Crown Castle International Reports First Quarter 2009 Results; Raises 2009 Outlook
"We had a very good first quarter, exceeding the midpoint of our Outlook for site rental revenue, site rental gross margin, Adjusted EBITDA, and recurring cash flow," stated
CONSOLIDATED FINANCIAL RESULTS
Site rental revenues for first quarter 2009 increased
Recurring cash flow, defined as Adjusted EBITDA less interest expense less sustaining capital expenditures, increased from
For the first quarter 2009, approximately 5% of
Net income attributable to CCIC stockholders was
SEGMENT RESULTS
U.S. site rental revenues for the first quarter of 2009 increased
INVESTMENTS AND LIQUIDITY
Since
During the first quarter of 2009,
Since the beginning of 2009,
During the first quarter of 2009,
"We are very pleased to have successfully accessed the credit markets multiple times this year for
In addition to the tables and information contained in this press release,
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
The following Outlook table is based on current expectations and assumptions. The Outlook table includes the interest expense associated with the
For the purposes of this Outlook, interest expense is based on run-rate interest charges and does not assume early debt retirement prior to the maturity date, with the exception of the purchases to-date and the repayment of the
As reflected in the following table,
The following table sets forth
(in millions, except
per share amounts) Second Quarter 2009 Full Year 2009
------------------- --------------
Site rental revenues $370 to $375 $1,500 to $1,515
Site rental cost of
operations $115 to $120 $460 to $470
Site rental gross margin $254 to $259 $1,035 to $1,050
Adjusted EBITDA $235 to $240 $960 to $975
Interest expense and
amortization of
deferred financing
costs(a) $108 to $113 $440 to $445
Sustaining capital
expenditures $8 to $10 $25 to $30
Recurring cash flow $116 to $121 $490 to $505
Net income (loss)
attributable to CCIC
common stockholders
after deduction of
dividends on
preferred stock $(174) to $(121) $(222) to $(102)
Net income (loss)
attributable to CCIC
common stockholders
per share(b) $(0.61) to $(0.42) $(0.78) to $(0.36)
(a) Inclusive of approximately $12 million and approximately $46
million , respectively, of non-cash expense.
(b) Represents net income (loss) attributable to CCIC common
stockholders per common share, based on 286.1 million shares
outstanding as of March 31, 2009 .
CONFERENCE CALL DETAILS
A telephonic replay of the conference call will be available from
The
The components of interest expense and amortization of deferred financing costs are as follows:
For the Three Months
Ended
March 31, March 31,
2009 2008
--------- ---------
(in thousands)
Interest expense on debt obligations $ 95,183 $ 82,763
Amortization of deferred financing costs 6,296 3,832
Amortization of discounts on long-term debt 1,965 --
Amortization of interest rate swaps 755 755
Amortization of purchase price adjustments
on long-term debt 874 943
Other 514 852
--------- ---------
$ 105,587 $ 89,145
========= =========
The components of interest expense and amortization of deferred financing costs are forecasted as follows:
Q2 2009 Full Year
Outlook 2009 Outlook
------------ ------------
(in millions)
Interest expense on debt obligations(a) $96 to $101 $392 to $397
Amortization of deferred financing costs $6 to $8 $26 to $28
Amortization of discounts on long-term
debt $2 to $4 $11 to $13
Amortization of interest rate swaps $0 to $1 $2 to $4
Amortization of purchase price
adjustments on long-term debt $0 to $1 $2 to $4
Other $0 to $1 $1 to $3
------------ ------------
$108 to $113 $440 to $445
============ ============
(a) Inclusive of approximately $63 million and $343 million ,
respectively, of cash interest payments.
Non-GAAP Financial Measures
This press release includes presentations of Adjusted EBITDA and recurring cash flow, which are non-GAAP financial measures.
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 other companies in the tower sector. 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
For the Three Months
Ended
--------------------
March 31, March 31,
2009 2008
--------- ---------
(in thousands, except per share amounts)
Net income (loss) $ 10,050 $ (13,173)
Adjustments to increase (decrease) net
income (loss):
Asset write-down charges 4,091 1,304
Acquisition and integration costs -- 2,504
Depreciation, amortization and accretion 133,176 132,033
Interest expense and amortization of deferred
financing costs 105,587 89,145
Gains (losses) on purchases and redemptions
of debt (13,350) --
Net gain (loss) on interest rate swaps (3,795) --
Interest and other income (expense) 246 (2,310)
Benefit (provision) for income taxes (1,491) (4,659)
Stock-based compensation charges 7,882 6,155
--------- ---------
Adjusted EBITDA $ 242,396 $ 210,999
========= =========
Less: Interest expense and amortization of
deferred financing costs 105,587 89,145
Less: Sustaining capital expenditures 4,991 3,760
--------- ---------
Recurring cash flow $ 131,818 $ 118,094
========= =========
Weighted average common shares
outstanding - basic 285,913 279,340
Recurring cash flow per share $ 0.46 $ 0.42
========= =========
Adjusted EBITDA and recurring cash flow for the quarter ending
Q2 2009 Full Year
(in millions) Outlook 2009 Outlook
------------- ------------
Net income (loss) $(169)to $(116) $(201) to $(81)
Adjustments to increase (decrease)
net income (loss):
Asset write-down charges $2 to $5 $10 to $19
Depreciation, amortization and
accretion $130 to $140 $518 to $548
Interest and other income (expense) $(2) to $1 $(6) to $3
Net gain (loss) on interest rate
swaps (a) $105 to $105 $101 to $101
Gains (losses) on purchases and
redemptions of debt $98 to $108 $85 to $95
Interest expense and amortization
of deferred financing costs(b) $108 to $113 $440 to $445
Benefit (provision) for income taxes $(91) to $(77) $(118) to $(85)
Stock-based compensation charges $6 to $9 $26 to $35
------------- ------------
Adjusted EBITDA $235 to $240 $960 to $975
============= ============
Less: Interest expense and
amortization of deferred
financing costs(b) $108 to $ 113 $440 to $445
Less: Sustaining capital expenditures $8 to $10 $25 to $30
------------- ------------
Recurring cash flow $116 to $121 $490 to $505
============= ============
(a) Based on the interest rates and yield curves in effect as of
April 28, 2009 .
(b) Inclusive of $11.6 million and $46.3 million , respectively, of
non-cash expense.
Other Calculations:
Sustaining capital expenditures for the quarters ended
For the Three
Months Ended
------------------
March 31, March 31,
(in thousands) 2009 2008
------- -------
Capital Expenditures $39,284 $61,686
Less: Revenue enhancing on existing sites 24,741 16,910
Less: Land purchases 3,392 27,047
Less: New site acquisition and construction 6,160 13,969
------- -------
Sustaining capital expenditures $ 4,991 $ 3,760
======= =======
Site rental gross margin for the quarter ending
Q2 2009 Full Year 2009
(in millions) Outlook Outlook
------------ ----------------
Site rental revenues $370 to $375 $1,500 to $1,515
Less: Site rental cost of operations $115 to $120 $460 to $470
------------ ----------------
Site rental gross margin $254 to $259 $1,035 to $1,050
============ ================
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 for our sites and towers, including new tenants resulting from leasing applications, (ii) the repayment, repurchase or refinancing of our debt, including timing with respect thereto, (iii) the growth of our business, (iv) the use and impact of the proceeds of our 9% senior notes and 7.75% senior secured notes offerings, (v) cash, cash equivalents and revolving credit facility availability, (vi) access to the credit markets, (vii) currency exchange rates, including the impact on our results, (viii) site rental revenues, (ix) site rental cost of operations, (x) site rental gross margin, (xi) Adjusted EBITDA, (xii) interest expense and amortization of deferred financing costs, (xiii) capital expenditures, including expenditures on land and new towers, revenue generating expenditures and sustaining capital expenditures, (xiv) recurring cash flow, including on a per share basis, (xv) net income (loss), including on a per share basis, and (xvi) the utility of certain financial measures in analyzing our results. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including but not limited to prevailing market conditions and the following:
* We have a substantial amount of indebtedness, including our tower
revenue notes which we anticipate refinancing or repaying within
the next three years. In the event we do not repay or refinance
such indebtedness, we could face substantial liquidity issues and
might be required to issue equity securities or securities
convertible into equity securities, or sell some of our assets to
meet our debt payment obligations.
* Our substantial level of indebtedness could adversely affect our
ability to react to changes in our business, and the terms of our
debt instruments limit our ability to take a number of actions
that our management might otherwise believe to be in our best
interests. In addition, if we fail to comply with our covenants,
our debt could be accelerated.
* Our interest rate swaps are currently in a substantial liability
position and will need to be cash settled within the next three
years, which could adversely affect our financial condition.
* Our business depends on the demand for wireless communications
and towers, and we may be adversely affected by any slowdown in
such demand.
* A substantial portion of our revenues is derived from a small
number of customers, and the loss, consolidation or financial
instability of, or network sharing among, any of our limited
number of customers may materially decrease revenues.
* Consolidation among our customers may result in duplicate or
overlapping parts of networks, which may result in a reduction of
sites and have a negative effect on revenues and cash flows.
* Sales or issuances of a substantial number of shares of our
common stock may adversely affect the market price of our common
stock.
* A wireless communications industry slowdown may materially and
adversely affect our business (including reducing demand for our
towers and network services) and the business of our customers.
* As a result of competition in our industry, including from some
competitors with significantly more resources or less debt than
we have, we may find it more difficult to achieve favorable
rental rates on our towers.
* New technologies may significantly reduce demand for our towers
and negatively impact our revenues.
* New wireless technologies may not deploy or be adopted by
customers as rapidly or in the manner projected.
* If we fail to retain rights to the land under our towers, our
business may be adversely affected.
* If we are unable to raise capital in the future when needed, we
may not be able to fund future 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 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 those that may
otherwise have been anticipated.
* If we fail to comply with laws and regulations which regulate our
business and which may change at any time, we may be fined or
even lose our right to conduct some of our business.
* Our network services business has historically experienced
significant volatility in demand, which reduces the
predictability of our results.
* If radio frequency emissions from wireless handsets or equipment
on our towers are demonstrated to cause negative health effects,
potential future claims could adversely affect our operations,
costs and revenues.
* 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.
* We are exposed to counterparty risk through our interest rate
swaps and a counterparty default could adversely affect our
financial condition.
* We may be adversely affected by our 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 SEC.
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(in thousands)
March 31, December 31,
2009 2008
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 609,337 $ 155,219
Restricted cash 159,019 147,852
Receivables, net of allowance for
doubtful accounts 33,496 37,621
Deferred income tax assets 29,444 28,331
Prepaid expenses, deferred site rental
receivables and other current assets 105,483 116,145
------------ ------------
Total current assets 936,779 485,168
Restricted cash 5,000 5,000
Deferred site rental receivables 156,697 144,474
Property and equipment, net 4,992,087 5,060,126
Goodwill 1,983,950 1,983,950
Other intangible assets, net 2,514,048 2,551,332
Deferred financing costs and other assets,
net of accumulated amortization 161,342 131,672
------------ ------------
$ 10,749,903 $ 10,361,722
============ ============
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 26,135 $ 33,808
Deferred rental revenues and other
accrued liabilities 259,155 281,794
Interest rate swaps 48,291 52,539
Short-term debt and current maturities
of long-term debt 225,517 466,217
------------ ------------
Total current liabilities 559,098 834,358
Long-term debt, less current maturities 6,276,728 5,630,527
Deferred income tax liability 33,218 40,446
Interest rate swaps 442,043 488,632
Other liabilities 348,109 337,168
------------ ------------
Total liabilities 7,659,196 7,331,131
Redeemable preferred stock 314,958 314,726
CCIC Stockholders' equity 2,776,288 2,715,865
Noncontrolling interest (539) --
------------ ------------
Total equity 2,775,749 2,715,865
------------ ------------
$ 10,749,903 $ 10,361,722
============ ============
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
AND OTHER FINANCIAL DATA
(in thousands, except per share data)
Three Months Ended
March 31,
----------------------
2009 2008
---------- ----------
Net revenues:
Site rental $ 367,667 $ 345,033
Network services and other 35,243 25,588
---------- ----------
Total net revenues 402,910 370,621
---------- ----------
Costs of operations (exclusive of
depreciation, amortization and accretion):
Site rental 109,698 112,380
Network services and other 22,061 18,411
---------- ----------
Total costs of operations 131,759 130,791
---------- ----------
General and administrative 36,637 34,986
Asset write-down charges 4,091 1,304
Acquisition and integration costs -- 2,504
Depreciation, amortization and accretion 133,176 132,033
---------- ----------
Operating income (loss) 97,247 69,003
Interest expense and amortization of deferred
financing costs (105,587) (89,145)
Gains (losses) on purchases and redemptions
of debt 13,350 --
Net gain (loss) on interest rate swaps 3,795 --
Interest and other income (expense) (246) 2,310
---------- ----------
Income (loss) before income taxes 8,559 (17,832)
Benefit (provision) for income taxes 1,491 4,659
---------- ----------
Net income (loss) 10,050 (13,173)
Net income (loss) attributable to the
noncontrolling interest 527 --
---------- ----------
Net income (loss) attributable to CCIC
stockholders 10,577 (13,173)
Dividends on preferred stock (5,201) (5,202)
---------- ----------
Net income (loss) attributable to CCIC common
stockholders after deduction of dividends on
preferred stock $ 5,376 $ (18,375)
========== ==========
Net income (loss) attributable to CCIC common
stockholders per common share:
Basic $ 0.02 $ (0.07)
Diluted $ 0.02 $ (0.07)
Weighted average common shares outstanding:
Basic 285,913 279,340
Diluted 287,608 279,340
Adjusted EBITDA $ 242,396 $ 210,999
========== ==========
Stock-based compensation expenses:
Site rental cost of operations $ 203 $ 298
Network services and other cost of
operations 252 133
General and administrative 7,427 5,724
---------- ----------
Total $ 7,882 $ 6,155
========== ==========
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended
March 31,
----------------------
2009 2008
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 10,050 $ (13,173)
Adjustments to reconcile net income (loss)
to net cash provided by (used for)
operating activities:
Depreciation, amortization and accretion 133,176 132,033
Gains on purchases and redemptions of
long-term debt (13,350) --
Amortization of deferred financing costs
and other non-cash interest 9,890 5,530
Stock-based compensation expense 6,976 5,418
Asset write-down charges 4,091 1,304
Deferred income tax benefit (provision) (3,234) (6,308)
Income (expense) from forward-starting
interest rate swaps (3,795) --
Other adjustments, net 821 (1,074)
Changes in assets and liabilities,
excluding the effects of acquisitions:
Increase (decrease) in liabilities (22,298) (22,364)
Decrease (increase) in assets (4,269) (33,574)
---------- ----------
Net cash provided by (used for)
operating activities 118,058 67,792
---------- ----------
Cash flows from investing activities:
Proceeds from disposition of property and
equipment 2,431 104
Capital expenditures (39,284) (61,686)
---------- ----------
Net cash provided by (used for)
investing activities (36,853) (61,582)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 813,744 --
Proceeds from issuance of capital stock 4,076 946
Principal payments on long-term debt (1,625) (1,625)
Purchases and redemptions of long-term debt (226,707) --
Purchases of capital stock (1,052) (42,365)
Borrowings (payments) under revolving credit
agreements (169,400) 75,000
Payments for financing costs (28,552) (1,502)
Net (increase) decrease in restricted cash (11,167) (10,324)
Dividends on preferred stock (4,969) (4,969)
---------- ----------
Net cash provided by (used for)
financing activities 374,348 15,161
---------- ----------
Effect of exchange rate changes on cash (1,435) 616
Net increase (decrease) in cash and cash
equivalents 454,118 21,987
Cash and cash equivalents at beginning of
period 155,219 75,245
---------- ----------
Cash and cash equivalents at end of period $ 609,337 $ 97,232
========== ==========
Supplemental disclosure of cash flow
information:
Interest paid $ 80,578 $ 82,385
Income taxes paid 2,207 939
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(dollars in thousands)
Quarter Ended 6/30/08 Quarter Ended 9/30/08
-------------------------- ---------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
-------- ------- -------- -------- ------- --------
Revenues
Site
Rental $328,952 $19,571 $348,523 $332,715 $21,269 $353,984
Services 27,016 3,974 30,990 27,972 2,392 30,364
-------- ------- -------- -------- ------- --------
Total
Revenues 355,968 23,545 379,513 360,687 23,661 384,348
Operating
Expenses
Site Rental 107,474 6,272 113,746 109,757 6,001 115,758
Services 20,320 1,500 21,820 18,878 1,663 20,541
-------- ------- -------- -------- ------- --------
Total
Operating
Expenses 127,794 7,772 135,566 128,635 7,664 136,299
General &
Administ-
rative 33,845 4,647 38,492 33,220 4,217 37,437
Add: Stock-
Based
Compens
-ation 6,622 937 7,559 6,346 754 7,100
-------- ------- -------- -------- ------- --------
Adjusted
EBITDA $200,951 $12,063 $213,014 $205,178 $12,534 $217,712
-------- ------- -------- -------- ------- --------
Quarter Ended 6/30/08 Quarter Ended 9/30/08
--------------------------- ---------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
-------- ------- -------- -------- ------- --------
Gross
Margins:
Site
Rental 67% 68% 67% 67% 72% 67%
Services 25% 62% 30% 33% 30% 32%
Adjusted
EBITDA
Margin 56% 51% 56% 57% 53% 57%
-------- ------- -------- -------- ------- --------
Quarter Ended 12/31/08 Quarter Ended 3/31/09
--------------------------- ---------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
-------- ------- -------- -------- ------- --------
Revenues
Site Rental $339,262 $15,757 $355,019 $350,695 $16,972 $367,667
Services 34,570 2,433 37,003 33,451 1,792 35,243
-------- ------- -------- -------- ------- --------
Total
Revenues 373,832 18,190 392,022 384,146 18,764 402,910
Operating
Expenses
Site Rental 109,233 5,006 114,239 104,979 4,719 109,698
Services 20,803 877 21,680 20,919 1,142 22,061
-------- ------ -------- --------- ------- --------
Total
Operating
Expenses 130,036 5,883 135,919 125,898 5,861 131,759
General &
Administ-
rative 35,342 3,329 38,671 33,309 3,328 36,637
Add: Stock-
Based
Compens-
ation 7,510 443 7,953 6,976 906 7,882
-------- ------ -------- --------- ------- --------
Adjusted
EBITDA $215,964 $ 9,421 $225,385 $231,915 $10,481 $242,396
-------- ------ -------- -------- ------- --------
Quarter Ended 12/31/08 Quarter Ended 3/31/09
--------------------------- ---------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
-------- ------- -------- -------- ------- --------
Gross Margins:
Site Rental 68% 68% 68% 70% 72% 70%
Services 40% 64% 41% 37% 36% 37%
Adjusted
EBITDA
Margin 58% 52% 57% 60% 56% 60%
-------- ------- -------- -------- ------- --------
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA)
to GAAP Financial Measure:
(dollars in thousands)
Quarter Ended
------------------------------------------
6/30/2008 9/30/2008 12/31/2008 3/31/2009
Net income (loss) $ 60,339 $(32,207) $(63,817) $ 10,050
Adjustments to increase
(decrease) net income
(loss):
Asset write-down charges 4,993 2,902 7,689 4,091
Acquisition and
integration costs -- -- -- --
Depreciation,
amortization
and accretion 131,896 131,714 130,799 133,176
Gains (losses)
on purchases
and redemptions
of debt -- -- (42) (13,350)
Interest and other
income (expense) (206) 847 (431) 246
Net gain (loss)
on interest rate swaps -- (2,404) 40,292 (3,795)
Interest expense,
amortization of
deferred financing
costs 88,757 88,138 88,074 105,587
Impairment of available-
for-sale securities -- 23,718 32,150 --
Benefit (provision)for
income taxes (80,324) (2,096) (17,282) (1,491)
Stock-based compensation 7,559 7,100 7,953 7,882
--------- --------- ---------- ---------
Adjusted EBITDA $ 213,014 $ 217,712 $ 225,385 $ 242,396
========= ========= ========== =========
CCI FACT SHEET Q1 2008 to Q1 2009
dollars in thousands
Q1 '08 Q1 '09 % Change
---------- ---------- --------
CCUSA
-----
Site Rental Revenues $ 323,748 $ 350,695 8%
Ending Sites 22,416 22,481 0%
CCAL
----
Site Rental Revenues $ 21,285 $ 16,972 -20%
Ending Sites 1,440 1,590 10%
TOTAL CCIC
----------
Site Rental Revenues $ 345,033 $ 367,667 7%
Ending Sites 23,856 24,071 1%
---------- ---------- --------
Ending Cash and Cash Equivalents $ 97,232* $ 609,337*
Debt
Bank Debt $ 793,500 $ 637,000
Securitized Debt & Other Notes $5,349,978 $5,865,245
---------- ----------
Total Debt $6,143,478 $6,502,245
6 1/4% Convertible Preferred Stock $ 314,030 $ 314,958
Leverage Ratios
Net Bank Debt + Bonds / EBITDA 7.2X 6.1X
Total Net Debt / EBITDA 7.5X 6.4X
Last Quarter Annualized
Adjusted EBITDA $ 843,996 $ 969,584
*Excludes Restricted Cash
CONTACT:Crown Castle International Corp. Jay Brown , CFOFiona McKone , VP - Finance 713-570-3050