Crown Castle International Reports Second Quarter 2007 Results and Increases Full Year 2007 Outlook
"We had an excellent quarter as we exceeded our outlook for tower site rental revenue, tower gross margin, Adjusted EBITDA and recurring cash flow," stated John P. Kelly, President and Chief Executive Officer of Crown Castle. "Along with delivering these results, we made significant progress on the integration of Global Signal. Further, we are slightly ahead of our estimates of cost savings related to the Global Signal merger. I am pleased with the progress we have made on our integration efforts while at the same time delivering results that exceed our Outlook for operating metrics."
Consolidated Financial Results
Site rental revenue for the second quarter of 2007 increased $153.2 million, or 90.6%, to $322.3 million from $169.2 million for the same period in the prior year. Pro forma site rental revenue growth was approximately 9.5%, comparing reported second quarter 2007 results to pro forma second quarter 2006 results. Site rental gross margin, defined as site rental revenue less site rental cost of operations, increased $91.9 million, or 77.8%, to $210.2 million in the second quarter of 2007 from the same period in 2006. Pro forma site rental gross margin growth was approximately 10.2%, comparing reported second quarter 2007 results to pro forma second quarter 2006 results. Adjusted EBITDA (see definition herein) for the second quarter of 2007 increased $82.5 million, or 79.5%, to $186.4 million, from the same period in 2006.
Recurring cash flow, defined as Adjusted EBITDA less interest expense and sustaining capital expenditures, increased by 41.9% from $64.1 million in the second quarter of 2006 to $90.9 million for the second quarter of 2007, inclusive of approximately $18.9 million of additional interest expense from the $1.15 billion in borrowings in the fourth quarter 2006 and first quarter 2007 to reduce potential and actual shares outstanding. Weighted average common shares outstanding increased to 282.0 million for the second quarter of 2007, inclusive of the impact from the 98.1 million shares issued in the Merger and 17.7 million shares purchased in the first quarter, from 212.7 million for the same period in the prior year. Recurring cash flow per share, defined as recurring cash flow divided by weighted average common shares outstanding, was $0.32 in the second quarter of 2007, inclusive of the dilutive effect of additional interest expense from $1.15 billion in borrowings in the fourth quarter 2006 and the first quarter 2007 used to reduce potential and actual shares outstanding, compared to $0.30 in the second quarter of 2006.
Net loss was $32.7 million for the second quarter of 2007, inclusive of a $64.0 million increase in depreciation, amortization and accretion expense and an improvement in benefit (provision) for income taxes of $16.1 million, compared to a net loss of $13.3 million for the same period in 2006. Net loss after deduction of dividends on preferred stock was $37.9 million in the second quarter of 2007, compared to a loss of $18.5 million for the same period last year. Second quarter 2007 net loss per share was $(0.13), compared to a net loss per share of $(0.09) in last year's second quarter.
Segment Results
U.S. site rental revenue for the second quarter of 2007 increased $149.2 million, or 96.6%, to $303.7 million, compared to second quarter 2006 U.S. site rental revenue of $154.5 million. U.S. site rental revenue for the second quarter of 2007 benefited by approximately $1.0 million of unexpected out of run-rate items. U.S. site rental gross margin increased $89.4 million, or 82.6%, to $197.5 million from the same period in 2006.
Australia site rental revenue for the second quarter of 2007 increased $4.0 million, or 27.3%, to $18.7 million, compared to $14.7 million in the second quarter of 2006. Australia site rental gross margin for the second quarter of 2007 increased $3.0 million, or 28.5%, to $13.5 million, compared to second quarter of 2006. In both the second quarter of 2006 and 2007, Australia site rental revenue and site rental gross margin benefited by approximately $2 million from an annual customer payment.
Investments And Liquidity
During the second quarter of 2007, Crown Castle invested approximately $77.7 million in capital expenditures. Capital expenditures was comprised of $6.7 million of sustaining capital expenditures and $71.0 million of revenue generating capital expenditures, of which $37.2 million was spent on land purchases, $5.9 million on existing sites, $16.9 million on the construction of new sites and $10.9 million for the purchase of its corporate headquarters.
"Based on our second quarter 2007 results and outlook for full year 2007, we expect to start building additional debt capacity during the second half of 2007 within our stated leverage target of six to eight times debt to Adjusted EBITDA," stated Ben Moreland, Chief Financial Officer of Crown Castle. "Since we purchased 17.7 million shares in January 2007 with $600 million of borrowed funds, we have reduced our total debt leverage, somewhat ahead of schedule, from 9.0 times, based on annualized first quarter 2007 Adjusted EBITDA, to 8.0 times leverage, based on annualized second quarter 2007 Adjusted EBITDA. Consistent with our past actions, we can resume borrowing within our stated leverage target to augment our investment of recurring cash flow in activites that we believe will maximize long-term recurring cash flow per share. We continue to believe that we can achieve 20% to 25% annual growth in recurring cash flow per share through revenue and margin growth on our towers combined with the appropriate investment of cash in share purchases, land purchases, tower builds and other tower related capital expenditures. While some of these investments, particularly share purchases, are dilutive in the short-term to recurring cash flow per share when done with borrowed funds, we believe that the combination of continuing operating performance, maintaining an appropriately levered balance sheet and investing in activities related to our core business will enable us to enhance long-term recurring cash flow per share."
Long-Term Spectrum Lease
As previously announced on July 23, 2007, a Crown Castle subsidiary entered into a lease of its U.S. nationwide 1670-1675 MHz spectrum ("Spectrum"). The Spectrum is leased to a venture formed by Telcom Ventures, LLC and Columbia Capital, LLC ("Lessee") for a $13 million annual lease fee beginning July 23, 2007 until October 1, 2013. Upon the expiration of the initial term of the lease, the Lessee will have the right to acquire the Spectrum for $130 million, escalated at CPI from July 2007, or to renew the lease for a period of up to ten years on the same terms, subject to the annual lease fee increasing to $14.3 million. As part of such transaction, Crown Castle has transferred to Lessee the subsidiary holding the assets related to its trial network in New York City and will be the preferred provider of tower infrastructure during the Spectrum lease for future tower sites as the Spectrum is deployed by Lessee. Further, Crown Castle expects that substantially all of its operating and general and administrative costs associated with its Emerging Businesses segment will be eliminated as a result of the transactions described above.
Outlook
The following Outlook tables are based on current expectations and assumptions. The Outlook tables include the expected impact of the Merger on Crown Castle's results from January 12, 2007 to December 31, 2007 and assume a US dollar to Australian dollar exchange rate of 0.75 US dollars to 1.00 Australian dollars.
As reflected in the following tables, Crown Castle has increased the midpoint of its full year 2007 Outlook, previously issued on May 2, 2007, for site rental revenue by $6 million, site rental gross margin by $6.5 million, Adjusted EBITDA by $12.5 million and recurring cash flow by $13 million.
This Outlook section contains 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 is set forth below and in Crown Castle's filings with the Securities and Exchange Commission ("SEC").
The following tables set forth Crown Castle's current Outlook for the third quarter of 2007 and full year 2007:
(in millions, except per
share amounts) Third Quarter 2007 Full Year 2007
------------------ ----------------
Site rental revenue $323 to $328 $1,276 to $1,281
Site rental cost of
operations $112 to $117 $443 to $448
Site rental gross margin $209 to $214 $829 to $834
Adjusted EBITDA $192 to $197 $750 to $760
Interest expense and
amortization of deferred
financing costs
(inclusive of
approximately $6.3
million and $25 million,
respectively, from
non-cash expense) $88 to $90 $346 to $350
Sustaining capital
expenditures $6 to $8 $19 to $23
Recurring cash flow $96 to $101 $378 to $388
Net loss after deduction
of dividends on
preferred stock $(93) to $(50) $(242) to $(137)
Net loss per share* $(0.33) to $(0.18) $(0.86) to $(0.49)
*Based on 282.2 million
shares outstanding as
of June 30, 2007.
Pro Forma Consolidated Results
The following table provides investors with additional information on business trends and does not purport to represent what the actual consolidated results of operations would have been for the three and six months ended June 30, 2006, nor are they necessarily indicative of future consolidated results. The pro forma consolidated results are presented for illustrative purposes only and do not reflect the realization of potential cost savings and any related integration costs. The following table contains pro forma Crown Castle results for the three and six months ended June 30, 2006 and June 30, 2007, assuming the Merger was completed on January 1 for the periods presented below. As such, these results reflect adjustments to straight-line revenue and straight-line ground lease expense.
(in millions) Reported Pro Forma Pro Forma Pro Forma
-------- --------- --------- ---------
Results Results Results Results
------- ------- ------- -------
Q2 2007 Q2 2006 YTD Q2 2007 YTD Q2 2006
------- ------- ----------- -----------
Site rental
revenue $322.3 $294.3 $638.0 $579.7
Site rental cost
of operations $112.2 $103.7 $225.4 $206.1
Site rental
gross margin $210.1 $190.6 $412.6 $373.6
Conference Call Details
Crown Castle has scheduled a conference call for Wednesday, August 1, 2007, at 10:30 a.m. eastern time to discuss the second quarter 2007 results and Crown Castle's Outlook. Please dial 303-262-2190 and ask for the Crown Castle call at least 10 minutes prior to the start time. A telephonic replay of the conference call will be available from 12:30 p.m. eastern time on Wednesday, August 1, 2007 through 11:59 p.m. eastern time on Wednesday, August 8, 2007 and may be accessed by dialing 303-590-3000 using pass code 11093808#. An audio archive will also be available on Crown Castle's website at http://www.crowncastle.com shortly after the call and will be accessible for approximately 90 days.
Crown Castle International Corp. engineers, deploys, owns and operates technologically advanced shared wireless infrastructure, including extensive networks of towers. Crown Castle offers significant wireless communications coverage to 91 of the top 100 U.S. markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 22,000 and over 1,400 wireless communication sites in the U.S. and Australia, respectively. For more information on Crown Castle, please visit http://www.crowncastle.com.
The Crown Castle International Corp. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3063
Summary of Non-Cash Amounts in Tower Gross Margin
In accordance with applicable accounting standards, Crown Castle recognizes site rental revenues and ground lease expenses monthly on a straight-line basis, regardless of whether the receipts and payments are in equal monthly amounts. An agreement, related to an acquisition in Australia, provides the seller with a rent-free period at the beginning of the lease term, and other agreements call for rent to be prepaid for a specified period. If and to the extent the payment terms call for fixed escalations (as in fixed dollar or fixed percentage increases), the effect of such increases is recognized on a straight-line basis over the appropriate lease term. As a result of this accounting method, a portion of the revenue and expense recognized in a given period represents cash collected or paid in other periods.
A summary of the non-cash portions of our site rental revenue, ground lease expense, stock-based compensation for those employees directly related to U.S. tower operations, net amortization of below-market and above-market leases, and resulting impact on site rental gross margins is as follows:
(in thousands) For the Three Months Ended
--------------------------
June 30, 2007
Non-cash portion of site rental revenues
attributable to straight-line recognition
of revenues $10,924
Non-cash portion of ground lease expense
attributable to straight-line recognition
of expenses (8,931)
Non-cash stock-based compensation charges (128)
Net amortization of below market and above
market leases 68
-------
Non-cash impact on site rental gross margin $ 1,933
=======
Non-GAAP Financial Measures
This press release includes presentations of Adjusted EBITDA and recurring cash flow, which are non-GAAP financial measures.
Crown Castle defines Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, integration costs, depreciation, amortization and accretion, losses on purchases and redemptions of debt, interest and other income (expense), interest expense and amortization of deferred financing costs, benefit (provision) for income taxes, minority interests, cumulative effect of change in accounting principle, income (loss) from discontinued operations, and stock-based compensation charges. Adjusted EBITDA is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP)).
Crown Castle defines recurring cash flow to be Adjusted EBITDA, less interest expense and sustaining capital expenditures. Each of the amounts included in the calculation of recurring cash flow are computed in accordance with GAAP, with the exception of sustaining capital expenditures, which is not defined under GAAP. Sustaining capital expenditures are defined as capital expenditures (determined in accordance with GAAP) which do not increase the capacity or term of an asset. Recurring cash flow is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with GAAP). Recurring cash flow per share is not intended to be an alternative measure of earnings per share.
Adjusted EBITDA and recurring cash flow are presented as additional information because management believes these measures are useful indicators of the financial performance of our core businesses. In addition, Adjusted EBITDA is a measure of current financial performance used in our debt covenant calculations. Our measures of Adjusted EBITDA and recurring cash flow may not be comparable to similarly titled measures of other companies, including companies in the tower industry and in the historical financial statements of Global Signal. The tables set forth below reconcile these non-GAAP financial measures to comparable GAAP financial measures.
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures:
Adjusted EBITDA, recurring cash flow and recurring cash flow per share for the quarters ended June 30, 2007 and June 30, 2006 are computed as follows:
For the Three Months Ended
----------------------------
June 30, 2007 June 30, 2006
------------- -------------
(in thousands, except per share amounts)
Net income (loss) $(32,740) $(13,335)
Asset write-down charges 3,391 1,522
Integration costs (a) 5,069 --
Depreciation, amortization
and accretion 133,324 69,374
Losses on purchases of debt -- 740
Interest and other
income (expense) (2,906) 2,199
Interest expense and
amortization of deferred
financing costs 88,790 37,455
Benefit (provision) for
income taxes (15,620) 507
Minority interests 390 (4)
Stock-based compensation
charges (c) 6,682 5,380
--------- ---------
Adjusted EBITDA $186,380 $103,838
========= =========
Less: Interest expense and
amortization of deferred
financing costs 88,790 37,455
Less: Sustaining capital expenditures 6,671 2,307
--------- ---------
Recurring cash flow $ 90,919 $ 64,076
========= =========
Weighted average common shares
outstanding 282,025 212,675
Recurring cash flow per share $ 0.32 $ 0.30
========= =========
Adjusted EBITDA and recurring cash flow for the quarter ending September 30, 2007 and the year ending December 31, 2007 are forecasted as follows:
(in millions) Q3 2007 Full Year 2007
------- --------------
Outlook Outlook
------- -------
Net income (loss) $(88) to $(45) $(221) to $(116)
Adjustments to increase\
(decrease) net income (loss):
Restructuring charges
(credits)(a) $2 to $4 $2 to $4
Asset write-down charges $55 to $60 $63 to $70
Integration costs (a) $5 to $9 $24 to $33
Depreciation, amortization
and accretion $130 to $140 $530 to $570
Losses on purchases and
redemptions of debt -- --
Interest and other income
(expense) $(3) to $(1) $(10) to $(7)
Interest expense and amortization
of deferred financing costs(b) $88 to $90 $346 to $350
Benefit (provision) for
income taxes $(40) to $(29) $(99) to $(73)
Minority interests -- --
Income (loss) from discontinued
operations, net of tax -- --
Stock-based compensation charges(c) $5 to $7 $20 to $24
Adjusted EBITDA $192 to $197 $750 to $760
============ ============
Less: Interest expense and
amortization of deferred
financing costs(b) $88 to $90 $346 to $350
Less: Sustaining capital expenditures $6 to $8 $19 to $23
-------- ----------
Recurring cash flow $96 to $101 $378 to $388
============ ============
(a) inclusive of stock-based compensation charges
(b) inclusive of approximately $6.3 million and $25 million,
respectively, from non-cash expense
(c) exclusive of amounts included in restructuring charges (credits)
and integration costs
Other Calculations:
Sustaining capital expenditures for the quarters ended June 30, 2007 and June 30, 2006 is computed as follows:
For the Three Months Ended
--------------------------
(in thousands) June 30, 2007 June 30, 2006
------------- -------------
Capital Expenditures $77,745 $27,208
Less: Revenue enhancing on existing sites 5,955 9,292
Less: Land purchases 37,251 4,171
Less: New site construction 27,868 11,438
------- -------
Sustaining capital expenditures $ 6,671 $ 2,307
======= =======
Site rental gross margin for the quarter ending September 30, 2007 and for the year ending December 31, 2007 is forecasted as follows:
(in millions) Q3 2007 Full Year 2007
------- --------------
Outlook Outlook
------- -------
Site rental revenue $323 to $328 $1,276 to $1,281
Less: Site rental cost of
operations $112 to $117 $443 to $448
------------ ------------
Site rental gross margin $209 to $214 $829 to $834
============ ============
Cautionary Language Regarding Forward-Looking Statements
This press release contains forward-looking statements and information that are based on our management's current expectations. Such statements include, but are not limited to, plans, projections, Outlook and estimates regarding (i) the Merger and integration of the Global Signal assets, including with respect to cost savings and other benefits from the Merger, (ii) additional debt capacity, (iii) our investments of cash from borrowings and recurring cash flow, including availability and type of investments and the impact of and return on our investments, (iv) the utility of certain financial measures in analyzing our results, (v) the Spectrum lease, (vi) operating and general and administrative costs related to the Emerging Businesses segment, (vii) currency exchange rates, (viii) site rental revenue, (ix) site rental cost of operations, (x) site rental gross margin, (xi) Adjusted EBITDA, (xii) interest expense and amortization of deferred financing costs, (xiii) sustaining capital expenditures, (xiv) recurring cash flow (including recurring cash flow per share and annual growth) and (xv) net loss (including net loss per share). Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including but not limited to prevailing market conditions and the following:
* The Merger may cause disruptions in our business, which may
have an adverse effect on our business and financial
results.
* The assets of Global Signal acquired in the Merger may not
perform as expected, which may have an adverse effect on our
business, financial condition or results of operations.
* The integration of Global Signal is expected to result in
substantial expenses and may present significant challenges.
* Our business depends on the demand for wireless
communications and towers, and we may be adversely affected
by any slowdown in such demand, including a slow down
attributable to wireless carrier consolidation or by the
sharing of networks by wireless carriers.
* The loss or consolidation of, network sharing among, or
financial instability of any of our limited number of
customers may materially decrease revenues.
* Our substantial level of indebtedness may adversely affect
our ability to react to changes in our business and limit
our ability to use debt to fund future capital needs.
* An economic or wireless telecommunications industry
slowdown may materially and adversely affect our business
(including reducing demand for our towers and network
services) and the business of our customers.
* We operate in a competitive industry, and some of our
competitors have significantly more resources or less debt
than we do.
* Technology changes may significantly reduce the demand for
tower leases and negatively impact the growth in our
revenues.
* New wireless technologies may not deploy or be adopted by
customers as rapidly or in the manner projected.
* We generally lease or sublease the land under our towers
and may not be able to extend these leases.
* We may need additional financing, which may not be
available, for strategic growth opportunities.
* Our lease relating to our Spectrum has certain risk factors
different from our core tower business, including that the
Spectrum lease may not be renewed or continued, that the
option to acquire the Spectrum license may not be
exercised, and that the Spectrum may not be deployed, which
may result in the revenues derived from the Spectrum being
less than anticipated.
* FiberTower's business has certain risk factors different
from our core tower business (including an unproven
business model and the Risk Factors set forth in its SEC
filings) and may produce results that are less than
anticipated, resulting in a write off of all or part of our
investment in FiberTower. In addition, FiberTower's
business may require additional financing which may not be
available.
* Laws and regulations, which may change at any time and
with which we may fail to comply, regulate our business.
* Sales or issuances of a substantial number of shares of
our common stock may adversely affect the market price of
our common stock.
* We are heavily dependent on our senior management.
* Our network services business has historically experienced
significant volatility in demand, which reduces the
predictability of our results.
* We may suffer from future claims if radio frequency
emissions from wireless handsets or equipment on our towers
are demonstrated to cause negative health effects.
* Certain provisions of our certificate of incorporation,
bylaws and operative agreements and domestic and
international competition laws may make it more difficult
for a third party to acquire control of us or for us to
acquire control of a third party, even if such a change in
control would be beneficial to our stockholders.
* Disputes with customers and suppliers may adversely
affect results.
* We may suffer losses due to exposure to changes in foreign
currency exchange rates relating to our operations outside
the U.S.
Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors which could affect our results is included in our filings with the SEC.
Crown Castle International Corp.
Condensed Consolidated Statement of Operations (unaudited)
And Other Financial Data
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Net revenues:
Site rental $ 322,336 $ 169,160 $ 622,128 $ 331,057
Network services
and other 20,534 24,616 36,451 45,384
--------- --------- --------- ---------
Total net
revenues 342,870 193,776 658,579 376,441
--------- --------- --------- ---------
Costs of
operations
(exclusive of
depreciation,
amortization and
accretion):
Site rental 112,166 50,927 218,761 100,617
Network services
and other 14,679 15,880 26,452 29,666
--------- --------- --------- ---------
Total costs of
operations 126,845 66,807 245,213 130,283
General and
administrative 34,216 25,825 68,033 49,988
Corporate
development 2,111 2,686 3,296 4,364
Asset write-down
charges 3,391 1,522 4,743 1,857
Integration costs 5,069 -- 13,917 --
Depreciation,
amortization and
accretion 133,324 69,374 272,017 141,465
--------- --------- --------- ---------
Operating
income
(loss) 37,914 27,562 51,360 48,484
Losses on
purchases
and redemptions
of debt -- (740) -- (740)
Interest and other
income (expense) 2,906 (2,199) 6,205 (3,535)
Interest expense
and amortization
of deferred
financing costs (88,790) (37,455) (170,805) (69,715)
--------- --------- --------- ---------
Income (loss)
from
continuing
operations
before income
taxes and
minority
interests (47,970) (12,832) (113,240) (25,506)
Benefit (provision)
for income taxes 15,620 (507) 37,782 (1,123)
Minority interests (390) 4 (173) 915
--------- --------- --------- ---------
Income (loss) from
continuing
operations (32,740) (13,335) (75,631) (25,714)
Income (loss) from
discontinued
operations, net
of tax -- -- -- 5,657
--------- --------- --------- ---------
Net income (loss) (32,740) (13,335) (75,631) (20,057)
Dividends on
preferred stock (5,202) (5,202) (10,403) (10,403)
--------- --------- --------- ---------
Net income (loss)
after deduction of
dividends on
preferred stock $ (37,942) $ (18,537) (86,034) (30,460)
========= ========= ========= =========
Per common share -
basic and diluted:
Income (loss) from
continuing
operations $ (0.13) $ (0.09) $ (0.31) $ (0.17)
Income (loss) from
discontinued
operations -- -- -- 0.03
--------- --------- --------- ---------
Net income (loss) $ (0.13) $ (0.09) (0.31) (0.14)
========= ========= ========= =========
Weighted average
common shares
outstanding -
basic and diluted 282,025 212,675 277,741 213,574
--------- --------- --------- ---------
Adjusted EBITDA $ 186,380 $ 103,838 $ 353,638 $ 200,700
========= ========= ========= =========
Stock-based
compensation
expenses:
Site rental
cost of
operations $ 128 $ 50 $ 194 $ 66
Network services
and other
cost of
operations 106 60 175 80
General and
administrative 6,228 4,708 11,469 7,998
Corporate
development 220 562 (237) 750
Integration
costs 159 -- 790 --
--------- --------- --------- ---------
Total $ 6,841 $ 5,380 $ 12,391 $ 8,894
========= ========= ========= =========
Crown Castle International Corp.
Condensed Consolidated balance sheet (UNAUDITED)
(in thousands)
June 30, December 31,
2007 2006
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 92,432 $ 592,716
Restricted cash 146,605 115,503
Receivables, net of allowance
for doubtful accounts 27,592 30,774
Prepaid expenses and other
current assets 107,743 61,034
----------- -----------
Total current assets 374,372 800,027
Restricted cash 5,000 5,000
Deferred site rental receivable 113,801 98,527
Available-for-sale securities 114,108 154,955
Property and equipment, net 5,123,413 3,246,446
Goodwill 1,956,522 391,448
Other intangible assets, net 2,743,879 225,295
Deferred financing costs and
other assets, net of
accumulated amortization 189,928 84,470
----------- -----------
$10,621,023 $ 5,006,168
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,522 $ 18,545
Deferred rental revenues and
other accrued liabilities 208,387 182,250
Short-term debt and current
maturities of long-term debt 6,500 --
----------- -----------
Total current liabilities 238,409 200,795
Long-term debt, less current
maturities 5,990,684 3,513,890
Deferred income tax liability 267,279 --
Other liabilities 298,535 193,279
----------- -----------
Total liabilities 6,794,907 3,907,964
----------- -----------
Minority interests 324 29,052
Redeemable preferred stock 313,335 312,871
Stockholders' equity 3,512,457 756,281
----------- -----------
$10,621,023 $ 5,006,168
=========== ===========
Crown Castle International Corp.
Condensed Consolidated Statement of Cash flows
(in thousands)
Six Months Ended
June 30,
-------------------------
2007 2006
----------- -----------
Cash flows from operating
activities:
Net income (loss) $ (75,631) $ (20,057)
Adjustments to reconcile net
income (loss) to net cash
provided by (used for)
operating
activities:
Depreciation, amortization and
accretion 272,017 141,465
Deferred income tax (benefit)
provision (39,621) 19
Other adjustments 28,077 16,441
Changes in assets and
liabilities, excluding the
effects of acquisitions:
Increase (decrease) in
liabilities (50,172) 3,605
Decrease (increase) in assets (15,932) (23,101)
----------- -----------
Net cash provided by (used for)
operating activities 118,738 118,372
----------- -----------
Cash flows from investing
activities:
Proceeds from investments and
disposition of property and
equipment 2,782 1,079
Payments for acquisitions (net
of cash acquired) (489,477) --
Payments for capital
expenditures (124,925) (49,274)
Investments and loans (500) (1,000)
----------- -----------
Net cash provided by (used for)
investing activities (612,120) (49,195)
----------- -----------
Cash flows from financing
activities:
Proceeds from issuance of
long-term debt 650,000 1,000,000
Proceeds from issuance of
capital stock 13,334 37,909
Payments under revolving credit
agreements -- (295,000)
Purchases of common stock (601,352) (340,104)
Incurrence of financing costs (8,779) (4,272)
Net decrease (increase) in
restricted cash (14,138) (12,075)
Interest rate swap receipts
(payments) -- 5,915
Dividends on preferred stock (9,940) (9,938)
Capital distribution to
minority interest holders of
CCAL (37,196) --
----------- -----------
Net cash provided by (used for)
financing activities (8,071) 382,435
----------- -----------
Effect of exchange rate changes
on cash 1,169 (82)
Cash flows from discontinued
operations -- 5,657
----------- -----------
Net increase (decrease) in cash
and cash equivalents (500,284) 457,187
Cash and cash equivalents at
beginning of period 592,716 65,408
----------- -----------
Cash and cash equivalents at end
of period $ 92,432 $ 522,595
=========== ===========
Supplemental disclosure of cash
flow information:
Interest paid $ 150,565 $ 61,292
Income taxes paid 2,099 1,393
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(in $ thousands)
-------------------------------------
Quarter Ended 9/30/06
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Revenues
Site Rental 166,620 12,375 -- 178,995
Services 19,994 1,950 -- 21,944
-------------------------------------
Total Revenues 186,614 14,325 -- 200,939
Operating Expenses
Site Rental 50,484 4,151 626 55,261
Services 14,044 691 -- 14,735
-------------------------------------
Total Operating Expenses 64,528 4,842 626 69,996
General & Administrative 20,363 2,595 -- 22,958
Operating Cash Flow 101,723 6,888 (626) 107,985
Corporate Development 518 -- 1,957 2,475
Add: Stock-Based
Compensation (a) 3,710 254 765 4,729
-------------------------------------
Adjusted EBITDA 104,915 7,142 (1,818) 110,239
(a) Exclusive of charges included in restructuring charges and
integration costs.
-------------------------------------
Quarter Ended 9/30/06
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Gross Margins:
Site Rental 70% 66% N/M 69%
Services 30% 65% N/M 33%
Operating Cash Flow Margins 55% 48% N/M 54%
Adjusted EBITDA Margin 56% 50% N/M 55%
-------------------------------------
-------------------------------------
Quarter Ended 12/31/06
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Revenues
Site Rental 172,801 13,871 -- 186,672
Services 22,636 1,533 -- 24,169
-------------------------------------
Total Revenues 195,437 15,404 -- 210,841
Operating Expenses
Site Rental 51,899 3,840 837 56,576
Services 15,246 860 -- 16,106
-------------------------------------
Total Operating Expenses 67,145 4,700 837 72,682
General & Administrative 19,935 2,870 -- 22,805
Operating Cash Flow 108,357 7,834 (837) 115,354
Corporate Development 454 -- 1,488 1,942
Add: Stock-Based
Compensation (a) 3,026 242 (173) 3,095
-------------------------------------
Adjusted EBITDA 110,929 8,076 (2,498) 116,507
(a) Exclusive of charges included in restructuring charges and
integration costs.
-------------------------------------
Quarter Ended 12/31/06
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Gross Margins:
Site Rental 70% 72% N/M 70%
Services 33% 44% N/M 33%
Operating Cash Flow Margins 55% 51% N/M 55%
Adjusted EBITDA Margin 57% 52% N/M 55%
-------------------------------------
-------------------------------------
Quarter Ended 3/31/07
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Revenues
Site Rental 284,752 15,040 -- 299,792
Services 14,146 1,771 -- 15,917
-------------------------------------
Total Revenues 298,898 16,811 -- 315,709
Operating Expenses
Site Rental 101,033 4,717 845 106,595
Services 10,650 1,123 -- 11,773
-------------------------------------
Total Operating Expenses 111,683 5,840 845 118,368
General & Administrative 30,148 3,669 -- 33,817
Operating Cash Flow 157,067 7,302 (845) 163,524
Corporate Development 920 -- 265 1,185
Add: Stock-Based
Compensation (a) 4,223 1,333 (637) 4,919
-------------------------------------
Adjusted EBITDA 160,370 8,635 (1,747) 167,258
-------------------------------------
(a) Exclusive of charges included in restructuring charges and
integration costs.
-------------------------------------
Quarter Ended 3/31/07
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Gross Margins:
Site Rental 65% 69% N/M 64%
Services 25% 37% N/M 26%
Operating Cash Flow Margins 53% 43% N/M 52%
Adjusted EBITDA Margin 54% 51% N/M 53%
-------------------------------------
-------------------------------------
Quarter Ended 6/30/07
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Revenues
Site Rental 303,665 18,671 -- 322,336
Services 18,652 1,882 -- 20,534
-------------------------------------
Total Revenues 322,317 20,553 -- 342,870
Operating Expenses
Site Rental 106,132 5,187 847 112,166
Services 13,608 1,071 -- 14,679
-------------------------------------
Total Operating Expenses 119,740 6,258 847 126,845
General & Administrative 30,953 3,263 -- 34,216
Operating Cash Flow 171,624 11,032 (847) 181,809
Corporate Development 732 -- 1,379 2,111
Add: Stock-Based
Compensation (a) 6,045 430 207 6,682
-------------------------------------
Adjusted EBITDA 176,937 11,462 (2,019) 186,380
-------------------------------------
(a) Exclusive of charges included in restructuring charges and
integration costs.
-------------------------------------
Quarter Ended 6/30/07
-------------------------------------
CCUSA CCAL EB CCIC
-------------------------------------
Gross Margins:
Site Rental 65% 72% N/M 65%
Services 27% 43% N/M 29%
Operating Cash Flow Margins 53% 54% N/M 53%
Adjusted EBITDA Margin 55% 56% N/M 54%
-------------------------------------
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to
GAAP Financial Measure:
(in $ thousands)
----------------------------------------------
Quarter Ended
----------------------------------------------
9/30/2006 12/31/2006 3/31/2007 6/30/2007
Net income (loss) $(15,561) $ (6,275) $(42,891) $(32,740)
Restructuring charges
(credits) -- (391) -- --
Asset write-down
charges 948 140 1,352 3,391
Integration costs -- 1,503 8,848 5,069
Depreciation,
amortization and
accretion 72,161 71,618 138,693 133,324
Losses on purchases
and redemptions
of debt 437 4,666 -- --
Interest and other
income (expense) 985 (2,891) (3,299) (2,906)
Interest expense,
amortization of
deferred financing
costs 46,450 46,163 82,015 88,790
Benefit (provision)
for income taxes 575 (855) (22,162) (15,620)
Minority interests (485) (266) (217) 390
Stock-based compensa-
tion (exclusive of
charges included in
restructuring charges
and integration costs) 4,729 3,095 4,919 6,682
-------- -------- -------- --------
Adjusted EBITDA $110,239 $116,507 $167,258 $186,380
======== ======== ======== ========
---------------------------------
CCI FACT SHEET Q2 2006 to Q2 2007
---------------------------------
$ in thousands
---------------------------------------------------------------------
%
Q2 '06 Q2 '07 Change
---------------------------------
CCUSA
Site Rental Revenue $ 154,491 $ 303,665 97%
Ending Sites 11,056 22,287 102%
CCAL
Site Rental Revenue $ 14,669 $ 18,671 27%
Ending Sites 1,385 1,438 4%
TOTAL CCIC
Site Rental Revenue $ 169,160 $ 322,336 91%
Ending Sites 12,441 23,725 91%
---------------------------------------------------------------------
Ending Cash and
Cash Equivalents $ 522,595* $ 92,432*
Debt
Bank Debt $1,000,000 $ 650,000
Securitized Debt &
Other Notes $1,975,586 $5,347,184
6 1/4% Convertible
Preferred Stock $ 312,407 $ 313,335
---------- ----------
Total Debt $3,287,993 $6,310,519
Leverage Ratios
Net Bank Debt + Bonds/EBITDA 5.9X 7.9X
Total Net Debt/EBITDA 6.7X 8.3X
Last Quarter Annnualized
Adjusted EBITDA $ 415,352 $ 745,520
* Excludes Restricted Cash
This news release was distributed by PrimeNewswire, www.primenewswire.com
SOURCE: Crown Castle International Corp.
Crown Castle International Corp.
Ben Moreland, CFO
Jay Brown, Treasurer
713-570-3000