Crown Castle International Reports Second Quarter 2009 Results; Raises 2009 Outlook
"We had an excellent second quarter, exceeding the top end 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 second quarter 2009 increased
Recurring cash flow, defined as Adjusted EBITDA less interest expense less sustaining capital expenditures, increased from
For the second quarter of 2009, approximately 5% of
Net loss attributable to CCIC stockholders was
SEGMENT RESULTS
U.S. site rental revenues for the second quarter of 2009 increased
On a currency-neutral basis,
INVESTMENTS AND LIQUIDITY
"I am very pleased with our second quarter financial results, our ability to increase our Outlook for the balance of 2009 and the continued progress that we have made to improve our balance sheet," stated
During the second quarter of 2009,
On
During the second quarter of 2009,
As of
During the second quarter of 2009,
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 forthCrown Castle's current Outlook for the third quarter of 2009 and full year 2009: (in millions, except per share amounts) Third Quarter 2009 Full Year 2009 ------------------ -------------- Site rental revenues $385 to $390 $1,520 to $1,530 Site rental cost of operations $114 to $120 $455 to $460 Site rental gross margin $268 to $273 $1,063 to $1,073 Adjusted EBITDA $246 to $251 $985 to $995 Interest expense and amortization of deferred financing costs(a) $113 to $115 $441 to $446 Sustaining capital expenditures $8 to $11 $26 to $31 Recurring cash flow $123 to $128 $513 to $523 Net income (loss) attributable to CCIC common stockholders after deduction of dividends on preferred stock $(31) to $12 $(172) to $(81) Net income (loss) attributable to CCIC common stockholders per share(b) $(0.11) to $0.04 $(0.60) to $(0.28) (a) Inclusive of approximately$17 million and approximately$60 million , respectively, of non-cash expense. (b) Represents net income (loss) attributable to CCIC common stockholders per common share, based on 286.5 million shares outstanding as ofJune 30, 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
--------------------------
June 30, June 30,
2009 2008
--------- ---------
(in thousands)
Interest expense on debt
obligations $ 94,049 $ 82,492
Amortization of deferred financing
costs 6,739 3,842
Amortization of discounts on
long-term debt 3,151 --
Amortization of interest rate swaps 5,311 755
Amortization of purchase price
adjustments on long-term debt 571 943
Other 429 725
--------- ---------
$110,250 $ 88,757
========= =========
The components of interest expense and amortization of deferred
financing costs are forecasted as follows:
Full Year
Q3 2009 2009
Outlook Outlook
------------ ------------
(in millions)
Interest expense on
debt obligations $98 to $100 $380 to $385
Amortization of deferred
financing costs $6 to $8 $26 to $28
Amortization of discounts
on long-term debt $3 to $4 $11 to $13
Amortization of interest
rate swaps $4 to $6 $16 to $18
Amortization of purchase
price adjustments on
long-term debt $0 to $0 $0 to $0
Other $0 to $1 $1 to $3
------------ ------------
$113 to $115 $441 to $446
============ ============
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 endedJune 30, 2009 and 2008 are computed as follows: -------------------------------------------------------------------- For the Three Months Ended ------------------------------- June 30, June 30, 2009 2008 ------------- ------------- (in thousands, except per share amounts) Net income (loss) $ (111,767) $ 60,339 Adjustments to increase (decrease) net income (loss): Asset write-down charges 7,295 4,993 Acquisition and integration costs -- -- Depreciation, amortization and accretion 131,597 131,896 Interest expense and amortization of deferred financing costs 110,250 88,757 Gains (losses) on purchases and redemptions of debt 98,676 -- Net gain (loss) on interest rate swaps 59,528 -- Interest and other income (expense) (3,249) (206) Benefit (provision) for income taxes (54,949) (80,324) Stock-based compensation charges 9,481 7,559 ------------- ------------- Adjusted EBITDA $ 246,862 $ 213,014 ============= ============= Less: Interest expense and amortization of deferred financing costs 110,250 88,757 Less: Sustaining capital expenditures 5,109 5,017 ------------- ------------- Recurring cash flow $ 131,503 $ 119,240 ============= ============= Weighted average common shares outstanding - basic 286,449 279,428 Recurring cash flow per share $ 0.46 $ 0.43 ============= ============= Adjusted EBITDA and recurring cash flow for the quarter endingSeptember 30, 2009 and the year endingDecember 31, 2009 are forecasted as follows: -------------------------------------------------------------- Full Year Q3 2009 2009 (in millions) Outlook Outlook ------------- ------------- Net income (loss) $(26) to $17 $(151) to $(60) Adjustments to increase (decrease) net income (loss): Asset write-down charges $3 to $6 $17 to $24 Gains (losses) on purchases and redemptions of debt $0 to $1 $85 to $96 Depreciation, amortization and accretion $130 to $135 $525 to $535 Interest and other income (expense) $(2) to $1 $(7) to $(1) Net gain (loss) on interest rate swaps (a) $(5) to $5 $50 to $60 Interest expense and amortization of deferred financing costs(b) $113 to $115 $441 to $446 Benefit (provision) for income taxes $(11) to $0 $(84) to $(60) Stock-based compensation charges $6 to $9 $28 to $36 ------------- ------------- Adjusted EBITDA $246 to $251 $985 to $995 ============= ============= Less: Interest expense and amortization of deferred financing costs(b) $113 to $115 $441 to $446 Less: Sustaining capital expenditures $8 to $11 $26 to $31 ------------- ------------- Recurring cash flow $123 to $128 $513 to $523 ============= ============= (a) Based on the interest rates and yield curves in effect as ofJuly 24, 2009 . (b) Inclusive of approximately$17 million and$60 million , respectively, of non-cash expense. Other Calculations: Sustaining capital expenditures for the quarters endedJune 30, 2009 and 2008 is computed as follows: -------------------------------------------------------------------- For the Three Months Ended --------------------------- June 30, June 30, (in thousands) 2009 2008 ----------- ----------- Capital Expenditures $ 39,624 $ 140,747 Less: Revenue enhancing on existing sites 28,193 18,356 Less: Land purchases 1,741 73,525 Less: New site acquisition and construction 4,581 43,849 ----------- ----------- Sustaining capital expenditures $ 5,109 $ 5,017 =========== =========== Site rental gross margin for the quarter endingSeptember 30, 2009 and for the year endingDecember 31, 2009 is forecasted as follows: ------------------------------------------------------------------- Q3 2009 Full Year 2009 (in millions) Outlook Outlook ------------ ---------------- Site rental revenues $385 to $390 $1,520 to $1,530 Less: Site rental cost of operations $114 to $120 $455 to $460 ------------ ---------------- Site rental gross margin $268 to $273 $1,063 to $1,073 ============ ================
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 and revenues which may result from leasing applications, (ii) the completion, terms, impact, interest expense and use of proceeds of the
-- 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) June 30, December 31, 2009 2008 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 334,989 $ 155,219 Restricted cash 190,886 147,852 Receivables, net of allowance for doubtful accounts 35,927 37,621 Deferred income tax assets 72,885 28,331 Prepaid expenses, deferred site rental receivables and other current assets 106,547 116,145 ------------ ------------ Total current assets 741,234 485,168 Restricted cash 5,000 5,000 Deferred site rental receivables 185,157 144,474 Property and equipment, net 4,964,104 5,060,126 Goodwill 1,984,183 1,983,950 Other intangible assets, net 2,478,757 2,551,332 Deferred financing costs and other assets, net of accumulated amortization 193,978 131,672 ------------ ------------ $ 10,552,413 $ 10,361,722 ============ ============ LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 27,324 $ 33,808 Deferred rental revenues and other accrued liabilities 294,641 281,794 Interest rate swaps 161,805 52,539 Short-term debt and current maturities of long-term debt 248,720 466,217 ------------ ------------ Total current liabilities 732,490 834,358 Long-term debt, less current maturities 6,024,623 5,630,527 Deferred income tax liability 72,747 40,446 Interest rate swaps 119,783 488,632 Other liabilities 363,931 337,168 ------------ ------------ Total liabilities 7,313,574 7,331,131 Redeemable preferred stock 315,190 314,726 ------------ ------------ CCIC Stockholders' equity 2,924,695 2,715,865 Noncontrolling interest (1,046) -- ------------ ------------ Total equity 2,923,649 2,715,865 ------------ ------------ $ 10,552,413 $ 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 Six Months Ended June 30, June 30, --------------------------------------------- 2009 2008 2009 2008 --------------------------------------------- Net revenues: Site rental $ 376,444 $ 348,523 $ 744,111 $ 693,556 Network services and other 33,430 30,990 68,673 56,578 --------- --------- --------- --------- Total net revenues 409,874 379,513 812,784 750,134 --------- --------- --------- --------- Costs of operations (exclusive of depreciation, amortization and accretion): Site rental 113,382 113,746 223,080 226,126 Network services and other 21,009 21,820 43,070 40,231 --------- --------- --------- --------- Total costs of operations 134,391 135,566 266,150 266,357 --------- --------- --------- --------- General and administrative 38,102 38,492 74,739 73,478 Asset write-down charges 7,295 4,993 11,386 6,297 Acquisition and integration costs -- -- -- 2,504 Depreciation, amortization and accretion 131,597 131,896 264,773 263,929 --------- --------- --------- --------- Operating income (loss) 98,489 68,566 195,736 137,569 Interest expense and amortization of deferred financing costs (110,250) (88,757) (215,837) (177,902) Gains (losses) on purchases and redemptions of debt (98,676) -- (85,326) -- Net gain (loss) on interest rate swaps (59,528) -- (55,733) -- Interest and other income (expense) 3,249 206 3,003 2,516 --------- --------- --------- --------- Income (loss) before income taxes (166,716) (19,985) (158,157) (37,817) Benefit (provision) for income taxes 54,949 80,324 56,440 84,983 --------- --------- --------- --------- Net income (loss) (111,767) 60,339 (101,717) 47,166 Less: Net income (loss) attributable to the noncontrolling interest (349) -- (876) -- --------- --------- --------- --------- Net income (loss) attributable to CCIC stockholders (111,418) 60,339 (100,841) 47,166 Dividends on preferred stock (5,201) (5,201) (10,402) (10,403) --------- --------- --------- --------- Net income (loss) attributable to CCIC stockholders after deduction of dividends on preferred stock $(116,619) $ 55,138 $(111,243) $ 36,763 ========= ========= ========= ========= Net income (loss) attributable to CCIC common stock- holders, after deduction of dividends on preferred stock, per common share: Basic $ (0.41) $ 0.20 $ (0.39) $ 0.13 Diluted $ (0.41) $ 0.19 $ (0.39) $ 0.13 Weighted average common shares outstanding: Basic 286,449 279,428 286,181 279,384 Diluted 286,449 288,427 286,181 288,242 Adjusted EBITDA $ 246,862 $ 213,014 $ 489,258 $ 424,013 ========= ========= ========= ========= Stock-based compensation expenses: Site rental cost of operations $ 266 $ 210 $ 469 $ 508 Network services and other cost of operations 343 238 595 371 General and administrative 8,872 7,111 16,299 12,835 --------- --------- --------- --------- Total $ 9,481 $ 7,559 $ 17,363 $ 13,714 ========= ========= ========= =========CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (in thousands) Six Months Ended June 30, ---------------------- 2009 2008 --------- --------- Cash flows from operating activities: Net income (loss) $(101,717) $ 47,166 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation, amortization and accretion 264,773 263,929 Gains (losses) on purchases and redemptions of long-term debt 85,326 -- Amortization of deferred financing costs and other non-cash interest 25,662 11,070 Stock-based compensation expense 15,031 12,040 Asset write-down charges 11,386 6,297 Deferred income tax benefit (provision) (59,780) (83,312) Income (expense) from forward- starting interest rate swaps 55,733 -- Other adjustments, net 380 742 Changes in assets and liabilities, excluding the effects of acquisitions: Increase (decrease) in liabilities 8,105 (4,519) Decrease (increase) in assets (35,441) (37,302) --------- --------- Net cash provided by (used for) operating activities 269,458 216,111 --------- --------- Cash flows from investing activities: Proceeds from disposition of property and equipment 3,172 1,117 Payment for acquisitions (net of cash acquired) of businesses (1,739) -- Capital expenditures (78,908) (202,434) --------- --------- Net cash provided by (used for) investing activities (77,475) (201,317) --------- --------- Cash flows from financing activities: Proceeds from issuance of long-term debt 1,978,848 -- Proceeds from issuance of capital stock 9,778 6,506 Principal payments on long-term debt (3,250) (3,250) Purchases and redemptions of long-term debt (1,721,486) -- --------- --------- Purchases of capital stock (1,218) (44,338) Borrowings under revolving credit agreements 50,000 75,000 Payments under revolving credit agreements (219,400) -- Payments for financing costs (49,815) (1,538) Net (increase) decrease in restricted cash (43,034) (15,082) Dividends on preferred stock (9,938) (9,939) --------- --------- Net cash provided by (used for) financing activities (9,515) 7,359 --------- --------- Effect of exchange rate changes on cash (2,698) 1,356 Net increase (decrease) in cash and cash equivalents 179,770 23,509 Cash and cash equivalents at beginning of period 155,219 75,245 --------- --------- Cash and cash equivalents at end of period $ 334,989 $ 98,754 ========= ========= Supplemental disclosure of cash flow information: Interest paid $ 145,643 $ 164,867 Income taxes paid 4,424 3,382CROWN CASTLE INTERNATIONAL CORP. Summary Fact Sheet (dollars in thousands) -------------------------- -------------------------- Quarter Ended 9/30/08 Quarter Ended 12/31/08 -------------------------- -------------------------- CCUSA CCAL CCIC CCUSA CCAL CCIC -------------------------- -------------------------- Revenues Site Rental $332,715 $21,269 $353,984 $339,262 $15,757 $355,019 Services 27,972 2,392 30,364 34,570 2,433 37,003 -------------------------- -------------------------- Total Revenues 360,687 23,661 384,348 373,832 18,190 392,022 Operating Expenses Site Rental 109,757 6,001 115,758 109,233 5,006 114,239 Services 18,878 1,663 20,541 20,803 877 21,680 -------------------------- -------------------------- Total Operating Expenses 128,635 7,664 136,299 130,036 5,883 135,919 General & Administrative 33,220 4,217 37,437 35,342 3,329 38,671 Add: Stock- Based Compensation 6,346 754 7,100 7,510 443 7,953 -------------------------- -------------------------- Adjusted EBITDA $205,178 $12,534 $217,712 $215,964 $9,421 $225,385 -------------------------- -------------------------- -------------------------- -------------------------- Quarter Ended 9/30/08 Quarter Ended 12/31/08 -------------------------- -------------------------- CCUSA CCAL CCIC CCUSA CCAL CCIC -------------------------- -------------------------- Gross Margins: Site Rental 67% 72% 67% 68% 68% 68% Services 33% 30% 32% 40% 64% 41% Adjusted EBITDA Margin 57% 53% 57% 58% 52% 57% -------------------------- -------------------------- -------------------------- -------------------------- Quarter Ended 3/31/09 Quarter Ended 6/30/09 -------------------------- -------------------------- CCUSA CCAL CCIC CCUSA CCAL CCIC -------------------------- -------------------------- Revenues Site Rental $350,695 $16,972 $367,667 $358,511 $17,933 $376,444 Services 33,451 1,792 35,243 32,098 1,332 33,430 -------------------------- -------------------------- Total Revenues 384,146 18,764 402,910 390,609 19,265 409,874 Operating Expenses Site Rental 104,979 4,719 109,698 107,983 5,399 113,382 Services 20,919 1,142 22,061 19,915 1,094 21,009 -------------------------- -------------------------- Total Operating Expenses 125,898 5,861 131,759 127,898 6,493 134,391 General & Administrative 33,309 3,328 36,637 34,069 4,033 38,102 Add: Stock- Based Compensation 6,976 906 7,882 8,055 1,426 9,481 -------------------------- -------------------------- Adjusted EBITDA $231,915 $10,481 $242,396 $236,697 $10,165 $246,862 -------------------------- -------------------------- -------------------------- -------------------------- Quarter Ended 3/31/09 Quarter Ended 6/30/09 -------------------------- -------------------------- CCUSA CCAL CCIC CCUSA CCAL CCIC -------------------------- -------------------------- Gross Margins: Site Rental 70% 72% 70% 70% 70% 70% Services 37% 36% 37% 38% 18% 37% Adjusted EBITDA Margin 60% 56% 60% 61% 53% 60% -------------------------- -------------------------- Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to GAAP Financial Measure: (dollars in thousands) ------------------------------------------- Quarter Ended ------------------------------------------- 9/30/2008 12/31/2008 3/31/2009 6/30/2009 Net income (loss) $ (32,207) $ (63,817) $ 10,050 $ (111,767) Adjustments to increase (decrease) net income (loss): Asset write-down charges 2,902 7,689 4,091 7,295 Acquisition and integration costs -- -- -- -- Depreciation, amortization and accretion 131,714 130,799 133,176 131,597 Gains (losses) on purchases and redemption of debt -- (42) (13,350) 98,676 Interest and other income (expense) 847 (431) 246 (3,249) Net gain (loss) on interest rate swap (2,404) 40,292 (3,795) 59,528 Interest expense, amortization of deferred financing costs 88,138 88,074 105,587 110,250 Impairment of available- for-sale securities 23,718 32,150 -- -- Benefit (provision) for income taxes (2,096) (17,282) (1,491) (54,949) Stock-based compensation 7,100 7,953 7,882 9,481 ---------- ---------- ---------- ---------- Adjusted EBITDA $ 217,712 $ 225,385 $ 242,396 $ 246,862 ============================================ --------------------------------- CCI FACT SHEET Q2 2008 to Q2 2009 --------------------------------- dollars in thousands --------------------------------------------------------------------- Q2 '08 Q2 '09 % Change ---------------------------------- CCUSA ----- Site Rental Revenues $ 328,952 $ 358,511 9% Ending Sites 22,461 22,425 0% CCAL ---- Site Rental Revenues $ 19,571 $ 17,933 -8% Ending Sites 1,449 1,591 10% TOTAL CCIC ---------- Site Rental Revenues $ 348,523 $ 376,444 8% Ending Sites 23,910 24,016 0% --------------------------------------------------------------------- Ending Cash and Cash Equivalents $ 98,754* $ 334,989* Debt Bank Debt $ 791,875 $ 635,375 Securitized Debt & Other Notes $5,350,870 $5,637,968 ---------- ---------- Total Debt $6,142,745 $6,273,343 Leverage Ratios Net Debt / EBITDA 7.5x 6.3x Last Quarter Annualized Adjusted EBITDA $ 852,056 $ 987,448 *Excludes Restricted Cash
CONTACT:Crown Castle International Corp. Jay Brown , CFOFiona McKone , VP - Finance 713-570-3050