Crown Castle International Reports Third Quarter 2007 Results, Provides 2008 Outlook
"We had another solid quarter, exceeding the midpoint of our third quarter Outlook for site rental revenue, site rental gross margin, Adjusted EBITDA and recurring cash flow," stated John P. Kelly, President and Chief Executive Officer of Crown Castle. "Our new leasing pipeline continues to build. Further, with the AWS spectrum clearing process well underway, our confidence in the growth of new leasing revenue continues to increase. In addition, we made significant progress in the third quarter with the integration of the Global Signal assets and anticipate that we will be substantially complete by the end of the year. Along with the third quarter results, we are announcing our full year 2008 Outlook which suggests approximately 25% year-over-year growth in recurring cash flow per share, which is at the high end of our previously stated annual growth goal of 20% to 25%. Our expectation for growth in recurring cash flow per share reinforces our belief that our well-located assets, industry-leading customer service, and efficient capital structure will create short and long-term value for our shareholders."
CONSOLIDATED FINANCIAL RESULTS
Site rental revenue for the third quarter of 2007 increased $147.8 million, or 82.6%, to $326.8 million from $179.0 million for the same period in the prior year. Pro forma site rental revenue growth was 7.3%, comparing reported third quarter 2007 results to pro forma third quarter 2006 results, exclusive of approximately $1.1 million and $6.5 million of out of run-rate items in the third quarter of 2007 and the third quarter of 2006, respectively. Site rental gross margin, defined as site rental revenue less site rental cost of operations, increased $91.2 million, or 73.7%, to $214.9 million in the third quarter of 2007 from the same period in 2006. Pro forma site rental gross margin growth was 10.0%, comparing reported third quarter 2007 results to pro forma third quarter 2006 results, exclusive of the previously mentioned out of run-rate site rental revenue. Adjusted EBITDA (see definition herein) for the third quarter of 2007 increased $85.5 million, or 77.6%, to $195.8 million, from the same period in 2006.
Recurring cash flow, defined as Adjusted EBITDA less interest expense and sustaining capital expenditures, increased by $39.2 million, or 63.8%, from $61.6 million in the third quarter of 2006 to $100.8 million for the third quarter of 2007, inclusive of approximately $18.9 million of additional interest expense from the $1.15 billion in borrowings in the fourth quarter of 2006 and first quarter of 2007 to reduce potential and actual shares outstanding by 33.7 million shares. Weighted average common shares outstanding increased to 282.6 million for the third quarter of 2007, inclusive of the impact from the Merger, from 201.1 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 $0.36 in the third quarter of 2007, inclusive of $(0.02) per share of dilution from the previously mentioned borrowings used to reduce potential and actual shares outstanding, compared to $0.31 in the third quarter of 2006.
Net loss was $(67.0) million for the third quarter of 2007, inclusive of (i) a $57.7 million asset write-down charge and $3.1 million restructuring charge related to the long-term spectrum lease announced in July 2007, (ii) a $63.4 million increase in depreciation, amortization and accretion expense primarily relating to the Merger, (iii) $4.7 million of Merger integration costs, and (iv) an improvement in benefit (provision) for income taxes of $32.5 million, compared to a net loss of $(15.6) million for the same period in 2006. Net loss after deduction of dividends on preferred stock was $(72.2) million in the third quarter of 2007, compared to a loss of $(20.8) million for the same period last year. Third quarter 2007 net loss per share was $(0.26), compared to a net loss per share of $(0.10) in last year's third quarter.
SEGMENT RESULTS
US site rental revenue for the third quarter of 2007 increased $143.2 million, or 85.9%, to $309.8 million, compared to third quarter 2006 US site rental revenue of $166.6 million. US site rental gross margin increased $88.3 million, or 76.4%, to $203.8 million from the same period in 2006.
Australia site rental revenue for the third quarter of 2007 increased $4.6 million, or 37.4%, to $17.0 million, compared to $12.4 million in the third quarter of 2006. Australia site rental gross margin for the third quarter of 2007 increased $2.9 million, or 35.6%, to $11.2 million, compared to the third quarter of 2006.
INVESTMENTS AND LIQUIDITY
During the third quarter of 2007, Crown Castle invested approximately $66.3 million in capital expenditures. Capital expenditures was comprised of $5.6 million of sustaining capital expenditures and $60.7 million of revenue generating capital expenditures, of which $34.7 million was spent on land purchases, $10.9 million on existing sites and $15.1 million on the construction of new sites.
OUTLOOK
"As presented below, we are providing full year 2008 Outlook for operating results that suggests growth in recurring cash flow per share of approximately 25% year-over-year, which is at the high end of our stated goal of 20% to 25% annual growth," stated Ben Moreland, Chief Financial Officer of Crown Castle. "This anticipated growth reflects the expected performance of our tower business, the efficiency of our capital structure in translating revenue growth into recurring cash flow per share growth, and the impact of prior investment decisions, including the acquisition of Global Signal and the purchase of 30% of our fully diluted shares over the last four years. While there are many potential factors that could drive additional leasing in 2008 beyond our expectations, our full year 2008 Outlook suggests site rental revenue and Adjusted EBITDA growth of approximately $100 million, in-line with the growth we are experiencing in 2007. I am very pleased that this level of growth in site rental revenue and Adjusted EBITDA translates into achieving the high end of our targeted growth rate in recurring cash flow per share."
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 and assume a US dollar to Australian dollar exchange rate of 0.85 US dollars to 1.00 Australian dollar for fourth quarter 2007 Outlook. Crown Castle has assumed an exchange rate of 0.83 US dollars to 1.00 Australian dollar for full year 2007 and full year 2008 Outlook.
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 table sets forth Crown Castle's current Outlook for the fourth quarter of 2007 and full year 2007:
(in millions, except per share amounts)
Fourth Quarter Full Year
2007 2007
--------- ---------
Site rental revenue $333 to $338 $1,282 to $1,287
Site rental cost
of operations $112 to $117 $443 to $448
Site rental gross margin $218 to $223 $837 to $842
Adjusted EBITDA $202 to $207 $751 to $756
Interest expense and amortization
of deferred financing costs(a) $88 to $90 $348 to $350
Sustaining capital expenditures $6 to $8 $19 to $23
Recurring cash flow $106 to $111 $380 to $385
Net loss after deduction of
dividends on preferred stock $(46) to $(9) $(201) to $(163)
Net loss per share(b) $(0.16) to $(0.03) $(0.71) to $(0.58)
(a) Inclusive of approximately $6 million and $25 million,
respectively, from non-cash expense.
(b) Based on 282.8 million shares outstanding as of September 30,
2007.
The following table sets forth Crown Castle's current Outlook for the full year 2008:
(in millions, except per share amounts)
Full Year 2008
--------------
Site rental revenue $1,377 to $1,392
Site rental cost of operations $445 to $455
Site rental gross margin $930 to $940
Adjusted EBITDA $850 to $862
Interest expense and amortization of
deferred financing costs(a) $355 to $360
Sustaining capital expenditures $21 to $26
Recurring cash flow $474 to $484
(a) Inclusive of approximately $25 million from non-cash
expense.
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 nine months ended September 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. The following table contains pro forma Crown Castle results for the three months ended September 30, 2006 and nine months ended September 30, 2006 and 2007, assuming the Merger was completed on January 1 for each of the periods. As such, the pro forma results reflect adjustments to straight-line revenue and straight-line ground lease expense.
Reported Pro Forma Pro Forma Pro Forma
-------- --------- --------- ---------
Results Results Results Results
-------- ------- ------- -------
Q3 2007 Q3 2006 YTD Q3 2007 YTD Q3 2006
-------- ------- ----------- -----------
Site rental
revenue $326.8(1) $310.1(1) $964.8 $889.7
Site rental
cost of
operations $111.9 $109.2 $337.3 $315.3
Site rental
gross
margin $214.9 $200.9 $627.5 $574.4
(1) Includes out of run-rate site rental revenue items as indicated
on page 2 of the release in the "Consolidated Financial Results"
section.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Wednesday, October 31, 2007, at 10:30 a.m. eastern time to discuss the third quarter 2007 results and Crown Castle's Outlook. Please dial 303-262-2193 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, October 31, 2007 through 11:59 p.m. eastern time on Wednesday, November 7, 2007 and may be accessed by dialing 303-590-3000 using pass code 11098162#. 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 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 US 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 US and Australia, respectively. 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, net amortization of below-market and above-market leases acquired, and resulting impact on site rental gross margins is as follows:
For the Three Months Ended
--------------------------
September 30, 2007
(in thousands)
Non-cash portion of site rental
revenues attributable to straight-line
recognition of revenues $ 10,703
Non-cash portion of ground lease
expense attributable to straight-line
recognition of expenses (8,382)
Stock-based compensation charges (94)
Net amortization of below-market and
above-market leases 312
--------------
Non-cash impact on site rental
gross margin $ 2,539
==============
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 September 30, 2007 and September 30, 2006 are computed as follows:
For the
Three Months Ended
---------------------
Sept. 30, Sept. 30,
2007 2006
---------------------
(in thousands, except per share amounts)
Net income (loss) $(67,013) $(15,561)
Restructuring charges (a) 3,191 --
Asset write-down charges 59,306 948
Integration costs (a) 4,749 --
Depreciation, amortization and accretion 135,540 72,161
Losses on purchases of debt -- 437
Interest and other income (expense) (2,965) 985
Interest expense and amortization
of deferred financing costs 89,407 46,450
Benefit (provision) for income taxes (31,923) 575
Minority interests (324) (485)
Stock-based compensation charges (c) 5,812 4,729
--------- ---------
Adjusted EBITDA $195,780 $110,239
========= =========
Less: Interest expense and amortization
of deferred financing costs 89,407 46,450
Less: Sustaining capital expenditures 5,565 2,230
--------- ---------
Recurring cash flow $100,808 $ 61,559
========= =========
Weighted average common shares outstanding 282,577 201,070
Recurring cash flow per share $ 0.36 $ 0.31
========= =========
Adjusted EBITDA and recurring cash flow for the quarter ending December 31, 2007 and the years ending December 31, 2007 and December 31, 2008 are forecasted as follows:
Q4 2007 Full Year 2007 Full Year 2008
------------- -------------- --------------
(in millions) Outlook Outlook Outlook
------------- -------------- --------------
Net income (loss) $(41) to $(4) $(181) to $(143) $(98) to $5
Adjustments to
increase
(decrease) net
income (loss):
Restructuring
charges(a) -- $3 to $3 --
Asset write-down
charges $3 to $5 $67 to $69 $5 to $10
Integration costs (a) $5 to $9 $24 to $28 $1 to $5
Depreciation,
amortization
and accretion $130 to $140 $537 to $547 $520 to $560
Losses on purchases
and redemptions
of debt -- -- --
Interest and
other income
(expense) $(3) to $(1) $(12) to $(9) $(12) to $(7)
Interest expense and
amortization of
deferred financing
costs(b) $88 to $90 $348 to $350 $355 to $360
Benefit (provision)
for income taxes $(17) to $(7) $(90) to $(80) $(35) to $(10)
Minority interests -- -- --
Income (loss) from
discontinued
operations,
net of tax -- -- --
Stock-based
compensation
charges(c) $5 to $7 $22 to $24 $23 to $30
------------- -------------- --------------
Adjusted EBITDA $202 to $207 $751 to $756 $850 to $862
============= ============== ==============
Less: Interest
expense and
amortization of
deferred financing
costs(b) $88 to $90 $348 to $350 $355 to $360
Less: Sustaining
capital
expenditures $6 to $8 $19 to $23 $21 to $26
------------- -------------- --------------
Recurring cash flow $106 to $111 $380 to $385 $474 to $484
============= ============== ==============
(a) Inclusive of stock-based compensation charges.
(b) Inclusive of approximately $6 million, $25 million and $25
million, respectively, from non-cash expense.
(c) Exclusive of amounts included in restructuring charges and
integration costs.
Other Calculations:
Sustaining capital expenditures for the quarters ended September 30, 2007 and September 30, 2006 is computed as follows:
For the Three Months Ended
----------------------------
(in thousands) September 30, September 30,
2007 2006
Capital Expenditures $66,334 $30,652
Less: Revenue enhancing on
existing sites 10,930 8,717
Less: Land purchases 34,731 6,846
Less: New site construction 15,108 12,859
------- -------
Sustaining capital expenditures $ 5,565 $ 2,230
======= =======
Site rental gross margin for the quarter ending December 31, 2007 and for the years ending December 31, 2007 and December 31, 2008 is forecasted as follows:
(Q4 2007) Full Year 2007 Full Year 2008
------------- -------------- --------------
Outlook Outlook Outlook
------------- -------------- --------------
Site rental
revenue $333 to $338 $1,282 to $1,287 $1,377 to $1,392
Less: Site rental
cost of operations $112 to $117 $443 to $448 $445 to $455
------------- ---------------- ---------------
Site rental gross
margin $218 to $223 $837 to $842 $930 to $940
============= ================ ==============
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) leasing demand and revenue growth, (ii) the Merger and integration of the Global Signal assets, including timing and expected benefits from the Merger, (iii) recurring cash flow (including recurring cash flow per share and annual growth), (iv) value creation for our shareholders, (v) performance of our tower business, (vi) impact of and return on our investments, including the Merger and the purchase of our securities, (vii) the impact of our capital structure, (viii) currency exchange rates, (ix) the utility of certain financial measures in analyzing our results, (x) site rental revenue, (xi) site rental cost of operations, (xii) site rental gross margin, (xiii) Adjusted EBITDA, (xiv) interest expense and amortization of deferred financing costs, (xv) sustaining capital expenditures, and (xvi) 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 our 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 Nine Months Ended
September 30, September 30,
------------------------------------------
2007 2006 2007 2006
------------------------------------------
Net revenues:
Site rental $ 326,797 $ 178,995 $ 948,925 $ 510,052
Network services
and other 24,947 21,944 61,398 67,328
--------- --------- --------- ---------
Total net
revenues 351,744 200,939 1,010,323 577,380
--------- --------- --------- ---------
Costs of operations
(exclusive of
depreciation,
amortization and
accretion):
Site rental 111,863 55,261 330,624 155,878
Network services
and other 17,032 14,735 43,484 44,401
--------- --------- ---------- ----------
Total costs of
operations 128,895 69,996 374,108 200,279
General and
administrative 32,881 25,433 104,210 79,785
Restructuring charges 3,191 -- 3,191 --
Asset write-down
charges 59,306 948 64,049 2,805
Integration costs 4,749 -- 18,666 --
Depreciation,
amortization and
accretion 135,540 72,161 407,557 213,626
--------- --------- --------- ---------
Operating income
(loss) (12,818) 32,401 38,542 80,885
Losses on purchases
and redemptions of
debt -- (437) -- (1,177)
Interest and other
income (expense) 2,965 (985) 9,170 (4,520)
Interest expense and
amortization of
deferred financing
costs (89,407) (46,450) (260,212) (116,165)
--------- --------- --------- ---------
Income (loss) from
continuing
operations before
income taxes and
minority
interests (99,260) (15,471) (212,500) (40,977)
Benefit (provision)
for income taxes 31,923 (575) 69,705 (1,698)
Minority interests 324 485 151 1,400
--------- --------- --------- ---------
Income (loss) from
continuing
operations (67,013) (15,561) (142,644) (41,275)
Income (loss) from
discontinued
operations, net of
tax -- -- -- 5,657
--------- --------- --------- ---------
Net income (loss) (67,013) (15,561) (142,644) (35,618)
Dividends on
preferred stock (5,201) (5,201) (15,604) (15,604)
--------- --------- --------- ---------
Net income (loss)
after deduction of
dividends on
preferred stock $ (72,214) $ (20,762) $(158,248) $(51,222)
========= ========= ========= =========
Per common share -
basic and diluted:
Income (loss) from
continuing
operations $ (0.26) $ (0.10) $ (0.57) $ (0.27)
Income (loss) from
discontinued
operations -- -- -- 0.03
--------- --------- --------- ---------
Net income (loss) $ (0.26) $ (0.10) $ (0.57) $ (0.24)
========= ========= ========= =========
Weighted average
common shares
outstanding -
basic and diluted 282,577 201,070 279,353 209,406
--------- --------- --------- ---------
Adjusted EBITDA $ 195,780 $ 110,239 $ 549,418 $ 310,939
========= ========= ========= =========
Stock-based
compensation
expenses:
Site rental cost
of operations $ 94 $ 50 $ 288 $ 116
Network services
and other cost of
operations 98 60 272 140
General and
administrative 5,620 4,619 16,853 13,367
Restructuring
charges 2,377 -- 2,377 --
Integration costs -- -- 790 --
--------- --------- --------- ---------
Total $ 8,189 $ 4,729 $ 20,580 $ 13,623
========= ========= ========= =========
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(in thousands)
September 30, December 31,
2007 2006
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 119,802 $ 592,716
Restricted cash 152,903 115,503
Receivables, net of
allowance for doubtful
accounts 33,935 30,774
Prepaid expenses and other
current assets 114,780 61,034
----------- -----------
Total current assets 421,420 800,027
Restricted cash 5,000 5,000
Deferred site rental receivable 121,582 98,527
Available-for-sale securities 101,195 154,955
Property and equipment, net 5,047,374 3,246,446
Goodwill 1,990,785 391,448
Other intangible assets, net 2,699,237 225,295
Deferred financing costs and
other assets, net of accumulated
amortization 119,723 84,470
----------- -----------
$10,506,316 $ 5,006,168
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,636 $ 18,545
Deferred rental revenues and
other accrued liabilities 223,197 182,250
Current maturities of
long-term debt 6,500 --
----------- -----------
Total current liabilities 255,333 200,795
Long-term debt, less current
maturities 5,990,002 3,513,890
Deferred income tax liability 234,324 --
Other liabilities 303,488 193,279
----------- -----------
Total liabilities 6,783,147 3,907,964
----------- -----------
Minority interests -- 29,052
Redeemable preferred stock 313,566 312,871
Stockholders' equity 3,409,603 756,281
----------- -----------
$10,506,316 $ 5,006,168
=========== ===========
Crown Castle International Corp.
Condensed Consolidated Statement of Cash flows
(in thousands)
Nine Months Ended
September 30,
--------------------------
2007 2006
----------- -----------
Cash flows from operating activities:
Net income (loss) $ (142,644) $ (35,618)
Adjustments to reconcile net income
(loss) to net cash provided by
(used for) operating activities:
Depreciation, amortization
and accretion 407,557 213,626
Asset write-down charges 64,049 2,805
Deferred income tax (benefit)
provision (72,447) (1,738)
Other adjustments 37,172 23,862
Changes in assets and liabilities,
excluding the effects of acquisitions:
Increase (decrease) in
liabilities (36,263) 964
Decrease (increase) in assets (37,009) (24,978)
----------- -----------
Net cash provided by (used for)
operating activities 220,415 178,923
----------- -----------
Cash flows from investing activities:
Proceeds from investments and disposition
of property and equipment 3,664 2,235
Payments for acquisitions (net of cash
acquired) of businesses and minority
interests (494,352) (303,611)
Capital expenditures (191,258) (79,926)
Investments and loans (755) (6,350)
----------- -----------
Net cash provided by (used for)
investing activities (682,701) (387,652)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 650,000 1,000,000
Proceeds from issuance of capital stock 24,777 43,854
Principal payments on long-term debt (1,625) --
Purchases and redemptions of long-term debt -- (12,108)
Payments under revolving credit agreements -- (295,000)
Purchases of capital stock (603,656) (517,963)
Incurrence of financing costs (9,107) (7,888)
Net decrease (increase) in restricted cash (20,436) 2,063
Interest rate swap receipts (payments) -- 5,915
Dividends on preferred stock (14,909) (14,907)
Capital distribution to minority
interest holders of CCAL (37,196) --
----------- -----------
Net cash provided by (used for)
financing activities (12,152) 203,966
----------- -----------
Effect of exchange rate changes on cash 1,524 (218)
Cash flows from discontinued operations -- 5,657
----------- -----------
Net increase (decrease) in cash and
cash equivalents (472,914) 676
Cash and cash equivalents at beginning
of period 592,716 65,408
----------- -----------
Cash and cash equivalents at end of period $ 119,802 $ 66,084
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid $ 234,317 $ 106,364
Income taxes paid 3,228 3,284
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(dollars in thousands)
--------------------------------
Quarter Ended 12/31/06
--------------------------------
CCUSA CCAL 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 52,736 3,840 56,576
Services 15,246 860 16,106
--------- -------- ---------
Total Operating Expenses 67,982 4,700 72,682
General & Administrative 21,877 2,870 24,747
Operating Cash Flow 107,520 7,834 113,412
Add: Stock-Based
Compensation (a) 2,853 242 3,095
--------- -------- ---------
Adjusted EBITDA $ 108,431 $ 8,076 $ 116,507
--------- -------- ---------
--------------------------------
Quarter Ended 3/31/07
--------------------------------
CCUSA CCAL 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 101,878 4,717 106,595
Services 10,650 1,123 11,773
--------- -------- ---------
Total Operating Expenses 112,528 5,840 118,368
General & Administrative 31,333 3,669 35,002
Operating Cash Flow 156,222 7,302 162,339
Add: Stock-Based
Compensation (a) 3,586 1,333 4,919
--------- -------- ---------
Adjusted EBITDA $ 158,623 $ 8,635 $ 167,258
--------- -------- ---------
--------------------------------
Quarter Ended 6/30/07
--------------------------------
CCUSA CCAL 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 106,979 5,187 112,166
Services 13,608 1,071 14,679
--------- -------- ---------
Total Operating Expenses 120,587 6,258 126,845
General & Administrative 33,064 3,263 36,327
Operating Cash Flow 168,666 11,032 179,698
Add: Stock-Based
Compensation (a) 6,252 430 6,682
--------- -------- ---------
Adjusted EBITDA $ 174,918 $ 11,462 $ 186,380
--------- -------- ---------
--------------------------------
Quarter Ended 9/30/07
--------------------------------
CCUSA CCAL CCIC
--------------------------------
Revenues
Site Rental $ 309,798 $ 16,999 $ 326,797
Services 23,035 1,912 24,947
Total Revenues 332,833 18,911 351,744
Operating Expenses
Site Rental 106,014 5,849 111,863
Services 15,864 1,168 17,032
Total Operating Expenses 121,878 7,017 128,895
General & Administrative 29,319 3,562 32,881
Operating Cash Flow 181,636 8,332 189,968
Add: Stock-Based
Compensation (a) 5,373 439 5,812
Adjusted EBITDA $ 187,009 $ 8,771 $ 195,780
--------- -------- ---------
(a) Exclusive of charges included in restructuring charges and
integration costs.
--------------------------------
Quarter Ended 12/31/06
--------------------------------
CCUSA CCAL CCIC
--------------------------------
Gross Margins:
Site Rental 69% 72% 70%
Services 33% 44% 33%
Operating Cash Flow Margins 55% 51% 55%
Adjusted EBITDA Margin 55% 52% 55%
--------------------------------
--------------------------------
Quarter Ended 3/31/07
--------------------------------
CCUSA CCAL CCIC
--------------------------------
Gross Margins:
Site Rental 65% 69% 64%
Services 25% 37% 26%
Operating Cash Flow Margins 53% 43% 52%
Adjusted EBITDA Margin 54% 51% 53%
--------------------------------
--------------------------------
Quarter Ended 6/30/07
--------------------------------
CCUSA CCAL CCIC
--------------------------------
Gross Margins:
Site Rental 65% 72% 65%
Services 27% 43% 29%
Operating Cash Flow Margins 52% 54% 52%
Adjusted EBITDA Margin 54% 56% 54%
--------------------------------
--------------------------------
Quarter Ended 9/30/07
--------------------------------
CCUSA CCAL CCIC
--------------------------------
Gross Margins:
Site Rental 66% 66% 66%
Services 31% 39% 32%
Operating Cash Flow Margins 55% 44% 54%
Adjusted EBITDA Margin 56% 46% 56%
--------------------------------
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to
GAAP Financial Measure:
(dollars in thousands)
------------------------------------------
Quarter Ended
------------------------------------------
12/31/2006 3/31/2007 6/30/2007 9/30/2007
Net income (loss) $ (6,275) $(42,891) $(32,740) $(67,013)
Adjustments to increase
(decrease) net income
(loss):
Restructuring charges
(credits) (a) (391) -- -- 3,191
Asset write-down
charges 140 1,352 3,391 59,306
Integration costs (a) 1,503 8,848 5,069 4,749
Depreciation,
amortization and
accretion 71,618 138,693 133,324 135,540
Losses on purchases and
redemptions of debt 4,666 -- -- --
Interest and other
income (expense) (2,891) (3,299) (2,906) (2,965)
Interest expense,
amortization of
deferred financing
costs 46,163 82,015 88,790 89,407
Benefit (provision)
for income taxes (855) (22,162) (15,620) (31,923)
Minority interests (266) (217) 390 (324)
Cumulative effect of
change in accounting
principle -- -- -- --
Income (loss) from
discontinued
operations, net of tax -- -- -- --
Stock-based
compensation (b) 3,095 4,919 6,682 5,812
-------- -------- -------- --------
Adjusted EBITDA $116,507 $167,258 $186,380 $195,780
======== ======== ======== ========
(a) inclusive of stock-based compensation charges
(b) exclusive of amounts included in restructuring charges (credits)
and integration costs
---------------------------------
CCI FACT SHEET Q3 2006 to Q3 2007
---------------------------------
dollars in thousands
--------------------------------------------------------------------
%
Q3 '06 Q3 '07 Change
----------------------------------
CCUSA
Site Rental Revenue $ 166,620 $ 309,798 86%
Ending Sites 11,525 22,329 94%
CCAL
Site Rental Revenue $ 12,375 $ 16,999 37%
Ending Sites 1,385 1,438 4%
TOTAL CCIC
Site Rental Revenue $ 178,995 $ 326,797 83%
Ending Sites 12,910 23,767 84%
--------------------------------------------------------------------
Ending Cash and Cash
Equivalents $ 66,084 * $ 119,802 *
Debt
Bank Debt $1,000,000 $ 648,375
Securitized Debt &
Other Notes $1,963,915 $5,348,127
6 1/4% Convertible
Preferred Stock $ 312,639 $ 313,566
---------- ----------
Total Debt $3,276,554 $6,310,068
Leverage Ratios
Net Bank Debt + Bonds / EBITDA 6.6X 7.5X
Total Net Debt / EBITDA 7.3X 7.9X
Last Quarter Annnualized
Adjusted EBITDA $ 440,956 $ 783,120
* 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