Crown Castle International Reports Record Third Quarter Results; Announces Receipt of RaiWay Escrow Funds
HOUSTON, Nov. 5 /PRNewswire/ -- Crown Castle International Corp. (NYSE: CCI) today reported record results for the three months ended September 30, 2001.
Revenues for the third quarter of 2001 increased to $218.4 million from $174.6 million for the third quarter of 2000. Tower cash flow for the third quarter increased 34 percent to $79.8 million, up from $59.5 million in last year's third quarter. EBITDA for the third quarter increased 24 percent to $85.2 million, up from $68.8 million for the same period in 2000.
During the quarter, the Company built 259 towers, 117 of which were developed under an agreement with British Telecom in the UK. Net of anchor tenants on newly-built towers, acquired tenants and tenants lost, the Company added 1,371 new tenants during the third quarter, representing an annualized co-location rate of .38 tenants per tower on the 14,594 sites owned and managed at the beginning of the quarter. On a broadband equivalent (BBE) basis, the Company added 1,476 new tenants during the third quarter, representing an annualized BBE co-location rate of .40 tenants per tower. The BBE co-location rate was higher than the actual co-location rate due to strong leasing demand from 3G tenants in the UK. Annual same tower wireless revenue growth was 24 percent for the 12,489 towers owned and operated by the Company on September 30, 2000.
During the quarter, the Company lost 96 leases from Metricom. Before the effect of lost Metricom leases, the Company added 1,467 new tenants during the third quarter, representing an annualized co-location rate of .40 tenants per tower on the 14,594 sites owned and managed at the beginning of the quarter. On a BBE basis, the co-location rate before the effect of lost Metricom leases was .44 tenants per tower, higher than the actual co-location rate due to strong leasing demand from 3G tenants in the UK.
"We are extremely pleased with the growth of our tower cash flow and EBITDA during the third quarter," stated John P. Kelly, CEO of Crown Castle International. "Continued demand for our tower sites from major wireless carriers in the US and the UK along with significantly lower general and administrative expenses contributed to the outstanding operating margin expansion we experienced during the quarter. As we look to the fourth quarter and year 2002, our committed focus on the core aspects of our business will help us achieve continued margin expansion and EBITDA growth of between 20 percent and 30 percent per year."
Crown Castle also announced today that the Company has received approximately $380 million released from the escrow account established under the Company's agreement with RaiWay S.p.A., a subsidiary of RAI - Radiotelevisione Italiana S.p.A. (RAI), the Italian state-owned television and radio broadcaster.
OUTLOOK
The following statements are based on current expectations and assume a US dollar to UK pound exchange rate of 1.45 dollars to 1.00 pound and a US dollar to Australian dollar exchange rate of 0.50 US dollars to 1.00 Australian dollar. The following Outlook sections contain forward-looking statements, and actual results may differ materially. Information regarding potential risks which could cause actual results to differ from the forward-looking statements herein are set forth below and in the Risk Factors sections of the Company's filings with the Securities and Exchange Commission.
OUTLOOK FOR Q4 2001
The Company expects fourth quarter 2001 site rental and broadcast transmission revenue to be between $147 million and $151 million, assuming that new tenants are added to existing towers at an annualized rate of between .40 tenants per tower and .50 tenants per tower during the quarter. The Company expects fourth quarter network services revenue to be between $60 million and $70 million. The Company expects fourth quarter EBITDA of between $87 million and $93 million.
The Company expects to build approximately 225 to 275 new towers during the fourth quarter. The Company expects total capital expenditures to be between $150 million and $200 million during the fourth quarter. The Company expects total interest expense, net of interest income, to be between $70 million and $80 million for the fourth quarter.
OUTLOOK FOR YEAR 2002
The Company projects total EBITDA for year 2002 of between $380 million and $415 million for calendar year 2002, assuming that new tenants are added to existing towers at a rate of between .40 tenants per tower and .50 tenants per tower during the year. The Company expects total capital expenditures to be between $500 million and $600 million during year 2002. The Company expects cash interest expense, net of cash interest income, to be between $200 million and $225 million during year 2002. The Company expects total interest expense, net of interest income, to be between $275 million and $300 million during year 2002.
Crown Castle has scheduled a conference call for Tuesday, November 6, 2001 at 10:00 a.m. eastern time to discuss third quarter financial and operational results and the Company's Outlook. To participate in the call, dial 719-457- 2665 at least ten minutes before the conference call begins and ask for the Crown Castle conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until November 13, 2001. To access the replay, dial 719-457-0820 using a pass code of 740607.
Investors, analysts and the general public will also have the opportunity to listen to the conference call free over the Internet by visiting the Company's website at www.crowncastle.com . To listen to the live call on the web, please visit the website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live Webcast, an archived version will be available shortly after the call on the Company's website. For more information, please contact Karen Roan at Easterly Investor Relations at (713) 529-6600.
Crown Castle International Corp. engineers, deploys, owns and operates technologically advanced shared wireless infrastructure, including extensive networks of towers and rooftops as well as analog and digital audio and television broadcast transmission systems. The Company offers near-universal broadcast coverage in the United Kingdom and significant wireless communications coverage to 68 of the top 100 United States markets, to more than 95 percent of the UK population and to more than 92 percent of the Australian population. Crown Castle International owns, operates and manages over 14,500 wireless communication towers internationally. For more information on Crown Castle International, visit: www.crowncastle.com .
This press release contains forward-looking statements and information that are based on management's beliefs as well as assumptions made by and information currently available to management. Such forward-looking statements include, but are not limited to, expectations, projections and estimates regarding (i) demand for our tower sites, (ii) future cash flow margins, (iii) EBITDA growth rates, (iv) currency exchange rates, (v) site rental and broadcast transmission revenue, (vi) new tenant co-location rates, (vii) network services revenue, (viii) EBITDA, (ix) towers to be constructed, (x) capital expenditures, (xi) interest expense, and (xii) total revenues and total EBITDA.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including, but not limited to the success or failure of our efforts to implement our business strategy and the following:
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We may be unable to manage our significant growth.
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Our substantial level of indebtedness could adversely affect our ability to react to changes in our business and limit our ability to use debt to fund future capital needs.
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If we are unable to service our indebtedness, our indebtedness may be accelerated.
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Restrictive covenants on our debt instruments may limit our ability to take actions that may be in our best interests.
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We may be unable to raise the significant capital required to fund our operations and make acquisitions.
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We may not be able to construct or acquire new towers at the pace and in the locations that we desire.
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Our business depends on the demand for wireless communications.
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Demand for our network services business is very volatile which causes our network services operating results to vary significantly for any particular period.
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We operate in an increasingly competitive industry and many of our competitors have significantly more resources than we do.
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Extensive regulations, which could change at any time, govern our business and industry, and we could fail to comply with these regulations.
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We could suffer from future claims if radio frequency emissions from equipment on our towers is demonstrated to cause negative health effects.
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Our international operations expose us to changes in foreign currency exchange rates.
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We are heavily dependent on our senior management.
Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential factors which could affect the Company's financial results is included in the Risk Factors sections of the Company's filings with the Securities and Exchange Commission.
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER FINANCIAL DATA
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Net revenues:
Site rental and broadcast
transmission $146,222 $117,174 $420,064 $320,418
Network services and other 72,174 57,415 240,701 126,774
Total net revenues 218,396 174,589 660,765 447,192
Costs of operations:
Site rental and broadcast
transmission 58,856 50,383 176,150 139,233
Network services and other 50,241 34,993 169,248 70,901
Total costs of operations 109,097 85,376 345,398 210,134
General and administrative 21,458 18,196 77,818 52,544
Corporate development 2,679 2,222 9,890 6,415
Restructuring charges 19,252 --- 19,252 ---
Asset write-down charges 3,738 --- 16,010 ---
Non-cash general and administrative
compensation charges 1,949 808 4,724 1,619
Depreciation and amortization 78,525 65,596 227,372 167,365
Operating income (loss) (18,302) 2,391 (39,699) 9,115
Interest and other income
(expense) (1,462) 10,217 6,174 22,586
Interest expense and amortization
of deferred financing costs (79,091) (65,498) (218,921) (173,987)
Loss before income taxes, minority
interests and extraordinary
item (98,855) (52,890) (252,446) (142,286)
Provision for income taxes (11,727) (127) (11,787) (163)
Minority interests 252 52 1,115 (1,806)
Loss before extraordinary item (110,330) (52,965) (263,118) (144,255)
Extraordinary item - loss on
early extinguishment of debt --- --- --- (1,495)
Net loss (110,330) (52,965) (263,118) (145,750)
Dividends on preferred stock (19,000) (16,353) (58,770) (39,571)
Net loss after deduction of
dividends on preferred stock $(129,330) $(69,318) $(321,888) $(185,321)
Per common share - basic and
diluted:
Loss before extraordinary
item $(0.60) $(0.36) $(1.51) $(1.07)
Extraordinary item --- --- --- (0.01)
Net loss $(0.60) $(0.36) $(1.51) $(1.08)
Common shares outstanding -
basic and diluted 214,986 191,763 213,413 171,985
EBITDA (before restructuring and
asset write-down charges):
Site rental and broadcast
transmission $79,791 $59,481 $217,833 $160,254
Network services and other
(before corporate development
expenses and provision for UK
bad debt reserve) 8,481 11,536 23,590 24,260
EBITDA before corporate
development expenses and
provision for UK bad debt
reserve 88,272 71,017 241,423 184,514
Corporate development (2,679) (2,222) (9,890) (6,415)
Provision for UK bad
debt reserve (431) --- (3,874) ---
Total EBITDA $85,162 $68,795 $227,659 $178,099
CROWN CASTLE INTERNATIONAL CORP.
Towers & Tenants Fact Sheet
Quarter Ended 12/31/00 Quarter Ended 3/31/01
US UK AUS Total US UK AUS Total
Sites:
Owned & Managed
Sites 9,757 2,279 716 12,752 9,961 2,624 716 13,301
Rooftop Sites 115 51 --- 166 115 51 --- 166
Total Sites 9,872 2,330 716 12,918 10,076 2,675 716 13,467
Site Activity:
Beginning Sites 9,470 2,303 716 12,489 9,872 2,330 716 12,918
Built 216 27 --- 243 204 345 --- 549
Acquired 177 --- --- 177 --- --- --- ---
Lost --- --- --- --- --- --- --- ---
Managed Sites Added 9 --- --- 9 --- --- --- ---
Ending Sites 9,872 2,330 716 12,918 10,076 2,675 716 13,467
Quarter Ended 12/31/00 Quarter Ended 3/31/01
US UK AUS Total US UK AUS Total
Tenant Activity:
Beginning Tenants 18,422 4,848 1,231 24,501 19,877 5,194 1,412 26,483
Anchors on Builds 114 27 --- 141 67 345 --- 412
New 1,123 319 181 1,623 1,049 281 139 1,469
Metricom Tenants
Lost --- --- --- --- --- --- --- ---
Acquired 218 --- --- 218 --- --- --- ---
Ending Tenants 19,877 5,194 1,412 26,483 20,993 5,820 1,551 28,364
Quarter Ended 12/31/00 Quarter Ended 3/31/01
US UK AUS Total US UK AUS Total
Tenants per Site 2.0 2.2 2.0 2.1 2.1 2.2 2.2 2.1
New Tenants per Site 0.13 0.15 0.25 0.14 0.11 0.23 0.19 0.14
Annualized 0.51 0.59 1.01 0.55 0.44 0.94 0.78 0.56
Pure Co-Lo's per
Site 0.12 0.14 0.25 0.13 0.11 0.12 0.19 0.11
Annualized 0.47 0.55 1.01 0.52 0.43 0.48 0.78 0.45
Quarter Ended 12/31/00 Quarter Ended 3/31/01
US UK AUS Total US UK AUS Total
Avg Monthly Lease
Rate per New Tenant
Local Currency 1,445 370 1,170 1,476 342 1,143
US Dollars 1,445 537 644 1,476 496 629
Assumed Broadband
Rate, USD 1,500 650 1,000 1,500 650 1,000
New Tenants 1,123 319 181 1,623 1,049 281 139 1,469
Broadband Equivalent
New Tenants 1,082 264 116 1,462 1,032 214 87 1,334
BBE Co-Lo's per Site 0.11 0.11 0.16 0.12 0.10 0.09 0.12 0.10
Annualized 0.46 0.46 0.65 0.47 0.42 0.37 0.49 0.41
Quarter Ended 6/30/01 Quarter Ended 9/30/01
US UK AUS Total US UK AUS Total
Sites:
Owned & Managed
Sites 10,248 2,806 1,374 14,428 10,378 2,923 1,384 14,685
Rooftop Sites 115 51 --- 166 115 51 --- 166
Total Sites 10,363 2,857 1,374 14,594 10,493 2,974 1,384 14,851
Site Activity:
Beginning Sites 10,076 2,675 716 13,467 10,363 2,857 1,374 14,594
Built 191 182 16 389 133 117 9 259
Acquired 90 --- 642 732 --- --- --- ---
Lost --- --- --- --- --- --- --- ---
Managed Sites Added 6 --- --- 6 (3) --- 1 (2)
Ending Sites 10,363 2,857 1,374 14,594 10,493 2,974 1,384 14,851
Quarter Ended 6/30/01 Quarter Ended 9/30/01
US UK AUS Total US UK AUS Total
Tenant Activity:
Beginning Tenants 20,993 5,820 1,551 28,364 22,243 6,976 2,692 31,911
Anchors on Builds 75 182 16 273 75 117 9 201
New 1,045 515 71 1,631 1,030 359 78 1,467
Metricom Tenants
Lost --- --- --- --- (96) --- --- (96)
Acquired 130 459 1,054 1,643 --- 84 --- 84
Ending Tenants 22,243 6,976 2,692 31,911 23,252 7,536 2,779 33,567
Quarter Ended 6/30/01 Quarter Ended 9/30/01
US UK AUS Total US UK AUS Total
Tenants per Site 2.1 2.4 2.0 2.2 2.2 2.5 2.0 2.3
New Tenants per Site 0.11 0.24 0.12 0.14 0.10 0.16 0.06 0.11
Annualized 0.44 0.98 0.48 0.55 0.38 0.64 0.25 0.42
Pure Co-Lo's per
Site 0.10 0.19 0.10 0.12 0.09 0.13 0.06 0.09
Annualized 0.41 0.77 0.40 0.48 0.36 0.50 0.23 0.38
Quarter Ended 6/30/01 Quarter Ended 9/30/01
US UK AUS Total US UK AUS Total
Avg Monthly Lease Rate
per New Tenant
Local Currency 1,498 490 1,106 1,425 700 1,102
US Dollars 1,498 686 608 1,425 980 606
Assumed Broadband
Rate, USD 1,500 650 1,000 1,500 650 1,000
New Tenants 1,045 515 71 1,631 934 359 78 1,371
Broadband Equivalent
New Tenants 1,044 544 43 1,630 887 541 47 1,476
BBE Co-Lo's per
Site 0.10 0.20 0.06 0.12 0.09 0.19 0.03 0.10
Annualized 0.41 0.81 0.24 0.48 0.34 0.76 0.14 0.40
CROWN CASTLE INTERNATIONAL CORP.
Towers & Tenants Fact Sheet
Restricted and Non-Restricted Subsidiaries
Quarter Ended 12/31/00 Quarter Ended 3/31/01
Restricted Crown Restricted Crown
Group Atlantic UK Total Group Atlantic UK Total
Sites:
Owned & Managed
Sites 8,552 1,921 2,279 12,752 8,723 1,954 2,624 13,301
Rooftop Sites 115 --- 51 166 115 --- 51 166
Total Sites 8,667 1,921 2,330 12,918 8,838 1,954 2,675 13,467
Site Activity:
Beginning Sites 8,383 1,803 2,303 12,489 8,667 1,921 2,330 12,918
Built 180 36 27 243 171 33 345 549
Acquired 95 82 --- 177 --- --- ---
Lost --- --- --- --- --- ---
Managed Sites Added 9 --- 9 --- --- ---
Ending Sites 8,667 1,921 2,330 12,918 8,838 1,954 2,675 13,467
Quarter Ended 12/31/00 Quarter Ended 3/31/01
Restricted Crown Restricted Crown
Group Atlantic UK Total Group Atlantic UK Total
Tenant Activity:
Beginning
Tenants 16,107 3,546 4,848 24,501 17,410 3,879 5,194 26,483
Anchors on Builds 78 36 27 141 34 33 345 412
New 1,132 172 319 1,623 1,036 152 281 1,469
Metricom Tenants
Lost --- --- --- --- --- --- --- ---
Acquired 93 125 --- 218 --- --- --- ---
Ending Tenants 17,410 3,879 5,194 26,483 18,480 4,064 5,820 28,364
Quarter Ended 12/31/00 Quarter Ended 3/31/01
Restricted Crown Restricted Crown
Group Atlantic UK Total Group Atlantic UK Total
Tenants per Site 2.0 2.0 2.2 2.1 2.1 2.1 2.2 2.1
New Tenants per
Site 0.14 0.11 0.15 0.14 0.12 0.09 0.23 0.14
Annualized 0.57 0.45 0.59 0.55 0.48 0.38 0.94 0.56
Pure Co-Lo's per
Site 0.14 0.10 0.14 0.13 0.12 0.08 0.12 0.11
Annualized 0.54 0.38 0.55 0.52 0.48 0.32 0.48 0.45
Quarter Ended 6/30/01 Quarter Ended 9/30/01
Restricted Crown Restricted Crown
Group Atlantic UK Total Group Atlantic UK Total
Sites:
Owned & Managed
Sites 9,625 1,997 2,806 14,428 9,751 2,011 2,923 14,685
Rooftop Sites 115 --- 51 166 115 --- 51 166
Total Sites 9,740 1,997 2,857 14,594 9,866 2,011 2,974 14,851
Site Activity:
Beginning Sites 8,838 1,954 2,675 13,467 9,740 1,997 2,857 14,594
Built 164 43 182 389 128 14 117 259
Acquired 732 --- 732 ---
Lost --- --- --- (3) (3)
Managed Sites Added 6 --- 6 ---
Ending Sites 9,740 1,997 2,857 14,594 9,865 2,011 2,974 14,850
Quarter Ended 6/30/01 Quarter Ended 9/30/01
Restricted Crown Restricted Crown
Group Atlantic UK Total Group Atlantic UK Total
Tenant Activity:
Beginning
Tenants 18,480 4,064 5,820 28,364 20,679 4,256 6,976 31,911
Anchors on Builds 48 43 182 273 70 14 117 201
New 967 149 515 1,631 952 156 359 1,467
Metricom Tenants
Lost --- --- --- --- (60) (36) --- (96)
Acquired 1,184 --- 459 1,643 --- --- 84 84
Ending Tenants 20,679 4,256 6,976 31,911 21,641 4,390 7,536 33,567
Quarter Ended 6/30/01 Quarter Ended 9/30/01
Restricted Crown Restricted Crown
Group Atlantic UK Total Group Atlantic UK Total
Tenants per Site 2.1 2.1 2.4 2.2 2.2 2.2 2.5 2.3
New Tenants per
Site 0.11 0.10 0.24 0.14 0.10 0.07 0.16 0.11
Annualized 0.45 0.38 0.98 0.55 0.39 0.27 0.64 0.45
Pure Co-Lo's per
Site 0.11 0.08 0.19 0.12 0.09 0.06 0.13 0.09
Annualized 0.44 0.31 0.77 0.48 0.37 0.24 0.50 0.38
CROWN CASTLE INTERNATIONAL CORP.
EBITDA Summary Fact Sheet
(in $ thousands)
Quarter Ended 3/31/01
US UK AUS CCIC
Revenues
Site Rental 81,684 49,368 2,990 134,042
Services 69,135 9,776 --- 78,911
Total Revenues 150,819 59,144 2,990 212,953
Operating Expenses
Site Rental 33,600 23,044 1,095 57,739
Services 46,471 8,985 --- 55,456
Total Operating Expenses 80,071 32,029 1,095 113,195
General & Administrative
Site Rental 5,866 1,558 1,491 8,915
Services 16,835 145 --- 16,980
Total General &
Administrative 22,701 1,703 1,491 25,895
Operating Cash Flow
Site Rental 42,218 24,766 404 67,388
Services 5,829 646 --- 6,475
Total Pre-Overhead
Cash Flow 48,047 25,412 404 73,863
Corporate Overhead 3,405 48 --- 3,453
EBITDA 44,642 25,364 404 70,410
Quarter Ended 3/31/01
US UK AUS CCIC
Gross Margins:
Site Rental 59% 53% 63% 57%
Services 33% 8% 0% 30%
Operating Cash Flow Margins
Site Rental 52% 50% 14% 50%
Services 8% 7% 0% 8%
EBITDA Margin 30% 43% 14% 33%
Quarter Ended 6/30/01
US UK AUS CCIC
Revenues
Site Rental 84,635 50,694 4,471 139,800
Services 82,851 6,240 525 89,616
Total
Revenues 167,486 56,934 4,996 229,416
Operating Expenses
Site Rental 32,240 25,494 1,821 59,555
Services 56,932 6,169 450 63,551
Total Operating Expenses 89,172 31,663 2,271 123,106
General & Administrative
Site Rental 6,195 1,661 1,735 9,591
Services 17,219 3,655 --- 20,874
Total General &
Administrative 23,414 5,316 1,735 30,465
Operating Cash Flow
Site Rental 46,200 23,539 915 70,654
Services 8,700 (3,584) 75 5,191
Total Pre-Overhead
Cash Flow 54,900 19,955 990 75,845
Corporate Overhead 3,758 --- --- 3,758
EBITDA 51,142 19,955 990 72,087
Quarter Ended 6/30/01
US UK AUS CCIC
Gross Margins:
Site Rental 62% 50% 59% 57%
Services 31% 1% 14% 29%
Operating Cash Flow Margins
Site Rental 55% 46% 20% 51%
Services 11% -57% 14% 6%
EBITDA Margin 31% 35% 20% 31%
Quarter Ended 9/30/01
US UK AUS CCIC
Revenues
Site Rental 89,646 52,013 4,563 146,222
Services 65,581 5,972 621 72,174
Total Revenues 155,227 57,985 5,184 218,396
Operating Expenses
Site Rental 34,008 23,045 1,803 58,856
Services 44,695 4,930 616 50,241
Total Operating Expenses 78,703 27,975 2,419 109,097
General & Administrative
Site Rental 4,664 1,447 1,464 7,575
Services 13,285 598 --- 13,883
Total General &
Administrative 17,949 2,045 1,464 21,458
Operating Cash Flow
Site Rental 50,974 27,521 1,296 79,791
Services 7,601 444 5 8,050
Total Pre-Overhead
Cash Flow 58,575 27,965 1,301 87,841
Corporate Overhead 2,679 --- --- 2,679
EBITDA 55,896 27,965 1,301 85,162
Quarter Ended 9/30/01
US UK AUS CCIC
Gross Margins:
Site Rental 62% 56% 60% 60%
Services 32% 17% 1% 30%
Operating Cash Flow Margins
Site Rental 57% 53% 28% 55%
Services 12% 7% 1% 11%
EBITDA Margin 36% 48% 25% 39%
Contacts: W. Benjamin Moreland, CFO
Carmen Thompson, VP Finance
Crown Castle International
713-570-3000
Ken Dennard / kdennard@easterly.com
Easterly Investor Relations
713-529-6600
SOURCE Crown Castle International Corp.
CONTACT: W. Benjamin Moreland, CFO, or Carmen Thompson, VP Finance, both of Crown Castle International Corp., +1-713-570-3000; or Ken Dennard of Easterly Investor Relations, +1-713-529-6600, or kdennard@easterly.com , for Crown Castle International Corp./