Crown Castle International Reports Third Quarter 2006 Results; Raises 2006 Outlook
HOUSTON, Oct. 25 /PRNewswire-FirstCall/ -- Crown Castle International Corp. (NYSE: CCI) today reported results for the quarter ended September 30, 2006.
Site rental revenue for the third quarter of 2006 increased $26.2 million, or 17.1%, to $179.0 million from $152.8 million for the same period in the prior year. Site rental gross margin, defined as site rental revenue less site rental cost of operations, increased 21.2% to $123.7 million, up $21.6 million in the third quarter of 2006 from the same period in 2005. Adjusted EBITDA for the third quarter of 2006 increased $24.5 million, or 28.6%, to $110.2 million, up from $85.7 million for the same period in 2005.
Recurring cash flow, defined as Adjusted EBITDA less interest expense less sustaining capital expenditures, increased from $53.6 million in the third quarter of 2005 to $61.6 million for the third quarter of 2006, up 14.8%, inclusive of approximately $13.0 million of additional interest expense from $705.0 million of incremental borrowings in June 2006. Weighted average common shares outstanding decreased to 201.1 million for the third quarter of 2006 from 215.7 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, improved by 24.0% to $0.31 in the third quarter of 2006 compared to $0.25 in the third quarter of 2005.
Net loss was $15.6 million for the third quarter of 2006 compared to a net loss of $25.5 million for the same period in 2005. Net loss after deduction of dividends on preferred stock was $20.8 million in the third quarter of 2006, compared to a loss of $35.0 million for the same period last year. Third quarter 2006 net loss per share was $(0.10), compared to a net loss per share of $(0.16) in last year's third quarter.
"We are very pleased with the solid growth we are experiencing in our core business as reflected in our third quarter results for site rental revenue, site rental gross margin, Adjusted EBITDA and recurring cash flow per share," stated John P. Kelly, President and Chief Executive Officer of Crown Castle. "We continue to grow faster than our stated long-term growth targets in each of these financial metrics. Our customers' focus on building high-quality wireless networks, coupled with our industry-leading customer satisfaction, is driving our growth. We believe the proposed acquisition of Global Signal and the resulting combined asset portfolio, in which over 16,000 of the 23,500 towers are in the top 100 US markets, will enhance Crown Castle's ability to serve all wireless carriers and increase long-term shareholder value. While we are excited about the anticipated combination with Global Signal and are working hard on integration plans, we remain focused on meeting our objectives for our existing business."
The prior year amounts included in this release have been restated as discussed in Crown Castle's Annual Report or Form 10-K for the year ended December 31, 2005.
SEGMENT RESULTS
US site rental revenue for the third quarter of 2006 increased $26.3 million, or 18.7%, to $166.6 million, compared to third quarter 2005 US site rental revenue of $140.4 million. US site rental gross margin increased 23.4% to $116.1 million, up $22.1 million in the third quarter of 2006 from the same period in 2005.
Australia site rental revenue for the third quarter of 2006 of $12.4 million was unchanged due to out-of-period adjustments from the same period in 2005. Australia site rental gross margin increased 1.2% to $8.2 million, up $0.1 million in the third quarter of 2006 from the same period in 2005.
INVESTMENTS AND LIQUIDITY
During the third quarter of 2006, Crown Castle invested $208.6 million in purchases of its common stock and capital expenditures. During the quarter, Crown Castle purchased 5.2 million common shares using $177.9 million in cash at an average price of $34.22 per share. For the third quarter 2006, total capital expenditures were $30.7 million, comprised of $2.2 million of sustaining capital expenditures and $28.4 million of revenue generating capital expenditures, of which $8.7 million was spent on existing sites, $6.8 million on land purchases and $12.9 million on the construction of new sites. Common shares outstanding at September 30, 2006 were 201.9 million.
During 2006, Crown Castle has purchased 15.9 million of its common shares using $518.0 million in cash to reduce common shares outstanding by approximately 7%. Since January 1, 2003, Crown Castle has invested over $1.4 billion in purchases of its securities to reduce fully diluted common shares by approximately 66 million shares.
On August 1, 2006, Crown Castle redeemed its 10 3/4% and 9 3/8% Senior Notes, which had approximately $10.0 million and $1.7 million outstanding, respectively, at June 30, 2006, for approximately $12.7 million including accrued interest. At October 25, 2006, Crown Castle's availability under its revolving credit facility was $250 million.
"We continue to focus on activities that we believe will maximize long- term recurring cash flow per share," stated Ben Moreland, Chief Financial Officer of Crown Castle. "We believe the actions we have taken thus far during 2006, including the agreement to acquire Global Signal and the purchase of approximately 7% of common stock outstanding, will enhance the growth rate of this measure in future periods. Further, we are working on alternatives to refinance our existing credit facility at a lower interest cost, including a potential offering of additional securitized notes, which we hope to complete during the next several months. Even without the benefit of lowering our run- rate interest expense, our expected growth in recurring cash flow per share for full year 2006 based on our outlook is approximately 40%, which significantly exceeds our 20% to 25% annual target."
OUTLOOK
The following Outlook tables are based on current expectations and assumptions and assume a US dollar to Australian dollar exchange rate of 0.75 US dollars to 1.00 Australian dollars. 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.
As reflected in the following tables, Crown Castle has increased the mid- point of its full year 2006 outlook previously issued on August 3, 2006 for site rental revenue by $1.5 million, site rental revenue gross margin by $2.5 million, Adjusted EBITDA by $9.5 million and recurring cash flow by $10.5 million.
The following tables set forth Crown Castle's current Outlook for the fourth quarter of 2006 and full year 2006:
(in millions, except per
share amounts) Fourth Quarter 2006 Full Year 2006
Site rental revenue $180 to $182 $690 to $692
Site rental cost of operations $55 to $57 $212 to $214
Site rental gross margin $124 to $126 $478 to $480
Adjusted EBITDA $111 to $113 $422 to $424
Interest expense $46 to $47 $162 to $164
Sustaining capital expenditures $3 to $5 $10 to $12
Recurring cash flow $61 to $63 $249 to $251
Net loss after deduction of
dividends on preferred stock $(26) to $(10) $(82) to $(61)
Net loss per share* $(0.13) to $(0.05) $(0.39) to $(0.29)
* Based on 201.9 million shares outstanding at September 30, 2006 for fourth quarter 2006 Outlook and 209.4 million weighted average shares outstanding for the nine months ended September 30, 2006 for full year 2006 Outlook.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, October 26, 2006, at 10:30 a.m. eastern time to discuss the third quarter of 2006 results and Crown Castle's Outlook. Please dial 303-262-2075 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 Thursday, October 26, 2006 through 11:59 p.m. eastern time on Thursday, November 2, 2006 and may be accessed by dialing 303-590-3000 using passcode 11073700#. 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 76 of the top 100 US markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 11,500 and over 1,300 wireless communication sites in the US and Australia, respectively. On October 6, 2006, Crown Castle announced it had entered into a definitive agreement to acquire Global Signal Inc. (NYSE: GSL). Global Signal owns, leases or manages approximately 11,000 towers and other wireless communications sites. For more information on Crown Castle, please visit http://www.crowncastle.com .
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, and resulting impact on site rental gross margins is as follows:
(in thousands) For the Three Months Ended
September 30, 2006
Non-cash portion of site rental revenue:
Amounts attributable to rent-free periods $1,746
Amounts attributable to straight-line
recognition of fixed escalations 2,900
4,646
Non-cash portion of ground lease expense:
Amounts attributable to straight-line
recognition of fixed escalations 4,263
Non-cash stock-based compensation charges 50
Non-cash impact on site rental gross margin: $333
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 cumulative effect of change in accounting principle, income (loss) from discontinued operations, minority interests, benefit (provision) for income taxes, interest expense, amortization of deferred financing costs, losses on purchases and redemptions of debt, interest and other income (expense), depreciation, amortization and accretion, operating stock-based compensation charges, asset write-down charges and restructuring charges (credits). Adjusted EBITDA is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with Generally Accepted Accounting Principles (GAAP)).
Crown Castle defines recurring cash flow to be Adjusted EBITDA, less interest expense and less 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).
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. 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 September 30, 2006 and September 30, 2005 are computed as follows:
For the Three Months Ended
(in thousands, except per share amounts) September 30, September 30,
2006 2005
Net income (loss) $(15,561) $(25,536)
Income (loss) from discontinued
operations, net of tax --- ---
Minority interests (485) (834)
Benefit (provision) for income taxes 575 117
Interest expense and amortization of
deferred financing costs 46,450 28,600
Losses on purchases and redemption of debt 437 2,676
Interest and other income (expense) 985 (3,293)
Depreciation, amortization and accretion 72,161 70,215
Operating stock-based compensation charges 4,729 12,590
Asset write-down charges 948 1,161
Restructuring charges, including
stock-based compensation charges --- ---
Adjusted EBITDA $110,239 $85,696
Less: Interest expense and amortization
of deferred financing costs 46,450 28,600
Less: Sustaining capital expenditures 2,230 3,467
Recurring cash flow $61,559 $53,629
Weighted average common shares outstanding 201,070 215,664
Recurring cash flow per share $0.31 $0.25
Adjusted EBITDA and recurring cash flow for the quarter ending
December 31, 2006 and the year ending December 31, 2006 are forecasted as
follows:
(in millions) Q4 2006 Full Year 2006
Outlook Outlook
Net income (loss) $(21) to (5) $(62) to (41)
Income (loss) from discontinued
operations, net of tax --- (5) to (6)
Minority interests 0 to (1) (1) to (2)
Benefit (provision) for income taxes 0 to 1 3 to 5
Interest expense and amortization of
deferred financing costs 46 to 47 162 to 164
Losses on purchases and redemptions of debt --- 1 to 2
Interest and other income (expense) (1) to 1 3 to 5
Depreciation, amortization and accretion 71 to 76 284 to 290
Operating stock-based compensation charges 3 to 5 17 to 19
Asset write-down charges 0 to 2 3 to 5
Restructuring charges (credits) --- ---
Adjusted EBITDA $111 to 113 $422 to 424
Less: Interest expense and amortization
of deferred financing costs 46 to 47 162 to 164
Less: Sustaining capital expenditures 3 to 5 10 to 12
Recurring cash flow $61 to 63 $249 to 251
Other Calculations:
Sustaining capital expenditures for the quarters ended September 30, 2006 and September 30, 2005 is computed as follows:
For the Three Months Ended
(in thousands) September 30, September 30,
2006 2005
Capital Expenditures $30,652 $16,867
Less: Revenue enhancing on existing sites (8,717) (5,496)
Less: Land purchases (6,846) (2,868)
Less: New site construction (12,859) (5,036)
Sustaining capital expenditures $2,230 $3,467
Site rental gross margin for the quarter ending December 31, 2006 and for the year ending December 31, 2006 is forecasted as follows:
(in millions) Q4 2006 Full Year 2006
Outlook Outlook
Site rental revenue $180 to $182 $690 to $692
Less: Site rental cost of operations $55 to $57 $212 to $214
Site rental gross margin $124 to $126 $478 to $480
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 and estimates regarding (i) growth in our business, demand for our towers and leasing activity, (ii) network development by our customers, (iii) the contemplated merger with Global Signal ("Contemplated Merger"), including the potential impact and benefits of the Contemplated Merger, (iv) our capital investments, including the availability and type of investments and the impact of and return on our investments, (v) potential debt issuances, alternatives and refinancing, (vi) currency exchange rates, (vii) site rental revenue, (viii) site rental cost of operations, (ix) site rental gross margin, (x) Adjusted EBITDA, (xi) interest expense, (xii) sustaining capital expenditures, (xiii) recurring cash flow (including recurring cash flow per share) and (xiv) 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 integration of Global Signal and its assets following the
Contemplated Merger is expected to result in substantial expenses and
may present significant challenges, including that the acquired assets
may not perform as contemplated.
-- Whether or not the Contemplated Merger is consummated, the
announcement and pendency of the merger could cause disruptions in our
business, which could have an adverse effect on our businesses and
financial results.
-- The Contemplated Merger is subject to waiting periods, and the receipt
of consents and approvals from, or challenge by, various government
entities, which may impose conditions on, jeopardize or delay
consummation of, or reduce the anticipated benefits of the merger.
-- The Contemplated Merger is subject to certain conditions to closing
that could result in the merger being delayed or not consummated,
which could negatively impact our stock price and future business and
operations.
-- If the Contemplated Merger is not consummated, we will have incurred
substantial costs that may adversely affect our financial results and
operations and the market price of our common stock.
-- The issuance of shares of our common stock in conjunction with the
Contemplated Merger may cause the market price of our stock to fall
and will decrease the aggregate voting power of our current
stockholders.
-- Our business depends on the demand for wireless communications and
towers, and we may be adversely affected by any slowdown in such
demand.
-- The loss or consolidation of, network sharing among, or financial
instability of any of our limited number of customers may materially
decrease revenues.
-- 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.
-- 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.
-- 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.
-- 3G and other 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.
-- Restrictive covenants on our debt instruments may limit our ability to
take actions that may be in our best interests.
-- Modeo's business has certain risk factors different from our core
tower business, including an unproven business model, and may fail to
operate successfully and produce results that are less than
anticipated. In addition, Modeo's business may require additional
financing which may not be available.
-- FiberTower's business has certain risk factors different from our core
tower business, including an unproven business model, 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.
-- 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.
-- Sales or issuances of a substantial number of shares of our common
stock may adversely affect the market price of our common stock.
-- 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 in Australia.
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 Securities and Exchange Commission ("SEC").
Additional Information and Where to Find It
In connection with the Contemplated Merger, Crown Castle plans to file with the SEC a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus. INVESTORS AND SECURITY HOLDERS OF CROWN CASTLE AND GLOBAL SIGNAL ARE URGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY ARE AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CROWN CASTLE, GLOBAL SIGNAL, THE CONTEMPLATED MERGER AND RELATED MATTERS. The final Joint Proxy Statement/Prospectus will be mailed to stockholders of Crown Castle and Global Signal. Investors and security holders of Crown Castle and Global Signal will be able to obtain copies of the Registration Statement and the Joint Proxy Statement/Prospectus, when they become available, as well as other filings with the SEC that will be incorporated by reference into such documents, containing information about Crown Castle and Global Signal, without charge, at the SEC's website at http://www.sec.gov . These documents may also be obtained for free from Crown Castle by directing a request to Crown Castle International Corp., Investor Relations, 510 Bering Drive, Suite 600, Houston, TX 77057 or for free from Global Signal by directing a request to Global Signal Inc. at 301 North Cattlemen Road, Suite 300, Sarasota, Florida 34232-6427, Attention: Secretary.
Participants in the Solicitation
Neither Crown Castle nor Global Signal is currently engaged in a solicitation of proxies from the security holders of Crown Castle or Global Signal in connection with the Contemplated Merger. If a proxy solicitation commences, Crown Castle, Global Signal and their respective directors and executive officers and other members of management may be deemed to be participants in such solicitation. Information regarding Crown Castle's directors and executive officers is available in Crown Castle's Annual Report on Form 10-K for the year ended December 31, 2005, and the proxy statement, dated April 11, 2006, for its 2006 annual meeting of stockholders, which are filed with the SEC. Information regarding Global Signal's directors and executive officers is available in Global Signal's Annual Report on Form 10-K for the year ended December 31, 2005 and the proxy statement, dated April 12, 2006, for its 2006 annual meeting of stockholders, which are filed with the SEC. Additional information regarding the interests of such directors and executive officers will be included in the Registration Statement containing the Joint Proxy Statement/Prospectus to be filed with the SEC.
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,
2006 2005 2006 2005
(As restated) (As restated)
Net revenues:
Site rental $178,995 $152,802 $510,052 $441,679
Network services and other 21,944 19,457 67,328 56,454
Total net revenues 200,939 172,259 577,380 498,133
Costs of operations (exclusive
of depreciation, amortization
and accretion):
Site rental 55,261 50,671 155,878 147,396
Network services and other 14,735 13,333 44,401 39,204
Total costs of operations 69,996 64,004 200,279 186,600
General and administrative 22,958 33,977 72,946 80,458
Corporate development 2,475 1,172 6,839 2,456
Restructuring charges --- --- --- 8,477
Asset write-down charges 948 1,161 2,805 2,152
Depreciation, amortization
and accretion 72,161 70,215 213,626 211,132
Operating income (loss) 32,401 1,730 80,885 6,858
Losses on purchases
and redemptions of debt (437) (2,676) (1,177) (283,797)
Interest and other
income (expense) (985) 3,293 (4,520) (1,238)
Interest expense
and amortization of deferred
financing costs (46,450) (28,600) (116,165) (103,262)
Income (loss) from continuing
operations before income
taxes and minority interests (15,471) (26,253) (40,977) (381,439)
Benefit (provision)
for income taxes (575) (117) (1,698) (408)
Minority interests 485 834 1,400 2,765
Income (loss) from continuing
operations (15,561) (25,536) (41,275) (379,082)
Income (loss) from discontinued
operations, net of tax --- --- 5,657 848
Net income (loss) (15,561) (25,536) (35,618) (378,234)
Dividends on preferred stock (5,201) (9,429) (15,604) (28,650)
Net income (loss) after
deduction of dividends
on preferred stock $(20,762) $(34,965) $(51,222) $(406,884)
Per common share --
basic and diluted:
Income (loss) from continuing
operations $(0.10) $(0.16) $(0.27) $(1.86)
Income (loss) from
discontinued operations --- --- 0.03 ---
Net income (loss) $(0.10) $(0.16) $(0.24) $(1.86)
Weighted average common shares
outstanding -- basic
and diluted 201,070 215,664 209,406 219,167
Adjusted EBITDA $110,239 $85,696 $310,939 $244,619
Stock-based compensation charges:
Site rental cost of operations $50 $504 $116 $622
Network services and other cost
of operations 60 246 140 305
General and administrative 3,666 11,559 11,664 14,731
Corporate development 953 281 1,703 342
Total operating stock-based
compensation 4,729 12,590 13,623 16,000
Restructuring stock-based
compensation --- --- --- 6,424
Total stock-based
compensation $4,729 $12,590 $13,623 $22,424
Crown Castle International Corp.
Condensed Consolidated balance sheet
(in thousands)
Sept. 30, Dec. 31,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $66,084 $65,408
Restricted cash 88,669 91,939
Receivables, net of allowance for doubtful
accounts 21,872 16,830
Deferred site rental receivable 12,282 9,307
Prepaid expenses and other current assets 42,405 37,811
Total current assets 231,312 221,295
Restricted cash 5,021 3,814
Deferred site rental receivable 94,853 87,392
Available-for-sale securities 249,035 ---
Property and equipment, net of accumulated
depreciation 3,260,049 3,294,333
Goodwill 390,365 340,412
Deferred financing costs and other assets, net of
accumulated amortization 288,968 184,071
$4,519,603 $4,131,317
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $16,667 $12,230
Accrued interest 8,627 8,281
Deferred rental revenues and other accrued
liabilities 152,243 148,703
Short-term debt and current maturities of
long-term debt 10,000 295,000
Total current liabilities 187,537 464,214
Long-term debt, less current maturities 2,953,915 1,975,686
Deferred ground lease payable 132,087 118,747
Other liabilities 57,978 55,559
Total liabilities 3,331,517 2,614,206
Minority interests 27,879 26,792
Redeemable preferred stock 312,639 311,943
Stockholders' equity 847,568 1,178,376
$4,519,603 $4,131,317
Note: In accordance with the Indenture Agreement governing the Notes, all
rental cash receipts for the month are restricted and held by the
trustee. Amounts in excess of reserve balances as calculated by
the trustee are returned to the Company on the 15th of the
subsequent month.
Crown Castle International Corp.
Condensed Consolidated Statement of Cash flows
(in thousands)
Nine Months Ended
September 30,
2006 2005
(As
restated)
Cash flows from operating activities:
Net income (loss) $(35,618) $(378,234)
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operating
activities:
Depreciation, amortization and accretion 213,626 211,132
Losses on purchases and redemptions of long-term
debt 1,177 283,797
Amortization of deferred financing costs 6,070 4,174
Stock-based compensation charges 13,623 22,424
Asset write-down charges 2,805 2,152
Minority interests (1,400) (2,765)
Equity in losses and write-downs of
unconsolidated affiliates 9,573 3,365
(Income) loss from discontinued operations (5,657) (848)
Deferred income tax (benefit) expense (1,738) ---
Interest rate swap (income) expense 476 941
Changes in assets and liabilities:
Increase (decrease) in accrued interest 346 (36,985)
Increase (decrease) in accounts payable 2,911 (1,080)
Increase (decrease) in deferred rental
revenues, deferred ground lease payable
and other liabilities (2,293) (408)
Decrease (increase) in receivables (4,796) 12,984
Decrease (increase) in inventories, prepaid
expenses, deferred site rental receivables
and other assets (20,182) (11,911)
Net cash provided by (used for)
operating activities 178,923 108,738
Cash flows from investing activities:
Proceeds from investments and disposition of
property and equipment 2,235 1,968
Acquisition of assets (303,611) (144,580)
Capital expenditures (79,926) (38,799)
Investments, loans and other (6,350) (55,034)
Net cash provided by (used for) investing
activities (387,652) (236,445)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 1,000,000 1,900,000
Proceeds from issuance of capital stock 43,854 37,044
Purchases and redemption of long-term debt (12,108)(1,848,222)
Borrowing under revolving credit agreements --- 145,000
Payments under revolving credit agreements (295,000) (180,000)
Purchases of capital stock (517,963) (292,718)
Incurrence of financing costs (7,888) (31,973)
Initial funding of restricted cash --- (48,873)
Net decrease (increase) in restricted cash 2,063 (31,823)
Interest rate swap receipts (payments) 5,915 (6,381)
Dividends on preferred stock (14,907) (13,220)
Net cash provided by (used for)
financing activities 203,966 (371,166)
Effect of exchange rate changes on cash (218) (457)
Discontinued operations 5,657 3,973
Net increase (decrease) in cash and cash equivalents 676 (495,357)
Cash and cash equivalents at beginning of period 65,408 566,707
Cash and cash equivalents at end of period $66,084 $71,350
Supplemental disclosure of cash flow information:
Interest paid $106,364 $132,748
Income taxes paid 3,284 7,408
CROWN CASTLE INTERNATIONAL CORP.
EBITDA Fact Sheet
(in $ thousands)
Quarter Ended 12/31/05
CCUSA CCAL EB(A) CCIC
Revenues
Site Rental 143,933 11,513 --- 155,446
Services 21,798 1,382 --- 23,180
Total Revenues 165,731 12,895 --- 178,626
Operating Expenses
Site Rental 45,461 4,299 199 49,959
Services 14,693 733 --- 15,426
Total Operating Expenses 60,154 5,032 199 65,385
General & Administrative 22,042 2,861 --- 24,903
Operating Cash Flow 83,535 5,002 (199) 88,338
Corporate Development 194 --- 1,648 1,842
Add: Non-Cash Compensation 3,775 114 58 3,947
Adjusted EBITDA 87,116 5,116 (1,789) 90,443
Quarter Ended 12/31/05
CCUSA CCAL EB(A) CCIC
Gross Margins:
Site Rental 68% 63% N/M 68%
Services 33% 47% N/M 33%
Operating Cash Flow Margins 50% 39% N/M 49%
Adjusted EBITDA Margin 53% 40% N/M 51%
(A) Emerging Business
Quarter Ended 3/31/06
CCUSA CCAL EB(A) CCIC
Revenues
Site Rental 150,138 11,759 --- 161,897
Services 18,982 1,786 --- 20,768
Total Revenues 169,120 13,545 --- 182,665
Operating Expenses
Site Rental 45,307 4,122 261 49,690
Services 12,717 1,069 --- 13,786
Total Operating Expenses 58,024 5,191 261 63,476
General & Administrative 20,200 3,963 --- 24,163
Operating Cash Flow 90,896 4,391 (261) 95,026
Corporate Development 358 --- 1,320 1,678
Add: Non-Cash Compensation 2,234 1,155 125 3,514
Adjusted EBITDA 92,772 5,546 (1,456) 96,862
Quarter Ended 3/31/06
CCUSA CCAL EB(A) CCIC
Gross Margins:
Site Rental 70% 65% N/M 69%
Services 33% 40% N/M 34%
Operating Cash Flow Margins 54% 32% N/M 52%
Adjusted EBITDA Margin 55% 41% N/M 53%
(A) Emerging Business
Quarter Ended 6/30/06
CCUSA CCAL EB(A) CCIC
Revenues
Site Rental 154,491 14,669 --- 169,160
Services 22,696 1,920 --- 24,616
Total Revenues 177,187 16,589 --- 193,776
Operating Expenses
Site Rental 46,310 4,175 442 50,927
Services 14,867 1,013 --- 15,880
Total Operating Expenses 61,177 5,188 442 66,807
General & Administrative 23,026 2,799 --- 25,825
Operating Cash Flow 92,984 8,602 (442) 101,144
Corporate Development 489 --- 2,197 2,686
Add: Non-Cash Compensation 4,835 171 374 5,380
Adjusted EBITDA 97,330 8,773 (2,265) 103,838
Quarter Ended 6/30/06
CCUSA CCAL EB(A) CCIC
Gross Margins:
Site Rental 70% 72% N/M 70%
Services 34% 47% N/M 35%
Operating Cash Flow Margins 52% 52% N/M 52%
Adjusted EBITDA Margin 55% 53% N/M 54%
(A) Emerging Business
Quarter Ended 9/30/06
CCUSA CCAL EB(A) 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: Non-Cash Compensation 3,710 254 765 4,729
Adjusted EBITDA 104,915 7,142 (1,818) 110,239
Quarter Ended 9/30/06
CCUSA CCAL EB(A) 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%
(A) Emerging Business
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to GAAP
Financial Measure:
(in $ thousands)
Quarter Ended
12/31/2005 3/31/2006 6/30/2006 9/30/2006
Net income (loss) $(23,303) $(6,722) $(13,335) $(15,561)
Income (loss) from discontinued
operations, net of tax --- (5,657) --- ---
Minority interests (760) (911) (4) (485)
Benefit (provision) for income taxes 2,817 616 507 575
Interest expense and amortization
of deferred financing costs 30,544 32,260 37,455 46,450
Losses on purchases and
redemptions of debt --- --- 740 437
Interest and other income
(expense) (2,592) 1,336 2,199 985
Depreciation, amortization and
accretion 69,986 72,091 69,374 72,161
Operating stock-based
compensation charges 3,947 3,514 5,380 4,729
Asset write-down charges 773 335 1,522 948
Cumulative effect of change in
accounting principle 9,031 --- --- ---
Adjusted EBITDA $90,443 $96,862 $103,838 $110,239
CCI FACT SHEET Q3 2006
$ in thousands
Q3 '05 Q3 '06 %Change
CCUSA
Site Rental Revenue $140,358 $166,620 19%
Ending Sites 11,070 11,525 4%
CCAL
Site Rental Revenue $12,444 $12,375 -1%
Ending Sites 1,386 1,385 0%
Emerging Business
Site Rental Revenue $--- --- N/A
Ending Sites --- --- N/A
TOTAL CCIC
Site Rental Revenue $152,802 $178,995 17%
Ending Sites 12,456 12,910 4%
Cash and Cash Equivalents $71,350 * $66,084 *
Debt
Bank Debt $145,000 $1,000,000
Bonds $1,975,686 $1,963,915
6 1/4% & 8 1/4% Convertible Preferred
Stock $509,043 $312,639
Total Debt $2,629,729 $3,276,554
Leverage Ratios
Net Bank Debt / LQA Adjusted EBITDA N/A 2.1X
Net Bank Debt + Bonds / LQA Adjusted
EBITDA 6.0X 6.6X
Total Net Debt / LQA Adjusted EBITDA 7.5X 7.3X
Last Quarter Annualized Adjusted
EBITDA $342,784 $440,956
*Excludes Restricted Cash
Contacts: Ben Moreland, CFO
Jay Brown, Treasurer
Crown Castle International Corp.
713-570-3000
SOURCE Crown Castle International Corp.
-0- 10/25/2006
/CONTACT: Ben Moreland, CFO, or Jay Brown, Treasurer, both of Crown
Castle International Corp., +1-713-570-3000/
/Web site: http://www.sec.gov /
/Web site: http://www.crowncastle.com /
(CCI)
CO: Crown Castle International Corp.; Global Signal
ST: Texas
IN: CPR TLS
SU: ERN CCA ERP
AW-JP
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8982 10/25/2006 16:21 EDT http://www.prnewswire.com