized representatives to, abide by the terms and provisions of the Confidentiality Agreement inconnection with such access and any information provided in connection therewith.(b) During the period from the date of this Agreement to the earlier of the Effective Time and the date that this Agreement is terminated inaccordance with its terms, the Company shall, and shall cause its Subsidiaries to, provide to the Buyer and the Financing Sources all reasonable cooperationreasonably requested by the Buyer in connection with any financing to be incurred by the Buyer or any of its Affiliates in connection with the consummationof the transactions contemplated by this Agreement (the "Financing"), including to (i) furnish to the Buyer and the Financing Sources any financialstatements, schedules, or other financial data relating to the Company and its Subsidiaries reasonably requested by the Buyer as may be reasonably necessaryto consummate the Financing; provided, that the Company and its Subsidiaries shall not be obligated to furnish any such statements, schedules, or datawhich (A) they do not produce in the ordinary course of their business, and (B) which would be materially burdensome to produce, (ii) furnish the report ofthe Company's auditor on the most recently available audited consolidated financial statements of the Company and its Subsidiaries and use reasonable bestefforts to obtain the consent of such auditor to the use of such report in accordance with normal custom and practice and use reasonable best efforts to causesuch auditor to provide customary comfort letters to the Financing Sources in connection with the Financing, (iii) make available the Employees and advisorsof the Company and its Subsidiaries to provide reasonable assistance in connection with the Financing; provided, that such assistance shall not materiallyinterfere with the normal duties and responsibilities of such Employees, and (iv) take such other reasonable actions that are customary in connection with theFinancing or reasonably necessary or desirable to permit the Buyer to fulfill conditions or obligations under any financing documents.(c) Nothing in Section 3.02(b) shall require the Company, any of its Subsidiaries, any of their respective Affiliates, or any CompanyEquityholder to (i) pay any commitment or other fee in connection with the Financing, or (ii) have any Liability or obligation under or in connection with theFinancing, including in connection with any Contract related to the Financing, unless and until the Closing occurs. Nothing in Section 3.02(b) shall requireany officer or director of the Company or any of its Subsidiaries to take any action in such capacity with respect to the Financing unless and until the Closingoccurs. If the Closing does not occur, the Buyer shall indemnify and hold harmless the Company, its Subsidiaries and Affiliates, and its and their respectiveofficers, directors, employees, advisors, and stockholders from and against any Losses incurred by any of them in connection with the arrangement of theFinancing or the utilization of any information provided by any of them in connection therewith. The Buyer shall bear any and all out-of-pocket fees andexpenses incurred by the Company or any of its Subsidiaries in connection with the cooperation provided to it and the Financing Sources pursuant to Section3.02(b).3.03 Regulatory Filings; Closing Conditions.(a) The Buyer, the Merger Sub, and the Company shall each file or cause to be filed, reasonably promptly after the date of thisAgreement, any requests for consent, approval, or waiver, notifications, or the like required to be filed under the HSR Act, with the Federal CommunicationsCommission, or with any other Governmental Entity in connection with the transactions contemplated hereby (the "Governmental Filings"). The Buyer, theMerger Sub, and the Company shall each bear the out-of-pocket costs and expenses incurred by them in connection with the12preparation of any Governmental Filings, and each party shall pay all filing fees or other similar amounts required to be paid by it in connection with thesubmission of any Governmental Filing by such party.(b) The Buyer and the Merger Sub shall use their reasonable best efforts to comply with, as soon as is reasonably practicable, anyformal or informal requests for additional information or documents with respect to the Governmental Filings or the subject matter thereof, and in connectiontherewith the Company shall use its reasonable best efforts to provide the Buyer and the Merger Sub with any such additional information and/or documentsunder its control and possession. The Buyer, the Merger Sub, and the Company shall each provide prompt notice of any communication (whether written ororal) received by them from any Governmental Entity with respect to the Governmental Filings or the subject matter thereof, consult with each other prior toproviding any additional information to or otherwise communicating (whether in written or oral form) with any Governmental Entity with respect to theGovernmental Filings or the subject matter thereof, and incorporate their respective reasonable comments in connection with providing any additionalinformation to or otherwise communicating (whether in written or oral form) with any Governmental Entity with respect to the Governmental Filings or thesubject matter thereof. The Buyer, the Merger Sub, and the Company shall each have the right to have a representative attend and participate in any meetingbetween the Buyer, the Merger Sub, or the Company, on the one hand, and any Governmental Entity, on the other hand, concerning the Governmental Filingsor the subject matter thereof, in each case to the extent legally permissible.(c) The Buyer, the Merger Sub and the Company shall use their reasonable best efforts to cause the waiting periods or other requirementsunder the HSR Act to terminate or expire and to cause all other consents and approvals from Governmental Entities required in connection with the transactionscontemplated hereby to be obtained, in each case at the earliest possible date (and in any event prior to the Outside Date). Without limiting the generality of theforegoing (but subject to the other provisions of this Section 3.03(c)), the Buyer and the Merger Sub shall promptly and diligently pursue, at their sole cost andexpense, any or all of the following actions to the extent necessary to eliminate any concerns on the part of, or to satisfy any conditions imposed by, anyGovernmental Entity regarding the consummation of the transactions contemplated hereby (and whether or not with respect to the Governmental Filings or thesubject matter thereof): (i) resist fully, vigorously, and in good faith (including by the institution or defense of legal proceedings (which shall include arequirement to promptly exhaust all avenues of appeal and to post any bonds required in connection therewith)) any request for, or the entry of, and seek tohave vacated or terminated, any Order of any Governmental Entity that could restrain, prevent, or delay the consummation of the transactions contemplatedhereby, (ii) proposing and entering into good faith negotiations, providing information, making proposals, and entering into and performing Contracts orsubmitting to Orders regarding (A) the sale, divestiture, licensing, holding separate, or other disposition (and whether through the establishment of a trust orotherwise) of any assets, operations, businesses, divisions, or customers (including, after the Closing, any of such items of the Surviving Corporation or anyof its Subsidiaries) of the Buyer or any of its Affiliates, and/or (B) the termination or modification of any Contract or other business relationship, includingthe taking of any action that limits the freedom of action, of Buyer or any of its Affiliates (including, after the Closing, the Surviving Corporation or any of itsSubsidiaries), and (iii) promptly take and diligently pursue all other actions and do all other things necessary and proper to avoid or eliminate each and everyimpediment under any applicable Law that may be asserted by any Governmental Entity or any other Person to the consummation of the transactionscontemplated by this Agreement. Notwithstanding the generality of the foregoing, in no event shall the Buyer or the Merger Sub be required to, and thereasonable best efforts of the Buyer and the Merger Sub pursuant to this Section 3.03(c) shall not include any requirement to, propose or enter into good faithnegotiations, provide information, make proposals, enter into or perform Contracts, or submit to Orders with respect to any of the actions described in clauses(A) or (B) above if the result thereof would reasonably be expected to result in an MAE Condition.(d) Subject to the other provisions of this Section 3.03, the Buyer, the Merger Sub, and the Company shall each use their respectivereasonable best efforts to take or cause to be taken all actions, to do or cause to be done, and to assist and cooperate with the other parties hereto in doing, allthings necessary, proper, or advisable to consummate and make effective, at the earliest possible date (and in any event prior to the Outside Date), thetransactions contemplated hereby, including the satisfaction of each of the conditions set forth in Article II hereof and obtaining consents and authorizationsfrom, and providing notice to, parties to Contracts with the Company and its Subsidiaries, to the extent such consent, authorization or notice is required bythe terms thereof.3.04 Notices to Stockholders. The Company shall, in accordance with applicable Law and reasonably13promptly after the date of this Agreement, mail to any stockholder of the Company that did not, within one (1) Business Day after the date hereof, execute awritten consent approving the transactions contemplated hereby, notice of such stockholder's appraisal rights pursuant to Section 262 of the DelawareCorporation Law or any other provision of applicable Law and of any other matter required by Section 228 of the Delaware Corporation Law or any otherprovision of applicable Law. The delivery of such notice shall satisfy all stockholder notice requirements (if any) under the Organizational Documents of theCompany, the Delaware Corporation Law, and any Contract or other Law pursuant to which the Company may be bound for the vote or consent to adopt thisAgreement. Prior to such mailing, the Company shall deliver to the Buyer, for its review and comment, the notice to be delivered by the Company pursuant tothis Section 3.04 and shall incorporate therein any reasonable comments of the Buyer and its legal counsel delivered to the Company prior to the Business Dayimmediately prior to the date on which such notice is to be mailed.3.05 Exclusive Dealing. During the period from the date of this Agreement to the earlier of the Effective Time and the date that this Agreement isterminated in accordance with its terms, the Company shall not, and the Company shall not authorize or permit any of its Affiliates or any of its or theirofficers, directors, employees, stockholders, or any other authorized representatives to, (a) initiate, solicit, knowingly facilitate, or knowingly encourageinquiries regarding, or the making of any proposal for, an Alternative Transaction or any proposal that would be reasonably expected to lead to an AlternativeTransaction, (b) enter into, maintain, continue or otherwise participate in any discussions or negotiations regarding, or furnish or disclose to any Person anyinformation with respect to or otherwise cooperate in any way with, any proposal for an Alternative Transaction, or (c) enter into any Alternative Transactionor any Contract with respect to any Alternative Transaction. The Company shall, and shall cause each of its Affiliates and each of its and their officers,directors, employees, stockholders, and any other authorized representatives to, immediately cease any existing activities, discussions, or negotiations withany Persons (other than the Buyer and the Merger Sub) conducted heretofore with respect to any Alternative Transaction and request from each Person that hasexecuted a confidentiality agreement with the Company in contemplation of an Alternative Transaction within the previous two (2) years the prompt return ordestruction of all confidential information previously furnished to such Person or its representatives and terminate access by each such Person and itsrepresentatives to any online or other data rooms containing any information in respect of the Company or any of its Subsidiaries.3.06 Certain Supplemental Disclosures. Prior to the Closing, the Company and the Buyer shall reasonably promptly notify each other if either ofthem obtains knowledge that any of the representations or warranties made by such party in this Agreement are not true and correct in all material respects, orif the Company obtains knowledge of any material errors in, or omissions from, the Company Disclosure Letter. For the avoidance of doubt, no disclosure byany party pursuant to this Section 3.06 shall be deemed to amend or supplement the Company Disclosure Letter or to prevent or cure any breach of anyrepresentation or warranty.ARTICLE IVREPRESENTATIONS AND WARRANTIES OF THE COMPANYExcept as set forth in the corresponding sections or subsections of the letter delivered to the Buyer by the Company concurrently with theexecution of this Agreement (the "Company Disclosure Letter"), which such letter shall be interpreted in accordance with Section 9.08, the Companyrepresents and warrants to the Buyer and the Merger Sub as follows:4.01 Organization and Corporate Power. The Company is a corporation duly incorporated, validly existing, and in good standing under the Lawsof the State of Delaware, and is qualified to do business as a foreign corporation in each jurisdiction in which the failure to be so qualified would have,individually or in the aggregate, a Company Material Adverse Effect. Section 4.01 of the Company Disclosure Letter sets forth a correct and complete list of thejurisdictions in which the Company is so qualified. The Company has made available to the Buyer correct and complete copies of the OrganizationalDocuments of the Company, in each case as amended through the date of this Agreement. The Company has made available to the Buyer materially correctand complete copies of the minutes (or, in the case of draft minutes, the most recent drafts thereof) of all meetings of its board of directors held since August27, 2009. The Company has all requisite corporate power and authority necessary to own and operate its assets and to carry on its businesses as presentlyconducted, except where the failure to have such power is not, and would not reasonably be expected to be, individually or in the aggregate, material to theCompany and its14Subsidiaries, taken as a whole. The Company has all requisite corporate power and authority necessary to execute, deliver, and perform its obligations under,this Agreement and the other agreements contemplated hereby.4.02 Due Execution and Delivery; Valid and Binding Agreement. The board of directors of the Company, by resolutions duly adopted at a meetingduly called and held, or by written consent in lieu of a meeting of such board of directors, has (a) approved and authorized the execution and delivery of thisAgreement and the other agreements contemplated hereby, (b) approved the consummation of the transactions contemplated hereby and thereby, including theMerger, (c) determined that the execution and delivery of this Agreement, the other agreements contemplated hereby, and the consummation of the transactionscontemplated hereby and thereby, is advisable, (d) recommended that the stockholders of the Company adopt this Agreement, and (e) directed that thisAgreement be submitted to the stockholders of the Company for their adoption. The Requisite Stockholder Approval with respect to the adoption of thisAgreement is the only vote of the Company's stockholders required to approve this Agreement and the transactions contemplated hereby. This Agreement andthe other agreements contemplated hereby have been duly authorized, executed, and delivered by the Company and, assuming the due execution and delivery ofthis Agreement and the other agreements contemplated hereby by the other parties thereto, this Agreement and the other agreements contemplated hereby eachconstitute a valid and binding obligation of the Company, enforceable against it in accordance with its terms, except as limited by the application ofbankruptcy, moratorium, and other Laws affecting creditors' rights generally and as limited by the availability of specific performance and other equitableremedies and the application of equitable principles.4.03 Required Filings and Consents. No permit, consent, approval, or authorization of, or declaration to or filing with, any Governmental Entity isrequired in connection with any of the execution, delivery, or performance of this Agreement or the other agreements contemplated hereby by the Company,except for the applicable requirements of the HSR Act, the consent of the Federal Communications Commission, and for those permits, consents, approvals,authorizations, declarations, and filings the failure of which to be obtained or made is not, and would not reasonably be expected to be, individually or in theaggregate, material to the Company and its Subsidiaries, taken as a whole.4.04 Non Contravention. Neither the execution and delivery of this Agreement or the other agreements contemplated hereby by the Company, nor theperformance of its obligations hereunder or thereunder by the Company, will:(a) violate any Law or Order to which the Company or any of its Subsidiaries is subject or by which the Company or any of itsSubsidiaries is bound, or any provision of the Organizational Documents of the Company or any of its Subsidiaries; or(b) conflict with, result in a breach of, constitute a default under or a violation of (with or without notice of lapse of time, or both), resultin the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, give rise to the loss of a material benefit under, result in thecreation of any Lien, or require any notice under, any Company Material Contract, except, in the case of this clause (b), for any conflict, breach, default,violation, acceleration, termination, modification, cancellation, loss, Lien, or failure to give notice that is not, and would not reasonably be expected to be,individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole or does not and would not reasonably be expected to prevent ormaterially impede, interfere with, hinder, or delay the consummation of the Merger or the other transactions contemplated hereby.4.05 Capitalization of the Company.(a) The authorized capital stock of the Company consists solely of (i) 250,000,000 shares of Company Common Stock, of which41,243,889 are issued and outstanding as of the date hereof, and (ii) 2,000,000 shares of Preferred Stock, par value $0.01 per share, none of which are issuedand outstanding. All of such issued and outstanding shares of capital stock have been duly authorized and are validly issued and are not subject to anypreemptive rights.(b) The Company has reserved 4,727,654 shares of Company Common Stock as of the date hereof for issuance pursuant to awardsmade under the terms of the Company's 2009 Stock Award Plan, and 4,722,00015shares have been reserved for issuance pursuant to the terms of Company Options issued and outstanding as of the date hereof. Section 4.05(b) of theCompany Disclosure Letter contains a correct and complete list, as of the date hereof, of such Company Options, including the holder, date of grant, numberof shares, exercise or reference price, and vesting terms.(c) Except for (i) the issued and outstanding shares of capital stock described in Section 4.05(a), and (ii) issued and outstandingCompany Options, as of the date hereof there are no authorized, issued, or outstanding shares of capital stock or other equity or voting securities, and nooptions, warrants, convertible or exchangeable securities, or other rights that would give the holder thereof the right to purchase or acquire any shares of capitalstock or other equity or voting securities of, or the right to receive any economic interest in, the Company. The Company is not a party to any voting trusts,stockholder agreements, proxies, or other Contracts with respect to the voting or transfer of any of the shares of its capital stock or other equity or votingsecurities. There are no bonds, debentures, notes, or other Indebtedness of the Company having the right to vote (or convertible into, or exchangeable for,shares in the capital stock or other equity or voting securities of the Company having the right vote) on any matters on which holders of Company CommonStock or Preferred Stock may vote.4.06 Subsidiaries.(a) Section 4.06(a) of the Company Disclosure Letter sets forth a correct and complete list of the Company's Subsidiaries, including eachSubsidiary's name and jurisdiction of incorporation or formation, as applicable. Each of the Subsidiaries listed in such section are duly incorporated orformed, as applicable, validly existing, and in good standing under the Laws of their respective jurisdictions of incorporation or formation, as applicable, andare qualified to do business as foreign entities in each jurisdiction in which the failure to be so qualified would have a Company Material Adverse Effect. TheCompany has made available to the Buyer correct and complete copies of the minutes (or, in the case of draft minutes, the most recent drafts thereof) of allmeetings of the board of directors, or similar body, of each of the Company's Subsidiaries held since August 27, 2009. Each of the Subsidiaries listed in suchsection has all requisite power and authority necessary to own and operate its assets and to carry on its businesses as presently conducted, except where thefailure to have such power and authority would not, individually or in the aggregate, have a Company Material Adverse Effect.(b) All of the issued and outstanding shares of capital stock or other equity or voting securities of the Subsidiaries listed in Section4.06(a) of the Company Disclosure Letter are directly or indirectly owned by the Company, free and clear of all Liens. None of the Subsidiaries listed in suchsection have authorized, issued, or entered into any Contract with respect to any options, warrants, convertible or exchangeable securities, or other rights thatwould give any Person (other than the Company or another Subsidiary of the Company) the right to purchase or acquire any shares of capital stock or otherequity or voting securities of any such Subsidiary. All of the issued and outstanding shares of common stock or equity interests of each of the Company'sSubsidiaries have been duly authorized, validly issued, fully paid and, if applicable, are nonassessable and are not subject to any preemptive rights.(c) Except for the Subsidiaries listed in Section 4.06(a) of the Company Disclosure Letter, neither the Company nor any of itsSubsidiaries (i) owns, of record or beneficially, or holds the right to acquire any shares of capital stock or any other equity or voting securities of any otherPerson or (ii) controls any other Person.4.07 Financial Statements; Internal Controls.(a) Set forth in Section 4.07 of the Company Disclosure Letter are the following financial statements (collectively, the "Company FinancialStatements"): (i) the audited, consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2009 and December 31, 2010, and therelated audited, consolidated statement of income and cash flows of the Company and its Subsidiaries for the fiscal years then ended (the "Audited FinancialStatements"), and (ii) the unaudited, consolidated balance sheet of the Company and its Subsidiaries as of September 30, 2011 (the "Latest Balance Sheet"),and the related unaudited, consolidated statements of income and cash flows of the Company and its Subsidiaries for the nine (9) month period then ended(together with the Latest Balance Sheet, the "Interim Financial Statements"). The Company Financial Statements (a) are derived from the underlying booksand records of the Company and its Subsidiaries, and (b) present fairly in all material respects in16accordance with GAAP applied on a consistent basis the financial condition and results of operations of the Company and its Subsidiaries on a consolidatedbasis as of the times and for the periods referred to therein (subject, in the case of the Interim Financial Statements, to year-end audit adjustments and theabsence of footnotes and other presentation items). There were no changes in the method or application of the Company's or its Subsidiaries' accountingpolicies or changes in the method of applying the Company's or its Subsidiaries' use of estimates in the preparation of the Interim Financial Statements ascompared with the Audited Financial Statements.(b) The books, records, and accounts of the Company and each of its Subsidiaries, all of which have been made available to the Buyerto the extent requested by it, are correct and complete in all material respects and represent actual, bona fide transactions and have been maintained inaccordance with sound business practices in all material respects. The Company's and each of its Subsidiaries' system of internal controls over financialreporting is sufficient to provide reasonable assurance (i) that transactions are recorded as necessary to permit preparation of financial statements inconformity with GAAP, consistently applied, (ii) that transactions are executed only in accordance with the authorization of management, and (iii) regardingprevention or timely detection of the unauthorized acquisition, use, or disposition of the assets of the Company or its Subsidiaries. Since December 31, 2010,no officer, director, or employee of the Company or any of its Subsidiaries has refused to execute any certification of any nature whatsoever required by Lawor requested by any accounting, banking, financial, or legal firm or entity.4.08 Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries has any Liabilities (whether or not required to be reflected orreserved against on a balance sheet prepared in accordance with GAAP), other than, (a) Liabilities reflected or reserved against in the Company FinancialStatements, (b) Liabilities incurred since the date of the Latest Balance Sheet in the ordinary course of business, (c) Liabilities incurred in connection with thetransactions contemplated by this Agreement, and (d) Liabilities that are not, and would not reasonably be expected to be, individually or in the aggregate,material to the Company and its Subsidiaries, taken as a whole.4.09 Absence of Company MAE. Since December 31, 2010 (a) no Company Material Adverse Effect has occurred, (b) the Company and itsSubsidiaries have operated their respective businesses only in the ordinary course, and (c) neither the Company nor any of its Subsidiaries has taken anyaction or failed to take any action prior to the date hereof which, if taken or failed to have been taken after the date hereof, would constitute a breach of Section3.01(b) without the consent of the Buyer.4.10 Properties.(a) Neither the Company nor any of its Subsidiaries owns any interest in any real property. Section 4.10(a) of the Company DisclosureLetter sets forth a correct and complete list of all real property leased by the Company or any of its Subsidiaries as of the date hereof and the location of suchreal property.(b) The Company or one of its Subsidiaries owns good and marketable title to all of the personal property shown as owned on the LatestBalance Sheet or acquired thereafter (other than any personal property which has been disposed of in the ordinary course of business), free and clear of allLiens, other than Permitted Liens. The tangible personal property of the Company and its Subsidiaries (i) has been maintained in the ordinary course ofbusiness, and (ii) is in good operating condition and repair, ordinary wear and tear excepted, in each case except as would not be, and would not reasonably beexpected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole.(c) Section 4.10(c) of the Company Disclosure Letter sets forth a correct and complete list of each Node and its location, in each case as ofthe date hereof.(d) There are no pending nor, to the Company's knowledge, threatened condemnation or eminent domain or relocation proceedingsaffecting any tangible personal property of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is required to make anymaterial payments to any Governmental Entities in connection with the construction or operation of its DAS Networks, in each case except for those paymentsrequired by the terms of any Company Material Contract.(e) Permanent electrical service is connected to each On-Air Node, and to the Company's17knowledge, there is no current or pending condition which could result in the termination of such service. The electric utility service available to each On-AirNode is adequate for its current use and is not being misappropriated.4.11 Company Material Contracts.(a) Section 4.11 of the Company Disclosure Letter sets forth each of the following Contracts to which the Company or one of itsSubsidiaries is a party as of the date hereof (the "Company Material Contracts"):(i) collective bargaining agreements or other Contracts with any labor union;(ii) Contracts relating to the incurrence of Indebtedness;(iii) Contracts for or relating to the lease of any personal property (including any DAS Networks) for which the annual rental orpayment exceeds $250,000;(iv) Contracts for the lease or sublease of any real property to or from any Person for which the annual rental exceeds $250,000;(v) Contracts for the lease or license of any Intellectual Property (other than for commercially available, off-the-shelf software)pursuant to which the Company or any of its Subsidiaries has granted to any third party, or been granted by any third party, any material rightsused in the conduct of their business;(vi) Master service agreements or Contracts with any customer of the Company or any of its Subsidiaries;(vii) Fiber IRU Contracts;(viii) DAS Network orders, right-of-way use Contracts (and other similar Contracts) with Governmental Entities, and access orattachment Contracts (and other similar Contracts) with utilities, in each case for DAS Networks of the Company and its Subsidiaries;(ix) Contracts that require or that would be reasonably be expected to require the expenditure by the Company or any of itsSubsidiaries of $250,000 or more within the one (1) year period commencing on the date hereof or $1,000,000 or more during the remaining life of theContract;(x) Contracts (other than confidentiality agreements entered into in the ordinary course of business) which prohibit the Companyor any of its Subsidiaries from freely engaging in business anywhere in the world or pursuant to which any material benefit is required to be given orlost as a result of so competing;(xi) joint venture, partnership, or development Contracts;(xii) Contracts which contemplate the acquisition (however structured) of any corporation, partnership, limited liabilitycompany, or other business organization after the date hereof;(xiii) Contracts with any Company Equityholders or their Affiliates which will survive the Closing, other than any Plan or anyContract related to employment of any such Person;(xiv) Contracts under which the Company or any of its Subsidiaries has advanced or loaned any amount to any of its directorsor officers, or to any other Person outside the ordinary course of business;(xv) Contracts granting the other party to such Contract or a third party "most favored nation" status that applies to theCompany or existing or future Affiliates of the Company;18(xvi) Contracts that provide for "exclusivity" or any similar requirement in favor of any Person other than the Company or anyof its Subsidiaries;(xvii) Contracts containing any "non-solicitation", "no-hire" or similar provisions that restrict the Company or any of itsSubsidiaries;(xviii) Contracts under which the Company or any of its Subsidiaries has agreed to indemnify any Person; and(xix) Contracts entered into in connection with the settlement or other resolution of any claim or Action that provides for ongoingobligations on the part of the Company or any of its Subsidiaries following the Closing, other than terms providing solely for confidentiality or non-disparagement.(b) The Company has made available to the Buyer a correct and complete copy of each Company Material Contract (including anyamendments, modifications, novations, variations, or supplements thereto). With respect to each Company Material Contract and in each case except as isnot, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole: (i) suchCompany Material Contract is valid and binding on the Company or one of its Subsidiaries, as applicable, and is in full force and effect, (ii) the Company orone of its Subsidiaries, as applicable, has performed all of the obligations required to be performed by it as of the date hereof under such Company MaterialContract, (iii) neither the Company nor any of its Subsidiaries has, within the previous eighteen (18) months, received written notice of any default by theCompany or any of its Subsidiaries under such Company Material Contract, (iv) neither the Company nor any of its Subsidiaries is in default under anyCompany Material Contract, and (v) to the Company's knowledge, no event has occurred and no condition exists that would, with or without notice, the lapseof time, or both, constitute a breach of or a default under such Company Material Contract by the Company or any of its Subsidiaries.4.12 Intellectual Property.(a) Section 4.12 of the Company Disclosure Letter sets forth a correct and complete list of all registered Intellectual Property and allmaterial unregistered Intellectual Property owned by the Company or one of its Subsidiaries as of the date hereof and used in the conduct of the business of theCompany and its Subsidiaries (the "Company Intellectual Property"). The Company or one of its Subsidiaries owns good and marketable title to all of theregistered Intellectual Property set forth in such section, free and clear of all Liens, other than Permitted Liens. Except as is not, and would not reasonably beexpected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, (i) the Company or one of its Subsidiaries hasduly registered or filed, and taken all actions necessary to maintain, all of the registered Intellectual Property set forth in such section with each appropriateGovernmental Entity, and (ii) none of the registered Intellectual Property set forth in such section has been adjudged invalid or unenforceable in whole or part.The Company owns, is licensed, or otherwise has the right to use (in each case, free and clear of all Liens, other than Permitted Liens) all Intellectual Propertyused in or necessary to carry on business as presently conducted, except for any such failure to own, license or have the right to use that is not, and would notreasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole.(b) Except as is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and itsSubsidiaries, taken as a whole, (i) the Company Intellectual Property was either (A) developed by employees of the Company and its Subsidiaries within thescope of their employment, (B) developed by independent contractors or consultants who have assigned all of their rights in and to such Company IntellectualProperty to the Company or one of its Subsidiaries under written Contracts, or (C) otherwise acquired by the Company or one of its Subsidiaries under avalid written Contract, and (ii) the Company or one of its Subsidiaries have taken all reasonable steps to protect and preserve the confidentiality of all tradesecrets and other confidential information included in the Company Intellectual Property (including by requiring all employees and consultants who haveaccess to such information to execute valid and binding written confidentiality and non-use agreements or agreements that contain similar obligations) inaccordance with protection procedures customarily used in the industry to protect rights of like importance.19(c) Except as is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and itsSubsidiaries, taken as a whole, (i) neither the Company nor any of its Subsidiaries has, within the previous eighteen (18) months, received written notice ofany infringement or misappropriation by any Person of any Company Intellectual Property or by the Company or any of its Subsidiaries of any IntellectualProperty of any other Person, (ii) to the Company's knowledge, no Person is infringing or misappropriating or has infringed or misappropriated any CompanyIntellectual Property, and (iii) to the Company's knowledge, the Company and its Subsidiaries are not infringing or misappropriating, and have not infringedor misappropriated within the previous eighteen (18) months, the Intellectual Property of any other Person.(d) Except as is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and itsSubsidiaries, taken as a whole (i) there are no bugs or defects in the software, hardware, and network equipment (taken as whole) used in the Company's andits Subsidiaries' business (taken as whole), (ii) all such hardware and network equipment (taken as a whole) is in good operating condition, ordinary wearand tear excepted, and (iii) there have been no unauthorized intrusions or breaches of the security of the Company's and its Subsidiaries' informationtechnology systems.4.13 Tax Matters.(a) The Company and its Subsidiaries have filed all United States federal income Tax Returns and all other material Tax Returns thatthey were required to file. All such Tax Returns are correct and complete in all material respects.(b) All material Taxes, that are due and payable, of the Company and its Subsidiaries in respect of periods ending prior to the ClosingDate, have been paid or are being contested in good faith by appropriate proceedings. Section 4.13(b) of the Company Disclosure Letter sets forth a correct andcomplete list of each such material Tax being contested in good faith by appropriate proceedings as of the date hereof.(c) The Company and its Subsidiaries have withheld and paid over to the proper taxing authority or other Governmental Entities allmaterial Taxes required to be withheld and paid over.(d) There is no pending dispute or claim concerning any material Tax Liability of the Company or any of its Subsidiaries either claimedor raised by any Governmental Entity in writing. Neither the Company nor any of its Subsidiaries has received any written notice of audit from anyGovernmental Entity as of the date hereof, which audit is still pending and not concluded.(e) Within the past three (3) years, neither the Company nor any of its Subsidiaries has distributed stock of another Person in atransaction that was intended to be governed by Sections 355 or 361 of the Code.(f) Neither the Company nor any of its Subsidiaries is or has been a party to any "listed transaction", as defined in Section 6707A(c)(2)of the Code.(g) Neither the Company nor any of its Subsidiaries currently is the beneficiary of any extension of time within which to file any materialTax Return.(h) There are no Liens for material Taxes (other than Taxes not yet due and payable) upon any of the assets of the Company or any of itsSubsidiaries.(i) Neither the Company nor any of its Subsidiaries is party to any Contract, entered into prior to the Closing and not including anyContract to which the Buyer, the Merger Sub, or any of their respective Affiliates is a party, that would result in the payment of any "excess parachutepayment" within the meaning of Section 280G of the Code (or any corresponding provision of state, local, or foreign Law) in connection with the transactionscontemplated by this Agreement.(j) Neither the Company nor any of its Subsidiaries has any material Liability for the Taxes of20any Person (other than the Company and its Subsidiaries) under Treasury Regulation § 1.1502-6 (or any similar provision of state, local, or foreign Law);under any Tax allocation, sharing or indemnification agreement; or as a transferee or successor; or by Contract (other than Contracts entered into in theordinary course of business the principal subject of which is not Taxes).4.14 Litigation. There are no Actions pending or, to the knowledge of the Company, threatened by or against the Company or any of itsSubsidiaries, which are, or would reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as awhole, and neither the Company nor any of its Subsidiaries is subject to any outstanding Order, or, to the knowledge of the Company, any investigation byany Governmental Entity.4.15 Compliance with Laws; Permits.(a) The Company and each of its Subsidiaries is in compliance with all applicable Laws, except where the failure to comply is not, andwould not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole. Neither the Companynor any of its Subsidiaries has, within the previous eighteen (18) months, received written notice from any Governmental Entity alleging that the Company orany of its Subsidiaries is not in compliance with any applicable Law in any material respect.(b) Except as is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and itsSubsidiaries, taken as a whole, the Company or one of its Subsidiaries holds all permits, consents, approvals, and authorizations, and has made all requiredfilings and registrations with Governmental Entities (collectively, "Permits"), required for the operation of their respective businesses as presently conducted.The Permits described by the immediately foregoing sentence are the "Material Permits". Section 4.15(b) of the Company Disclosure Letter sets forth a correctand complete list of all of the Material Permits as of the date hereof. Except as is not, and would not reasonably be expected to be, individually or in theaggregate, material to the Company and its Subsidiaries, taken as a whole, all of Material Permits are in full force and effect. Neither the Company nor any ofits Subsidiaries are in material default (other than a default that has been cured as of the date hereof) under any Material Permit. Except as is not, and wouldnot reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, no Material Permit issubject to suspension, modification (other than immaterial modifications), revocation, or nonrenewal as a result of the consummation of the transactionscontemplated by this Agreement. Neither the Company nor any of its Subsidiaries has, within the previous eighteen (18) months, received written notice fromany Governmental Entity alleging that the Company or any of its Subsidiaries is not in compliance with any such Permits in any material respect. Noproceeding is pending or, to the Company's knowledge, threatened seeking the revocation or material limitation of any Permit.4.16 Employee Benefit Plans.(a) Section 4.16(a) of the Company Disclosure Letter sets forth a correct and complete list of each of the following which the Company orany of its Subsidiaries maintains, sponsors, or contributes to, or under which any Employee or former Employee of the Company or its Subsidiaries has anypresent or future right to benefits as a result of their current or former employment by the Company or any of its Subsidiaries: (i) any "pension plans" (asdefined under Section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"), whether or not subject to ERISA), (ii) any "welfare plans" (asdefined under Section 3(1) of ERISA, whether or not subject to ERISA), and (iii) any equity compensation, incentive compensation, deferred compensation,severance, employment, change in control, termination, welfare, disability, death benefit, fringe benefit, perquisite, collective bargaining and all otheremployee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA. All such plans, agreements, programs,policies and arrangements referred to in clauses (i) through (iii) of this Section 4.16(a) shall be collectively referred to as the "Plans".(b) With respect to each Plan, the Company has made available to the Buyer a correct and complete copy (or, to the extent no such copyexists, an accurate written description) thereof and, to the extent applicable: (i) any related trust agreement, insurance annuity or other funding Contract, (ii) themost recent determination letter, (iii) the most recent summary plan description and any subsequent summaries of material modifications and (iv) for21the two most recent years (A) Form 5500 and related schedules and filings, (B) audited financial statements, and (C) actuarial valuation reports. Except asspecifically provided in the foregoing documents made available to Buyer, there are no amendments to any Plan that have been adopted or approved nor hasthe Company or any of its Subsidiaries undertaken to make any such amendments or to adopt or approve any new Plan.(c) Except as would not be reasonably likely to result in a material Liability to the Company, (i) each of the Plans has been operated,funded, and administered according to such Plan's terms and in compliance with applicable Law, including the Code and ERISA, (ii) there are no non-exempt"prohibited transactions" (as described in ERISA Section 406 or Code Section 4975) with respect to any Plan and neither the Company nor any of itsSubsidiaries has otherwise engaged in any prohibited transaction, (iii) neither the Company nor any of its Subsidiaries nor any of their respective directors,officers, employees, or any other fiduciary has committed any breach of fiduciary responsibility imposed by ERISA that would subject the Company or anyof its Subsidiaries or, to the Company's knowledge, any of their respective directors, officers, or employees, to material Liability under ERISA, (iv) allcontributions (including any employee salary reduction contributions) or other amounts payable (including premiums payable with respect to insurancepolicies funding any Plan) by the Company or any of its Subsidiaries with respect to any Plan or required by applicable Law or any Contract for any periodthrough the date hereof have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fullyreflected on the Company Financial Statements, (v) each Plan which is intended to be qualified within the meaning of Section 401(a) of the Code is so qualifiedand has received a favorable determination letter or opinion letter as to its qualification, and nothing has occurred, whether by action or failure to act, thatcould reasonably be expected to cause the loss of such qualification, (vi) no event has occurred and no condition exists with respect to any Plan that wouldsubject the Company or its Subsidiaries, either directly or by reason of their affiliation with any member of their "Controlled Group" (defined as anyorganization which is a member of a controlled group of organizations within the meaning of Section 414(b), (c), (m) or (o) of the Code) to any material Tax orother material Liability and (vii) neither the Company, its Subsidiaries nor any member of their Controlled Group has engaged in, or is a successor or parentcorporation to an entity that engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA.(d) Neither the Company nor any of its Subsidiaries has ever sponsored, maintained, contributed to, or had any Liability with respect toany Plan that is subject to Title IV of ERISA, ERISA Section 302, or Code Section 412, or to a "multiemployer plan" as defined in ERISA Section 3(37) or4001(a)(3) or any "multiple employer plan" as defined in ERISA Section 4063. No Plan provides for post-employment or retiree medical, health, or otherwelfare benefits, except as and to the extent required by the provisions of Part 6 of Subtitle B of Title I of ERISA and Code Section 4980B(f) or similar stateLaw.(e) None of the execution and delivery of this Agreement or any of the other agreements contemplated hereby, or the consummation of anytransaction contemplated herein or therein (alone or in conjunction with any other event), could result in (i) the payment to any present or former Employee ofany money or other property, (ii) accelerate, trigger, or provide any other rights or benefits to any present or former Employee, (iii) accelerate or trigger anyother material obligation under any Plan, or (iv) result in any material breach or violation of, or material default under or limit the Company's or any of itsSubsidiaries' right to amend, modify or terminate, any Plan.(f) With respect to each Plan, (i) no Actions (other than routine claims for benefits in the ordinary course of business) are pending or, tothe Company's knowledge, threatened, (ii) to the Company's knowledge, no facts or circumstances exist that could give rise to any such Actions, and (iii) noadministrative investigation, audit, or other administrative proceeding by the Department of Labor, the Pension Benefit Guaranty Corporation, the InternalRevenue Service, or other Governmental Entity are pending, in progress or, to the Company's knowledge, threatened.4.17 Environmental Matters. Except as do not have, and would not reasonably be expected to have, individually or in the aggregate, a CompanyMaterial Adverse Effect (a) the Company and its Subsidiaries are in compliance with all Environmental Laws, (b) the Company and its Subsidiaries hold,and are operating in compliance with, all Permits required under any Environmental Laws for the conduct of their respective businesses, (c) neither theCompany nor any of its Subsidiaries has, within the previous eighteen (18) months, received written notice of any violation by any of them of anyEnvironmental Laws or that any of them have any Liability under any Environmental Laws (including any investigatory, remedial, or corrective obligation),(d) there has been no Release of or exposure to22any Hazardous Materials that would reasonably be expected to result in any Liability of the Company or any Subsidiary, (e) neither the Company nor any ofits Subsidiaries has entered into or is subject to any Order pursuant to any Environmental Law, (f) neither the Company nor any of its Subsidiaries hasretained or assumed, either Contractually or by operation of Law, any Liabilities that could reasonably be expected to form the basis of any Action against theCompany or any of its Subsidiaries under any Environmental Law, (g) there are no underground or aboveground storage tanks, generators, known orsuspected asbestos-containing materials, or polychlorinated biphenyls on, at, under, or about any property owned, operated, or leased by the Company or anyof its Subsidiaries, in each case for which the Company is responsible, and (h) the Company has made available to the Buyer correct and complete copies ofall Phase II environmental site assessments, remedial reports, and compliance audits, and all other environmental reports, studies, or audits describing matterswhich are, or which would reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, andin each case which are in the possession of the Company or any of its Subsidiaries and which relate to the operations of the Company or its Subsidiaries ortheir respective owned, leased, or operated properties.4.18 Insurance. Section 4.18(a) of the Company Disclosure Letter sets forth a correct and complete list of all of the material insurance policiescurrently maintained by the Company or any of its Subsidiaries. Section 4.18(b) of the Company Disclosure Letter sets forth a correct and complete list of allclaims submitted by the Company or any its Subsidiaries to an insurance carrier within the previous eighteen (18) months. Except in each case as is not, andwould not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, all premiums undersuch policies covering all periods up to and including the Closing Date have been timely paid, no policy aggregate is impaired by the payment of claims, nonotice of cancellation, termination or premium increase (retroactive or otherwise) has been received within the previous eighteen (18) months, and the Companyand its Subsidiaries have complied with all of the terms and conditions of such policies. There are no pending or, to the Company's knowledge, threatenedmaterial claims under such policies. The Company has made available to the Buyer a correct and complete copy of each such policy.4.19 Affiliate Transactions. No director, officer, stockholder, or Affiliate of the Company (a) is a party to any Contract, commitment, ortransaction with the Company or any of its Subsidiaries (other than employment arrangements with directors, officers, or stockholders who are alsoemployees), (b) has any interest in any material property used by the Company or any of its Subsidiaries, or (c) to the Company's knowledge, owns anydirect or indirect interest in, or is a manager, director, officer, employee, partner, or consultant of, any competitor, supplier, customer, distributor, lessor,tenant, creditor or debtor of the Company or any of its Subsidiaries, in each case that is, or would reasonably be expected to be, individually or in theaggregate, material to the Company and its Subsidiaries, taken as a whole.4.20 Brokers' Fees. Neither the Company nor any of its Subsidiaries has any Liability to pay any fees or commissions to any broker, finder,investment banker, financial advisor, agent, or any other Person with respect to this Agreement and the transactions contemplated by this Agreement, exceptfor the fees and expenses of Deutsche Bank Securities Inc., as financial advisor to the Company, and any other fees and expenses paid or to be paid directlyby the Company Equityholders or included in Transaction Expenses.4.21 Labor Relations.(a) Neither the Company nor any of its Subsidiaries is a party to any collective bargaining or other labor Contract and no Employee iscovered by any collective bargaining or other labor Contract. There are not any union organizing activities concerning any Employees of the Company or anyof its Subsidiaries. Since December 31, 2010, there has not been and there presently is (i) no unfair labor practice charge or complaint pending or, to theCompany's knowledge, threatened against the Company or any Subsidiary and (ii) no labor strike, slowdown, work stoppage, lockout or other laborcontroversy is in effect or, to the Company's knowledge, threatened against the Company or any of its Subsidiaries.(b) Except as is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and itsSubsidiaries, taken as a whole, each individual who renders services to the Company or any of its Subsidiaries who is classified by the Company or suchSubsidiary, as applicable, as having the status of23an independent contractor or other non-employee status for any purpose (including for purposes of taxation and tax reporting and under Plans) is properly socharacterized.4.22 Illegal Payments. None of the Company, any of its Subsidiaries, or any of their respective officers, directors or employees has offered, made, orreceived on behalf of any of them any illegal payment or contribution of any kind, directly or indirectly, including payments, gifts, or gratuities, to anyPerson (including any official, employee, or agent of any Governmental Entity or any candidate for any office of any Governmental Entity). There have beenno false or fictitious entries made in the books or records of the Company or its Subsidiaries relating to any payment prohibited by Law, and neither theCompany nor its Subsidiaries has established or maintained any fund for use in making any such payments.ARTICLE VREPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE MERGER SUBThe Buyer and the Merger Sub represent and warrant to the Company as follows:5.01 Organization and Corporate Power. Each of the Buyer and the Merger Sub is a corporation duly incorporated, validly existing, and in goodstanding under the Laws of the State of Delaware. Each of the Buyer and the Merger Sub has all requisite corporate power and authority necessary to execute,deliver, and perform its obligations under, this Agreement and the other agreements contemplated hereby (subject, in the case of the Merger, to the adoption ofthis Agreement by the Buyer as the sole stockholder of the Merger Sub).5.02 Due Execution and Delivery; Valid and Binding Agreement. The board of directors of each of the Buyer and the Merger Sub, by resolutionsduly adopted at a meeting duly called and held, or by written consent in lieu of a meeting of such board of directors, has (a) approved and authorized theexecution and delivery of this Agreement and the other agreements contemplated hereby, (b) approved the consummation of the transactions contemplatedhereby and thereby, including the Merger, (c) determined that the execution and delivery of this Agreement, the other agreements contemplated hereby, and theconsummation of the transactions contemplated hereby and thereby is advisable, (d) in the case of the Merger Sub, recommended that the stockholders of theMerger Sub adopt this Agreement, and (e) in the case of the Merger Sub, directed that this Agreement be submitted to the stockholders of the Merger Sub fortheir adoption. The approval of the Buyer, as the sole record and beneficial owner of all of the issued and outstanding capital stock of the Merger Sub, is theonly vote of the Merger Sub's stockholders required to approve this Agreement and the transactions contemplated hereby, and such approval shall be obtainedimmediately following the execution of this Agreement. This Agreement and the other agreements contemplated hereby have been duly authorized, executed anddelivered by each of the Buyer and the Merger Sub and, assuming the due execution and delivery of this Agreement and the other agreements contemplatedhereby by the Company, this Agreement and the other agreements contemplated hereby each constitute a valid and binding obligation of each of the Buyer andthe Merger Sub, enforceable against each of them in accordance with its terms, except as limited by the application of bankruptcy, moratorium, and otherLaws affecting creditors' rights generally and as limited by the availability of specific performance and other equitable remedies and the application ofequitable principles.5.03 Required Filings and Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any Governmental Entity isrequired in connection with any of the execution, delivery, or performance of this Agreement and the other agreements contemplated hereby by the Buyer or theMerger Sub, except for the applicable requirements of the HSR Act, the consent of the Federal Communications Commission, and for those permits, consents,approvals, authorizations, declarations and filings the failure of which to be obtained or made would not have a Buyer Material Adverse Effect.5.04 Non Contravention. Except for those matters which would not have a Buyer Material Adverse Effect, neither the execution and delivery of thisAgreement or the other agreements contemplated hereby by the Buyer or the Merger Sub, nor the performance of their obligations hereunder or thereunder by theBuyer or the Merger Sub, will:(a) violate any Law or Order to which the Buyer or the Merger Sub is subject or by which the24Buyer is bound, or any provision of the Organizational Documents of the Buyer or the Merger Sub; or(b) conflict with, result in a breach of, constitute a default under or a violation of (with or without notice of lapse of time, or both), resultin the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, give rise to the loss of a material benefit under, result in thecreation of any Lien, or require any notice under, any material Contract to which the Buyer or the Merger Sub is a party or by which any of their respectiveassets are bound.5.05 Litigation. There are no Actions pending or, to the knowledge of the Buyer, overtly threatened by or against or affecting the Buyer or theMerger Sub by or before any Governmental Entity, which if determined adversely to the Buyer or the Merger Sub would have a Buyer Material AdverseEffect, and neither the Buyer nor the Merger Sub is subject to any investigation by any Governmental Entity or outstanding Order, in each case, which wouldhave a Buyer Material Adverse Effect.5.06 Sufficient Funds. The Buyer will on the Closing Date have unrestricted cash on hand sufficient to pay all amounts required to be paid by theBuyer at the Closing pursuant to the terms of Article I hereof, and all of its and its representatives' fees and expenses incurred in connection with thetransactions contemplated by this Agreement.5.07 Investment Intent. The shares of capital stock of the Company being acquired by the Buyer pursuant to this Agreement are being acquired forinvestment purposes only and not with a view to any public distribution thereof, and the Buyer will not offer to sell or otherwise dispose of any of such sharesof capital stock in violation of any of the registration requirements of the Securities Act, or any comparable state Law.5.08 Brokers' Fees. Neither the Buyer nor the Merger Sub has any Liability to pay any fees or commissions to any broker, finder, investmentbanker, financial advisor, agent or any other Person with respect to the transactions contemplated by this Agreement for which the Company, any of itsSubsidiaries, or any Company Equityholder could become liable or obligated.ARTICLE VIOTHER COVENANTS AND AGREEMENTS6.01 Continuing Access to Information. For a period of one (1) year after the Closing Date (or, if longer, until the final determination of theAdjusted Closing Consideration), the Buyer shall, and shall cause the Surviving Corporation and each of its Subsidiaries to, preserve and retain allcorporate, accounting, Tax, legal, auditing, and other books and records of the Company and its Subsidiaries relating to the conduct of the business andoperations of the Company and its Subsidiaries prior to the Closing Date; provided, that, following the final determination of the Adjusted ClosingConsideration, the Buyer, the Surviving Corporation, and its Subsidiaries may transfer, destroy, or discard any such books and records if they first give theRepresentative reasonable written notice prior to transferring, destroying, or discarding any such books and records; provided, further, if the Representative sorequests, the Buyer and the Surviving Corporation shall allow the Representative to take possession of such books and records at the Representative's sole costand expense. After the Closing Date and during the aforementioned period, the Buyer shall, and shall cause the Surviving Corporation and each of itsSubsidiaries to, permit the Representative to have reasonable access to, and to inspect and copy, during normal business hours and upon reasonable advancenotice, all materials referred to in this Section 6.01; provided, that such access does not unreasonably interfere with the normal operations of the SurvivingCorporation or any of its Subsidiaries; provided, further, that the Representative, on the one hand, and the Buyer, the Surviving Corporation, or any of theirrespective Subsidiaries, on the other hand, are not engaged in litigation or any other dispute resolution process with each other or such materials do not relate tothe subject matter of such litigation or process.6.02 Director and Officer Liability and Indemnification.(a) Following the Closing, the Surviving Corporation and each of its currently existing Subsidiaries shall, and the Buyer shall cause theSurviving Corporation and each of its currently existing Subsidiaries25to, include and maintain in effect in their respective Organizational Documents, for a period of six (6) years after the Closing, provisions regarding theelimination of Liability of directors (or their equivalent), indemnification of officers and directors (or their equivalent), and advancement of expenses whichare, with respect to each such entity, no less advantageous to such Persons than the corresponding provisions contained in such Organizational Documents asof the Closing Date.(b) For a period of six (6) years after the Closing, the Surviving Corporation shall, and the Buyer shall cause the Surviving Corporationto, maintain in effect the Company's current directors' and officers' liability insurance and fiduciary liability insurance in effect on the date of this Agreement(a correct and complete copy of which has been made available to the Buyer) (the "D&O Insurance") in respect of acts or omissions occurring at or prior to theClosing, covering each Person currently covered by the D&O Insurance, on terms with respect to coverage, deductible, and amounts no less favorable thanthose of the D&O Insurance. Alternatively, at the Buyer's option, the Buyer may require that the Company purchase a six (6)‑year pre‑paid "tail policy" onterms and conditions (in both amount and scope) providing substantially equivalent benefits as the D&O Insurance maintained by the Company with respectto matters arising on or before the Closing, covering without limitation the transactions contemplated hereby; provided, that in no event shall the Buyer berequired to pay, with respect to the entire six (6)-year period following Closing, premiums for insurance under this Section 6.02 that in the aggregate exceed150% of the annual premiums payable by the Company for coverage during period year ending in August, 2010 under the D&O Insurance (which premiumsfor such year are hereby represented and warranted by the Company to be $23,109).(c) In the event that the Buyer, the Surviving Corporation, or any of its Subsidiaries or any of their respective successors or assigns (i)consolidates with or merges into any other Person or (ii) transfers all or substantially all of its properties or assets to any other Person, then, and in each case,the successors and assigns of the Buyer, the Surviving Corporation, or any of its Subsidiaries, as the case may be, shall assume and be bound by theobligations set forth in this Section 6.02.(d) The provisions of this Section 6.02 shall survive the Closing indefinitely and are intended to be for the benefit of, and shall beenforceable by, each of the directors and officers of the Company and each of its Subsidiaries as of the Closing, together with each of their respectivesuccessors and representatives after the Closing, and their rights under this Section 6.02 are in addition to, and shall not be deemed to be exclusive of, anyother rights to which any such Person is entitled, whether pursuant to Law, Contract, Organizational Document, or otherwise.6.03 Employee Benefits Matters.(a) The Buyer shall, and shall cause the Surviving Corporation and each of its Subsidiaries to, honor each Plan (including anyseverance, retention, change of control, or other similar plans, Contracts, agreements, or offer letters, offer summaries) in accordance with its terms as ineffect immediately prior to the Closing, subject to any amendment or termination thereof that may be permitted by such Plan. Without limiting the generality ofthis Section 6.03(a), during the one (1) year period following the Closing, the Buyer shall, and shall cause the Surviving Corporation and each of itsSubsidiaries to maintain the severance plans of the Company and its Subsidiaries as in effect at the Closing and provide any Employee whose employment isterminated by the Surviving Corporation or any of its Subsidiaries during such one (1) year period without cause (as determined by the Buyer) with severanceand other separation benefits that are no less favorable in the aggregate than what would be payable to such Employee pursuant to the severance plan or policythat was applicable to such Employee as of the Closing. For purposes of determining the severance and other separation benefits to which an Employee shallbecome entitled pursuant to the preceding sentence, such Employee's service with the Buyer and its Subsidiaries (including the Surviving Corporation and itsSubsidiaries) and all Pre‑Closing Service shall be recognized.(b) For all purposes under the employee benefit plans of the Buyer and its Affiliates providing benefits to any Employees after the Closing(the "New Plans"), the Buyer shall, and shall cause the Surviving Corporation and each of its Subsidiaries to, cause each Employee to receive credit for allservice with the Company and its Subsidiaries before the Closing (including predecessor or acquired entities or any other entities with respect to which theCompany and its Subsidiaries have given credit for prior service) to the extent recognized in any similar Plan in which such Employee participatedimmediately prior to the Closing (such service, "Pre‑Closing Service") for all purposes, including26determining eligibility to participate, level of benefits, vesting, and benefit accruals, except to the extent such credit would result in a duplication of accrual ofbenefits for the same period of service. In addition, and without limiting the generality of the foregoing, (i) each Employee immediately shall be eligible toparticipate, without any waiting time, in any New Plan to the extent coverage under such New Plan replaces coverage under a similar or comparable Plan inwhich such Employee participated immediately before the Closing (such plans, collectively, the "Old Plans"), and (ii) for purposes of each New Planproviding medical, dental, pharmaceutical, vision and/or disability benefits to any Employee, the Buyer shall, and shall cause the Surviving Corporation andeach of its Subsidiaries to, cause all pre‑existing condition exclusions and actively‑at‑work requirements of such New Plan to be waived for such Employeeand his or her covered dependents, to the extent any such exclusions or requirements were waived or were inapplicable under any Old Plan, and shall causeany eligible expenses incurred by such Employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date suchEmployee's participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible,coinsurance, and maximum out‑of‑pocket requirements applicable to such Employee and his or her covered dependents for the applicable plan year as if suchamounts had been paid in accordance with such New Plan.(c) During the one (1) year period following the Closing, the Buyer shall, and shall cause the Surviving Corporation and each of itsSubsidiaries to, provide current Employees as of the Closing who continue employment following the Closing with benefits under employee benefit plans,programs, policies and agreements (collectively, "Employee Benefits") that are substantially comparable in the aggregate to the Employee Benefits provided bythe Buyer to similarly situated employees of the Buyer and its Subsidiaries.(d) Nothing in this Section 6.03 or any other provision of this Agreement shall (i) be construed to modify, amend, or establish any benefitplan, program, or arrangement or in any way affect the ability of the parties hereto or any other Person to modify, amend, or terminate any of its benefit plans,programs, or arrangements or (ii) create any right with respect to any current or former employee to continued employment with the Buyer or the SurvivingCorporation or any of its Subsidiaries, or (iii) interfere with the right of the Buyer, the Surviving Corporation, and its Subsidiaries to terminate theemployment of any employee for any reason. This Section 6.03 is not intended to, and shall not be construed to, confer upon any Person other than the partiesto this Agreement any rights or remedies hereunder.6.04 Public Announcements. The parties hereto agree that no public release or announcement concerning the transactions contemplated hereby shallbe issued or made by or on behalf of any party without the prior consent of the other parties (which consent will not be unreasonably withheld, conditioned ordelayed), and if any such release or announcement is authorized, the other party or parties shall have a reasonable time to comment on such announcement inadvance of its issuance. Each of the Company and the Buyer (and their respective Affiliates) may, at its discretion prior to the Closing, make announcementsfrom time to time to their respective employees, customers, suppliers, and other business relations, and may otherwise make announcements as it mayreasonably determine is necessary to comply with applicable Law or the requirements of any Contract to which it is a party, in which case it shall provide theCompany or the Buyer, as applicable, reasonable time to comment on such announcement in advance of its issuance. Notwithstanding the foregoing, theBuyer and the Company shall cooperate to prepare joint press releases to be issued on (or promptly after) the date hereof and on the Closing Date. The partieshereto agree to keep the terms of this Agreement confidential, except to the extent required by applicable Law or for financial reporting purposes and except thatthe parties may disclose such terms to their respective employees, accountants, advisors, and other representatives as necessary in connection with theordinary conduct of their respective businesses (so long as such Persons agree to or are bound by Contract to keep the terms of this Agreement confidential).6.05 Fees and Expenses. Except as otherwise provided herein, (a) the Buyer shall pay all fees and expenses incurred by it or the Merger Sub inconnection with this Agreement and the transactions contemplated hereby, and (b) all fees and expenses incurred by the Company in connection with thisAgreement and the transactions contemplated hereby shall be paid by the Company prior to the Closing or included in the Transaction Expenses. For theavoidance of doubt, and except as set forth in Section 1.09, neither the Company nor any of its Subsidiaries shall pay any costs or expenses (including legalfees or expenses) incurred by any Company Equityholder.6.06 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, and other such Taxes, and27all conveyance fees, recording charges, and other fees and charges (including any penalties and interest) incurred in connection with consummation of thetransactions contemplated by this Agreement ("Transfer Taxes") shall be borne fifty percent (50%) by the Buyer and fifty percent (50%) by the CompanyEquityholders as a Transaction Expense. The Buyer shall file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes.6.07 FIRPTA Certificate. Either (a) the Company shall, prior to or on the Closing Date, deliver to the Buyer a certification that the CompanyCommon Stock is not a U.S. real property interest within the meaning of Section 897 of the Code, or (b) each Company Equityholder shall, prior to or on theClosing Date, deliver to the Buyer a non-foreign affidavit dated as of the Closing Date, sworn under penalty of perjury and in form and substance requiredunder the Treasury Regulations issued pursuant to Section 1445 of the Code stating that such Company Equityholder is not a "foreign person" as defined inSection 1445 of the Code; provided, that notwithstanding anything in this Agreement to the contrary, the Buyer's sole remedy if the Company or a CompanyEquityholder, as applicable, fails to provide such certificate shall be to make an appropriate withholding under Sections 897 and 1445 of the Code.6.08 Tax Shelter. Neither the Buyer nor any of its Affiliates shall take any action that would cause the transactions contemplated by this Agreementto constitute part of a transaction that is the same as, or substantially similar to, the "intermediary transaction tax shelter" described in IRS Notices 2001-16and 2008-111.6.09 The Representative.(a) The board of directors of the Company has determined that it is desirable to designate the Representative to act on behalf of theCompany Equityholders for certain limited purposes, as described herein. By virtue of adoption of this Agreement by the Company Equityholders, andwithout further action by any Company Equityholder, Madison Dearborn Capital Partners V-A, L.P. is hereby irrevocably appointed, authorized andempowered to act as the initial "Representative", and execution of a written consent approving the transactions contemplated hereby by a CompanyEquityholder shall, to the maximum extent permitted under applicable Law, constitute irrevocable ratification and approval of such designation by suchCompany Equityholder and authorization of the Representative to serve in such capacity, and shall also constitute a reaffirmation, approval, acceptance, andadoption of, and an agreement to comply with and perform, all of the acknowledgments and agreements made by the Representative on behalf of the CompanyEquityholders in this Agreement and the other agreements entered into in connection herewith (including the Escrow Agreement). The Representative may resignat any time and for any reason and the Representative may be removed only by the vote of Persons who collectively owned more than fifty percent (50%) of theoutstanding shares of Company Common Stock as of immediately prior to the Closing (the "Majority Holders"). The designation of the Representative iscoupled with an interest, and, except as set forth in the immediately preceding sentence, such designation is irrevocable and shall not be affected by the death,incapacity, illness, bankruptcy, dissolution, or other inability to act of any of the Company Equityholders. In the event that the Representative has resigned orbeen removed, a new Representative shall be appointed by a vote of the Majority Holders, such appointment to become effective upon the written acceptancethereof by the new Representative. Written notice of any such resignation, removal or appointment of a Representative shall be delivered by the Representativeto the Buyer promptly after such action is taken.(b) The Representative shall have such powers and authority as are necessary or appropriate to carry out the functions assigned to itunder this Agreement and in any other agreement entered into in connection herewith (including the Escrow Agreement) and in connection therewith, shall beentitled to take such actions as the Representative deems appropriate in its sole discretion; provided, that the Representative shall have no obligation to act onbehalf of the Company Equityholders. The Buyer and the Escrow Agent shall be entitled to rely on the actions taken by the Representative without independentinquiry into the capacity of the Representative to so act and none of the Buyer, the Merger Sub, the Surviving Corporation and the Escrow Agent shall haveany obligations, responsibilities, or Liabilities whatsoever to the Company Equityholders with respect to any claim or Action by any Company Equityholderagainst the Representative. All actions, notices, communications, and determinations by the Representative to carry out such functions shall conclusively bedeemed to have been authorized by, and shall be binding upon, the Company Equityholders. The Representative shall not have, by reason of this Agreement,any fiduciary relationship in respect of any other Company Equityholder. Neither the Representative nor any of its direct or indirect officers, directors,partners, managers, employees, agents or representatives shall have any Liability to the Company28Equityholders with respect to actions taken or omitted to be taken by the Representative in such capacity (or any of its direct or indirect officers, directors,partners, managers, employees, agents or representatives in connection therewith), except for any actions, or action omitted to be taken, which are finallydetermined to constitute gross negligence or willful misconduct by the Representative. The Representative shall at all times be entitled to rely on any directionsreceived from the Majority Holders; provided, that the Representative shall not be required to follow any such direction, and shall be under no obligation totake any action in its capacity as Representative based upon any such direction.(c) The Representative shall be entitled to engage such counsel, accountants, experts, and other agents and consultants as it shall deemnecessary in connection with exercising its powers and performing its function hereunder and (in the absence of bad faith on the part of the Representative)shall be entitled to conclusively rely on the opinions and advice of such Persons. The Representative (for itself and its direct or indirect officers, directors,partners, managers, employees, agents and representatives) shall be entitled to full reimbursement for all reasonable expenses, disbursements, and advances(including fees and disbursements of its counsel, accountants, experts, and other agents and consultants) incurred by the Representative in such capacity (orany of its direct or indirect officers, directors, partners, managers, employees, agents or representatives in connection therewith), and to full indemnificationagainst any Loss, Liability, or expense arising out of actions taken or omitted to be taken in its capacity as Representative (except for any Loss, Liability, orexpense which is finally determined was primarily caused by the gross negligence or willful misconduct of the Representative), including the costs andexpenses of investigation and defense of claims, from any Company Equityholder. For the avoidance of doubt, neither the Buyer, the Company, nor any oftheir respective Subsidiaries shall have any reimbursement obligations under this Section 6.09(c).(d) Pursuant to Section 1.10(e), the Buyer shall pay over to the Representative at the Closing an amount in cash equal to theRepresentative Amount. The Representative shall deposit such funds into such accounts, or otherwise invest such funds, in any manner it may reasonablydetermine, and in no event shall the Representative nor any of its direct or indirect officers, directors, partners, managers, employees, agents or representativeshave any Liability to the Company Equityholders with respect to such funds or the manner of their investment, except for any action, or action omitted to betaken, by the Representative which is finally determined to constitute gross negligence or willful misconduct by the Representative. Such funds shall be a non-exclusive source of recovery for the Representative for any expenses, disbursements, or advances (including fees and disbursements of counsel, accountants,experts, and other agents and consultants) incurred by the Representative in its capacity as such (or any of its direct or indirect officers, directors, partners,managers, employees, agents or representatives in connection therewith), or for any Loss, Liability, or other expense incurred by the Representative orotherwise arising out of any action taken by it in its capacity as such (except for any Loss, Liability, or expense which is finally determined was primarilycaused by the gross negligence or willful misconduct of the Representative). In addition to the Representative Amount, the Representative shall have the powerand authority to set aside and retain additional funds otherwise payable to Company Equityholders pursuant to this Agreement to satisfy such obligations.(e) From time to time, the Representative may elect to distribute to the Company Equityholders all or any portion of the RepresentativeAmount, together with any interest or earnings thereon. If the Representative so elects, it shall pay over (or cause to be paid over) to each CompanyEquityholder an amount equal to (i) the aggregate amount then being distributed by the Representative, multiplied by (ii) such Company Equityholder'sPercentage Interest; provided, that, for any amount payable to a holder of Company Options pursuant to this Section 6.09(e), the Representative shall pay overto each holder of Company Options the amount that such holder is entitled to pursuant to this Section 6.09(e), less any applicable withholding Taxes pursuantto Section 1.12(g). The aggregate amount distributable pursuant to this Section 6.09(e) with respect to a share of Company Common Stock is the "Per ShareRepresentative Amount Distribution." Each of the Buyer, the Merger Sub, the Company, and the Surviving Corporation shall have no obligations,responsibilities or Liabilities whatsoever to the Company Equityholders with respect to the distribution to the Company Equityholders by the Representative ofall or any portion of the Representative Amount.(f) In the event the Representative makes, or causes to be made, any payment to any holder of Company Options after the Closing,including with respect to the Per Share Adjustment Distribution, the Per Share Representative Amount Distribution, or the Per Share Escrow Distribution, theBuyer shall, and shall cause the Surviving Corporation and its Subsidiaries to, provide the Representative with all reasonable cooperation requested by it inconnection with any such payment, including in connection with any calculations of amounts to be withheld from such29payments and any matters related thereto; provided, each of the Buyer, the Merger Sub, the Company, and the Surviving Corporation shall have noobligations or responsibilities whatsoever to make such payments.6.10 Conflicts and Privileges. Each of the parties hereto hereby agrees, on its own behalf and on behalf of its direct or indirect directors, partners,managers, members, partners, officers, employees, and Affiliates, that Kirkland & Ellis LLP may serve as counsel to each and any of the Representative, theCompany Equityholders, and their respective Affiliates (individually and collectively, the "Seller Group"), on the one hand, and the Company, on the otherhand, in connection with the negotiation, preparation, execution, and delivery of this Agreement and the other agreements entered into in connection herewithand the consummation of the transactions contemplated hereby and thereby. Each of the parties to this Agreement hereby further agrees, on its own behalf andon behalf of its direct or indirect directors, partners, managers, members, partners, officers, employees, and Affiliates, that Kirkland & Ellis LLP may serveas counsel to the Seller Group, any member thereof, or any direct or indirect director, partner, manager, member, partner, officer, employee, or Affiliate of anymember of the Seller Group, in connection with any matter (including any Action) arising out of or relating to this Agreement, the other agreements entered intoin connection herewith, or the transactions contemplated hereby or thereby, notwithstanding such representation of the Company or any continued orcontinuing representation of the Company. Each of the parties hereto hereby consents thereto and waives any conflict of interest arising therefrom, and each ofsuch parties shall cause any Affiliate thereof to consent to waive any conflict of interest arising from such representation.6.11 No Additional Representations. The Buyer and the Merger Sub acknowledge and agree that neither the Company, nor any of its Affiliates orrepresentatives, nor any other Person acting on behalf of the Company or any of its Affiliates or representatives, has made any (and the Buyer, the MergerSub, and their Affiliates have not relied on any) representation or warranty, express or implied, regarding the Company, its Subsidiaries, or any of theirrespective businesses or assets, except as expressly set forth in this Agreement, and neither the Buyer nor the Merger Sub are relying on any representations orwarranties, express or implied, made by or on behalf of the Company or any of its Subsidiaries, or any of their Affiliates of representatives, other than thoseexpressly set forth in this Agreement.6.12 Section 280G. In order to satisfy the requirements of Section 280G(b)(5)(A)(ii) of the Code, the Company shall timely submit to a vote of thestockholders of the Company for their approval all payments or benefits (other than any payments or benefits made or to be made pursuant to Contractsnegotiated by the Buyer, except for payments made pursuant to Contracts disclosed, in writing, to the Company at least five (5) days prior to the Closing) thatin the absence of such approval could reasonably be expected to constitute "parachute payments" (within the meaning of Section 280G of the Code and theregulations thereunder), to any individuals that are "disqualified individuals" (within the meaning of Section 280G(c) of the Code and regulations thereunder).Copies of all disclosures to stockholders regarding the facts regarding the vote shall be provided to the Buyer prior to their distribution to the stockholders ofthe Company, for the Buyer's review and comment, and the Company and the Buyer shall work together in good faith to mutually acceptable disclosure to theCompany's stockholders. In addition, to the extent necessary to meet the requirements of Section 280G(b)(5)(B) of the Code and the regulations thereunder, theCompany shall use its reasonable best efforts to receive an irrevocable written waiver from each such disqualified individual of all payments or benefitspayable to such disqualified individuals that in the absence of such approval would constitute "parachute payments" (within the meaning of Section 280G ofthe Code and the regulations thereunder) (assuming that no portion of any payment to be received by such disqualified individuals would be viewed as"reasonable compensation for personal services" within the meaning of Section 280G of the Code and the regulations thereunder).ARTICLE VIITERMINATION7.01 Termination. This Agreement may be terminated at any time prior to the Closing:(a) by the mutual written consent of the Buyer and the Company;(b) by the Buyer if the Requisite Stockholder Approval with respect to the adoption of this Agreement has not been obtained within one (1)Business Day after the date hereof;(c) by the Buyer or the Company if the transactions contemplated hereby have not been30consummated on or prior to the first Business Day that is at least ten (10) months after the date hereof (the "Outside Date"); provided, that (i) the Buyer shallnot be entitled to terminate this Agreement pursuant to this Section 7.01(c) if the Buyer's or the Merger Sub's material breach of this Agreement has preventedthe consummation of the transactions contemplated hereby, and (ii) the Company shall not be entitled to terminate this Agreement pursuant to this Section7.01(c) if the Company's material breach of this Agreement has prevented the consummation of the transactions contemplated hereby;(d) by the Buyer or the Company if any Law shall be in effect, or any Governmental Entity of competent jurisdiction shall have issuedany Order, in each case which would prevent or prohibit the consummation of the Merger or the other transactions contemplated hereby and, in the case of anysuch Order, such Order shall have become final and nonappealable; provided, that the right to terminate this Agreement under this Section 7.01(d) shall not beavailable to any party whose breach of any obligation under this Agreement has been the cause of, or has resulted in, such Law or Order;(e) by the Buyer if any MAE Order shall be in effect and shall have become final and nonappealable;(f) by the Buyer if the Company shall have breached or failed to perform in any material respect any of its representations, warranties,covenants, or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to a failure of a condition set forth in Section2.02(a) or Section 2.02(b) and (ii) is incapable of being cured prior to the Outside Date or is not cured by the Company within sixty (60) days following receiptof written notice of such breach or failure to perform from the Buyer; or(g) by the Company if the Buyer or the Merger Sub shall have breached or failed to perform in any material respect any of itsrepresentations, warranties, covenants, or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to a failure of acondition set forth in Section 2.03(a) or Section 2.03(b) and (ii) is incapable of being cured prior to the Outside Date or is not cured by the Buyer within sixty(60) days following receipt of written notice of such breach or failure to perform from the Company.7.02 Effect of Termination. In the event of any termination of this Agreement by the Buyer or the Company as provided in Section 7.01, thisAgreement shall forthwith become void and of no further force or effect (other than this Section 7.02, Section 3.02(c), Section 6.04, Section 6.05, Section7.03, and Article IX, each of which shall survive the termination of this Agreement and shall be enforceable by the parties hereto) and there shall be noLiability or obligation on the part of the Buyer, the Merger Sub, or the Company to any other party hereto, except for Liability for breaches (whetherintentional, unintentional, willful, inadvertent, or otherwise) of this Agreement by any such party prior to the time of such termination, which such Liabilityshall be for all remedies available at law or in equity to the non-breaching party or parties.7.03 Continuing Confidentiality. If the transactions contemplated by this Agreement are terminated as provided in Section 7.01, the Buyer and theMerger Sub acknowledge and agree that all documents, copies thereof, and all other materials received from or on behalf of the Company or any of itsSubsidiaries relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, shall continue to be subject to theConfidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement.ARTICLE VIIISURVIVAL; INDEMNIFICATION8.01 Non-Survival. The representations and warranties of the parties, together with any covenant or agreement of the parties requiring performanceprior to the Closing, contained in this Agreement or contained in any certificate or other document delivered pursuant to this Agreement shall not survive theClosing and shall terminate and be of no further force or effect as of the Effective Time. The covenants and agreements of the parties requiring performanceafter the Closing (including the obligations of the Buyer to make the payments contemplated by Article I hereof) shall survive the Closing and shall terminatein accordance with their respective terms.318.02 Indemnification.(a) From and after the Closing, and subject to the other provisions of this Article VIII, the Buyer, the Surviving Corporation, theirrespective Subsidiaries, and its and their officers, directors and employees (each a "Buyer Indemnitee") shall be held harmless, solely out of the funds held inthe Escrow Account, from and against (i) any and all Losses (including any Losses arising out of any litigation, mediation, alternative dispute resolution,settlement, investigation, or hearing) imposed upon or incurred by any Buyer Indemnitee which arise out of or are in connection with any Malibu Action, (ii)any and all Losses (including any Losses arising out of any litigation, mediation, alternative dispute resolution, settlement, investigation, or hearing) imposedupon or incurred by any Buyer Indemnitee which arise out of or are in connection with any Shareholder Action, and (iii) any and all Pre-Closing IndemnifiableTaxes.(b) The rights of the Buyer Indemnitees to be indemnified and held harmless pursuant to Section 8.02(a) shall survive the Closing andshall terminate, with respect to any Indemnified Action, upon the final and complete resolution of such Indemnified Action in accordance with applicable Law;provided, that the rights of the Buyer Indemnitees to be indemnified and held harmless pursuant to Section 8.02(a) shall be subject to the provisions of Section8.08.(c) The rights of the Buyer Indemnitees to be indemnified and held harmless pursuant to Section 8.02(a) shall not be affected by anyknowledge at or prior to the execution of this Agreement or at or prior to the Closing of any inaccuracy or breach of any representation, warranty, covenant oragreement, whether such knowledge came from the Buyer, the Merger Sub, the Company, or any other Person, or any waiver of Section 2.02 or Section 2.03.8.03 Control of Claims; Cooperation.(a) Subject to the limitations set forth in this Section 8.03, the Lead Party shall have the exclusive right to direct and control the defense ofeach Indemnified Action, including the right to (i) select counsel to represent the Buyer Indemnitees in any such Indemnified Action, (ii) make all decisionsregarding the prosecution or abandonment of any claim or theory arising in any such Indemnified Action, (iii) control the discovery process, the production ofdocuments, and requests for discovery and production of documents from other Persons, (iv) enter into joint defense and other similar Contracts and allocateLiability among co-defendants and similar parties with respect to any such Indemnified Action, (v) settle or compromise any such Indemnified Action, and(vi) take any other action which the Lead Party would be entitled to take were it the named defendant in any such Indemnified Action. The Lead Party shallhave the right to withdraw from the Escrow Account, from time to time as it may reasonably determine and with reasonable prior notice to the SecondaryParty, such amounts as are reasonably necessary to pay all of the reasonable out-of-pocket fees and expenses (including attorneys', experts', and other advisors'fees and expenses) incurred in connection with the defense of any Indemnified Action.(b) The Secondary Party shall have the right to observe and participate in any Indemnified Action with separate counsel of its choosingand at its sole cost and expense; provided, that the Lead Party shall remain in exclusive control of each Indemnified Action. Notwithstanding the foregoingsentence or the provisions of Section 8.03(a), the Secondary Party shall be entitled to assume and control the defense of any Indemnified Action if the LeadParty is not diligently conducting the defense of such Indemnified Action in a customary and commercially reasonable manner; provided, that if theSecondary Party assumes and controls the defense of any Indemnified Action pursuant to this Section 8.03(b), such Secondary Party shall not settle orcompromise such Indemnified Action without the prior, written consent of the Lead Party (which such consent shall not be unreasonably withheld,conditioned, or delayed).(c) Notwithstanding the provisions of Section 8.03(a) and (b), the Lead Party shall not settle or compromise any Indemnified Actionwithout the prior, written consent of the Secondary Party (which such consent shall not be unreasonably withheld, conditioned, or delayed); provided, that nosuch consent shall be required from the Secondary Party if the Lead Party is the Representative and so long as (i) such settlement or compromise includes acomplete release in favor of each Buyer Indemnitee with respect to the matters underlying such Indemnified Action, (ii) such settlement or compromise does notimpose upon any Buyer Indemnitee any injunctive or equitable relief (other than any immaterial injunctive or equitable relief that is merely incidental to aprimary obligation for monetary damages),32and (iii) the monetary damages payable in such settlement or compromise are to be funded entirely out of amounts then held in the Escrow Account.(d) Without limiting the provisions of Section 6.01 (and it being understood that if the provisions of Section 6.01 are in conflict with theprovisions of this Section 8.03(d), this Section 8.03(d) shall control), the Buyer shall, and shall cause the Surviving Corporation and each of its Subsidiariesto, preserve and retain all corporate, accounting, Tax, legal, auditing, and other books and records of the Company and its Subsidiaries which relate to anIndemnified Action until the final and complete resolution of such Indemnified Action in accordance with applicable Law. With respect to any IndemnifiedAction, the Buyer shall, and shall cause the Surviving Corporation and each of its Subsidiaries to, permit the Representative to have reasonable access to, andto inspect and copy, during normal business hours and upon reasonable advance notice, all materials referred to in this Section 8.03(d) that relate to suchIndemnified Action; provided, that the Representative, on the one hand, and the Buyer, the Surviving Corporation, or any of their respective Subsidiaries, onthe other hand, are not engaged in litigation or any other dispute resolution process with each other or such materials do not relate to the subject matter of suchlitigation or process The Buyer and the Representative shall cooperate with each other, and the Buyer shall cause the Surviving Corporation and itsSubsidiaries, and their respective officers, directors, employees, consultants, and advisors, to cooperate with the reasonable requests of the Representative, inconnection with the defense of any Indemnified Action, including by (i) furnishing or causing to be furnished corporate, accounting, Tax, legal, auditing, andother books and records (subject to the immediately foregoing proviso), (ii) attending conferences, meetings, hearings, proceedings, trials, and appeals, (iii)making officers, directors, employees, consultants, and advisors reasonably available for interviews, depositions, and the giving of testimony, and (iv)taking all other actions reasonably necessary or desirable as part of the defense of any Indemnified Action; provided, that any such cooperation does notunreasonably interfere with the normal operations of the Surviving Corporation or any of its Subsidiaries.(e) Section 8.05 contains certain provisions regarding the direction and control of Pre-Closing Income Tax Audits, and with respect to Pre-Closing Income Tax Audits Section 8.05 shall control in the event of any conflict between such Section and this Section 8.03.8.04 Limitations. The rights of the Buyer Indemnitees to be indemnified pursuant to the provisions of Section 8.02(a) are subject to the followinglimitations:(a) The amount of any and all Losses shall be determined on the basis of the net effect to the applicable Buyer Indemnitee after givingeffect to any actual cash payments, setoffs, insurance proceeds, indemnification proceeds, or other payments, in each case to the extent actually received,realized or retained by such Buyer Indemnitee, which arise out of or are related to the Indemnification Action giving rise to such Losses.(b) The amount of any and all Losses shall be reduced to the extent such Losses are actually taken into account in the calculation of theAdjusted Closing Consideration, but only to the extent they actually reduce the Adjusted Closing Consideration.(c) The amount of any and all Losses shall be net of any Tax benefits realized by the Buyer Indemnitees which are attributable to suchLosses. For this purpose, a Buyer Indemnitee shall be deemed to recognize a Tax benefit with respect to a taxable year if, and to the extent that, the BuyerIndemnitee's cumulative liability for Taxes through the end of such taxable year, calculated by excluding any Tax items attributable to the Losses from alltaxable years, exceeds the Buyer Indemnitee's actual cumulative liability for Taxes through the end of such taxable year, calculated by taking into account anyTax items attributable to the Losses for all taxable years (to the extent permitted by relevant Tax law and treating such Tax items as the last items claimed forany taxable year).8.05 Tax-Related Matters.(a) In the case of any taxable period that includes (but does not end on) the Closing Date (a "Straddle Period"), the amount of any IncomeTaxes of the Company and its Subsidiaries attributable to the Pre-Closing Tax Period shall be determined based on an interim closing of the books as of theclose of business on the Closing Date.(b) None of the Buyer, the Merger Sub, their Subsidiaries, Affiliates or representatives shall,33prior to the Closing Date, discuss any Tax issue with any Governmental Entity that relates to any position that the Company or any Subsidiary has taken in aPre-Closing Tax Period, including on a "no-name" basis.(c) With respect to any Pre-Closing Income Tax Audit, the Lead Party shall have the exclusive right to control all proceedings and maymake all decisions taken in connection with such Pre-Closing Income Tax Audit, including all decisions to grant or deny any waiver or extension of theapplicable statute of limitations or to settle or compromise such Pre-Closing Income Tax Audit (so long as the conditions set forth in Section 8.03(c) aresatisfied). Each of the Representative and the Buyer shall keep the other party advised of significant developments in the Pre-Closing Income Tax Audit.(d) If the Representative is the Lead Party with respect to any Pre-Closing Income Tax Audit, the Buyer, the Surviving Corporation, andtheir respective Subsidiaries and Affiliates shall cooperate fully, as and to the extent reasonably requested by the Representative, in connection with any Pre-Closing Income Tax Audit. Such cooperation shall include (i) providing properly executed powers of attorney so that the Representative and its counsel canfully control any Pre-Closing Income Tax Audit that extends beyond the Closing Date, (ii) promptly notifying the Representative of any communicationsbetween a Governmental Entity and the Buyer, the Surviving Corporation or any of their Subsidiaries or Affiliates regarding any Pre-Closing Income TaxAudit, and (iii) the retention and (upon the Representative's request) the provision of records and information that are reasonably relevant to any Pre-ClosingIncome Tax Audit and making employees available on a mutually convenient basis to provide additional information and explanation of any material providedhereunder; provided, that any such cooperation does not unreasonably interfere with the normal operations of the Surviving Corporation or any of itsSubsidiaries. If a Pre-Closing Income Tax Audit occurs, the Buyer, the Surviving Corporation, and their respective Subsidiaries and Affiliates agree (x) toretain all books and records with respect to Tax matters pertinent to the Company and its Subsidiaries relating to any taxable period beginning before theClosing Date until the expiration of the statute of limitations (and, to the extent notified by the Representative, any extensions thereof) of the respective taxableperiods, and to abide by all record retention agreements entered into with any taxing authority, and (y) to give the Representative reasonable written notice priorto transferring, destroying or discarding any such books and records and, if the Representative so requests, the Buyer, the Surviving Corporation, and theirrespective Subsidiaries and Affiliates shall allow the Representative to take possession of such books and records; provided, further, that the Representative,on the one hand, and the Buyer, the Surviving Corporation, or any of their respective Subsidiaries, on the other hand, are not engaged in litigation or any otherdispute resolution process with each other or such materials do not relate to the subject matter of such litigation or process.8.06 Escrowed Funds.(a) If and to the extent there are earnings on the funds in the Escrow Account, such earnings shall be applied as follows: (i) first, to thepayment of the fees and expenses of the Escrow Agent as set forth in the Escrow Agreement, (ii) second, to fund a distribution to the Buyer in the amountspecified in the Escrow Agreement in respect of Taxes payable by the Buyer on such earnings, and (iii) third, added to the other funds in the Escrow Account.In connection with any payment from the Escrow Account to any Person pursuant to any provision of this Agreement, an additional amount shall be added tosuch payment equal to (A) the amount of earnings then on deposit in the Escrow Account (after taking into account clauses (i) and (ii) of this sentence),multiplied by (B) a fraction, the numerator of which is the amount of such payment and the denominator of which is the Escrow Amount.(b) Subject to the provisions of Section 8.06(c) and (e), (i) following the final determination of the Adjusted Closing Considerationpursuant to Section 1.12, an amount equal to (A) the Adjustment Amount, minus (B) all amounts paid to the Buyer pursuant to Section 1.12 in connectionwith the final determination of the Adjusted Closing Consideration shall be distributed from the Escrow Account to the Representative for the benefit of theCompany Equityholders, (ii) following the final and complete resolution of all Malibu Actions in accordance with applicable Law, an amount equal to (A) theMalibu Amount, minus (B) all amounts paid to Buyer Indemnitees pursuant to Section 8.02(a) in connection with any Malibu Actions shall be distributedfrom the Escrow Account to the Representative for the benefit of the Company Equityholders, (iii) following the final and complete resolution of allShareholders Actions in accordance with applicable Law, an amount equal to (A) the Shareholder Amount, minus (B) all amounts paid to Buyer Indemniteespursuant to Section 8.02(a) in connection with any Shareholders Actions shall be distributed from34the Escrow Account to the Representative for the benefit of the Company Equityholders, and (iv) following the final and complete resolution of all Pre-ClosingIncome Tax Audits in accordance with applicable Law, an amount equal to (A) the Pre-Closing Tax Amount, minus (B) all amounts paid to Buyer Indemniteespursuant to Section 8.02(a) in connection with any Pre-Closing Income Tax Audits shall be distributed from the Escrow Account to the Representative for thebenefit of the Company Equityholders, in the case of each of clauses (i) through (iv), to the extent such calculations do not result in a negative number.(c) Subject to the provisions of Section 8.06(e), in the event any Malibu Actions are first initiated after the date hereof, then,notwithstanding the provisions of Section 8.06(b), (i) following the final and complete resolution of all Malibu Actions first initiated prior to the date hereof inaccordance with applicable Law, an amount equal to (A) $25,000,000.00, minus (B) all amounts paid to Buyer Indemnitees pursuant to Section 8.02(a) inconnection with any Malibu Actions first initiated prior to the date hereof (to the extent such calculation does not result in a negative number) shall bedistributed from the Escrow Account to the Representative for the benefit of the Company Equityholders, and (ii) following the final and complete resolution ofall Malibu Actions first initiated after the date hereof in accordance with applicable Law, an amount equal to (A) $5,000,000.00, minus (B) all amounts paid toBuyer Indemnitees pursuant to Section 8.02(a) in connection with any Malibu Actions first initiated after the date hereof (to the extent such calculation does notresult in a negative number) shall be distributed from the Escrow Account to the Representative for the benefit of the Company Equityholders.(d) In the event of any distribution from the Escrow Account to the Representative for the benefit of the Company Equityholders pursuantto Section 8.06(b) or (c), the Representative shall pay over (or cause to be paid over) to each Company Equityholder an amount equal to (i) the aggregateamount then being distributed to the Representative, multiplied by (ii) such Company Equityholder's Percentage Interest; provided, that, for any amountpayable to a holder of Company Options pursuant to this Section 8.06(d), the Representative shall pay over to each holder of Company Options the amountthat such holder is entitled to pursuant to this Section 8.06(d), less any applicable withholding Taxes pursuant to Section 1.11(g). The aggregate amountdistributable pursuant to this Section 8.06(d) with respect to a share of Company Common Stock is the "Per Share Escrow Distribution." Each of the Buyer,the Merger Sub, the Company, and the Surviving Corporation shall have no obligations, responsibilities or Liabilities whatsoever to the CompanyEquityholders with respect to distributions to the Company Equityholders by the Representative pursuant to this Section 8.06(d).(e) In the event any Buyer Indemnitee has any claim for indemnification pursuant to the provisions of Section 8.02(a), such BuyerIndemnitee shall deliver notice of such claim with reasonable promptness to the Representative. The failure by any Buyer Indemnitee to so notify theRepresentative shall not affect such Buyer Indemnitee's right to indemnification, except to the extent (and only to the extent) that the Representative is actuallyand materially prejudiced by such failure. If the Representative does not notify such Buyer Indemnitee within thirty (30) days following its receipt of suchnotice that the Representative disputes such claim, such Buyer Indemnitee shall be conclusively entitled to payment from the Escrow Account in the amountspecified in such notice. If the Representative has timely disputed such notice, the parties shall proceed in good faith to negotiate a resolution of such disputeand, if not resolved through negotiations, such dispute may be resolved by litigation in an appropriate court of jurisdiction determined pursuant to Section9.13. Any indemnification of the Buyer Indemnitees pursuant to this Article VIII shall be satisfied from the funds then remaining in the Escrow Accountwithin two (2) Business Days after the final determination thereof. No Indemnified Action shall be deemed to have reached a final and complete resolution untilall outstanding claims made by a Buyer Indemnitee for indemnification relating to such Indemnified Action have been resolved pursuant to this Section8.06(e). The Buyer and the Representative shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to make any distributionsfrom the Escrow Account provided for in this Agreement.(f) The Lead Party shall have the right to withdraw funds from the Escrow Account from time to time in accordance with the provisionsof the last sentence of Section 8.03(a).8.07 Settlement of Certain Actions. Notwithstanding any other provision of this Agreement (including Section 3.01(b)(xi)), the Company shall havethe right to settle or compromise any Action prior to Closing that would otherwise be an Indemnified Action following the Closing, so long as (a) suchsettlement or compromise35includes a complete release by the Persons bringing such Action with respect to the matters underlying such Action, (ii) such settlement or compromise doesnot impose upon any Buyer Indemnitee any injunctive or equitable relief (other than any immaterial injunctive or equitable relief that is merely incidental to aprimary obligation for monetary damages), and (iii) the monetary damages payable in such settlement or compromise are actually paid by the Company or oneof its Subsidiaries in Cash prior to the Closing. With respect to the Malibu Actions, the Malibu Amount shall be reduced by the amount of any suchsettlement or compromise which meets the foregoing conditions prior to the Closing. Furthermore, in the event that (x) there are no Malibu Actions pending asof the Closing Date, the Malibu Amount shall be reduced to $0, (y) there are no Shareholder Actions pending as of the Closing Date, the Shareholder Amountshall be reduced to $0, and (z) there are no Pre-Closing Income Tax Audits pending as of the Closing Date, the Pre-Closing Tax Amount shall be reduced to $0.8.08 Exclusive Remedy. The Buyer agrees and acknowledges, on behalf of itself and each other Buyer Indemnitee, that their sole and exclusiveremedy for the payment of any amount to which a Buyer Indemnitee may be entitled pursuant to this Article VIII shall be such Buyer Indemnitee's right toreceive amounts from the Escrow Account and that if the Escrow Account contains insufficient funds, the Buyer Indemnitees shall have no rights whatsoeverto seek or receive payment for any such insufficiency from the Representative or any Company Equityholder. The parties hereto agree and acknowledge thatthe sole and exclusive remedy of the Buyer Indemnitees in respect of or in connection with the Indemnified Actions shall be the indemnification provisions setforth in this Article VIII; provided, that nothing in this Article VIII shall limit a Buyer Indemnitee's rights in respect of fraud or intentional misrepresentation.8.09 Adjustment to Purchase Price. The parties agree that any indemnification payments made hereunder shall be treated as an adjustment to theAdjusted Closing Consideration for all Tax purposes to the extent permitted by Law.ARTICLE IXMISCELLANEOUS9.01 Amendment and Waiver. This Agreement may be amended or waived only in a writing signed by the Buyer and (a) the Company, prior to theClosing, or (b) the Representative, after the Closing; provided, that from and after the time at which the Requisite Stockholder Approval with respect to theadoption of this Agreement has been obtained and prior to the Effective Time, any such amendment or waiver that, in accordance with the DelawareCorporation Law, requires consent of the Company's stockholders shall be effective only to the extent the Requisite Stockholder Approval has been obtainedfor such amendment or waiver (with it being understood and agreed that, to the maximum extent permitted under the Delaware Corporation Law, anyamendment or waiver of this Agreement shall be effective without the requirement that the Requisite Stockholder Approval for such amendment or waiver beobtained); provided, further, that Schedule 1.05 may be amended prior to the Closing solely in a writing signed by the Buyer and delivered to the Company.No waiver of any provision hereunder or any breach or default thereof shall extend to or affect in any way any other provision or prior or subsequent breach ordefault, and no failure or delay to enforce, or partial enforcement of, any provision hereof shall operate as a waiver of such provision or of any other provision.9.02 Notices. All notices, demands, and other communications to be given or delivered under or by reason of the provisions of this Agreementshall be in writing and shall be deemed to have been given (a) if personally delivered, on the date of delivery, (b) if delivered by overnight courier service ofnational standing (with charges prepaid), on the Business Day following the date of delivery to such courier service, (c) if deposited in the United States mail,first‑class postage prepaid, on the fifth (5th) Business Day following the date of such deposit, or (d) if delivered by telecopy or electronic mail, provided therelevant delivery report or computer record, as applicable, indicates a full and successful delivery, (i) on the date of such delivery, if such delivery iscompleted at or prior to 5:00 p.m., local time of the recipient party, on the date of such delivery, and (ii) on the next Business Day following the date ofdelivery, if such delivery is completed after 5:00 p.m., local time of the recipient party, on the date of such delivery. Notices, demands, and communicationsto the Company, the Representative, or the Buyer shall, unless another address is specified in writing pursuant to the provisions hereof, be sent to theaddresses indicated below:36To the Company (prior to the Closing):NextG Networks, Inc. 52 2nd Avenue, Suite 2200 Waltham, Massachusetts 02451 Attn: Steven Moskowitz (smoskowitz@nextgnetworks.net)H. Anthony Lehv (alehv@nextgnetworks.net) Fax No.: (781) 790-0739with a copy (which shall not constitute notice) to:Kirkland & Ellis LLP 300 N. LaSalle Chicago, Illinois 60654 Attn: Jeffrey W. Richards, P.C. (jeff.richards@kirkland.com)Matthew J. Richards (matthew.richards@kirkland.com) Fax No.: (312) 862-2200To the Representative:c/o Madison Dearborn Partners, LLC 3 First National Plaza, Suite 4600 Chicago, Illinois 60602 Attn: Zaid F. Alsikafi (zalsikafi@mdcp.com)Mark Tresnowski (mtresnowski@mdcp.com) Fax No.: (312) 895-1001with a copy (which shall not constitute notice) to:Kirkland & Ellis LLP 300 N. LaSalle Chicago, Illinois 60654 Attn: Jeffrey W. Richards, P.C. (jeff.richards@kirkland.com)Matthew J. Richards (matthew.richards@kirkland.com) Fax No.: (312) 862-2200To the Buyer or the Surviving Corporation:Crown Castle International Corp. 1220 Augusta Drive, Suite 500 Houston, Texas 77057 Attn: E. Blake Hawk (blake.hawk@crowncastle.com)Philip Kelley (phil.kelley@crowncastle.com) Fax No.: (713) 570-3053with a copy (which shall not constitute notice) to:Cravath, Swaine & Moore LLP Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Attn: Stephen L. Burns (sburns@cravath.com)Erik R. Tavzel (etavzel@cravath.com) Fax No.: (212) 474-3700379.03 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and theirrespective heirs, successors, and permitted assigns. Neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assigned(including by operation of Law) by any party without the prior written consent of the Buyer and (a) the Company, prior to the Closing, or (b) theRepresentative, after the Closing; provided, that the Merger Sub may assign, in its sole discretion and without any required consent, any or all of its rights,interests, and obligations under this Agreement to the Buyer or to any direct or indirect wholly-owned Subsidiary of the Buyer, but no such assignment shallrelieve the Merger Sub of any of its obligations hereunder. Any attempted assignment of this Agreement not in accordance with the terms of this Section 9.03shall be null and void.9.04 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid underapplicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision shall be ineffective only tothe extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement. Upon suchdetermination that any provision is prohibited or invalid, each of the parties hereto shall negotiate in good faith to modify this Agreement so as to effect theoriginal intent of such parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated asoriginally contemplated to the fullest extent possible.9.05 No Strict Construction. Notwithstanding the fact that this Agreement has been drafted or prepared by one of the parties, each of the partieshereto confirms that they and their respective counsel have reviewed, negotiated, and adopted this Agreement as the joint agreement and understanding of theparties hereto and the language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no ruleof strict construction shall be applied against any party hereto.9.06 Captions. The captions used in this Agreement and the Company Disclosure Letter are for convenience of reference only and do not constitutea part of this Agreement or a part of the Company Disclosure Letter and shall not be deemed to limit, characterize, or in any way affect any provision of thisAgreement or the Company Disclosure Letter, and all provisions of this Agreement and the Company Disclosure Letter shall be enforced and construed as ifno captions had been used therein.9.07 Complete Agreement. This Agreement, together with the Confidentiality Agreement, the Escrow Agreement, and any other agreements referredto herein or therein executed and delivered on or after the date hereof, contain the complete agreement among the parties hereto with respect to the subject matterhereof and supersede any prior understandings, agreements, or representations by or between such parties, written or oral, which may have related to thesubject matter hereof in any way.9.08 Company Disclosure Letter. The Company Disclosure Letter shall be arranged in paragraphs corresponding to the lettered paragraphscontained in the Sections of this Agreement; provided, that any event, fact, or circumstance disclosed in any lettered paragraph of the Company DisclosureLetter shall be deemed to be a disclosure for purposes of each other lettered paragraph of the Company Disclosure Letter to the extent that it is reasonablyapparent from the face of such disclosure that it would also qualify such other lettered paragraph. The inclusion of information in the Company DisclosureLetter shall not be construed as or constitute an admission or agreement that a violation, right of termination, default, Liability, or other obligation of any kindexists with respect to any item, nor shall it be construed as or constitute an admission or agreement that such information is material to any Person. Inaddition, matters reflected in the Company Disclosure Letter are not necessarily limited to matters required by this Agreement to be reflected in the CompanyDisclosure Letter. Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature.Neither the specification of any dollar amount in any representation, warranty, or covenant contained in this Agreement nor the inclusion of any specific itemin the Company Disclosure Letter is intended to imply that such amount, or higher or lower amounts, or the item so included or other items, are or are notmaterial, and no Person shall use the fact of the setting forth of any such amount or the inclusion of any such item in any dispute or controversy between theparties as to whether any obligation, item or matter not described herein or included in the Company Disclosure Letter is or is not material for purposes of thisAgreement. Furthermore, neither the specification of any item or matter in any38representation, warranty, or covenant contained in this Agreement nor the inclusion of any specific item in the Company Disclosure Letter is intended to implythat such item or matter, or other items or matters, are or are not in the ordinary course of business, and no Person shall use the fact of setting forth or theinclusion of any such items or matter in any dispute or controversy between the parties as to whether any obligation, item, or matter not described herein orincluded in the Company Disclosure Letter is or is not in the ordinary course of business for purposes of this Agreement.9.09 Counterparts. This Agreement may be executed in multiple counterparts (including by means of telecopied or electronically transmittedsignature pages), all of which taken together shall constitute one and the same Agreement.9.10 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreementwere not performed by the parties hereto, as applicable, in accordance with their specific terms or were otherwise breached by the parties hereto, as applicable.It is accordingly agreed that the parties shall be entitled to an injunction or injunctions, without any requirement to post or provide any bond or other securityin connection therewith, to prevent breaches of this Agreement by any party hereto, as applicable, and to enforce specifically the terms and provisions hereofagainst the parties hereto, as applicable, this being in addition to any other remedy to which the parties hereto are entitled at law or in equity.9.11 Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person, other than theparties hereto or their respective successors and permitted assigns, any legal or equitable rights, remedies, or Liabilities under or by reason of this Agreement;provided, that the provisions of Sections 6.02 are intended to be for the benefit of the Persons covered thereby and may be enforced directly by such Persons.9.12 GOVERNING LAW. THE INTERNAL LAW (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF DELAWARE SHALLGOVERN ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, AND INTERPRETATION OF THIS AGREEMENT AND THEPERFORMANCE OF THE OBLIGATIONS IMPOSED BY THIS AGREEMENT.9.13 CONSENT TO JURISDICTION. SUBJECT TO THE PROVISIONS OF SECTION 1.12 (WHICH SHALL GOVERN ANY DISPUTEARISING THEREUNDER), THE PARTIES AGREE THAT JURISDICTION AND VENUE IN ANY SUIT, ACTION, OR PROCEEDING BROUGHTBY ANY PARTY IN CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE PERFORMANCEOF THE OBLIGATIONS IMPOSED HEREUNDER SHALL PROPERLY AND EXCLUSIVELY LIE IN ANY FEDERAL OR STATE COURTLOCATED IN THE STATE OF DELAWARE. EACH PARTY ALSO AGREES NOT TO BRING ANY SUIT, ACTION, OR PROCEEDING INCONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE PERFORMANCE OF THEOBLIGATIONS IMPOSED HEREUNDER IN ANY OTHER COURT. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTYIRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY WITH RESPECTTO ANY SUCH SUIT, ACTION, OR PROCEEDING. THE PARTIES IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN SUCHCOURT, AND HEREBY WAIVE ANY OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THERESOLUTION OF SUCH SUIT, ACTION, OR PROCEEDING. THE PARTIES FURTHER AGREE THAT THE MAILING BY CERTIFIED ORREGISTERED MAIL, RETURN RECEIPT REQUESTED, OF ANY PROCESS REQUIRED BY ANY SUCH COURT SHALL CONSTITUTE VALIDAND LAWFUL SERVICE OF PROCESS AGAINST THEM, WITHOUT NECESSITY FOR SERVICE BY ANY OTHER MEANS PROVIDED BYSTATUTE OR RULE OF COURT.9.14 WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, TO THE FULLEST EXTENTPERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (A) ARISING UNDERTHIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIESHERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN39EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE.THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, ORCAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE PARTIES TO THIS AGREEMENT MAYFILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THEWAIVER OF THEIR RIGHT TO TRIAL BY JURY.* * * * * *40IN WITNESS WHEREOF, the parties hereto have executed this Agreement and Plan of Merger on the date first written above.THE BUYER:CROWN CASTLE INTERNATIONAL CORP.By:/s/ W. Benjamin Moreland Name: W. Benjamin Moreland Its: President & Chief Executive OfficerTHE MERGER SUB:CROWN CASTLE NG ACQUISITIONS CORP.By:/s/ W. Benjamin Moreland Name: W. Benjamin Moreland Its: President & Chief Executive OfficerTHE COMPANY:NEXTG NETWORKS, INC.By:/s/ Steven Moskowitz Name: Steven MoskowitzIts: President & CEOTHE REPRESENTATIVE:MADISON DEARBORN CAPITAL PARTNERS V-A, L.P.By: Madison Dearborn Partners V-A&C, L.P. Its: General PartnerBy: Madison Dearborn Partners, LLC Its: General PartnerBy:/s/ Zaid F. Alsikafi Name: Zaid F. AlsikafiIts: Managing Director41Annex AIn this Agreement, unless the context requires otherwise, (a) words expressed in the singular number shall include the plural and vice versa, (b)words expressed in the masculine shall include the feminine and neuter gender and vice versa, (c) references to Articles, Sections, Exhibits, Annexes, and thepreamble are references to articles, sections, exhibits, annexes and the preamble of this Agreement, (d) references to any Person shall include the successorsand permitted assigns of such Person, (e) the word "will" shall be construed to have the same meaning and effect as the word "shall", (f) the word "or" shallnot be exclusive, (g) the word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall notsimply mean "if", (h) references to "day" or "days" in the lower case are to calendar days, (i) references to "the date hereof" are to the date of this Agreement,(j) the words "hereof", "herein", "hereto", and "hereunder", and words of similar import, shall refer to this Agreement as a whole and not any particularprovision of this Agreement, (k) references to this Agreement, any other Contract, or any Law shall be construed as a reference to this Agreement, such otherContract, or such Law as the same has been amended, modified, novated, varied, or supplemented from time to time in accordance with its terms, (l)references to any Law shall include all rules and regulations promulgated thereunder, (m) the terms "include", "includes", and "including" shall be deemed tobe followed by "without limitation", whether or not they are in fact followed by such words or words of similar import, and (n) references to dollars or "$" areto United States dollars.In this Agreement, the following terms have the meanings set forth below:"Action" means any claim, action, suit, audit, assessment, arbitration, proceeding, or investigation by or before any mediator, arbitrator, orGovernmental Entity."Adjusted Closing Consideration" shall have the meaning set forth in Section 1.12(f)."Adjustment Amount" shall have the meaning set forth in the definition of "Escrow Amount" in this Annex A."Adjustment Calculation Time" means 11:59 p.m. (Eastern time) on the Business Day immediately prior to the Closing Date."Affiliate" means, with respect to any Person, any Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled byor is under common Control with such Person."Agreed Accounting Principles" means GAAP, applied in a manner consistent with the methodologies, practices, estimation techniques,assumptions, and principles used in the preparation of the Company Financial Statements; provided, that if there is any difference in the methodologies,practices, estimation techniques, assumptions, or principles in one portion of Company Financial Statements as compared to any other portion of theCompany Financial Statements, the methodologies, practices, estimation techniques, assumptions, and principles used in the Latest Balance Sheet shallcontrol to the extent they have been described to the Buyer in reasonable detail prior to the date hereof."Agreement" shall have the meaning set forth in the Preamble."Alternative Transaction" means any direct or indirect acquisition, in one transaction or a series of related transactions, including any merger,consolidation, tender offer, exchange offer, public offering, stock acquisition, asset acquisition, binding share exchange, business combination,recapitalization, liquidation, dissolution, joint venture or similar transaction, resulting in any Person or group of related Persons who are not currentlystockholders of the Company (other than the Company, any Subsidiary of the Company, the Buyer, or the Merger Sub) acquiring (i) assets or businesses thatconstitute or represent 10% or more of the total revenue, net income, EBITDA, or assets of the Company and its Subsidiaries on a consolidated basis, or (ii)10% or more of the outstanding shares of any class of capital stock of, or other equity or voting interests, in the Company, or any class of capital stock of, orother equity or voting interests in, any of the Company's Subsidiaries directly or indirectly holding, individually or taken together, the assets or businessesreferred to in clause (i) above, in each case other than the transactions contemplated by this Agreement.42"Arbiter" means an independent and nationally-prominent accounting or valuation firm with expertise in disputes of the type contemplated by Section1.12 and which is mutually-acceptable to the Buyer and the Representative; provided, that if the Buyer and the Representative are unable to agree on such afirm, they shall each nominate such a firm, and the two firms so nominated shall nominate a third such firm, with such third firm to serve as the Arbiter.Notwithstanding the foregoing, in the event that a dispute arising under Section 1.12 concerns the calculation of the amount set forth in clause (i) of thedefinition of the term Old Nodes Completion Amount, the Arbiter with respect to the portion of such dispute concerning such calculation shall be a mutually-acceptable industry expert knowledgeable in the matters contemplated by such clause, and if the parties are unable to agree on such an expert, such expert shallbe chosen in the same manner as the foregoing valuation or accounting firm is chosen."Audited Financial Statements" shall have the meaning set forth in Section 4.07(a)."Business Day" means any day, other than a Saturday, Sunday, or any other day on which banks located in New York, New York are authorizedor required by applicable Law to be closed for business."Buyer" shall have the meaning set forth in the Preamble."Buyer Indemnitee" shall have the meaning set forth in Section 8.02(a)."Buyer Material Adverse Effect" means any Effect that has had, or would reasonably be expected to have, a material adverse effect on the ability ofthe Buyer or the Merger Sub to consummate the Merger or the other transactions contemplated hereby."Capex Adjustment" means an amount equal to (i) the New Nodes Paid Amount minus (ii) the Old Nodes Completion Amount; provided, that theCapex Adjustment shall not exceed $50,000,000.00 without the prior written consent of the Buyer. The Capex Adjustment shall be added to the ClosingConsideration if positive and subtracted from the Closing Consideration if negative."Cash" means cash and cash equivalents, as determined in accordance with the Agreed Accounting Principles."Certificate" means a certificate which immediately prior to the Effective Time represented any shares of Company Common Stock."Certificate of Merger" shall have the meaning set forth in Section 1.02."Closing" shall have the meaning set forth in Section 1.10."Closing Cash" means the Cash of the Company and its Subsidiaries on a consolidated basis as of the Adjustment Calculation Time."Closing Consideration" shall have the meaning set forth in Section 1.09(b)."Closing Date" shall have the meaning set forth in Section 1.10."Closing Indebtedness" means the Indebtedness of the Company and its Subsidiaries on a consolidated basis as of the Adjustment Calculation Time.For purposes of calculating Closing Indebtedness, obligations of the type referred to in clause (iii) of the definition of Indebtedness shall be calculated on thebasis of the amount that would be required to be recorded on a balance sheet prepared in accordance with the Agreed Accounting Principles in respect of suchobligations."Closing Statement" shall have the meaning set forth in Section 1.12(a)."Code" means the Internal Revenue Code of 1986."Company" shall have the meaning set forth in the Preamble."Company Common Stock" means the common stock, par value $0.01 per share, of the Company."Company Disclosure Letter" shall have the meaning set forth in Article IV.43"Company Equityholders" means holders of Company Common Stock and/or Company Options as of the Effective Time."Company Financial Statements" shall have the meaning set forth in Section 4.07(a)."Company Intellectual Property" shall have the meaning set forth in Section 4.12(a)."Company Material Adverse Effect" means any Effect that has had, or would reasonably be expected to have, a material adverse effect on thebusiness, assets, financial condition, or results of operations of the Company and its Subsidiaries on a consolidated basis or on the ability of the Company toconsummate the Merger or the other transactions contemplated hereby; provided, that none of the following shall be taken into account in determining whetherthere has been a Company Material Adverse Effect: (i) Effects arising from or relating to general business or economic conditions, whether or not affecting theindustry in which the Company and its Subsidiaries operate; (ii) Effects arising from or relating to national or international political conditions, including theengagement by the United States in hostilities, or the escalation thereof, or the occurrence of any military or terrorist attack on the United States; (iii) Effectsarising from or relating to any changes in financial, banking, securities, or commodities markets, including any disruptions thereof and any changes in anyprices therein; (iv) Effects arising from or relating to any acquisition or business combination transaction entered into, consummated, or abandoned by anycustomer of the Company or any of its Subsidiaries or any other provider of wireless voice or data services in the United States; (v) changes in, or changes ininterpretations of, GAAP or other applicable accounting rules, regulations, or pronouncements, and any Effects arising therefrom or related thereto; (vi)changes in, or changes in interpretations of, applicable Law, and any Effects arising therefrom or related thereto; (vii) any failure by the Company or any ofits Subsidiaries to meet any projections or forecasts, or any other predictions of revenue or earnings, for any period, and any Effects arising therefrom orrelated thereto (provided, that the underlying cause for any such failure shall not be excluded by this clause (vii)); (viii) the announcement of the transactionscontemplated hereby, and any Effects arising therefrom or related thereto (including any actions taken by customers, suppliers, or other business relations as aresult thereof); (ix) the taking of any action by any Person which is required to be taken pursuant to the terms of this Agreement, and any Effects arisingtherefrom or related thereto; and (x) Effects arising from or relating to any violation or breach by the Buyer or the Merger Sub of this Agreement of which theBuyer has been provided written notice. Notwithstanding the foregoing, clauses (i), (ii), (iii), (v), and (vi) shall not exclude, and thus the determination ofwhether a Company Material Adverse Effect has occurred may include, Effects that have, or are reasonably expected to have, a disproportionately adverseeffect on the Company and its Subsidiaries relative to other comparable companies in the same industry as the Company and its Subsidiaries."Company Material Contracts" shall have the meaning set forth in Section 4.11(a)."Company Options" shall have the meaning set forth in Section 1.08."Confidentiality Agreement" shall have the meaning set forth in Section 3.02(a)."Constituent Corporations" shall have the meaning set forth in the Preamble."Contract" shall mean any written agreement, arrangement, bond, commitment, contract, indenture, instrument, lease, or license."Control" shall mean, with respect to any Person, the power to direct the management and policies of such Person, directly or indirectly, whetherthrough the ownership of voting securities, by Contract, or otherwise and the term "Controlled" has a meaning correlative with the foregoing."DAS Network" means distributed antenna systems designed to provide radio frequency transport for the distribution of radio frequency signalsthrough fiber optic cable to remote antenna nodes. DAS Networks shall also include "fiber to the cell" projects entered into by the Company and itsSubsidiaries in the ordinary course of their business in substantially the same manner as previously conducted."Delaware Corporation Law" means the Delaware General Corporation Law."Designated Contact" shall have the meaning set forth in Section 3.02(a)(ii).44"Dissenting Shares" shall have the meaning set forth in Section 1.07."D&O Insurance" shall have the meaning set forth in Section 6.02(b)."Effect" means any change, effect, event, occurrence, or development."Effective Time" shall have the meaning set forth in Section 1.02."Employee" means any director, officer, employee or independent contractor of the Company or its Subsidiaries."Employee Benefits" shall have the meaning set forth in Section 6.03(c)."Environmental Laws" means the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation andRecovery Act, the Clean Air Act, the Clean Water Act, and the Toxic Substances Control Act, and any other Laws or Orders imposing standards of conduct orotherwise relating to pollution or the protection of the environment, natural resources, endangered or threatened species or biota, or human health and safety."ERISA" shall have the meaning set forth in Section 4.16(a)."Escrow Account" shall have the meaning set forth in Section 1.10(d)."Escrow Agent" means the escrow agent to be mutually agreed upon by the Buyer and the Representative and party to the Escrow Agreement."Escrow Agreement" shall have the meaning set forth in Section 1.10(d)."Escrow Amount" means an amount equal to (i) $30,000,000.00 (the "Malibu Amount"), plus (ii) in the event any Shareholder Actions are initiatedprior to the Closing, an amount (the "Shareholder Amount") equal to (A) $1,000,000.00, plus (B) one hundred fifty percent (150%) of the considerationotherwise payable pursuant to the terms of this Agreement to the Company Equityholders bringing such Shareholder Actions, plus (iii) in the event any Pre-Closing Income Tax Audit is initiated prior to the Closing, $8,000,000.00 (the "Pre-Closing Tax Amount"), plus (iv) $10,000,000.00 (the "AdjustmentAmount"). The Escrow Amount is subject to reduction as set forth in Section 8.07."Estimated Closing Consideration" shall have the meaning set forth in Section 1.09(b)."Financing" shall have the meaning set forth in Section 3.02(b)."Financing Sources" means any entities that commit to provide or otherwise enter into agreements to assist the Buyer in connection with anyfinancing proposed to be provided to or for the benefit of the Buyer in connection with the consummation of the transactions contemplated by this Agreement,including the parties to any underwriting group or financing commitment and any joinder agreements or credit agreements relating thereto."GAAP" means United States generally accepted accounting principles."Governmental Entity" means any government, governmental agency, department, bureau, office, commission, authority, instrumentality, court ofcompetent jurisdiction, or self‑regulatory organization, in each case whether foreign, federal, state, or local."Governmental Filings" shall have the meaning set forth in Section 3.03(a)."Hazardous Materials" means (i) any petroleum or petroleum products, radioactive materials or wastes, asbestos in any form, urea formaldehydefoam insulation and polychlorinated biphenyls; and (ii) any other chemical, material, substance or waste that is regulated under any Environmental Law."HSR Act" shall mean the Hart‑Scott‑Rodino Antitrust Improvements Act of 1976."Income Taxes" means any Tax imposed on or with respect to income by the U.S. or any state thereof."Indebtedness" means, without duplication, (i) any obligations for borrowed money or for the deferred purchase45price of property or services (including earn-outs but excluding accounts payable or other trade payables), (ii) any obligations evidenced by any note, bond,debenture, or other similar instrument, (iii) any obligations under leases or other Contracts which are required to be capitalized in accordance with the AgreedAccounting Principles, (iv) any obligations to reimburse the issuer thereof for any amount actually funded under any letter of credit, banker's acceptance, orother similar credit transaction, (v) any obligations under any interest rate protection, currency protection, or commodity hedging Contract (including anyswaps, forward contracts, caps, floors, collars and similar Contracts), (vi) any obligations of other Persons secured by any Lien on any property or asset ofthe Company or any of its Subsidiaries, whether or not such obligation is assumed by the Company or any of its Subsidiaries, and (vii) any guaranteesissued in respect of obligations described in clauses (i)-(vi) above of any other Person, together in each case with accrued and unpaid interest thereon, and anypremiums, fees, expenses, and other amounts due in connection therewith."Indemnified Action" means any Malibu Action, any Shareholder Action, or any Pre-Closing Income Tax Audit."Intellectual Property" means all of the following in any jurisdiction throughout the world, (i) patents, patent applications, patent disclosures andinventions, (ii) Internet domain names, trademarks, service marks, trade names, logos and corporate names and registrations and applications for registrationthereof, (iii) copyrights and copyrightable works and registrations and applications for registration thereof, (iv) computer software (including source code andexecutable code), data, data bases and documentation thereof, (v) trade secrets and other confidential information (including ideas, formulas, compositions,inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques,research and development information, drawings, specifications, designs, plans, proposals, technical data, financial and marketing plans and customer andsupplier lists and information), (vi) all other proprietary property rights, (vii) goodwill associated with any of the foregoing, and (viii) copies and tangibleembodiments thereof (in whatever form or medium)."Interim Financial Statements" shall have the meaning set forth in Section 4.07(a)."Latest Balance Sheet" shall have the meaning set forth in Section 4.07(a)."Law" means any statute, law (including common law), ordinance, rule, regulation, or treaty of any Governmental Entity."Lead Party" means the Representative, unless and until the Losses which may be incurred as a result of all Indemnified Actions are reasonablyexpected to exceed, either individually or in the aggregate with all other unpaid claims for indemnification pursuant to Section 8.02(a), an amount equal to onehundred fifty percent (150%) of the amount then remaining in the Escrow Account, in which case the Lead Party shall be a Buyer Indemnitee."Letter of Transmittal" shall have the meaning set forth in Section 1.11(a)."Liability" means liabilities or obligations of any type or nature, and whether accrued or unaccrued, absolute, contingent, liquidated or unliquidated,or otherwise."Liens" means any claim, charge, covenant, easement, encumbrance, pledge, security interest, lien, mortgage, deed of trust, or other restriction ontitle or transfer."Loss" means any loss, Liability, Tax, assessment, damage, claim, cost, or expense (including interest, penalties, fines, and reasonable anddocumented expenses incurred in connection with the defense of any Action, including attorneys', experts', and other advisors' fees and expenses)."MAE Condition" means (i) a Company Material Adverse Effect or (ii) a material adverse effect on the business, assets, financial condition, orresults of operations of the Buyer and its Subsidiaries on a consolidated basis of such materiality that, if such material adverse effect were to have occurred onthe Company and its Subsidiaries on a consolidated basis, instead of the Buyer and its Subsidiaries on a consolidated basis, would constitute a CompanyMaterial Adverse Effect)."MAE Order" means any Order proposed or requested by a Governmental Entity relating to the efforts undertaken by the Buyer and the Merger Subpursuant to Section 3.03(c) and which would reasonably be expected to46result in an MAE Condition."Malibu Action" means any Action pending against the Company or any of its Subsidiaries as of the date hereof and any Action first initiatedagainst the Company or any of its Subsidiaries prior to the Closing Date, in each case which arises out of the fire that occurred in October of 2007 in MalibuCanyon following the toppling in high winds of three (3) utility poles on which the Company and its Subsidiaries had attached equipment."Malibu Amount" shall have the meaning set forth in the definition of "Escrow Amount" in this Annex A."Majority Holders" shall have the meaning set forth in Section 6.09(a)."Material Permits" has the meaning given to such term in Section 4.15(b)."Merger" shall have the meaning set forth in the Recitals."Merger Sub" shall have the meaning set forth in the Preamble."Merger Sub Common Stock" means the common stock, par value $0.01 per share, of the Merger Sub."New Nodes" means DAS Networks first ordered by the customer thereof from the Company or one of its Subsidiaries after June 30, 2011. SectionA-1 of the Company Disclosure Letter sets forth a correct and complete list of the New Nodes as of the date hereof."New Nodes Bill Amount" means an amount equal to (i) the aggregate amount billed to customers of the Company and its Subsidiaries by themprior to the Adjustment Calculation Time in connection with amounts required to be paid by such customers to fund capital expenditures made by theCompany or any of its Subsidiaries in connection with the construction of New Nodes, minus (ii) all accounts receivable of the Company and itsSubsidiaries on a consolidated basis in respect of any such amounts billed outstanding as of the Adjustment Calculation Time."New Nodes Cost Amount" means an amount equal to (i) all capital expenditures made by the Company and its Subsidiaries on a consolidated basis after June30, 2011 and prior to the Adjustment Calculation Time in order to construct New Nodes, minus (ii) all accounts payable and accrued liabilities of theCompany and its Subsidiaries on a consolidated basis in respect of any such capital expenditures outstanding as of the Adjustment Calculation Time."New Nodes Paid Amount" means an amount equal to (i) the New Nodes Cost Amount, minus (ii) the New Nodes Bill Amount."New Plans" shall have the meaning set forth in Section 6.03(b)."Nodes" means remote antenna nodes which are part of a DAS Network."Notice of Disagreement" shall have the meaning set forth in Section 1.12(c)."Old Nodes" means DAS Networks first ordered by the customer thereof from the Company or one of its Subsidiaries on or prior to June 30, 2011.Section A-2 of the Company Disclosure Letter sets forth a correct and complete list of the Old Nodes as of the date hereof."Old Nodes Completion Amount" means an amount equal to (i) all capital expenditures required to be made by the Company and its Subsidiaries ona consolidated basis from and after the Adjustment Calculation Time in order to complete construction of the Old Nodes, plus (without duplication) (ii) allaccounts payable and accrued liabilities of the Company and its Subsidiaries on a consolidated basis in respect of any capital expenditures relating to the OldNodes outstanding as of the Adjustment Calculation Time, minus (iii) the aggregate amount (whether or not any such amount is reflected in accountsreceivable) to be received from customers of the Company and its Subsidiaries by them from and after the Adjustment Calculation Time in completesatisfaction of the obligations of such customers to fund capital expenditures made by the Company or any of its Subsidiaries in connection with theconstruction of Old Nodes (as determined in accordance with the applicable Contract (including any applicable course of dealing arrangements) to which theCompany or one of its Subsidiaries is a party). With respect to the calculation in clause (i), the Company shall include its good faith calculation of suchamount in its preparation of the materials related to the Estimated Closing47Consideration, the Buyer shall include its good faith calculation of such amount in its preparation of the materials related to the Closing Statement, and, if it isthe subject of any Notice of Disagreement, the Representative shall include its good faith calculation of such amount in such Notice of Disagreement."Old Plans" shall have the meaning set forth in Section 6.03(b)."On-Air DAS Networks" means DAS Networks (i) ready to accept a signal source and be tested and optimized as part of a carrier's network, or (ii)accepting signals and which have been tested and optimized as part of a carrier's network, in each case as of June 30, 2011."On-Air Nodes" means Nodes which are part of an On-Air DAS Network."Option Exercise Proceeds" means the aggregate proceeds which would be receivable by the Company upon the exercise of all Company Optionsimmediately prior to the Effective Time."Order" means any judgment, order, injunction, decree, or writ of any Governmental Entity."Organizational Documents" means, for any Person, the certificate of incorporation and by-laws of such Person, or the equivalent constituentdocuments with respect to Persons that are not corporations."Outside Date" shall have the meaning set forth in Section 7.01(c)."Paying Agent" means an independent and nationally-prominent bank or trust company reasonably acceptable to the Company and designated by theBuyer prior to the Effective Time to act as agent for the payment of the Per Share Price pursuant to Section 1.11(b)."Percentage Interest" means, with respect to any Company Equityholder, the percentage determined by dividing (a) the sum of (i) the aggregatenumber of shares of Company Common Stock held by such Company Equityholder as of immediately prior to the Effective Time (if any), plus (ii) theaggregate number of shares of Company Common Stock issuable upon exercise of all Company Options outstanding and held by such CompanyEquityholder as of immediately prior to the Effective Time (if any), assuming all such Company Options were exercised in full, by (b) the Total Shares. Theaggregate sum of all Percentage Interests shall equal 100%."Permits" shall have the meaning set forth in Section 4.15(b)."Permitted Liens" means, (i) Liens for Taxes, assessments and governmental charges or levies not yet due and payable or that are being contested ingood faith and by appropriate proceedings, (ii) mechanics, carriers', workmen's, repairmen's, materialmen's or other Liens that secure amounts not yet dueand payable or that are being contested in good faith and by appropriate proceedings, (iii) pledges or deposits to secure obligations under workers'compensation or other similar Laws or to secure public or statutory obligations, (iv) pledges and deposits to secure the performance of bids, trade Contracts,leases, surety and appeal bonds, performance bonds, and other similar obligations, (v) recorded easements, covenants, rights of way, and other similarrestrictions, (vi) unrecorded easements, covenants, rights of way, and other similar restrictions that do not adversely affect in any material respect the currentuse of the applicable property, (vii) zoning and building codes and Laws and other similar restrictions, and (viii) any other Liens that are not, and would notreasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole."Per Share Adjustment Distribution" shall have the meaning set forth in Section 1.12(g)."Per Share Escrow Distribution" shall have the meaning set forth in Section 8.06(d)."Per Share Representative Amount Distribution" shall have the meaning set forth in Section 6.09(e)."Per Share Price" shall have the meaning set forth in Section 1.09(a)."Person" means any individual, partnership, limited liability company, corporation, association, joint stock company, trust, joint venture,unincorporated organization, or Governmental Entity."Plans" shall have the meaning set forth in Section 4.16(a).48"Pre-Closing Income Tax Audit" means any audit by a Governmental Entity charged with enforcing Taxes that is (i) with respect to Income Taxes ofthe Company or any Subsidiary, (ii) with respect to a Pre-Closing Tax Period, and (ii) initiated by such Governmental Entity in writing and such writtennotice is received by the Company or any of its Subsidiaries prior to the Closing Date. For purposes of this Agreement, a Pre-Closing Income Tax Audit shallalso include any judicial or other proceedings that directly result from an audit that meets the requirements of the previous sentence and is with respect to thesame Pre-Closing Tax Period as the Pre-Closing Income Tax Audit commenced prior to the Closing."Pre-Closing Indemnifiable Taxes" means all Income Taxes (or the non-payment thereof) of the Company and its Subsidiaries for all taxable periodsending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the ClosingDate (each a "Pre-Closing Tax Period"), but solely to the extent that such Income Taxes are imposed with respect to such period or periods as a direct result ofand in connection with a Pre-Closing Income Tax Audit."Pre-Closing Service" shall have the meaning set forth in Section 6.03(b)."Pre-Closing Tax Amount" shall have the meaning set forth in the definition of "Escrow Amount" in this Annex A."Release" means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migrationinto or through the environment or within any building, facility, or fixture."Representative" shall have the meaning set forth in Section 6.09(a)."Representative Amount" means $5,000,000.00."Requisite Stockholder Approval" means the approval of at least a majority of the outstanding shares of Company Common Stock."Secondary Party" means, with respect to any given Indemnified Action, (i) the Representative if a Buyer Indemnitee is the Lead Party and (ii) aBuyer Indemnitee if the Representative is the Lead Party."Securities Act" means the Securities Act of 1933."Seller Group" shall have the meaning set forth in Section 6.10."Shareholder Action" means any Action pending against the Company or any of its Subsidiaries as of the date hereof and any Action first initiatedagainst the Company or any of its Subsidiaries prior to the Closing Date, in each case which involves (i) the assertion by any Person of appraisal, dissent, orsimilar rights under the Delaware Corporation Law (including in respect of any Dissenting Shares), (ii) any claims by any Person for breach of fiduciaryduties owed by an officer, director, or securityholder of the Company to the Company or any of its Subsidiaries or to any securityholder of the Company andresulting from actions taken (or omitted to be taken) prior to or in connection with consummation of the Merger, or (iii) any claims by any CompanyEquityholder against the Representative and for which the Company or any of its Subsidiaries may be Liable."Shareholder Amount" shall have the meaning set forth in the definition of "Escrow Amount" in this Annex A."Straddle Period" shall have the meaning set forth in Section 8.05(a)."Subsidiary" means, with respect to any Person, any partnership, limited liability company, corporation, association, joint stock company, trust,joint venture, or unincorporated organization of which (i) if a corporation, a majority of the total voting power of shares of capital stock entitled (without regardto the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly,by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a business entity other than a corporation, a majorityof the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or moreSubsidiaries of that Person or a combination49thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a business entity other than a corporation if suchPerson or Persons shall be allocated a majority of gains or losses or shall be or Control the general partner or other managing Person of such business entity."Surviving Corporation" shall have the meaning set forth in Section 1.01."Taxes" means any foreign, federal, state, or local income, gross receipts, payroll, employment, excise, severance, stamp, customs duties,franchise, employees' income withholding, foreign or domestic withholding, social security, unemployment, real property, personal property, sales, use,transfer, value added, alternative or add‑on minimum tax, including any interest, penalties or additions to Tax or additional amounts in respect of theforegoing."Tax Returns" means any return, report, information return, or statement relating to Taxes, including any schedule or attachment thereto, andincluding any amendment thereof."Total Shares" means the total number of shares of Company Common Stock issued and outstanding as of the Effective Time plus the total numberof shares of Company Common Stock issuable upon exercise of all Company Options outstanding as of the Effective Time."Transaction Expenses" means the out‑of‑pocket fees and expenses of the Company and its Subsidiaries incurred in connection with thetransactions contemplated hereby, in each case to the extent unpaid as of the Closing."Transfer Taxes" shall have the meaning set forth in Section 6.06.50EXHIBIT 11CROWN CASTLE INTERNATIONAL CORP.COMPUTATION OF NET INCOME (LOSS)PER COMMON SHARE(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) Years Ended December 31, 2011 2010 2009 2008 2007Income (loss) from continuing operations attributable to CCIC stockholders$171,077 $(310,940) $(114,332) $(48,858) $(222,813)Dividends on preferred stock and losses on purchases of preferred stock(22,940) (20,806) (20,806) (20,806) (20,805)Income (loss) from continuing operations attributable to CCIC stockholdersafter deduction of dividends on preferred stock and losses on purchases ofpreferred stock for basic and diluted computations148,137 (331,746) (135,138) (69,664) (243,618)Income (loss) from discontinued operations attributable to CCIC stockholders— — — — —Net income (loss) attributable to CCIC stockholders after deduction ofdividends on preferred stock and losses on purchases of preferred stock forbasic and diluted computations$148,137 $(331,746) $(135,138) $(69,664) $(243,618)Weighted-average number of common shares outstanding during the period forbasic and diluted computations (in thousands)283,821 286,764 286,622 282,007 279,937Per common share-basic and diluted: Income (loss) from continuing operations attributable toCCIC stockholders$0.52 $(1.16) $(0.47) $(0.25) $(0.87)Income (loss) from discontinued operations attributable toCCIC stockholders— — — — —Net income (loss)$0.52 $(1.16) $(0.47) $(0.25) $(0.87) EXHIBIT 12CROWN CASTLE INTERNATIONAL CORP.COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES ANDEARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS(DOLLARS IN THOUSANDS) Years Ended December 31, 2011 2010 2009 2008 2007Computation of earnings: Income (loss) before income taxes$179,807 $(338,105) $(190,523) $(153,219) $(317,003)Add: Fixed charges (as computed below)620,871 600,295 551,288 458,477 454,731Subtract: Interest capitalized(265) — — — (1,406) $800,413 $262,190 $360,765 $305,258 $136,322Computation of fixed charges and combinedfixed charges and preferred stock dividendsand losses on purchases of preferred stock: Interest expense$404,968 $406,222 $386,447 $332,058 $329,610Amortized premiums, discounts andcapitalized interest expense related toindebtedness102,883 84,047 59,435 22,056 20,649Interest capitalized265 — — — 1,406Interest component of operating lease expense112,755 110,026 105,406 104,363 103,066Fixed charges620,871 600,295 551,288 458,477 454,731Dividends on preferred stock and losses onpurchases of preferred stock22,940 20,806 20,806 20,806 20,805Combined fixed charges and preferred stockdividends and losses on purchases ofpreferred stock$643,811 $621,101 $572,094 $479,283 $475,536Ratio of earnings to fixed charges1.3 — — — —(Deficiency) excess of earnings to cover fixedcharges$179,542 $(338,105) $(190,523) $(153,219) $(318,409)Ratio of earnings to combined fixed chargesand preferred stock dividends and losses onpurchases of preferred stock1.2 — — — —(Deficiency) excess of earnings to covercombined fixed charges and preferred stockdividends and losses on purchases ofpreferred stock$156,602 $(358,911) $(211,329) $(174,025) $(339,214) EXHIBIT 21CROWN CASTLE INTERNATIONAL CORP. SUBSIDIARIES Subsidiary Jurisdiction ofIncorporationCC Holdings GS V LLC DelawareCC Towers Guarantor LLC DelawareCC Towers Holding LLC DelawareCCGS Holdings Corp. DelawareCrown Atlantic Company LLC DelawareCrown Castle Atlantic LLC DelawareCrown Castle Australia Holdings Pty Limited AustraliaCrown Castle Australia Pty Ltd AustraliaCrown Castle CA Corp. DelawareCrown Castle GT Company LLC DelawareCrown Castle GT Corp. DelawareCrown Castle GT Holding Sub LLC DelawareCrown Castle MU LLC DelawareCrown Castle Operating Company DelawareCrown Castle Operating LLC DelawareCrown Castle PT Inc. DelawareCrown Castle Solutions Corp. DelawareCrown Castle South LLC DelawareCrown Castle Towers 06-2 LLC DelawareCrown Castle Towers LLC DelawareCrown Castle USA Inc. PennsylvaniaCrown Communication LLC (f/k/a Crown Communication Inc. d/b/a/ Crown Communications and CrownCom) DelawareGlobal Signal Acquisitions II LLC DelawareGlobal Signal Acquisitions III LLC DelawareGlobal Signal Acquisitions IV LLC DelawareGlobal Signal GP LLC DelawareGlobal Signal Holdings III LLC DelawareGlobal Signal Operating Partnership, L.P. DelawareMW Cell REIT 1 LLC DelawareNewPath Networks, Inc. DelawarePinnacle Towers Acquisition LLC DelawarePinnacle Towers Acquisitions Holdings LLC DelawarePinnacle Towers LLC DelawareWCP Wireless Site RE Funding LLC DelawareWCP Wireless Site RE Holdco LLC DelawareExhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsCrown Castle International Corp.:We consent to the incorporation by reference in the registration statements (Nos. 333-67379, 333-101008, 333-118659 and 333-163843) on Form S-8, theregistration statements (Nos. 333-94821, 333-41106, and 333-106728) on Form S-3, and the registration statements (Nos. 333-139953, 333-140452, and 333-156781) on Form S-3 ASR of Crown Castle International Corp. of our reports dated February 15, 2011, with respect to the consolidated balance sheets ofCrown Castle International Corp. as of December 31, 2011 and 2010, and the related consolidated statements of operations and comprehensive income (loss),cash flows, and equity for each of the years in the three-year period ended December 31, 2011, and the related financial statement schedule, and theeffectiveness of internal control over financial reporting as of December 31, 2011, which reports appear in the December 31, 2011 annual report on Form 10-Kof Crown Castle International Corp./s/ PricewaterhouseCoopers LLPPittsburgh, PennsylvaniaFebruary 13, 2012Exhibit 23.2Consent of Independent Registered Public Accounting FirmThe Board of DirectorsCrown Castle International Corp.:We consent to the incorporation by reference in the registration statements (Nos. 333-67379, 333-101008, 333-118659 and 333-163843) on Form S-8, theregistration statements (Nos. 333-94821, 333-41106, and 333-106728) on Form S-3, and the registration statements (Nos. 333-139953, 333-140452, and 333-156781) on Form S-3 ASR of Crown Castle International Corp. of our report dated February 15, 2011, with respect to the consolidated balance sheet ofCrown Castle International Corp. as of December 31, 2010, and the related consolidated statements of operations and comprehensive income (loss), cashflows, and redeemable convertible preferred stock and equity for each of the years in the two-year period ended December 31, 2010, and the related financialstatement schedule for 2010 and 2009, which report appears in the December 31, 2011 annual report on Form 10-K of Crown Castle International Corp./s/ KPMG LLPPittsburgh, PennsylvaniaFebruary 13, 2012Exhibit 31.1CertificationFor the Year Ended December 31, 2011I, 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 report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date: February 13, 2012 /s/ W. Benjamin MorelandW. Benjamin MorelandPresident and Chief Executive OfficerExhibit 31.2CertificationFor the Year Ended December 31, 2011I, Jay A. Brown, 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 report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date: February 13, 2012 /s/ Jay A. BrownJay A. BrownSenior Vice President, Chief Financial Officerand TreasurerExhibit 32.1Certification Pursuant to18 U.S.C. Section 1350As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report on Form 10-K of Crown Castle International Corp., a Delaware Corporation (“Company”), for the period endingDecember 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (“Report”), each of the undersigned officers of the Companyhereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of such officer'sknowledge:1)the Report complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany as of December 31, 2011 (the last date of the period covered by the Report). /s/ W. Benjamin MorelandW. Benjamin MorelandPresident and Chief Executive OfficerFebruary 13, 2012 /s/ Jay A. BrownJay A. BrownSenior Vice President, Chief Financial Officerand TreasurerFebruary 13, 2012A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Crown Castle InternationalCorp. and will be retained by Crown Castle International Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

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