Crown Castle International Reports Third Quarter 2008 Results; Provides 2009 Outlook
"We had another strong quarter of record results, exceeding the midpoint of our third quarter Outlook for site rental revenue, site rental gross margin, Adjusted EBITDA, and recurring cash flow," stated Ben Moreland, President and Chief Executive Officer of Crown Castle. "We are experiencing solid growth in our business and remain excited about the strong fundamentals underlying our business, driven by the increasing demand for wireless communication services even in light of the global economic slowdown. Along with the third quarter results, we are announcing our full year 2009 Outlook which suggests annual site rental revenue and Adjusted EBITDA growth of 8% and 10%, respectively, on a currency neutral basis."
CONSOLIDATED FINANCIAL RESULTS
Total revenue for the third quarter of 2008 increased 9% to $384.3 million from $351.7 million in the same period in 2007. Site rental revenue for the third quarter of 2008 increased $27.2 million, or 8%, to $354.0 million from $326.8 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 $23.3 million, or 11%, to $238.2 million in the third quarter of 2008 from $214.9 million in the same period in 2007. Adjusted EBITDA for the third quarter of 2008 increased $21.9 million, or 11%, to $217.7 million from $195.8 million in the same period in 2007. Crown Castle's previously issued Outlook for third quarter 2008 was based on a U.S. dollar to Australian dollar exchange rate of 0.94 U.S. dollars to 1.00 Australian dollar compared to an actual exchange rate of 0.89 U.S. dollars to 1.00 Australian dollar, which negatively impacted site rental revenue and Adjusted EBITDA by $1.3 million and $0.9 million, respectively.
Recurring cash flow, defined as Adjusted EBITDA less interest expense and sustaining capital expenditures, increased 23% from $100.8 million in the third quarter of 2007 to $123.5 million for the third quarter of 2008. Weighted average common shares outstanding was 283.6 million for the third quarter of 2008, as compared to 282.6 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 $0.44 in the third quarter of 2008, up 22% compared to $0.36 in the third quarter of 2007.
Net loss was $32.2 million for the third quarter of 2008, inclusive of a $23.7 million impairment charge to write-down Crown Castle's investment in FiberTower Corporation, compared to a net loss of $67.0 million for the same period in 2007, inclusive of a $37.5 million asset write-down charge, net of tax, related to the long-term spectrum lease previously held by Modeo. Net loss after deduction of dividends on preferred stock was $37.4 million in the third quarter of 2008, compared to a loss of $72.2 million for the same period last year. Third quarter 2008 net loss per common share (after deduction of dividends on preferred stock) was $0.13, compared to a net loss per common share of $0.26 in third quarter 2007.
In addition to the tables and information contained in this press release, Crown Castle will post supplemental information on its website at http://investor.crowncastle.com that will be discussed during its conference call tomorrow morning, Thursday November 6, 2008.
SEGMENT RESULTS
U.S. site rental revenue for the third quarter of 2008 increased $22.9 million, or 7%, to $332.7 million, compared to third quarter 2007 U.S. site rental revenue of $309.8 million. U.S. site rental gross margin increased $19.2 million, or 9%, to $223.0 million from the same period in 2007.
Australia site rental revenue for the third quarter of 2008 increased $4.3 million, or 25%, to $21.3 million, compared to $17.0 million in the third quarter of 2007. Australia site rental gross margin for the third quarter of 2008 increased 37% to $15.3 million compared to $11.2 million in the third quarter of 2007.
INVESTMENTS
During the third quarter of 2008, Crown Castle invested approximately $140.3 million in capital expenditures. Capital expenditures was comprised of $6.1 million of sustaining capital expenditures and $134.2 million of revenue generating capital expenditures, of which $63.8 million was spent on land purchases, $21.7 million on existing sites and $48.7 million on the construction and acquisition of new sites.
"In light of the significant deterioration of the credit markets, we intend to reduce our discretionary capital expenditures and allocate the majority of our cash flow to eliminate our upcoming debt maturities," stated Jay Brown, Chief Financial Officer of Crown Castle. "As noted in our Outlook section of this release, we expect to generate approximately $670 million of recurring cash flow during the fourth quarter of 2008 and full year 2009. Over the next 14 months, we have approximately $472 million of debt maturities, which we expect to repay, unless we are able to refinance all or a portion of this debt. Given the predictable level of cash flow that our business produces and that we have no other significant debt maturities until February 2011, I am comfortable that we will be able to navigate the difficult credit markets without impacting the core growth or execution of our business as we drive toward long-term value creation for our shareholders."
In the third quarter, Crown Castle recorded an impairment charge of $23.7 million related to the decline in the market value of its FiberTower investment. The timing and nature of the charge was based primarily on the length of time and extent to which the market value has been less than the adjusted cost basis, and the impact of current broad-based economic and market conditions on the short-term prospects for recovery of the FiberTower stock price. As of September 30, 2008, Crown Castle's FiberTower investment had a carrying value of $36.4 million.
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 Crown Castle's filings with the Securities and Exchange Commission ("SEC").
In the third quarter 2008, approximately 6% of Crown Castle's site rental revenue was derived from its tower operations in Australia. The 2008 Outlook issued on July 24, 2008 assumed a U.S. dollar to Australian dollar exchange rate of 0.94 U.S. dollars to 1.00 Australian dollar for the second half of 2008. Since its previously issued Outlook, the Australian dollar to U.S. dollar exchange rate has decreased by approximately 30%. Based on the current exchange rate, the exchange rate assumptions for the fourth quarter 2008 have been adjusted to 0.64 U.S. dollars to 1.00 Australian dollar. The estimated impact to site rental revenue and site rental gross margin in the 2008 Outlook from the decrease in the forecasted Australian dollar exchange rate is expected to be approximately $7 million and $5 million, respectively, which Crown Castle has reflected in its revised full year 2008 Outlook.
Similar to the rate of growth forecasted for 2008, Crown Castle expects 2009 site rental revenue growth, on a currency neutral basis, of approximately 8%. The Outlook table below reflects site rental revenue and Adjusted EBITDA growth of approximately $93 million and $76 million, respectively, from 2008 to 2009, which includes approximately $16 million and $10 million, respectively, of negative impact from the movement in the Australian dollar to U.S. dollar exchange rate. Further, the 2009 Outlook assumes no further borrowings, reduction in interest expense associated with debt repayment, or changes in interest rates.
The Outlook table is based on current expectations and assumptions. The Outlook table assumes a U.S. dollar to Australian dollar exchange rate of 0.64 and 0.67 U.S. dollars to 1.00 Australian dollar for the fourth quarter of 2008 and full year 2009 Outlook, respectively.
The following table sets forth Crown Castle's current Outlook for the fourth quarter of 2008, full year 2008 and full year 2009:
(in millions, Fourth Quarter Full Year Full Year
except per 2008 2008 2009
share amounts) -------------- --------- ---------
Site rental
revenue $350 to $355 $1,397 to $1,402 $1,485 to $1,500
Site rental
cost of
operations $113 to $117 $455 to $459 $465 to $475
Site rental
gross margin $235 to $240 $940 to $945 $1,015 to $1,030
Adjusted
EBITDA $217 to $222 $857 to $862 $925 to $945
Interest
expense and
amortization
of deferred
financing
costs(a) $87 to $90 $353 to $356 $355 to $360
Sustaining
capital
expenditures $11 to $13 $26 to $28 $25 to $30
Recurring cash
flow $118 to $123 $479 to $484 $540 to $560
Net income
(loss) after
deduction of
dividends on
preferred
stock $(34) to $(6) $(87) to $(53) $(72) to $2
Net income
(loss) per
share(b) $(0.12) to $(0.02) $(0.30) to $(0.20) $(0.25) to $0.01
(a) Inclusive of approximately $6 million, $25 million, and
$25 million, respectively, of non-cash expense.
(b) Represents net income (loss) per common share, based on 285.6
million shares outstanding as of September 30, 2008.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, November 6, 2008, at 10:30 a.m. eastern time to discuss third quarter 2008 results and Crown Castle's Outlook. Supplemental materials for the call can be found on the Crown Castle website at http://investor.crowncastle.com. Please dial 303-262-2051 and ask for the Crown Castle call at least 10 minutes prior to the start time. The conference call may also be accessed live at the Internet address shown above. A telephonic replay of the conference call will be available from 12:30 p.m. eastern time on Thursday, November 6, 2008 through 11:59 p.m. eastern time on Thursday, November 13, 2008 and may be accessed by dialing 303-590-3000 using passcode 11121062#. An audio archive will also be available on Crown Castle's website at http://investor.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 1,600 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.globenewswire.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. 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, net amortization of below-market and above-market leases acquired, and resulting impact on site rental gross margins is as follows:
For the Three Months Ended
--------------------------
(in thousands) September 30, 2008
------------------
Non-cash portion of site rental revenue
attributable to rent free periods and
straight-line recognition of revenue $ 10,099
Non-cash portion of ground lease expense
attributable to straight-line recognition
of expenses (10,002)
Stock-based compensation charges (178)
Net amortization of below-market and
above-market leases 150
------------
Non-cash impact on site rental gross
margin $ 69
============
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, acquisition and 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 expense. 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. We define sustaining capital expenditures as capital expenditures (determined in accordance with GAAP) which do not increase the capacity or life of our revenue generating assets and include capitalized costs related to (i) maintenance activities on our towers, (ii) vehicles, (iii) information technology equipment, and (iv) office equipment. 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 ended September 30, 2008 and 2007 are computed as follows:
For the Three Months Ended
--------------------------
September 30, September 30,
2008 2007
------------ ------------
(in thousands, except per share amounts)
Net income (loss) $ (32,207) $ (67,013)
Adjustments to increase (decrease) net
income (loss):
Restructuring charges -- 3,191
Asset write-down charges 2,902 59,306
Acquisition and integration costs(a) -- 4,749
Depreciation, amortization and accretion 131,714 135,540
Interest and other income (expense) (1,557) (2,965)
Interest expense and amortization of
deferred financing costs 88,138 89,407
Impairment of available-for-sale
securities 23,718 --
Benefit (provision) for income taxes (2,096) (31,923)
Minority interests -- (324)
Stock-based compensation charges(c) 7,100 5,812
------------ ------------
Adjusted EBITDA $ 217,712 $ 195,780
============ ============
Less: Interest expense and amortization of
deferred financing costs 88,138 89,407
Less: Sustaining capital expenditures 6,058 5,565
------------ ------------
Recurring cash flow $ 123,516 $ 100,808
============ ============
Weighted average common shares outstanding
- basic and diluted 283,573 282,577
Recurring cash flow per share $ 0.44 $ 0.36
============ ============
Adjusted EBITDA and recurring cash flow for the quarter ending December 31, 2008 and for the years ending December 31, 2008 and December 31, 2009 is forecasted as follows:
Full Year Full Year
Q4 2008 2008 2009
------- --------- ---------
(in millions) Outlook Outlook Outlook
------- ------- -------
Net income (loss) $(29) to $(1) $(66) to $(32) $(51) to $23
Adjustments to increase
(decrease) net income
(loss):
Asset write-down charges $2 to $4 $11 to $13 $8 to $16
Acquisition and integration
costs (a) $0 to $0 $0 to $3 $1 to $3
Depreciation, amortization
and accretion $130 to 140 $526 to $536 $530 to $560
Interest and other income
(expense) $0 to $20 $(4) to $16 $(10) to $30
Interest expense and
amortization of deferred
financing costs(b) $87 to $90 $353 to $356 $355 to $360
Benefit (provision) for
income taxes $(16) to $(1) $(35) to $(18) $(28) to $13
Stock-based compensation
charges(c) $5 to $8 $26 to $34 $25 to $35
-------- ---------- ----------
Adjusted EBITDA $217 to $222 $857 to $862 $925 to $945
============ ============ ============
Less: Interest expense and
amortization of deferred
financing costs(b) $87 to $90 $353 to $356 $355 to $360
Less: Sustaining capital
expenditures $11 to $13 $26 to $28 $25 to $30
---------- ---------- ----------
Recurring cash flow $118 to $123 $479 to $484 $540 to $560
============ ============ ============
(a) Inclusive of stock-based compensation charges.
(b) Inclusive of approximately $6 million, $25 million, and
$25 million, respectively, from non-cash expense.
(c) Exclusive of expense included in integration costs and
restructuring charges.
Other Calculations:
Sustaining capital expenditures for the quarters ended September 30, 2008 and September 30, 2007 is computed as follows:
For the Three Months Ended
--------------------------
September 30, September 30,
2008 2007
------------ ------------
(in thousands)
Capital Expenditures $ 140,303 $ 66,334
Less: Revenue enhancing on existing sites 21,687 10,930
Less: Land purchases 63,841 34,731
Less: New site acquisition and
construction 48,717 15,108
------------ ------------
Sustaining capital expenditures $ 6,058 $ 5,565
============ ============
Site rental gross margin for the quarter ending December 31, 2008 and for the years ending December 31, 2008 and December 31, 2009 is forecasted as follows:
(in millions) Q4 2008 Full Year 2008 Full Year 2009
------- -------------- --------------
Outlook Outlook Outlook
------- ------- -------
Site rental revenue $350 to $355 $1,397 to $1,402 $1,485 to $1,500
Less: Site rental
cost of
operations $113 to $117 $455 to $459 $465 to $475
------------ ------------ ------------
Site rental gross
margin $235 to $240 $940 to $945 $1,015 to $1,030
============ ============ ================
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 growth and execution of our business and demand for wireless communication services, (ii) the repayment or refinancing of our debt, (iii) predictability of our cash flows, (iv) the impact of the economic slowdown and difficult credit markets, (v) currency exchange rates, including the impact on our results, (vi) site rental revenues, (vii) site rental cost of operations, (viii) site rental gross margin, (ix) Adjusted EBITDA, (x) interest expense and amortization of deferred financing costs, (xi) capital expenditures, including sustaining capital expenditures, (xii) recurring cash flow, including on a per share basis, (xiii) net income (loss), including on a per share basis, and (xiv) the utility of certain financial measures in analyzing our results. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including but not limited to prevailing market conditions and the following:
* Our business depends on the demand for wireless communications and 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. * Our substantial level of indebtedness may adversely affect our ability to react to changes in our business, and we may not be able to refinance on favorable terms our existing debt or use debt to fund future capital needs. * 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. * FiberTower's business has certain risk factors different from our core tower business, including an unproven business model, and may produce results that are less than anticipated, resulting in a write off of all or part of our investment in FiberTower. * 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. * Sales or issuances of a substantial number of shares of our common stock may adversely affect the market price of our common stock. * 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 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 BALANCE SHEET (UNAUDITED)
(in thousands)
September 30, December 31,
2008 2007
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 73,104 $ 75,245
Restricted cash 169,975 165,556
Receivables, net of allowance for doubtful
accounts 29,147 33,842
Prepaid expenses 82,170 72,518
Deferred income tax assets and other
current assets 152,878 150,094
------------ ------------
Total current assets 507,274 497,255
Restricted cash 5,000 5,000
Deferred site rental receivables 141,611 127,388
Available-for-sale securities, net 36,367 60,085
Property and equipment, net 5,059,917 5,051,055
Goodwill 1,981,816 1,970,501
Other intangible assets, net 2,593,619 2,676,288
Deferred financing costs and other assets,
net of accumulated amortization 124,261 100,561
------------ ------------
$ 10,449,865 $ 10,488,133
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 37,593 $ 37,366
Deferred revenues and other accrued
liabilities 246,423 253,121
Short-term debt and current maturities of
long-term debt 166,500 81,500
------------ ------------
Total current liabilities 450,516 371,987
Long-term debt, less current maturities 5,921,846 5,987,695
Deferred income tax liability 184,150 281,259
Deferred ground lease payables and other
liabilities 424,113 366,483
------------ ------------
Total liabilities 6,980,625 7,007,424
Redeemable preferred stock 314,494 313,798
Stockholders' equity 3,154,746 3,166,911
------------ ------------
$ 10,449,865 $ 10,488,133
============ ============
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
AND OTHER FINANCIAL DATA
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------------
2008 2007 2008 2007
----------------------------------------------
Net revenues:
Site rental $ 353,984 $ 326,797 $1,047,540 $ 948,925
Network services and
other 30,364 24,947 86,942 61,398
---------- ---------- ---------- ----------
Total net revenues 384,348 351,744 1,134,482 1,010,323
---------- ---------- ---------- ----------
Costs of operations
(exclusive of
depreciation,
amortization and
accretion):
Site rental 115,758 111,863 341,884 330,624
Network services and
other 20,541 17,032 60,772 43,484
---------- ---------- ---------- ----------
Total costs of
operations 136,299 128,895 402,656 374,108
---------- ---------- ---------- ----------
General and
administrative 37,437 32,881 110,915 104,210
Restructuring charges -- 3,191 -- 3,191
Asset write-down
charges 2,902 59,306 9,199 64,049
Integration costs -- 4,749 2,504 18,666
Depreciation,
amortization and
accretion 131,714 135,540 395,643 407,557
---------- ---------- ---------- ----------
Operating income
(loss) 75,996 (12,818) 213,565 38,542
Interest and other
income (expense) 1,557 2,965 4,073 9,170
Interest expense and
amortization of
deferred financing
costs (88,138) (89,407) (266,040) (260,212)
Impairment of
available-for-sale
securities (23,718) -- (23,718) --
---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before income taxes
and minority
interests (34,303) (99,260) (72,120) (212,500)
Benefit (provision) for
income taxes 2,096 31,923 87,079 69,705
Minority interests -- 324 -- 151
---------- ---------- ---------- ----------
Net income (loss) (32,207) (67,013) 14,959 (142,644)
Dividends on preferred
stock (5,201) (5,201) (15,604) (15,604)
---------- ---------- ---------- ----------
Net income (loss) after
deduction of dividends
on preferred stock $ (37,408) $ (72,214) (645) $ (158,248)
========== ========== ========== ==========
Net income (loss) per
common share - basic
and diluted $ (0.13) $ (0.26) $ -- $ (0.57)
========== ========== ========== ==========
Weighted average common
shares outstanding -
basic and diluted
(in thousands) 283,573 282,577 280,780 279,353
---------- ---------- ---------- ----------
Adjusted EBITDA $ 217,712 $ 195,780 $ 641,725 $ 549,418
========== ========== ========== ==========
Stock-based
compensation expenses:
Site rental cost of
operations $ 178 $ 94 686 288
Network services and
other cost of
operations 217 98 588 272
General and
administrative 6,705 5,620 19,540 16,853
Restructuring charges -- 2,377 -- 2,377
Integration costs -- -- -- 790
---------- ---------- ---------- ----------
Total $ 7,100 $ 8,189 $ 20,814 $ 20,580
========== ========== ========== ==========
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine Months Ended
September 30,
----------------------
2008 2007
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 14,959 $ (142,644)
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operating
activities:
Depreciation, amortization and accretion 395,643 407,557
Asset write-down charges 9,199 64,049
Deferred income tax (benefit) provision (87,063) (72,447)
Impairment of available-for-sale securities 23,718 --
Other adjustments, net 35,712 34,970
Changes in assets and liabilities, excluding
the effects of acquisitions:
Increase (decrease) in liabilities 17,619 (34,061)
Decrease (increase) in assets (64,032) (37,009)
---------- ----------
Net cash provided by (used for) operating
activities 345,755 220,415
---------- ----------
Cash flows from investing activities:
Proceeds from investments and disposition of
property and equipment 1,117 3,664
Payments for acquisitions (net of cash
acquired) of businesses (27,736) (494,352)
Capital expenditures (342,737) (191,258)
Other -- (755)
---------- ----------
Net cash provided by (used for) investing
activities (369,356) (682,701)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt -- 650,000
Proceeds from issuance of capital stock 7,775 24,777
Principal payments on long-term debt (4,875) (1,625)
Purchases of capital stock (44,383) (603,656)
Borrowings under revolving credit agreements 85,000 --
Incurrence of financing costs (1,538) (9,107)
Net decrease (increase) in restricted cash (4,378) (20,436)
Dividends on preferred stock (14,908) (14,909)
Capital distributions to minority interest
holders of CCAL -- (37,196)
---------- ----------
Net cash provided by (used for) financing
activities 22,693 (12,152)
---------- ----------
Effect of exchange rate changes on cash (1,233) 1,524
Net increase (decrease) in cash and cash
equivalents (2,141) (472,914)
Cash and cash equivalents at beginning of
period 75,245 592,716
---------- ----------
Cash and cash equivalents at end of period $ 73,104 $ 119,802
========== ==========
Supplemental disclosure of cash flow
information:
Interest paid $ 247,300 $ 234,317
Income taxes paid 4,190 3,228
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(dollars in thousands)
-------------------------- --------------------------
Quarter Ended 12/31/07 Quarter Ended 3/31/08
-------------------------- --------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
-------------------------- --------------------------
Revenues
Site Rental $316,750 $ 20,793 $337,543 $323,748 $ 21,285 $345,033
Services 33,873 3,747 37,620 23,834 1,754 25,588
-------------------------- --------------------------
Total Revenues 350,623 24,540 375,163 347,582 23,039 370,621
Operating
Expenses
Site Rental 106,636 6,082 112,718 106,432 5,948 112,380
Services 19,906 2,352 22,258 17,359 1,052 18,411
-------------------------- --------------------------
Total Operating
Expenses 126,542 8,434 134,976 123,791 7,000 130,791
General &
Administrative 32,392 6,244 38,636 31,032 3,954 34,986
Add: Stock-Based
Compensation 5,164 2,510 7,674 5,418 737 6,155
-------------------------- --------------------------
Adjusted EBITDA $196,853 $ 12,372 $209,225 $198,177 $ 12,822 $210,999
-------------------------- --------------------------
Gross Margins:
Site Rental 66% 71% 67% 67% 72% 67%
Services 41% 37% 41% 27% 40% 28%
Adjusted EBITDA
Margin 56% 50% 56% 57% 56% 57%
-------------------------- --------------------------
-------------------------- --------------------------
Quarter Ended 6/30/08 Quarter Ended 9/30/08
-------------------------- --------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
-------------------------- --------------------------
Revenues
Site Rental $328,952 $ 19,571 $348,523 $332,715 $ 21,269 $353,984
Services 27,016 3,974 30,990 27,972 2,392 30,364
-------------------------- --------------------------
Total Revenues 355,968 23,545 379,513 360,687 23,661 384,348
Operating
Expenses
Site Rental 107,474 6,272 113,746 109,757 6,001 115,758
Services 20,320 1,500 21,820 18,878 1,663 20,541
-------------------------- --------------------------
Total Operating
Expenses 127,794 7,772 135,566 128,635 7,664 136,299
General &
Administrative 33,845 4,647 38,492 33,220 4,217 37,437
Add: Stock-Based
Compensation 6,622 937 7,559 6,346 754 7,100
-------------------------- --------------------------
Adjusted EBITDA $200,951 $ 12,063 $213,014 $205,178 $ 12,534 $217,712
-------------------------- --------------------------
Gross Margins:
Site Rental 67% 68% 67% 67% 72% 67%
Services 25% 62% 30% 33% 30% 32%
Adjusted EBITDA
Margin 56% 51% 56% 57% 53% 57%
-------------------------- --------------------------
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA)
to GAAP Financial Measure:
(dollars in thousands)
-----------------------------------------------
Quarter Ended
-----------------------------------------------
12/31/2007 3/31/2008 6/30/2008 9/30/2008
Net income (loss) $ (80,169) $ (13,173) $ 60,339 $ (32,207)
Adjustments to
increase (decrease)
net income (loss):
Asset write-down
charges 1,466 1,304 4,993 2,902
Integration costs 6,752 2,504 -- --
Depreciation,
amortization and
accretion 132,347 132,033 131,896 131,714
Interest and other
income (expense) (181) (2,310) (206) (1,557)
Interest expense,
amortization of
deferred financing
costs 90,047 89,145 88,757 88,138
Impairment of
available-for-sale
securities 75,623 -- -- 23,718
Benefit (provision)
for income taxes (24,334) (4,659) (80,324) (2,096)
Stock-based
compensation 7,674 6,155 7,559 7,100
---------- ---------- ---------- ----------
Adjusted EBITDA $ 209,225 $ 210,999 $ 213,014 $ 217,712
========== ========== ========== ==========
CCI FACT SHEET Q3 2007 to Q3 2008
dollars in thousands
Q3 '07 Q3 '08 % Change
----------------------------------
CCUSA
-----
Site Rental Revenues $ 309,798 $ 332,715 7%
Ending Sites 22,329 22,477 1%
CCAL
----
Site Rental Revenues $ 16,999 $ 21,269 25%
Ending Sites 1,438 1,594 11%
TOTAL CCIC
----------
Site Rental Revenues $ 326,797 $ 353,984 8%
Ending Sites 23,767 24,071 1%
Ending Cash and Cash Equivalents $ 119,802* $ 73,104*
Debt
Bank Debt $ 648,375 $ 800,250
Securitized Debt & Other Notes $5,348,127 $5,288,096
---------- ----------
Total Debt $5,996,502 $6,088,346
6 1/4% Convertible Preferred Stock $ 313,566 $ 314,494
Leverage Ratios
Net Debt/EBITDA 7.5X 6.9X
Net Debt + Preferreds/EBITDA 7.9X 7.3X
Last Quarter Annualized Adjusted
EBITDA $ 783,120 $ 870,848
*Excludes Restricted Cash
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Crown Castle International Corp.
Crown Castle International Corp.
Jay Brown, CFO
Fiona McKone, VP - Finance
713-570-3000