Crown Castle International Reports Fourth Quarter and Full Year 2007 Results
"We had an excellent fourth quarter and full year 2007, exceeding our previously provided outlook for site rental gross margin, Adjusted EBITDA and recurring cash flow," stated John P. Kelly, President and Chief Executive Officer of Crown Castle. "As I look back on 2007, I am very pleased with our full year results driven by greater than expected cost synergies following our acquisition of Global Signal and strong site rental revenue growth across our entire portfolio of towers. In addition to strong operating results, we have substantially completed all of our integration activities and are on track to finish the few remaining items in the first quarter. I commend our employees for the tremendous job they did in 2007, exceeding our operating targets and successfully integrating Global Signal. I believe that our fully integrated portfolio of towers is well-located to serve our customers, and coupled with the actions we have continued to take to optimize our capital structure, positions us for strong recurring cash flow per share growth in 2008."
CONSOLIDATED FINANCIAL RESULTS
Site rental revenue for the fourth quarter of 2007 increased $150.9 million, or 80.8%, to $337.5 million from $186.7 million for the same period in the prior year. Site rental gross margin, defined as site rental revenue less site rental cost of operations, increased 72.8% to $224.8 million, up $94.7 million in the fourth quarter of 2007 from the same period in 2006. Adjusted EBITDA for the fourth quarter of 2007 increased $92.7 million, or 79.6%, to $209.2 million, up from $116.5 million for the same period in 2006.
Recurring cash flow, defined as Adjusted EBITDA less interest expense less sustaining capital expenditures, increased from $67.5 million in the fourth quarter of 2006 to $110.9 million for the fourth quarter of 2007, up 64.4%, inclusive of $20.4 million of additional interest expense from $1.3 billion in borrowings in the fourth quarter 2006 and full year 2007 used to reduce potential and actual shares outstanding by 36.9 million shares. Weighted average common shares outstanding increased to 281.7 million for the fourth quarter of 2007, inclusive of the impact from the Merger, from 200.8 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 $0.39 in the fourth 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 $0.34 in the fourth quarter of 2006.
Net loss was $80.2 million for the fourth quarter of 2007, inclusive of a $75.6 million charge to write-down Crown Castle's investment in FiberTower Corporation, compared to a net loss of $6.3 million for the same period in 2006. Net loss after deduction of dividends on preferred stock was $85.4 million in the fourth quarter of 2007, compared to a loss of $11.5 million for the same period in 2006. Fourth quarter 2007 net loss per share was $0.30, compared to a net loss per share of $0.06 in the fourth quarter of 2006.
Site rental revenue for the full year 2007 increased 84.6% to $1.286 billion, up $589.7 million from $696.7 million for the full year 2006. Site rental gross margin for the full year 2007 increased 74.1% to $843.1 million, up $358.9 million from $484.3 million for the full year 2006. Adjusted EBITDA for the full year 2007 increased $331.2 million, or 77.5%, to $758.6 million, up from $427.4 million for the full year 2006.
Recurring cash flow increased $129.3 million, or 50.5%, from $255.8 million for the full year 2006 to $385.1 million for the full year 2007, inclusive of $76.7 million of additional interest expense from $1.3 billion in borrowings in the fourth quarter 2006 and full year 2007 used to reduce potential and actual shares outstanding by 36.9 million shares. Weighted average common shares outstanding increased to 279.9 million for the full year 2007, inclusive of the impact of the Merger, from 207.2 million for the full year 2006. Recurring cash flow per share was $1.38 in the full year 2007, inclusive of $0.10 per share of dilution from the previously mentioned borrowings used to reduce potential and actual shares outstanding, compared to $1.23 for the full year 2006.
Net loss was $222.8 million for the full year 2007, inclusive of a $75.6 million charge to write-down Crown Castle's FiberTower investment and $65.5 million of asset write-down charges primarily related to the Modeo write-down in the third quarter, compared to a net loss of $41.9 million for the full year 2006. Net loss after deduction of dividends on preferred stock was $243.6 million for the full year 2007, compared to a net loss of $62.7 million in the full year 2006. Full year 2007 net loss per share was $0.87 compared to a net loss per share of $0.30 for the full year 2006.
PRO FORMA RESULTS
During the fourth quarter of 2007, Crown Castle benefited from $4.1 million of out of run-rate items in site rental revenue ($4.2 million was included in its fourth quarter 2007 Outlook). During the fourth quarter of 2006, Crown Castle benefited from $8.9 million of out of run-rate items in site rental revenue. Pro forma site rental revenue growth was 8.3%, comparing reported fourth quarter 2007 results to pro forma fourth quarter 2006 results, excluding the out of run-rate items mentioned above. Pro forma site rental gross margin growth was 10.7%, comparing reported fourth quarter 2007 results to pro forma fourth quarter 2006 results. Pro forma site rental revenue growth was 7.9%, comparing pro forma full year 2007 results to pro forma full year 2006 results. Pro forma site rental gross margin growth was 9.5%, comparing pro forma full year 2007 results to pro forma full year 2006 results.
SEGMENT RESULTS
U.S. site rental revenue for the fourth quarter of 2007 increased $143.9 million, or 83.3%, to $316.8 million, compared to fourth quarter 2006 U.S. site rental revenue of $172.8 million. U.S. site rental gross margin increased 75.0% to $210.1 million, up $90.0 million in the fourth quarter of 2007 from the same period in 2006.
Australia site rental revenue for the fourth quarter of 2007 increased $6.9 million, or 49.9%, to $20.8 million, compared to $13.9 million for the fourth quarter of 2006. Australia site rental gross margin for the fourth quarter of 2007 increased $4.7 million, or 46.7%, to $14.7 million, compared to fourth quarter 2006 site rental gross margin of $10.0 million.
INVESTMENTS AND LIQUIDITY
During the fourth quarter of 2007, Crown Castle invested $108.7 million in capital expenditures comprised of $8.2 million of sustaining capital expenditures and $100.5 million of revenue generating capital expenditures, of which $17.9 million was spent on existing sites, $35.0 million on land purchases and $47.6 million on the acquisition of 25 towers and construction of new sites, including the completion of 53 towers.
During the fourth quarter of 2007, Crown Castle purchased 3.2 million of its outstanding common shares for $126.2 million at an average price of $38.97 per share. During the full year 2007, Crown Castle purchased 21.0 million of its outstanding common shares for $729.8 million at an average price of $34.68 per share to reduce common shares outstanding by 8%. During the first quarter of 2008 through February 6, 2008, Crown Castle purchased 1.1 million of its common shares for $42.0 million at an average price of $36.99 per share. Since January 2003, Crown Castle has invested over $2.2 billion in purchases of its securities to reduce fully diluted common shares by 88 million, or 29%.
Since October 1, 2007, Crown Castle has borrowed $150 million under its revolving credit facility. As of February 6, 2008, Crown Castle has $100 million of undrawn capacity under its revolving credit facility.
"During the last four months, we have continued our long-standing practice of investing significantly in our tower business," stated Ben Moreland, Chief Financial Officer of Crown Castle. "The strong growth that we experienced in Adjusted EBITDA during the second half of 2007 moved us within our targeted debt to Adjusted EBITDA leverage range of six to eight times, enabling us to opportunistically borrow funds to make investments that we believe will maximize long-term recurring cash flow per share. Consistent with our past actions, we have continued to evaluate and invest in share repurchases, construction of new sites, tower acquisitions and land purchases, which we believe will be long-term accretive to our business. The investment in our own towers via share repurchases continues to be motivated by our expectation that we can grow recurring cash flow per share 20% to 25% per year."
OUTLOOK
The following Outlook tables are based on current expectations and assumptions. The Outlook tables assume a U.S. dollar to Australian dollar exchange rate of 0.85 and 0.83 U.S. dollars to 1.00 Australian dollar for first quarter and full year 2008 Outlook, respectively.
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 first quarter of 2008 and full year 2008:
The following table sets forth Crown Castle's current Outlook for
the first quarter of 2008 and full year 2008:
(in millions, except per
share amounts) First Quarter 2008 Full Year 2008
------------------ --------------
Site rental revenue $336 to $341 $1,377 to $1,392
Site rental cost of
operations $108 to $113 $445 to $455
Site rental gross margin $226 to $231 $930 to $940
Adjusted EBITDA $205 to $210 $850 to $862
Interest expense and
amortization of deferred
financing costs(a) $89 to $91 $355 to $360
Sustaining capital
expenditures $6 to $8 $21 to $26
Recurring cash flow $109 to $114 $474 to $484
Net loss after deduction of
dividends on preferred stock $(41) to $(3) $(118) to $(16)
Net loss per share(b) $(0.15) to $(0.01) $(0.42) to $(0.06)
a) Inclusive of $6 million and $25 million, respectively, from
non-cash expense.
b) Based on 280.3 million shares outstanding as of December 31, 2007.
PRO FORMA CONSOLIDATED RESULTS
The following table provides investors with additional information and does not purport to represent what the actual consolidated results of operations would have been for the quarter ended December 31, 2006 and years ended December 31, 2006 and 2007, nor is the table necessarily indicative of future consolidated results. The pro forma consolidated results are presented for illustrative purposes only. Cost savings from the Merger are reflected in the periods in which such savings are achieved. The following table contains pro forma Crown Castle results for the quarter ended December 31, 2006 and the years ended December 31, 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.
(in millions) Reported Pro Forma Pro Forma Pro Forma
--------- ---------- ---------- ---------
Results Results Results Results
-------- ------- ------- -------
Q4 2007 Q4 2006 Full Year Full Year
------- ------- --------- ---------
2007 2006
---- ----
Site rental
revenue $ 337.5(1) $ 316.8(1) $1,302.2 $1,206.5
Site rental cost
of operations $ 112.7 $ 113.7 $ 450.5 $ 429.0
Site rental
gross margin $ 224.8 $ 203.1 $ 851.7 $ 777.5
1) Includes out of run-rate site rental revenue items as indicated on
page 3 of the release in the "Pro Forma Results" section.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, February 7, 2008, at 10:30 a.m. eastern time to discuss the fourth quarter and full year 2007 results and Crown Castle's Outlook. Please dial 303-262-2191 and ask for the Crown Castle call at least 10 minutes prior to the start time. A telephonic replay of the conference call will be available from 12:30 p.m. eastern time on Thursday, February 7, 2008 through 11:59 p.m. eastern time on Thursday, February 14, 2008 and may be accessed by dialing 303-590-3000 using passcode 11107434#. 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 U.S. markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 22,000 and over 1,300 wireless communication sites in the U.S. and Australia, respectively. For more information on Crown Castle, please visit http://www.crowncastle.com.
The Crown Castle International Corp. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3063
Summary of Non-Cash Amounts in Tower Gross Margin
In accordance with applicable accounting standards, Crown Castle recognizes site rental revenues and ground lease expenses monthly on a straight-line basis, regardless of whether the receipts and payments are in equal monthly amounts. An agreement, related to an acquisition in Australia, provides the seller with a rent-free period at the beginning of the lease term, and other agreements call for rent to be prepaid for a specified period. If, and to the extent the payment terms call for fixed escalations (as in fixed dollar or fixed percentage increases), the effect of such increases is recognized on a straight-line basis over the appropriate lease term. As a result of this accounting method, a portion of the revenue and expense recognized in a given period represents cash collected or paid in other periods.
A summary of the non-cash portions of our site rental revenue, ground lease expense, stock-based compensation for those employees directly related to US tower operations, net amortization of below-market and above-market lease acquired, and resulting impact on site rental gross margins is as follows:
(in thousands) For the Three For the Twelve
------------- --------------
Months Ended Months Ended
------------ ------------
December 31, 2007 December 31, 2007
----------------- -----------------
Non-cash portion of site rental
revenue attributable to
straight-line recognition
of revenue $ 10,681 $ 42,921
Non-cash portion of ground
lease expense attributable
to straight-line recognition
of expenses (11,018) (41,040)
Stock-based compensation
charges (109) (396)
Net amortization of
below-market and above-market
leases 166 638
---------- ---------
Non-cash impact on site rental
gross margin $ (280) $ 2,123
========== =========
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, impairment of available-for-sale securities, 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 Generally Accepted Accounting Principles ("GAAP")).
Crown Castle defines recurring cash flow to be Adjusted EBITDA, less interest expense and less sustaining capital expenditures. Each of the amounts included in the calculation of recurring cash flow are computed in accordance with GAAP, with the exception of sustaining capital expenditures, which is not defined under GAAP. Sustaining capital expenditures are defined as capital expenditures (determined in accordance with GAAP) which do not increase the capacity or life of an asset. Recurring cash flow is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with GAAP).
Adjusted EBITDA and recurring cash flow are presented as additional information because management believes these measures are useful indicators of the financial performance of our core businesses. In addition, Adjusted EBITDA is a measure of current financial performance used in our debt covenant calculations. Our measures of Adjusted EBITDA and recurring cash flow may not be comparable to similarly titled measures of other companies, 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 and years ended December 31, 2007 and 2006
-----------------------------------------------------------------
are computed as follows:
------------------------
For the For the
Three Months Ended Twelve Months Ended
------------------- --------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
-------- -------- --------- --------
(in thousands, except per share amounts)
Net income (loss) $(80,169) $(6,275) $(222,813) $(41,893)
Adjustments to increase
(decrease) net
income (loss):
Restructuring charges
(credits) (a) -- (391) 3,191 (391)
Asset write-down charges 1,466 140 65,515 2,945
Integration costs (a) 6,752 1,503 25,418 1,503
Depreciation,
amortization
and accretion 132,347 71,618 539,904 285,244
Losses on purchases and
redemption of debt -- 4,666 -- 5,843
Interest and other
income (expense) (181) (2,891) (9,351) 1,629
Interest expense and
amortization of deferred
financing costs 90,047 46,163 350,259 162,328
Impairment of
available-for-sale
securities 75,623 -- 75,623 --
Benefit (provision)
for income taxes (24,334) (855) (94,039) 843
Minority interests -- (266) (151) (1,666)
Income (loss) from
discontinued operations,
net of tax -- -- -- (5,657)
Stock-based compensation
charges (c) 7,674 3,095 25,087 16,718
-------- -------- --------- --------
Adjusted EBITDA $209,225 $116,507 $ 758,643 $427,446
======== ======== ========= ========
Less: Interest expense
and amortization of
deferred financing costs 90,047 46,163 350,259 162,328
Less: Sustaining capital
expenditures 8,238 2,852 23,318 9,306
-------- -------- --------- --------
Recurring cash flow $110,940 $ 67,492 $ 385,066 $255,812
======== ======== ========= ========
Weighted average common
shares outstanding 281,691 200,763 279,937 207,245
Recurring cash
flow per share $ 0.39 $ 0.34 $ 1.38 $ 1.23
======== ======== ========= ========
Adjusted EBITDA and recurring cash flow for the quarter ending
--------------------------------------------------------------
March 31, 2008 and the year ending December 31, 2008 are forecasted
-------------------------------------------------------------------
as follows:
-----------
Q1 2008 Full Year 2008
------- --------------
Outlook Outlook
------- -------
(in millions)
Net income (loss) $(36) to $2 $(97) to $5
Adjustments to increase
(decrease) net income (loss):
Restructuring charges(a) -- --
Asset write-down charges $0 to $3 $5 to $10
Integration costs (a) $1 to $4 $1 to $4
Depreciation, amortization
and accretion $130 to $140 $520 to $560
Losses on purchases and
redemptions of debt -- --
Interest and other income (expense) $(3) to $(1) $(12) to $(7)
Interest expense and amortization
of deferred financing costs(b) $89 to $91 $355 to $360
Benefit (provision) for
income taxes $(14) to $(4) $(35) to $(10)
Minority interests -- --
Income (loss) from discontinued
operations, net of tax -- --
Stock-based compensation charges(c) $5 to $8 $23 to $30
-------- ----------
Adjusted EBITDA $205 to $210 $850 to $862
============ ============
Less: Interest expense and
amortization of deferred
financing costs(b) $89 to $91 $355 to $360
Less: Sustaining capital
expenditures $6 to $8 $21 to $26
-------- ----------
Recurring cash flow $109 to $114 $474 to $484
============ ============
(a) Inclusive of stock-based compensation charges.
(b) Inclusive of $6 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 and years ended
----------------------------------------------------------------
December 31, 2007 and December 31, 2006 is computed as follows:
---------------------------------------------------------------
For the For the
Three Months Ended Twelve Months Ended
------------------- --------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
-------- -------- --------- --------
(in thousands)
Capital Expenditures $108,747 $ 44,894 $ 300,005 $124,820
Less:Revenue enhancing
on existing sites 17,913 10,419 45,818 36,378
Less:Land purchases 35,016 11,905 133,032 27,499
Less:New site acquisition
and construction 47,580 19,718 97,837 51,637
-------- -------- --------- --------
Sustaining capital
expenditures $ 8,238 $ 2,852 $ 23,318 $ 9,306
======== ======== ========= ========
Site rental gross margin for the quarter ending March 31, 2008 and
------------------------------------------------------------------
for the year ending December 31, 2008 is forecasted as
------------------------------------------------------
follows:
--------
Q1 2008 Full Year 2008
------- --------------
Outlook Outlook
------- -------
(in millions)
Site rental revenue $336 to $341 $1,377 to $1,392
Less: Site rental cost of operations $108 to $113 $445 to $455
------------ ------------
Site rental gross margin $226 to $231 $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) the Merger and the related integration activities, including timing and expected benefits derived therefrom, (ii) the impact of and benefits from our portfolio of towers and actions taken to optimize our capital structure, (iii) recurring cash flow (including recurring cash flow per share and annual growth), (iv) the impact of and return on our investments, including the purchase of our securities, land purchases, and the construction and acquisition of towers, (v) currency exchange rates, (vi) the utility of certain financial measures in analyzing our results, (vii) site rental revenues, (viii) site rental cost of operations, (ix) site rental gross margin, (x) Adjusted EBITDA, (xi) interest expense and amortization of deferred financing costs, (xii) sustaining capital expenditures, and (xiii) 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:
-- 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 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.
-- 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.
-- 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.
-- Our lease relating to our 1670-1675 MHz U.S. nationwide spectrum
license 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.
-- 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 Years Ended
December 31, December 31,
--------------------------------------------------
2007 2006 2007 2006
--------------------------------------------------
Net revenues:
Site rental $ 337,543 $ 186,672 $ 1,286,468 $ 696,724
Network services
and other 37,620 24,169 99,018 91,497
----------- ----------- ----------- -----------
Total net
revenues 375,163 210,841 1,385,486 788,221
----------- ----------- ----------- -----------
Costs of
operations
(exclusive of
depreciation,
amortization and
accretion):
Site rental 112,718 56,576 443,342 212,454
Network services
and other 22,258 16,106 65,742 60,507
----------- ----------- ----------- -----------
Total costs of
operations 134,976 72,682 509,084 272,961
----------- ----------- ----------- -----------
General and
administrative 38,636 24,747 142,846 104,532
Restructuring
charges (credits) -- (391) 3,191 (391)
Asset write-down
charges 1,466 140 65,515 2,945
Integration costs 6,752 1,503 25,418 1,503
Depreciation,
amortization and
accretion 132,347 71,618 539,904 285,244
----------- ----------- ----------- -----------
Operating income
(loss) 60,986 40,542 99,528 121,427
Losses on
purchases and
redemptions of
debt -- (4,666) -- (5,843)
Interest and other
income (expense) 181 2,891 9,351 (1,629)
Interest expense
and amortization
of deferred
financing costs (90,047) (46,163) (350,259) (162,328)
Impairment of
available-for-
sale securities (75,623) -- (75,623) --
----------- ----------- ----------- -----------
Income (loss)
from continuing
operations
before income
taxes and
minority
interests (104,503) (7,396) (317,003) (48,373)
Benefit (provision)
for income taxes 24,334 855 94,039 (843)
Minority interests -- 266 151 1,666
----------- ----------- ----------- -----------
Income (loss) from
continuing
operations (80,169) (6,275) (222,813) (47,550)
Income (loss) from
discontinued
operations, net
of tax -- -- -- 5,657
----------- ----------- ----------- -----------
Net income (loss) (80,169) (6,275) (222,813) (41,893)
Dividends on
preferred stock (5,201) (5,202) (20,805) (20,806)
----------- ----------- ----------- -----------
Net income (loss)
after deduction
of dividends on
preferred stock $ (85,370) $ (11,477) $ (243,618) $ (62,699)
=========== =========== =========== ===========
Per common share -
basic and
diluted:
Income (loss)
from continuing
operations $ (0.30) $ (0.06) $ (0.87) $ (0.33)
Income (loss)
from
discontinued
operations -- -- -- 0.03
----------- ----------- ----------- -----------
Net income
(loss) $ (0.30) $ (0.06) $ (0.87) $ (0.30)
=========== =========== =========== ===========
Weighted average
common shares
outstanding -
basic and diluted 281,691 200,763 279,937 207,245
----------- ----------- ----------- -----------
Adjusted EBITDA $ 209,225 $ 116,507 $ 758,643 $ 427,446
=========== =========== =========== ===========
Stock-based
compensation
expenses:
Site rental cost
of operations $ 109 $ 58 $ 396 $ 174
Network services
and other cost
of operations 98 58 371 198
General and
administrative 7,467 2,979 24,320 16,346
Restructuring
charges -- -- 2,377 --
Integration
costs -- -- 790 --
----------- ----------- ----------- -----------
Total $ 7,674 $ 3,095 $ 28,254 $ 16,718
=========== =========== =========== ===========
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(in thousands)
December 31, December 31,
2007 2006
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 75,245 $ 592,716
Restricted cash 165,556 115,503
Receivables, net of allowance for
doubtful accounts 37,134 30,774
Deferred income tax asset 113,492 1,980
Prepaid expenses and other current
assets 104,331 60,350
----------- -----------
Total current assets 495,758 801,323
Restricted cash 5,000 5,000
Deferred site rental receivable 127,388 98,527
Available-for-sale securities 60,085 154,955
Property and equipment, net 5,051,055 3,246,446
Goodwill 1,996,692 391,448
Other intangible assets, net 2,676,288 235,379
Deferred financing costs and other
assets, net of accumulated amortization 100,561 74,386
----------- -----------
$10,512,827 $ 5,007,464
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 37,366 $ 18,545
Deferred rental revenues and other
accrued liabilities 254,924 182,250
Current maturities of long-term debt 81,500 --
----------- -----------
Total current liabilities 373,790 200,795
Long-term debt, less current maturities 5,987,695 3,513,890
Deferred income tax liability 304,150 1,296
Other liabilities 366,483 193,279
----------- -----------
Total liabilities 7,032,118 3,909,260
Minority interests -- 29,052
Redeemable preferred stock 313,798 312,871
Stockholders' equity 3,166,911 756,281
----------- -----------
$10,512,827 $ 5,007,464
=========== ===========
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
Twelve Months Ended
December 31,
-------------------------
2007 2006
----------- -----------
Cash flows from operating activities:
Net income (loss) $ (222,813) $ (41,893)
Adjustments to reconcile net income
(loss) to net cash provided by (used
for) operating activities:
Depreciation, amortization and
accretion 539,904 285,244
Asset write-down charges 65,515 2,945
Deferred income tax (benefit) provision (100,718) (2,303)
Impairment of available-for-sale
securities 75,623 --
Other adjustments, net 53,648 35,633
Changes in assets and liabilities,
excluding the effects of acquisitions:
Increase (decrease) in liabilities 7,841 33,853
Decrease (increase) in assets (68,645) (37,720)
----------- -----------
Net cash provided by (used for)
operating activities 350,355 275,759
----------- -----------
Cash flows from investing activities:
Proceeds from investments and
disposition of property and equipment 3,664 2,282
Payments for acquisitions (net of cash
acquired) of businesses (494,352) (303,611)
Capital expenditures (300,005) (124,820)
Investments and loans (755) (6,350)
----------- -----------
Net cash provided by (used for)
investing activities (791,448) (432,499)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 650,000 2,550,000
Proceeds from issuance of capital stock 31,176 45,540
Principal payments on long-term debt (4,875) (1,000,585)
Purchases and redemptions of long-term
debt -- (12,108)
Payments under revolving credit
agreements -- (295,000)
Purchases of capital stock (729,811) (518,028)
Borrowings under revolving credit
agreements 75,000 --
Incurrence of financing costs (9,108) (36,918)
Initial funding of restricted cash -- (4,321)
Net decrease (increase) in restricted
cash (33,089) (20,429)
Interest rate swap receipts (payments) -- (9,360)
Dividends on preferred stock (19,879) (19,877)
Capital distribution to minority
interest holders of CCAL (37,196) --
----------- -----------
Net cash provided by (used for)
financing activities (77,782) 678,914
----------- -----------
Effect of exchange rate changes on cash 1,404 (523)
Cash flows from discontinued operations -- 5,657
----------- -----------
Net increase (decrease) in cash and cash
equivalents (517,471) 527,308
Cash and cash equivalents at beginning of
period 592,716 65,408
----------- -----------
Cash and cash equivalents at end of
period $ 75,245 $ 592,716
=========== ===========
Supplemental disclosure of cash flow
information:
Interest paid $ 324,605 $ 145,528
Income taxes paid 4,218 3,378
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(dollars in thousands)
--------------------------------
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 155,037 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 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
-------- -------- --------
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 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
-------- -------- --------
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
-------- -------- --------
--------------------------------
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%
-------- -------- --------
--------------------------------
Quarter Ended 12/31/07
--------------------------------
CCUSA CCAL CCIC
-------- -------- --------
Revenues $316,750 $ 20,793 $337,543
Site Rental 33,873 3,747 37,620
Services -------- -------- --------
350,623 24,540 375,163
Total Revenues
Operating Expenses 106,636 6,082 112,718
Site Rental 19,906 2,352 22,258
Services -------- -------- --------
Total Operating Expenses 126,542 8,434 134,976
General & Administrative 32,392 6,244 38,636
Operating Cash Flow 191,689 9,862 201,551
Add: Stock-Based Compensation (a) 5,164 2,510 7,674
-------- -------- --------
Adjusted EBITDA $196,853 $ 12,372 $209,225
-------- -------- --------
--------------------------------
Quarter Ended 12/31/07
--------------------------------
CCUSA CCAL CCIC
Gross Margins: -------- -------- --------
Site Rental 66% 71% 67%
Services 41% 37% 41%
Operating Cash Flow Margins 55% 40% 54%
Adjusted EBITDA Margin 56% 50% 56%
-------- -------- --------
(a) Exclusive of charges included in restructuring charges
and integration costs.
Reconciliation of Non-GAAP Financial Measure
(Adjusted EBITDA) to GAAP Financial Measure:
(dollars in thousands)
--------------------------------------------------
Quarter Ended
--------------------------------------------------
3/31/2007 6/30/2007 9/30/2007 12/31/2007
Net income
(loss) $ (42,891) $ (32,740) $ (67,013) $ (80,169)
Adjustments to
increase
(decrease)
net income
(loss):
Restructuring
charges
(credits) (1) -- -- 3,191 --
Asset write-
down charges 1,352 3,391 59,306 1,466
Integration
costs (1) 8,848 5,069 4,749 6,752
Depreciation,
amortization
and accretion 138,693 133,324 135,540 132,347
Losses on
purchases and
redemptions
of debt -- -- -- --
Interest and
other income
(expense) (3,299) (2,906) (2,965) (181)
Interest
expense,
amortization
of deferred
financing
costs 82,015 88,790 89,407 90,047
Impairment of
available-
for-sale
securities -- -- -- 75,623
Benefit
(provision)
for income
taxes (22,162) (15,620) (31,923) (24,334)
Minority
interests (217) 390 (324) --
Cumulative
effect of
change in
accounting
principle -- -- -- --
Income (loss)
from
discontinued
operations,
net of tax - -- -- -- --
Stock-based
compensation
(2) 4,919 6,682 5,812 7,674
Adjusted EBITDA $ 167,258 $ 186,380 $ 195,780 $ 209,225
========= ========= ========= =========
(1) Inclusive of stock-based compensation charges
(2) Exclusive of amounts included in restructuring charges
(credits) and integration costs
CCI FACT SHEET Q4 2006 to Q4 2007
dollars in thousands
Q4 '06 Q4 '07 % Change
---------- ---------- -----------
CCUSA
-----
Site Rental Revenue $ 172,801 $ 316,750 83%
Ending Sites 11,525 22,405 94%
CCAL
----
Site Rental Revenue $ 13,871 $ 20,793 50%
Ending Sites 1,387 1,441 4%
TOTAL CCIC
----------
Site Rental Revenue $ 186,672 $ 337,543 81%
Ending Sites 12,912 23,846 85%
---------- ---------- -----------
Ending Cash and
Cash Equivalents $ 592,716(1)$ 75,245(1)
Debt
Bank Debt $ 0 $ 720,125
Securitized Debt
& Other Notes $3,513,890 $5,349,070
6 1/4% Convertible
Preferred Stock $ 312,871 $ 313,798
---------- ----------
Total Debt $3,826,761 $6,382,993
Leverage Ratios
Net Bank Debt +
Bonds / EBITDA 6.3X 7.2X
Total Net Debt /
EBITDA 6.9X 7.5X
Last Quarter
Annualized
Adjusted EBITDA $ 466,028 $ 836,900
(1) 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