Crown Castle International Reports First Quarter 2007 Results
"The first quarter was another exciting quarter at Crown Castle as we closed on our Merger with Global Signal, purchased approximately 6% of our outstanding common shares and continued to see solid performance in our core tower business," stated John P. Kelly, President and Chief Executive Officer of Crown Castle. "After the closing of the Merger on January 12, we immediately began the integration of the Global Signal assets, as we continue to focus on delivering the level of service that our customers rank as best in the industry. We are very pleased with the pipeline of tenant applications that came with the Merger, and we are working diligently to satisfy our customers' requests. The quick and efficient integration of the Merger is important as we are seeing a significant increase in tenant applications for our towers compared to the fourth quarter of 2006 as our customers continue to build, expand and improve their wireless networks. Further, we believe we are on track to realize Merger synergies of approximately $12 million to $15 million this year and expect the annualized run-rate of these synergies to be approximately $20 million by the fourth quarter of 2007."
CONSOLIDATED FINANCIAL RESULTS
Site rental revenue for the first quarter of 2007 increased $137.9 million, or 85.2%, to $299.8 million from $161.9 million for the same period in the prior year. Pro forma site rental revenue growth was approximately 10.5%, comparing pro forma first quarter 2007 results to pro forma first quarter 2006 results. Site rental gross margin, defined as site rental revenue less site rental cost of operations, increased 72.2% to $193.2 million, up $81.0 million in the first quarter of 2007 from the same period in 2006. Pro forma site rental gross margin growth was approximately 9.8%, comparing pro forma first quarter 2007 results to pro forma first quarter 2006 results. Adjusted EBITDA (see definition herein) for the first quarter of 2007 increased $70.4 million, or 72.7%, to $167.3 million, up from $96.9 million for the same period in 2006.
Recurring cash flow, defined as Adjusted EBITDA less interest expense less sustaining capital expenditures, increased by 31.4% from $62.7 million in the first quarter of 2006 to $82.4 million for the first quarter of 2007, inclusive of approximately $16.4 million of additional interest expense from the $1.15 billion in borrowings in the fourth quarter 2006 and first quarter 2007 to reduce potential and actual shares outstanding. Weighted average common shares outstanding increased to 273.5 million for the first quarter of 2007, inclusive of the impact from the 98.1 million shares issued in the Merger and 17.7 million shares purchased in the first quarter, from 214.5 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 $0.30 in the first quarter of 2007, inclusive of the dilutive effect of additional interest expense from $1.15 billion in borrowings in the fourth quarter 2006 and the first quarter 2007 to reduce potential and actual shares outstanding, compared to $0.29 in the first quarter of 2006.
Net loss was $42.9 million for the first quarter of 2007, inclusive of a $66.6 million increase in depreciation, amortization and accretion expense, compared to a net loss of $6.7 million for the same period in 2006, inclusive of $5.7 million income from discontinued operations. Net loss after deduction of dividends on preferred stock was $48.1 million in the first quarter of 2007, compared to a loss of $11.9 million for the same period last year. First quarter 2007 net loss per share was $(0.18), compared to a net loss per share of $(0.06) in last year's first quarter, inclusive of $0.02 income from discontinued operations.
SEGMENT RESULTS
U.S. site rental revenue for the first quarter of 2007 increased $134.6 million, or 89.7%, to $284.8 million, compared to first quarter 2006 U.S. site rental revenue of $150.1 million. U.S. site rental revenue for the first quarter of 2007 benefited by approximately $3.8 million of out of run-rate items, a portion of which was expected. U.S. site rental gross margin increased $78.9 million, or 75.3%, to $183.7 million in the first quarter of 2007 from the same period in 2006.
Australia site rental revenue for the first quarter of 2007 increased $3.3 million, or 27.9%, to $15.0 million, compared to $11.8 million in the first quarter of 2006. Australia site rental gross margin for the first quarter of 2007 increased $2.7 million, or 35.2%, to $10.3 million, compared to first quarter of 2006 Australia site rental gross margin of $7.6 million.
INVESTMENTS AND LIQUIDITY
During the first quarter of 2007, Crown Castle invested approximately $647.5 million in stock purchases and capital expenditures. Capital expenditures was comprised of $2.8 million of sustaining capital expenditures and $44.3 million of revenue generating capital expenditures, of which $26.0 million was spent on land purchases, $11.0 million on existing sites, and $7.3 million on the construction of new sites. Also, during the first quarter of 2007, Crown Castle purchased 17.7 million of its common shares using approximately $600 million in cash, reducing Crown Castle's post-Merger common shares outstanding by approximately 6%. Common shares outstanding at March 31, 2007 were 281.6 million.
"We continue our focus on growing long-term recurring cash flow per share," stated Ben Moreland, Chief Financial Officer of Crown Castle. "While the comparison of recurring cash flow per share for the first quarter 2007 to the first quarter 2006 was negatively impacted by the short-term dilutive effect of borrowings to reduce actual and potential shares outstanding, we believe the actions we have taken will deliver long-term growth in this measure consistent with our long-term objectives. Further, although the comparisons of revenue and Adjusted EBITDA to prior period results are not comparable given the impact of the Merger, we believe the comparison of recurring cash flow per share will be useful in analyzing our future results as it includes operating results, the full capital cost of the Merger and the $2.0 billion we have spent since 2003 on purchases of our securities to reduce fully diluted common shares outstanding. As illustrated by the implicit growth in the recurring cash flow per share in our 2007 outlook for the second half of 2007, we believe the combination of our management's operation of these towers and our efficient capital structure positions us very well to realize our long-term objective of growing annual recurring cash flow per share 20% to 25%."
OUTLOOK
The following Outlook tables are based on current expectations and assumptions. The Outlook tables include the expected impact of the Merger on our results from January 12, 2007 to December 31, 2007 and assume a U.S. dollar to Australian dollar exchange rate of 0.75 U.S. dollars to 1.00 Australian dollars. In addition, the second quarter 2007 outlook includes an expected second quarter increase in Australia site rental revenue from an annual payment of approximately $2 million related to an agreement with one of our customers in Australia. Further, consistent with prior years, Crown Castle expects a seasonal increase of repair and maintenance expense of approximately $3.5 million in the second quarter of 2007 from the first quarter of 2007.
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 tables set forth Crown Castle's current Outlook for the second quarter of 2007 and full year 2007:
(in millions, except per
share amounts) Second Quarter 2007 Full Year 2007
------------------- ---------------
Site rental revenue $316 to $321 $1,265 to $1,280
Site rental cost of
operations $115 to $120 $440 to $450
Site rental gross margin $199 to $204 $820 to $830
Adjusted EBITDA $175 to $180 $735 to $750
Interest expense and
amortization of
deferred financing costs
(inclusive of
approximately
$5.6 million and
$23 million,
respectively, from
non-cash expense) $88 to $90 $346 to $351
Sustaining capital
expenditures $6 to $8 $19 to $23
Recurring cash flow $80 to $85 $365 to $375
Net loss after deduction
of dividends on
preferred stock $(66) to $(29) $(213) to $(100)
Net loss per share* $(0.23) to $(0.10) $(0.76) to $(0.36)
* Based on 281.6 million shares outstanding as of March 31, 2007.
PRO FORMA CONSOLIDATED RESULTS
The following table provides investors with additional information on business trends and does not purport to represent what the actual consolidated results of operations would have been for the quarters ended March 31, 2007 and March 31, 2006, nor are they necessarily indicative of future consolidated results. The pro forma consolidated results are presented for illustrative purposes only and do not reflect the realization of potential cost savings and any related integration costs. The following table contains pro forma Crown Castle results for the quarters ended March 31, 2006 and March 31, 2007, assuming the Merger was completed on January 1 for the periods presented below. As such, these results reflect adjustments to straight-line revenue and straight-line ground lease expense.
(in millions) Pro Forma Results Pro Forma Results
----------------- -----------------
Q1 2007 Q1 2006
-------- -------
Site rental revenue $315.5 $285.5
Site rental cost of
operations $113.4 $101.5
Site rental gross margin $202.0 $184.0
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, May 3, 2007, at 10:30 a.m. eastern time to discuss the first quarter 2007 results and Crown Castle's Outlook. Please dial 303-205-0055 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 1:30 p.m. eastern time on Thursday, May 3, 2007 through 11:59 p.m. eastern time on Thursday, May 10, 2007 and may be accessed by dialing 303-590-3000 using passcode 11088623#. 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 International Corp. 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 1,400 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.primezone.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 U.S. tower operations, and resulting impact on site rental gross margins is as follows:
(in thousands) For the Three Months Ended
--------------------------
March 31, 2007
Non-cash portion of site rental
revenues attributable to
straight-line recognition
of revenues $ 10,613
Non-cash portion of ground lease
expense attributable to
straight-line recognition
of expenses (9,855)
Non-cash stock-based compensation
charges (66)
----------
Non-cash impact on site rental
gross margin $ 692
Non-GAAP Financial Measures
This press release includes presentations of Adjusted EBITDA and recurring cash flow, which are non-GAAP financial measures.
Crown Castle defines Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, integration costs, depreciation, amortization and accretion, losses on purchases and redemptions of debt, interest and other income (expense), interest expense and amortization of deferred financing costs, benefit (provision) for income taxes, minority interests, cumulative effect of change in accounting principle, income (loss) from discontinued operations, and stock-based compensation charges. Adjusted EBITDA is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP)).
Crown Castle defines recurring cash flow to be Adjusted EBITDA, less interest expense and 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 term of an asset. Recurring cash flow is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with GAAP). Recurring cash flow per share is not intended to be an alternative measure of earnings per share.
Adjusted EBITDA and recurring cash flow are presented as additional information because management believes these measures are useful indicators of the financial performance of our core businesses. In addition, Adjusted EBITDA is a measure of current financial performance used in our debt covenant calculations. Our measures of Adjusted EBITDA and recurring cash flow may not be comparable to similarly titled measures of other companies, including companies in the tower industry and in the historical financial statements of Global Signal. The tables set forth below reconcile these non-GAAP financial measures to comparable GAAP financial measures.
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures:
Adjusted EBITDA, recurring cash flow and recurring cash flow per share for the quarters ended March 31, 2007 and March 31, 2006 are computed as follows:
For the Three Months Ended
--------------------------
March 31, March 31,
2007 2006
------------ ------------
(in thousands, except per share amounts)
Net income (loss) $ (42,891) $ (6,722)
Asset write-down charges 1,352 335
Integration costs (inclusive
of stock-based compensation
charges) 8,848 --
Depreciation, amortization and
accretion 138,693 72,091
Interest and other income (expense) (3,299) 1,336
Interest expense and amortization
of deferred financing costs 82,015 32,260
Benefit (provision) for income
taxes (22,162) 616
Minority interests (217) (911)
Income (loss) from discontinued
operations, net of tax -- (5,657)
Stock-based compensation charges
(exclusive of charges included in
integration costs) 4,919 3,514
--------- ---------
Adjusted EBITDA $ 167,258 $ 96,862
========= =========
Less: Interest expense and
amortization of deferred
financing costs 82,015 32,260
Less: Sustaining capital
expenditures 2,844 1,917
--------- ---------
Recurring cash flow $ 82,399 $ 62,685
========= =========
Weighted average common shares
outstanding 273,456 214,473
Recurring cash flow per share $ 0.30 $ 0.29
========= =========
Adjusted EBITDA and recurring cash flow for the quarter ending
June 30, 2007 and the year ending
Q2 2007 Full Year 2007
(in millions) Outlook Outlook
------- -------
Net income (loss) $(61) to $(24) $(192) to $(79)
Adjustments to increase
(decrease) net income (loss):
Restructuring charges
(credits) (inclusive of
stock-based compensation
charges) -- --
Asset write-down charges $2 to $4 $5 to $10
Integration costs
(inclusive of stock-based
compensation charges) $7 to $10 $24 to $33
Depreciation, amortization
and accretion $132 to $142 $530 to $570
Losses on purchases and
redemptions of debt -- --
Interest and other
income (expense) $(2) to $0 $(5) to $(2)
Interest expense and
amortization of
deferred financing costs $88 to $90 $346 to $351
(inclusive of approximately
$5.6 million and
$23 million,
respectively, from
non-cash expense)
Benefit (provision) for
income taxes $(27) to $(17) $(89) to $(59)
Minority interests $(1) to $0 $(2) to $0
Income (loss) from
discontinued
operations, net of tax -- --
Stock-based compensation
charges (exclusive
of amounts included
in restructuring
charges (credits) and
integration costs) $5 to $7 $20 to $24
-------- ----------
Adjusted EBITDA $175 to $180 $735 to $750
============ ============
Less: Interest expense
and amortization of
deferred financing
costs (inclusive
of approximately
$5.6 million and
$23 million, respectively,
from non-cash expense) $88 to $90 $346 to $351
Less: Sustaining capital
expenditures $6 to $8 $19 to $23
-------- ----------
Recurring cash flow $80 to $85 $365 to $375
========== ============
Other Calculations:
Sustaining capital expenditures for the quarters ended March 31, 2007
and March 31, 2006 is computed as follows:
For the Three Months Ended
---------------------------------
(in thousands) March 31, 2007 March 31, 2006
--------------- --------------
Capital Expenditures $ 47,179 $ 22,066
Less: Revenue enhancing on
existing sites 11,021 7,950
Less: Land purchases 26,033 4,576
Less: New site construction 7,281 7,623
--------------- --------------
Sustaining capital expenditures $2,844 $1,917
=============== =============
Site rental gross margin for the quarter ending June 30, 2007 and
for the year ending December 31, 2007 is forecasted as follows:
---------------------------------------------------------------------
(in millions) Q2 2007 Full Year 2007
------- --------------
Outlook Outlook
Site rental revenue $316 to $321 $1,265 to $1,280
Less: Site rental cost
of operations $115 to $120 $440 to $450
------------ ------------
Site rental gross margin $199 to $204 $820 to $830
============ ============
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) integration of the Global Signal assets, including the timing thereof, (ii) the potential impact and benefits of borrowings, share purchases and the Merger, including the Merger synergies, (iii) leasing demand for space on our towers, (iv) the utility of certain financial measures in analyzing our results, (v) currency exchange rates, (vi) site rental revenue, (vii) site rental cost of operations, (viii) site rental gross margin, (ix) Adjusted EBITDA, (x) interest expense and amortization of deferred financing costs, (xi) sustaining capital expenditures, (xii) recurring cash flow (including recurring cash flow per share) 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:
-- The Merger may cause disruptions in our business, which may have
an adverse effect on our business and financial results.
-- The assets of Global Signal acquired in the Merger may not
perform as expected, which may have an adverse effect on our
business, financial condition or results of operations.
-- The integration of Global Signal is expected to result in
substantial expenses and may present significant challenges.
-- Our business depends on the demand for wireless communications
and towers, and we may be adversely affected by any slowdown in
such demand, including a slowdown 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 revenues.
-- Our substantial level of indebtedness may adversely affect our
ability to react to changes in our business and limit our ability
to use debt to fund future capital needs.
-- An economic or wireless telecommunications industry slowdown may
materially and adversely affect our business (including reducing
demand for our towers and network services) and the business of
our customers.
-- We operate in a competitive industry, and some of our competitors
have significantly more resources or less debt than we do.
-- Technology changes may significantly reduce the demand for tower
leases and negatively impact the growth in our revenues.
-- New wireless technologies may not deploy or be adopted by
customers as rapidly or in the manner projected.
-- We generally lease or sublease the land under our towers and may
not be able to extend these leases.
-- We may need additional financing, which may not be available, for
strategic growth opportunities.
-- Modeo's business has certain risk factors different from our core
tower business, including an unproven business model, and may
fail to operate successfully and produce results that are less
than anticipated. In addition, Modeo's business may require
additional financing which may not be available.
-- FiberTower's business has certain risk factors different from our
core tower business (including an unproven business model and the
Risk Factors set forth in its SEC filings) and may produce
results that are less than anticipated, resulting in a write off
of all or part of our investment in FiberTower. In addition,
FiberTower's business may require additional financing which may
not be available.
-- Laws and regulations, which may change at any time and with which
we may fail to comply, regulate our business.
-- Sales or issuances of a substantial number of shares of our
common stock may adversely affect the market price of our common
stock.
-- We are heavily dependent on our senior management.
-- Our network services business has historically experienced
significant volatility in demand, which reduces the
predictability of our results.
-- We may suffer from future claims if radio frequency emissions
from wireless handsets or equipment on our towers are
demonstrated to cause negative health effects.
-- Certain provisions of our certificate of incorporation, bylaws
and operative agreements and domestic and international
competition laws may make it more difficult for a third party to
acquire control of us or for us to acquire control of a third
party, even if such a change in control would be beneficial to
our stockholders.
-- Disputes with customers and suppliers may adversely affect
results.
-- We may suffer losses due to exposure to changes in foreign
currency exchange rates relating to our operations outside the
U.S.
Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors which could affect our results is included in our filings with the SEC.
Crown Castle International Corp.
Condensed Consolidated Statement of Operations (unaudited)
And Other Financial Data
(in thousands, except per share data)
Three Months Ended
March 31,
----------------------
2007 2006
----------------------
Net revenues:
Site rental $ 299,792 $ 161,897
Network services and other 15,917 20,768
--------- ---------
Total net revenues 315,709 182,665
--------- ---------
Costs of operations (exclusive of
depreciation, amortization and
accretion):
Site rental 106,595 49,690
Network services and other 11,773 13,786
--------- ---------
Total costs of operations 118,368 63,476
General and administrative 33,817 24,163
Corporate development 1,185 1,678
Asset write-down charges 1,352 335
Integration costs 8,848 --
Depreciation, amortization
and accretion 138,693 72,091
--------- ---------
Operating income (loss) 13,446 20,922
Interest and other income (expense) 3,299 (1,336)
Interest expense and amortization
of deferred financing costs (82,015) (32,260)
--------- ---------
Income (loss) from continuing
operations before income
taxes and minority interests (65,270) (12,674)
Benefit (provision) for income
taxes 22,162 (616)
Minority interests 217 911
-------- ---------
Income (loss) from continuing
operations (42,891) (12,379)
Income (loss) from discontinued
operations, net of tax -- 5,657
--------- ---------
Net income (loss) (42,891) (6,722)
Dividends on preferred stock (5,201) (5,201)
--------- ---------
Net income (loss) after deduction
of dividends on preferred stock $ (48,092) $ (11,923)
========= =========
Per common share - basic and diluted:
Income (loss) from continuing
operations $ (0.18) $ (0.08)
Income (loss) from discontinued
operations -- 0.02
--------- ---------
Net income (loss) $ (0.18) $ (0.06)
========= =========
Weighted average common shares
outstanding - basic and diluted 273,456 214,473
--------- ---------
Adjusted EBITDA $ 167,258 $ 96,862
========= =========
Stock-based compensation expenses:
Site rental cost of operations $ 66 $ 16
Network services and other
cost of operations 69 20
General and administrative 5,241 3,290
Corporate development (457) 188
Integration costs 631 --
--------- ---------
Total $ 5,550 $ 3,514
========= =========
Condensed Consolidated balance sheet (unaudited)
(in thousands)
March 31, December 31,
2007 2006
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 124,536 $ 592,716
Restricted cash 159,579 115,503
Receivables, net of allowance
for doubtful accounts 25,863 30,774
Prepaid expenses and other
current assets 100,492 61,034
----------- -----------
Total current assets 410,470 800,027
Restricted cash 5,000 5,000
Deferred site rental receivable 107,254 98,527
Available-for-sale securities 136,772 154,955
Property and equipment, net 5,140,944 3,246,446
Goodwill 1,954,047 391,448
Other intangible assets, net 2,776,510 225,295
Deferred financing costs and other
assets, net of accumulated
amortization 97,112 84,470
----------- -----------
$10,628,109 $ 5,006,168
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 27,512 $ 18,545
Deferred rental revenues and
other accrued liabilities 225,782 182,250
Short-term debt and current
maturities of long-term debt 6,500 --
----------- -----------
Total current liabilities 259,794 200,795
Long-term debt, less current
maturities 5,989,741 3,513,890
Deferred income tax liability 256,673 --
Other liabilities 291,112 193,279
----------- -----------
Total liabilities 6,797,320 3,907,964
----------- -----------
Minority interests 27,504 29,052
Redeemable preferred stock 313,103 312,871
Stockholders' equity 3,490,182 756,281
----------- -----------
$10,628,109 $ 5,006,168
=========== ===========
Crown Castle International Corp.
Condensed Consolidated statement of cash flows (unaudited)
(in thousands)
Three Months Ended
March 31,
---------------------
2007 2006
-------- --------
Cash flows from operating activities:
Net income (loss) $ (42,891) $ (6,722)
Adjustments to reconcile net
income (loss) to net cash
provided by (used for)
operating activities:
Depreciation, amortization
and accretion 138,693 72,091
Deferred income tax
(benefit) provision (22,906) 19
Other adjustments 11,903 2,240
Changes in assets and
liabilities, excluding the
effects of acquisitions:
Increase (decrease) in
liabilities (33,166) (11,935)
Decrease (increase) in assets (2,877) (5,428)
--------- ---------
Net cash provided by
(used for) operating
activities 48,756 50,265
--------- ---------
Cash flows from investing activities:
Proceeds from investments and
disposition of property
and equipment 2,536 611
Payments for acquisitions
(net of cash acquired) (489,477) --
Payments for capital expenditures (47,179) (22,066)
Investments and loans -- (1,000)
--------- ---------
Net cash provided by
(used for) investing
activities (534,120) (22,455)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of
long-term debt 650,000 --
Proceeds from issuance of
capital stock 5,576 9,340
Purchases of common stock (600,709) (3,030)
Incurrence of financing costs (6,062) (156)
Net decrease (increase) in
restricted cash (27,112) (2,321)
Dividends on preferred stock (4,969) (4,969)
--------- ---------
Net cash provided by
(used for) financing
activities 16,724 (1,136)
--------- ---------
Effect of exchange rate changes
on cash 460 (308)
Cash flows from discontinued
operations -- 5,657
--------- ---------
Net increase (decrease) in cash
and cash equivalents (468,180) 32,023
Cash and cash equivalents at
beginning of period 592,716 65,408
--------- ---------
Cash and cash equivalents
at end of period $ 124,536 $ 97,431
========= =========
Supplemental disclosure of
cash flow information:
Interest paid $ 67,651 $ 29,847
Income taxes paid 393 109
--------------------------------------
Quarter Ended 6/30/06
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Revenues
Site Rental 154,491 14,669 - 169,160
Services 22,696 1,920 - 24,616
--------------------------------------
Total Revenues 177,187 16,589 - 193,776
Operating Expenses
Site Rental 46,310 4,175 442 50,927
Services 14,867 1,013 - 15,880
--------------------------------------
Total Operating
Expenses 61,177 5,188 442 66,807
General & Administrative 23,026 2,799 - 25,825
Operating Cash Flow 92,984 8,602 (442) 101,144
Corporate Development 489 - 2,197 2,686
Add: Stock-Based
Compensation
(exclusive of
charges included in
restructuring charges
and integration costs) 3,710 254 765 4,729
--------------------------------------
Adjusted EBITDA 97,330 8,773 (2,265) 103,838
--------------------------------------
--------------------------------------
Quarter Ended 6/30/06
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Gross Margins:
Site Rental 70% 72% N/M 70%
Services 34% 47% N/M 35%
Operating Cash Flow Margins 52% 52% N/M 52%
Adjusted EBITDA Margin 55% 53% N/M 54%
--------------------------------------
--------------------------------------
Quarter Ended 9/30/06
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Revenues
Site Rental 166,620 12,375 - 178,995
Services 19,994 1,950 - 21,944
--------------------------------------
Total Revenues 186,614 14,325 - 200,939
Operating Expenses
Site Rental 50,484 4,151 626 55,261
Services 14,044 691 - 14,735
--------------------------------------
Total Operating Expenses 64,528 4,842 626 69,996
General & Administrative 20,363 2,595 - 22,958
Operating Cash Flow 101,723 6,888 (626) 107,985
Corporate Development 518 - 1,957 2,475
Add: Stock-Based
Compensation (exclusive
of charges included in
restructuring charges
and integration costs) 3,710 254 765 4,729
--------------------------------------
Adjusted EBITDA 104,915 7,142 (1,818) 110,239
--------------------------------------
--------------------------------------
Quarter Ended 9/30/06
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Gross Margins:
Site Rental 70% 66% N/M 69%
Services 30% 65% N/M 33%
Operating Cash Flow
Margins 55% 48% N/M 54%
Adjusted EBITDA Margin 56% 50% N/M 55%
--------------------------------------
--------------------------------------
Quarter Ended 12/31/06
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Revenues
Site Rental 172,801 13,871 - 186,672
Services 22,636 1,533 - 24,169
--------------------------------------
Total Revenues 195,431 15,404 - 210,841
Operating Expenses
Site Rental 51,899 3,840 837 56,576
Services 15,246 860 - 16,106
--------------------------------------
Total Operating
Expenses 67,145 4,700 837 72,682
General & Administrative 19,935 2,870 - 22,805
Operating Cash Flow 108,357 7,834 (837) 115,354
Corporate Development 454 - 1,488 1,942
Add: Stock-Based
Compensation (exclusive
of charges included in
restructuring charges
and integration costs) 3,026 242 (173) 3,095
--------------------------------------
Adjusted EBITDA 110,928 8,076 (2,498) 116,507
--------------------------------------
--------------------------------------
Quarter Ended 12/31/06
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Gross Margins:
Site Rental 70% 72% N/M 70%
Services 33% 44% N/M 33%
Operating Cash Flow
Margins 55% 51% N/M 55%
Adjusted EBITDA Margin 57% 52% N/M 55%
--------------------------------------
--------------------------------------
Quarter Ended 3/31/07
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Revenues
Site Rental 284,751 15,040 - 299,792
Services 14,146 1,771 - 15,917
--------------------------------------
Total Revenues 298,898 16,811 - 315,709
Operating Expenses
Site Rental 101,033 4,717 845 106,595
Services 10,650 1,123 - 11,773
--------------------------------------
Total Operating
Expenses 111,683 5,840 845 118,368
General & Administrative 30,148 3,669 - 33,817
Operating Cash Flow 157,067 7,302 (845) 163,524
Corporate Development 920 - 265 1,185
Add: Stock-Based
Compensation (exclusive
of charges included in
restructuring charges
and integration costs) 4,223 1,333 (637) 4,919
--------------------------------------
Adjusted EBITDA 160,370 8,635 (1,747) 167,258
--------------------------------------
--------------------------------------
Quarter Ended 3/31/07
--------------------------------------
CCUSA CCAL EB CCIC
--------------------------------------
Gross Margins:
Site Rental 65% 69% N/M 64%
Services 25% 37% N/M 26%
Operating Cash Flow
Margins 53% 43% N/M 52%
Adjusted EBITDA Margin 54% 51% N/M 53%
--------------------------------------
Reconciliation of Non-GAAP Financial Measure
(Adjusted EBITDA) to GAAP Financial Measure:
(in $ thousands)
------------------------------------------
Quarters Ended
------------------------------------------
6/30/2006 9/30/2006 12/31/2006 3/31/2007
Net income (loss) $(13,335) $(15,561) $ (6,275) $(42,891)
Restructuring
charges (credits) - - (391) -
Asset write-down
charges 1,522 948 140 1,352
Integration costs - - 1,503 8,848
Depreciation,
amortization and
accretion 69,374 72,161 71,618 138,693
Losses on purchases
and redemptions
of debt 740 437 4,666 -
Interest and other
income (expense) 2,199 985 (2,891) (3,299)
Interest expense,
amortization of
deferred
financing costs 37,455 46,450 46,163 82,015
Benefit (provision)
for income taxes 507 575 (855) (22,162)
Minority interests (4) (485) (266) (217)
Stock-based
compensation
(exclusive of
charges
included in
restructuring
charges and
integration costs) 5,380 4,729 3,095 4,919
Adjusted EBITDA $103,838 $110,239 $116,507 $167,258
======== ======== ======== ========
-------------------------------------------------
CCI FACT SHEET Q1 2006 to Q1 2007
---------------------------------
$ in thousands
---------------------------------------------------------------------
Q1 '06 Q1 '07 % Change
------------------------------------
CCUSA
-----
Site Rental Revenue $150,138 $284,752 90%
Ending Sites 11,073 22,264 101%
CCAL
----
Site Rental Revenue $11,759 $15,040 28%
Ending Sites 1,385 1,438 4%
Emerging Businesses
-------------------
Site Rental Revenue - - N/A
Ending Sites - - N/A
TOTAL CCIC
----------
Site Rental Revenue $161,897 $299,792 85%
Ending Sites 12,458 23,702 90%
---------------------------------------------------------------------
Ending Cash and Cash
Equivalents $97,431* $124,536*
Debt
Bank Debt $295,000 $650,000
Securitized Debt &
Other Notes $1,975,586 $5,346,241
6 1/4% Convertible
Preferred Stock $312,175 $313,103
---------- ----------
Total Debt $2,582,761 $6,309,344
Leverage Ratios
Net Bank Debt + Bonds /
EBITDA 5.6X 8.8X
Total Net Debt / EBITDA 6.4X 9.2X
Last Quarter Annualized
Adjusted EBITDA $387,448 $669,032
*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