Crown Castle International Reports Second Quarter 2013 Results; Raises 2013 Outlook
"We had an excellent second quarter, producing AFFO per share of
CONSOLIDATED FINANCIAL RESULTS
Total revenue for the second quarter of 2013 increased 26% to
Funds from Operations ("FFO") increased 41% to
Income before income taxes for the second quarter of 2013 was
Adjusted EBITDA in the second quarter of 2013 exceeded the high-end of second quarter Outlook (previously issued on
FINANCING AND INVESTING ACTIVITIES
"We had a terrific quarter exceeding our expectations for site rental gross margin, Adjusted EBITDA and AFFO," stated
During the second quarter of 2013,
Further, during the second quarter of 2013,
Additionally, during the second quarter,
Also during the second quarter,
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
As reflected in the table below,
The following Outlook is based on current expectations and assumptions and assumes a US dollar to Australian dollar exchange rate of
The following table sets forth
| (in millions, except per share amounts) | Third Quarter 2013 | Full Year 2013 |
| Site rental revenues | $617 to $622 | $2,471 to $2,481 |
| Site rental cost of operations | $179 to $184 | $711 to $721 |
| Site rental gross margin | $437 to $442 | $1,755 to $1,765 |
| Adjusted EBITDA | $436 to $441 | $1,750 to $1,760 |
| Interest expense and amortization of deferred financing costs(a) | $138 to $143 | $581 to $591 |
| FFO | $270 to $275 | $1,022 to $1,032 |
| AFFO | $299 to $304 | $1,187 to $1,197 |
| AFFO per share(b) | $1.02 to $1.04 | $4.07 to $4.10 |
| Net income (loss) | $28 to $68 | $116 to $212 |
| Net income (loss) per share - diluted(b) | $0.10 to $0.23 | $0.40 to $0.73 |
| (a) See the reconciliation of "Components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense. | ||
| (b) Based on 291.8 million diluted shares outstanding as of June 30, 2013. | ||
CONFERENCE CALL DETAILS
A telephonic replay of the conference call will be available from
Non-GAAP Financial Measures and Other Calculations
This press release includes presentations of Adjusted EBITDA, Funds from Operations and Adjusted Funds from Operations, which are non-GAAP financial measures. These non-GAAP financial measures are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")). Each of the amounts included in the calculation of Adjusted EBITDA, FFO, and AFFO are computed in accordance with GAAP, with the exception of: (1) sustaining capital expenditures, which is not defined under GAAP and (2) our adjustment to the income tax provision in calculations of FFO and AFFO.
Our measures of Adjusted EBITDA, FFO and AFFO may not be comparable to similarly titled measures of other companies, including other companies in the tower sector or those reported by REITs. FFO and AFFO presented are not necessarily indicative of the operating results that would have been achieved had we converted to a REIT, nor are they necessarily indicative of future financial position or operating results. Our FFO and AFFO may not be comparable to those reported in accordance with
Adjusted EBITDA, FFO and AFFO 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.
Adjusted EBITDA.
Funds from Operations.
Adjusted Funds from Operations.
Sustaining capital expenditures.
The tables set forth below reconcile these non-GAAP financial measures to comparable GAAP financial measures. The components in these tables may not sum to the total due to rounding.
| Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures: | ||
| Adjusted EBITDA for the three months ended June 30, 2013 and 2012 is computed as follows: | ||
| For the Three Months Ended | ||
| June 30, 2013 | June 30, 2012 | |
| (in millions) | ||
| Net income (loss) | $ 53.4 | $ 117.1 |
| Adjustments to increase (decrease) net income (loss): | ||
| Asset write-down charges | 3.1 | 3.6 |
| Acquisition and integration costs | 7.2 | 7.5 |
| Depreciation, amortization and accretion | 190.7 | 152.5 |
| Amortization of prepaid lease purchase price adjustments | 3.9 | 3.9 |
| Interest expense and amortization of deferred financing costs | 140.3 | 144.9 |
| Gains (losses) on retirement of long-term obligations | 0.6 | 7.5 |
| Interest income | (0.3) | (0.4) |
| Other income (expense) | (0.5) | 2.2 |
| Benefit (provision) for income taxes | 36.6 | (68.4) |
| Stock-based compensation expense | 9.6 | 8.0 |
| Adjusted EBITDA | $ 444.4 | $ 378.5 |
| Adjusted EBITDA for the quarter ending September 30, 2013 and the year ending December 31, 2013 is forecasted as follows: | ||
| Q3 2013 | Full Year 2013 | |
| (in millions) | Outlook | Outlook |
| Net income (loss) | $28 to $68 | $116 to $212 |
| Adjustments to increase (decrease) net income (loss): | ||
| Asset write-down charges | $2 to $4 | $8 to $18 |
| Acquisition and integration costs | $1 to $5 | $9 to $19 |
| Depreciation, amortization and accretion | $189 to $194 | $749 to $769 |
| Amortization of prepaid lease purchase price adjustments | $3 to $5 | $14 to $16 |
| Interest expense and amortization of deferred financing costs(a) | $138 to $143 | $581 to $591 |
| Gains (losses) on retirement of long-term obligations | $0 to $0 | $36 to $36 |
| Interest income | $(1) to $1 | $(2) to $0 |
| Other income (expense) | $1 to $3 | $3 to $5 |
| Benefit (provision) for income taxes | $31 to $42 | $111 to $136 |
| Stock-based compensation expense | $9 to $11 | $39 to $44 |
| Adjusted EBITDA | $436 to $441 | $1,750 to $1,760 |
| (a) See the reconciliation of "Components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense. | ||
| FFO and AFFO for the quarter ending September 30, 2013 and the year ending December 31, 2013 is forecasted as follows: | ||
| Q3 2013 | Full Year 2013 | |
| (in millions) | Outlook | Outlook |
| Net income | $28 to $68 | $116 to $212 |
| Adjusted tax provision (a) | $29 to $40 | $104 to $129 |
| Real estate related depreciation, amortization and accretion | $187 to $190 | $738 to $753 |
| FFO | $270 to $275 | $1,022 to $1,032 |
| FFO (from above) | $270 to $275 | $1,022 to $1,032 |
| Adjustments to increase (decrease) FFO: | ||
| Straight-line revenue (b) | $(25) to $(20) | $(108) to $(93) |
| Straight-line expense | $18 to $23 | $77 to $92 |
| Stock-based compensation expense | $9 to $11 | $39 to $44 |
| Non-real estate related depreciation, amortization and accretion | $2 to $4 | $11 to $16 |
| Amortization of deferred financing costs, debt discounts and interest rate swaps | $19 to $23 | $93 to $104 |
| Other (income) expense | $1 to $3 | $3 to $5 |
| Gains (losses) on retirement of long-term obligations | $0 to $0 | $36 to $36 |
| Acquisition and integration costs | $1 to $5 | $9 to $19 |
| Asset write-down charges | $2 to $4 | $8 to $18 |
| Capital improvement capital expenditures | $(8) to $(6) | $(21) to $(19) |
| Corporate capital expenditures | $(4) to $(2) | $(19) to $(17) |
| AFFO | $299 to $304 | $1,187 to $1,197 |
| Weighted average common shares outstanding — diluted(c) | 291.8 | 291.8 |
| AFFO per share | $1.02 to $1.04 | $4.07 to $4.10 |
| (a) Adjusts the income tax provision to reflect our estimate of the cash taxes had we been a REIT, which predominately relates to foreign taxes paid. As a result, income tax expense (benefit) is lower by the amount of the adjustment. | ||
| (b) Q3 2013 Outlook includes a net benefit of between approximately $27 million and $32 million, comprised of prepaid rents expected to be received during Q3 2013 of between approximately $43 million and $48 million less amortization of prepaid rents received in the current and prior periods of between $13 million and $18 million. Full year 2013 Outlook includes a net benefit of between approximately $101 million and $116 million, comprised of prepaid rents expected to be received during full year 2013 of between approximately $167 million and $182 million less amortization of prepaid rents received in the current and prior periods of between $56 million and $71 million. Crown Castle amortizes prepaid rent over the term of its leases. | ||
|
(c) Based on diluted shares outstanding as of June 30, 2013. |
||
| FFO and AFFO for the three months ended June 30, 2013 and 2012 are computed as follows: | ||
| For the Three Months Ended | ||
| (in millions) | June 30, 2013 | June 30, 2012 |
| Net income | $ 53.4 | $ 117.1 |
| Adjusted tax provision (a) | 34.8 | (69.1) |
| Real estate related depreciation, amortization and accretion | 188.0 | 147.3 |
| FFO | $ 276.2 | $ 195.3 |
| Weighted average common shares outstanding — diluted | 292.7 | 291.2 |
| FFO per share | $ 0.94 | $ 0.67 |
| FFO (from above) | 276.2 | 195.3 |
| Adjustments to increase (decrease) FFO: | ||
| Straight-line revenue (b) | (25.9) | (44.7) |
| Straight-line expense | 20.6 | 13.1 |
| Stock-based compensation expense | 9.6 | 8.0 |
| Non-real estate related depreciation, amortization and accretion | 2.6 | 5.2 |
| Amortization of deferred financing costs, debt discounts and interest rate swaps | 20.6 | 24.3 |
| Other (income) expense | (0.5) | 2.2 |
| Gains (losses) on retirement of long-term obligations | 0.6 | 7.5 |
| Acquisition and integration costs | 7.2 | 7.5 |
| Asset write-down charges | 3.1 | 3.6 |
| Capital improvement capital expenditures | (2.4) | (4.0) |
| Corporate capital expenditures | (7.8) | (3.3) |
| AFFO | $ 303.9 | $ 214.8 |
| Weighted average common shares outstanding — diluted | 292.7 | 291.2 |
| AFFO per share | $ 1.04 | $ 0.74 |
| (a) Adjusts the income tax provision to reflect our estimate of the cash taxes had we been a REIT, which predominately relates to foreign taxes paid. As a result, income tax expense (benefit) is lower by the amount of the adjustment. | ||
| (b) Inclusive of a net benefit of approximately $31 million and $16 million, comprised of prepaid rents received of $46 million and $26 million less amortization of prepaid rents received in the current and prior periods of $15 million and $11 million for Q2 2013 and Q2 2012, respectively. Crown Castle currently amortizes prepaid rent over the term of its leases. | ||
| FFO and AFFO for the year ended December 31, 2012 are computed as follows: | |
| For the Year Ended | |
| (in millions) | December 31, 2012 |
| Net income | $ 200.9 |
| Adjusted tax provision (a) | (106.7) |
| Real estate related depreciation, amortization and accretion | 601.4 |
| FFO | $ 695.5 |
| Weighted average common shares outstanding — diluted | 291.3 |
| FFO per share | $ 2.39 |
| FFO (from above) | 695.5 |
| Adjustments to increase (decrease) FFO: | |
| Straight-line revenue(b) | (175.5) |
| Straight-line expense | 54.1 |
| Stock-based compensation expense | 47.4 |
| Non-real estate related depreciation, amortization and accretion | 21.2 |
| Amortization of deferred financing costs, debt discounts and interest rate swaps | 109.3 |
| Other (income) expense | 5.4 |
| Gains (losses) on retirement of long-term obligations | 132.0 |
| Net gain (loss) on interest rate swaps | — |
| Acquisition and integration costs | 18.3 |
| Asset write-down charges | 15.5 |
| Capital improvement capital expenditures | (21.6) |
| Corporate capital expenditures | (15.5) |
| AFFO | $ 886.1 |
| Weighted average common shares outstanding — diluted | 291.3 |
| AFFO per share | $ 3.04 |
| (a) Adjusts the income tax provision to reflect our estimate of the cash taxes had we been a REIT, which predominately relates to foreign taxes paid. As a result, income tax expense (benefit) is lower by the amount of the adjustment. | |
| (b) Inclusive of a net benefit of $76 million, comprised of prepaid rents received during year ending December 31, 2012 of $117 million less amortization of prepaid rents received in the year ending December 31, 2012 and prior periods of $42 million. Crown Castle amortizes prepaid rent over the term of its leases. | |
| Other Calculations: | ||
| The components of interest expense and amortization of deferred financing costs for the three months ended June 30, 2013 and 2012 are as follows: | ||
| For the Three Months Ended | ||
| (in millions) | June 30, 2013 | June 30, 2012 |
| Interest expense on debt obligations | $ 119.7 | $ 120.6 |
| Amortization of deferred financing costs | 5.0 | 5.3 |
| Amortization of adjustments on long-term debt | (1.0) | 3.0 |
| Amortization of interest rate swaps(a) | 16.2 | 16.3 |
| Other, net | 0.3 | (0.2) |
| Interest expense and amortization of deferred financing costs | $ 140.3 | $ 144.9 |
| (a) Relates to the amortization of interest rate swaps; the swaps were cash settled in prior periods. | ||
| The components of interest expense and amortization of deferred financing costs for the quarter ending September 30, 2013 and the year ending December 31, 2013 are forecasted as follows: | ||
| Q3 2013 | Full Year 2013 | |
| (in millions) | Outlook | Outlook |
| Interest expense on debt obligations | $119 to $121 | $483 to $493 |
| Amortization of deferred financing costs | $5 to $6 | $23 to $25 |
| Amortization of adjustments on long-term debt | $(1) to 0 | $8 to $10 |
| Amortization of interest rate swaps (a) | $15 to $17 | $62 to $67 |
| Other, net | $0 to $0 | $0 to $2 |
| Interest expense and amortization of deferred financing costs (b) | $138 to $143 | $581 to $591 |
| (a) Relates to the amortization of interest rate swaps, all of which has been cash settled in prior periods. | ||
| (b) Full year 2013 is inclusive of $16.5 million of non-cash expense related to the 9% senior notes and the 7.75% secured notes that were retired in January 2013. | ||
| Debt balances and maturity dates as of June 30, 2013: | ||
| (in millions) | ||
| Face Value | Final Maturity | |
| Revolver | $ 1,046.0 | January 2017 |
| Term Loan A | 468.8 | January 2017 |
| Term Loan B | 1,576.1 | January 2019 |
| 7.125% Senior Notes Due 2019 | 500.0 | November 2019 |
| 5.25% Senior Notes | 1,649.9 | January 2023 |
| 2012 Senior Notes(a) | 1,500.0 | 2017/2023 |
| Senior Secured Notes, Series 2009-1(b) | 189.1 | Various |
| Senior Secured Tower Revenue Notes, Series 2010-1-2010-3(c) | 1,900.0 | Various |
| Senior Secured Tower Revenue Notes, Series 2010-4-2010-6(d) | 1,550.0 | Various |
| WCP Secured Wireless Site Contracts Revenue Notes, Series 2010-1(e) | 287.4 | November 2040 |
| Capital Leases and Other Obligations | 113.3 | Various |
| Total Debt | $ 10,780.6 | |
| Less: Cash and Cash Equivalents(f) | $ 126.9 | |
| Net Debt | $ 10,653.7 | |
| (a) The 2012 Senior Notes consist of $500 million aggregate principal amount of 2.381% secured notes due 2017 and $1.0 billion aggregate principal amount of 3.849% secured notes due 2023. | ||
| (b) The Senior Secured Notes, Series 2009-1 consist of $119.1 million of principal as of June 30, 2013 that amortizes during the period beginning January 2010 and ending in 2019, and $70.0 million of principal that amortizes during the period beginning in 2019 and ending in 2029. | ||
| (c) The Senior Secured Tower Revenue Notes Series 2010-1, 2010-2 and 2010-3 have principal amounts of $300.0 million, $350.0 million, and $1,250.0 million with anticipated repayment dates of 2015, 2017, and 2020, respectively. | ||
| (d) The Senior Secured Tower Revenue Notes Series 2010-4, 2010-5 and 2010-6 have principal amounts of $250.0 million, $300.0 million and $1,000.0 million with anticipated repayment dates of 2015, 2017 and 2020, respectively. | ||
| (e) The WCP Secured Wireless Site Contracts Revenue Notes, Series 2010-1 ("WCP Securitized Notes") were assumed in connection with the WCP acquisition. If WCP Securitized Notes are not repaid in full by their anticipated repayment dates in 2015, the applicable interest rate increases by an additional approximately 5% per annum. If the WCP Securitized Notes are not repaid in full by their rapid amortization date of 2017, monthly principal payments commence. | ||
| (f) Excludes restricted cash. | ||
| Sustaining capital expenditures for the three months ended June 30, 2013 and 2012 is computed as follows: | ||
| For the Three Months Ended | ||
| (in millions) | June 30, 2013 | June 30, 2012 |
| Capital Expenditures | $ 138.5 | $ 94.6 |
| Less: Land purchases | 26.9 | 29.1 |
| Less: Tower improvements and other | 66.7 | 30.4 |
| Less: Construction of towers | 34.8 | 27.9 |
| Sustaining capital expenditures | $ 10.2 | $ 7.3 |
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) carrier network strategies, (ii) demand for mobile technology and our sites and services, (iii) new leasing activity and application volume, including the impact on our results and operations which may be derived therefrom, (iv) our investments and the potential benefits which may be derived therefrom, (v) our potential conversion to a REIT, including the timing thereof, (vi) currency exchange rates, (vii) site rental revenues, (viii) site rental cost of operations, (ix) site rental gross margin and services gross margin, (x) Adjusted EBITDA, (xi) interest expense and amortization of deferred financing costs, (xii) FFO, (xiii) AFFO, including on a per share basis, (xiv) net income (loss), including on a per share basis, (xv) prepaid rents, (xvi) our common shares outstanding, including on a diluted basis and (xvii) 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:
- Our business depends on the demand for wireless communications and wireless infrastructure, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in carrier network investment may materially and adversely affect our business (including reducing demand for new tenant additions and network services).
- A substantial portion of our revenues is derived from a small number of customers, and the loss, consolidation or financial instability of any of our limited number of customers may materially decrease revenues and reduce demand for our wireless infrastructure and network services.
- 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.
- We have a substantial amount of indebtedness. 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.
- Sales or issuances of a substantial number of shares of our common stock may adversely affect the market price of our common stock.
- 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 new or renewing customer contracts.
- The business model for our small cell operations contains differences from our traditional site rental business, resulting in different operational risks. If we do not successfully operate that business model or identify and manage those operational risks, such operations may produce results that are less than anticipated.
- New technologies may significantly reduce demand for our wireless infrastructure 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 wireless infrastructure, our business may be adversely affected.
- Our network services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
- The expansion and development of our business, including through acquisitions, increased product offerings, and other strategic growth opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations and financial results.
- 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.
- If radio frequency emissions from wireless handsets or equipment on our wireless infrastructure 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 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
| CROWN CASTLE INTERNATIONAL CORP. | ||
| CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) | ||
| (in thousands) | ||
| June 30, | December 31, | |
| 2013 | 2012 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 126,886 | $ 441,364 |
| Restricted cash | 161,541 | 575,938 |
| Receivables, net | 201,028 | 192,833 |
| Deferred income tax assets | 182,053 | 193,420 |
| Other current assets | 208,558 | 177,769 |
| Total current assets | 880,066 | 1,581,324 |
| Deferred site rental receivables, net | 977,498 | 864,819 |
| Property and equipment, net | 6,892,277 | 6,917,531 |
| Goodwill | 3,138,018 | 3,119,957 |
| Other intangible assets, net | 2,852,434 | 2,941,696 |
| Deferred income tax assets | 26,059 | 33,914 |
| Long-term prepaid rent, deferred financing costs and other assets, net | 626,233 | 629,468 |
| Total assets | $ 15,392,585 | $ 16,088,709 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Accounts payable and other accrued liabilities | $ 304,765 | $ 308,675 |
| Deferred revenues | 242,420 | 241,127 |
| Current maturities of debt and other obligations | 97,013 | 688,056 |
| Total current liabilities | 644,198 | 1,237,858 |
| Debt and other long-term obligations | 10,691,509 | 10,923,186 |
| Deferred income tax liabilities | 110,756 | 65,830 |
| Below-market tenant leases, deferred ground lease payable and other liabilities | 1,021,230 | 910,571 |
| Total liabilities | 12,467,693 | 13,137,445 |
| CCIC Stockholders' equity | 2,911,472 | 2,938,746 |
| Noncontrolling interest | 13,420 | 12,518 |
| Total equity | 2,924,892 | 2,951,264 |
| Total liabilities and equity | $ 15,392,585 | $ 16,088,709 |
| CROWN CASTLE INTERNATIONAL CORP. | ||||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) | ||||
| (in thousands) | ||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Net revenues: | ||||
| Site rental | $ 616,849 | $ 517,588 | $ 1,232,264 | $ 1,015,117 |
| Network services and other | 118,079 | 67,923 | 242,724 | 122,139 |
| Net revenues | 734,928 | 585,511 | 1,474,988 | 1,137,256 |
| Operating expenses: | ||||
| Costs of operations (exclusive of depreciation, amortization and accretion): | ||||
| Site rental | 179,015 | 131,571 | 356,621 | 254,442 |
| Network services and other | 70,199 | 40,262 | 147,576 | 71,783 |
| General and administrative | 54,790 | 47,078 | 113,035 | 98,079 |
| Asset write-down charges | 3,097 | 3,646 | 6,812 | 6,690 |
| Acquisition and integration costs | 7,215 | 7,495 | 8,817 | 9,175 |
| Depreciation, amortization and accretion | 190,651 | 152,482 | 377,110 | 291,882 |
| Total operating expenses | 504,967 | 382,534 | 1,009,971 | 732,051 |
| Operating income (loss) | 229,961 | 202,977 | 465,017 | 405,205 |
| Interest expense and amortization of deferred financing costs | (140,256) | (144,940) | (304,625) | (282,412) |
| Gains (losses) on retirement of long-term obligations | (577) | (7,518) | (36,486) | (14,586) |
| Interest income | 328 | 382 | 625 | 736 |
| Other income (expense) | 507 | (2,249) | (122) | (3,326) |
| Income (loss) before income taxes | 89,963 | 48,652 | 124,409 | 105,617 |
| Benefit (provision) for income taxes | (36,587) | 68,432 | (54,295) | 61,737 |
| Net income (loss) | 53,376 | 117,084 | 70,114 | 167,354 |
| Less: Net income (loss) attributable to the noncontrolling interest | 1,017 | 1,071 | 2,293 | 1,310 |
| Net income (loss) attributable to CCIC stockholders | 52,359 | 116,013 | 67,821 | 166,044 |
| Dividends on preferred stock | — | — | — | (2,629) |
| Net income (loss) attributable to CCIC stockholders after deduction of dividends on preferred stock | $ 52,359 | $ 116,013 | $ 67,821 | $ 163,415 |
| Net income (loss) attributable to CCIC common stockholders, after deduction of dividends on preferred stock, per common share: | ||||
| Basic | $ 0.18 | $ 0.40 | $ 0.23 | $ 0.57 |
| Diluted | $ 0.18 | $ 0.40 | $ 0.23 | $ 0.57 |
| Weighted average common shares outstanding (in thousands): | ||||
| Basic | 291,225 | 290,649 | 291,164 | 287,781 |
| Diluted | 292,706 | 291,203 | 292,570 | 289,029 |
| CROWN CASTLE INTERNATIONAL CORP. | ||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) | ||
| (in thousands) | ||
| Six Months Ended June 30, | ||
| 2013 | 2012 | |
| Cash flows from operating activities: | ||
| Net income (loss) | $ 70,114 | $ 167,354 |
| Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
| Depreciation, amortization and accretion | 377,110 | 291,882 |
| Gains (losses) on retirement of long-term obligations | 36,486 | 14,586 |
| Amortization of deferred financing costs and other non-cash interest | 57,471 | 48,780 |
| Stock-based compensation expense | 19,472 | 17,105 |
| Asset write-down charges | 6,812 | 6,690 |
| Deferred income tax benefit (provision) | 50,143 | (65,544) |
| Other adjustments, net | 1,291 | (41) |
| Changes in assets and liabilities, excluding the effects of acquisitions: | ||
| Increase (decrease) in liabilities | 82,652 | (7,583) |
| Decrease (increase) in assets | (141,524) | (148,887) |
| Net cash provided by (used for) operating activities | 560,027 | 324,342 |
| Cash flows from investing activities: | ||
| Payments for acquisition of businesses, net of cash acquired | (27,280) | (1,199,316) |
| Capital expenditures | (254,820) | (159,697) |
| Other investing activities, net | 6,644 | 1,188 |
| Net cash provided by (used for) investing activities | (275,456) | (1,357,825) |
| Cash flows from financing activities: | ||
| Proceeds from issuance of long-term debt | 30,941 | 2,100,000 |
| Proceeds from issuance of capital stock | — | 238 |
| Principal payments on debt and other long-term obligations | (51,085) | (34,744) |
| Purchases and redemptions of long-term debt | (675,480) | (699,486) |
| Purchases of capital stock | (98,867) | (35,673) |
| Borrowings under revolving credit facility | 48,000 | — |
| Payments under revolving credit facility | (255,000) | (251,000) |
| Payments for financing costs | (5,654) | (40,237) |
| Net decrease (increase) in restricted cash | 411,048 | 12,620 |
| Dividends on preferred stock | — | (2,481) |
| Net cash provided by (used for) financing activities | (596,097) | 1,049,237 |
| Effect of exchange rate changes on cash | (2,952) | 301 |
| Net increase (decrease) in cash and cash equivalents | (314,478) | 16,055 |
| Cash and cash equivalents at beginning of period | 441,364 | 80,120 |
| Cash and cash equivalents at end of period | $ 126,886 | $ 96,175 |
| Supplemental disclosure of cash flow information: | ||
| Interest paid | 212,592 | 234,862 |
| Income taxes paid | 10,242 | 2,556 |
| CROWN CASTLE INTERNATIONAL CORP. | ||||||||||||
| Summary Fact Sheet | ||||||||||||
| (dollars in millions) | ||||||||||||
| Quarter Ended | ||||||||||||
| 9/30/2012 | 12/31/2012 | 3/13/2013 | 6/30/2013 | |||||||||
| CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | |
| Revenues | ||||||||||||
| Site Rental | $ 507.2 | $ 31.5 | $ 538.8 | $ 537.9 | $ 32.4 | $ 570.3 | $ 581.3 | $ 34.1 | $ 615.4 | $ 583.6 | $ 33.3 | $ 616.8 |
| Services | 78.3 | 4.3 | 82.6 | 98.0 | 5.8 | 103.8 | 117.9 | 6.8 | 124.6 | 113.1 | 5.0 | 118.1 |
| Total Revenues | 585.5 | 35.8 | 621.3 | 635.9 | 38.2 | 674.1 | 699.1 | 40.9 | 740.1 | 696.6 | 38.3 | 734.9 |
| Operating Expenses | ||||||||||||
| Site Rental | 126.1 | 9.3 | 135.3 | 140.6 | 8.9 | 149.5 | 167.6 | 10.0 | 177.6 | 169.2 | 9.8 | 179.0 |
| Services | 46.6 | 3.4 | 50.0 | 63.5 | 4.4 | 67.9 | 71.8 | 5.5 | 77.4 | 66.0 | 4.2 | 70.2 |
| Total Operating Expenses | 172.7 | 12.7 | 185.3 | 204.1 | 13.3 | 217.4 | 239.4 | 15.5 | 255.0 | 235.3 | 13.9 | 249.2 |
| General & Administrative | 50.5 | 5.4 | 55.9 | 49.3 | 9.4 | 58.6 | 52.6 | 5.7 | 58.2 | 49.2 | 5.6 | 54.8 |
| Add: Stock-Based Compensation | 16.3 | (0.1) | 16.2 | 8.4 | 3.6 | 12.0 | 10.0 | 0.1 | 10.1 | 9.4 | 0.2 | 9.6 |
| Add: Amortization of prepaid lease purchase price adjustments | 3.9 | — | 3.9 | 3.9 | — | 3.9 | 3.9 | — | 3.9 | 3.9 | — | 3.9 |
| Adjusted EBITDA | $ 382.6 | $ 17.6 | $ 400.2 | $ 394.8 | $ 19.1 | $ 413.9 | $ 421.0 | $ 19.8 | $ 440.8 | $ 425.5 | $ 18.9 | $ 444.4 |
| Quarter Ended | ||||||||||||
| 9/30/2012 | 12/31/2012 | 3/31/2013 | 6/30/2013 | |||||||||
| CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | |
| Gross Margins: | ||||||||||||
| Site Rental | 75% | 71% | 75% | 74% | 73% | 74% | 71% | 71% | 71% | 71% | 71% | 71% |
| Services | 40% | 20% | 39% | 35% | 24% | 35% | 39% | 18% | 38% | 42% | 17% | 41% |
| Adjusted EBITDA | 65% | 49% | 64% | 62% | 50% | 61% | 60% | 48% | 60% | 61% | 49% | 60% |
| Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to GAAP Financial Measure: | ||||
| (dollars in millions) | ||||
| Quarter Ended | ||||
| 9/30/2012 | 12/31/2012 | 3/31/2013 | 6/30/2013 | |
| Net income (loss) | $ 43.2 | $ (9.6) | $ 16.7 | $ 53.4 |
| Adjustments to increase (decrease) net income (loss): | ||||
| Asset write-down charges | 1.6 | 7.3 | 3.7 | 3.1 |
| Acquisition and integration costs | 2.9 | 6.2 | 1.6 | 7.2 |
| Depreciation, amortization and accretion | 154.9 | 175.8 | 186.5 | 190.7 |
| Amortization of prepaid lease purchase price adjustment | 3.9 | 3.9 | 3.9 | 3.9 |
| Interest expense, amortization of deferred financing costs | 144.9 | 173.7 | 164.4 | 140.3 |
| Gains (losses) on retirement of long-term obligations | — | 117.4 | 35.9 | 0.6 |
| Interest income | (0.3) | (3.5) | (0.3) | (0.3) |
| Other income (expense) | 0.6 | 1.4 | 0.6 | (0.5) |
| Benefit (provision) for income taxes | 32.3 | (70.6) | 17.7 | 36.6 |
| Stock-based compensation | 16.2 | 12.0 | 10.1 | 9.6 |
| Adjusted EBITDA | $ 400.2 | $ 413.9 | $ 440.8 | $ 444.4 |
| Note: Components may not sum to total due to rounding. | ||||
| CCI Fact Sheet | |||
| (dollars in millions) | |||
| Quarter Ended | |||
| 6/30/2012 | 6/30/2013 | % Change | |
| CCUSA | |||
| Site Rental Revenues | $ 487.8 | $ 583.6 | 20% |
| Ending Towers (a) | 22,661 | 29,855 | 32% |
| CCAL | |||
| Site Rental Revenues | $ 29.8 | $ 33.3 | 12% |
| Ending Towers (a) | 1,654 | 1,746 | 6% |
| Total CCIC | |||
| Site Rental Revenues | $ 517.6 | $ 616.8 | 19% |
| Ending Towers (a) | 24,315 | 31,601 | 30% |
| Ending Cash and Cash Equivalents | $ 96.2 | $ 126.9 | |
| Total Face Value of Debt | $ 8,434.1 | $ 10,780.6 | |
| Net Debt | $ 8,337.9 | $ 10,653.7 | |
| Net Leverage Ratios:(b) | |||
| Net Debt / Adjusted EBITDA | 5.5X | 6.0X | |
| Last Quarter Annualized Adjusted EBITDA | $ 1,514.1 | $ 1,777.6 | |
| *Excludes Restricted Cash | |||
| (a) Exclusive of small cell networks | |||
| (b) Based on Face Values | |||
| Note: Components may not sum to total due to rounding. | |||
CONTACT:Jay Brown , CFOFiona McKone , VP -Corporate Finance Crown Castle International Corp. 713-570-3050
