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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): February 18, 2004

 

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Crown Castle International Corp.

(Exact Name of Registrant as Specified in its Charter)

 

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Delaware		001-16441		76-0470458
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification Number)

 

510 Bering Drive

Suite 500

Houston, TX 77057

(Address of Principal Executive Office)

 

Registrant’s telephone number, including area code: (713) 570-3000

 

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This document includes “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Other than statements of historical fact, all statements regarding industry prospects, the consummation of the transactions described in this document and the Company’s expectations regarding the future performance of its businesses and its financial position are forward-looking statements.

 

These forward-looking statements are subject to numerous risks and uncertainties.

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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

 

(c) Exhibits

 

Exhibit No.		Description
99.1		Press Release dated February 18, 2004

 

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On February 18, 2004, the Company issued a press release disclosing its financial results for the fourth quarter and year-ended 2003. The February 18 press release is furnished herewith as Exhibit 99.1 to this Form 8-K.

 

The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

2

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: February 18, 2004

 

3

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release dated February 18, 2004

 

4

 

[Crown Castle International New Release Graphic]		Exhibit 99.1

 

 

CROWN CASTLE INTERNATIONAL

REPORTS FOURTH QUARTER AND YEAR-END RESULTS;

INCREASES 2004 SITE RENTAL REVENUE AND

FREE CASH FLOW OUTLOOK

 

February 18, 2004 – HOUSTON, TEXAS – Crown Castle International Corp. (NYSE:CCI) today reported results for the fourth quarter ended December 31, 2003.

 

Site rental and broadcast transmission revenue for the fourth quarter of 2003 increased 19.4% percent to $214.0 million from $179.3 million for the same period in the prior year. Operating income improved to $23.6 million in the fourth quarter of 2003 from a loss of $3.6 million in the fourth quarter of 2002, an increase of $27.1 million.

 

Site rental and broadcast transmission revenue for the full year 2003 increased 16.1% percent to $786.8 million from $677.8 million for the full year 2002. Operating income improved $78.3 million to $51.7 million for the full year 2003 from a loss of $26.6 million for the full year 2002.

 

Net loss was $171.4 million for the fourth quarter of 2003, inclusive of $122.8 million in losses from the retirement of debt and preferred securities, compared to a net loss of $34.9 million for the same period in 2002, inclusive of $49.1 million of gains from the retirement of debt. Net loss after deduction of dividends on preferred stock was $181.4 million in the fourth quarter of 2003, inclusive of $122.8 million in losses from the retirement of debt and preferred securities, compared to a loss of $4.2 million for the same period last year, inclusive of $98.8 million in gains from the retirement of debt and preferred securities. Fourth quarter net loss per share was $(0.83) compared to a loss per share of $(0.02) in last year’s fourth quarter of 2002. Prior to July 1, 2003, gains and losses from purchases of our 12 ³/4% Senior Exchangeable Preferred Stock were presented as part of

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dividends on preferred stock in our consolidated statement of operations. Since that date, such gains and losses are presented as part of interest and other income (expense) due to the adoption of a new accounting standard for mandatorily redeemable financial instruments.

 

Net loss for full year 2003 was $420.9 million, inclusive of $160.3 million in losses from the retirement of debt and preferred securities, compared to a net loss of $272.5 million for the same period in 2002, inclusive of $79.1 million of gains from the retirement of debt. Net loss after deduction of dividends on preferred stock was $474.8 million for the full year 2003, inclusive of $160.0 million in losses from the retirement of debt and preferred securities, compared to a loss of $252.9 million for the same period last year, inclusive of $178.6 million in gains from the retirement of debt and preferred securities. Full year 2003 net loss per share was $(2.19) compared to a loss per share of $(1.16) for full year 2002.

 

Net cash from operating activities for the fourth quarter of 2003 was $116.0 million. Free cash flow, defined as net cash from operating activities less capital expenditures, for the fourth quarter of 2003 was a source of cash of $92.3 million. For the full year 2003, net cash from operating activities was $260.0 million. Free cash flow for the full year 2003 was a source of cash of $141.1 million, an improvement of $209.5 million from a use of cash of $68.3 million for the same period last year.

 

OPERATING RESULTS

 

US site rental revenue for the fourth quarter of 2003 increased $9.6 million, or 8.9%, to $117.7 million, up from $108.0 million for the same period in 2002, and UK site rental and broadcast transmission revenue for the fourth quarter of 2003 increased $23.2 million, or 35.5%, to $88.4 million, up from $65.2 million for the same period in 2002. These revenue results approximate same tower sales as over 99% of Crown Castle’s sites were in operation for the 12 months preceding December 31, 2003.

 

On a consolidated basis, site rental and broadcast transmission gross margin, defined as site rental and broadcast transmission revenue less site rental and broadcast transmission cost of operations, increased 21% to $130.5 million, up $22.7 million in the fourth quarter of 2003 from the same period in 2002. During the past 12 months, Crown Castle’s results have benefited predominantly from organic growth and, in part, from the weakening US dollar relative to the currencies of its UK and Australian subsidiaries.

 

Net cash from operating activities and free cash flow for the fourth quarter of 2003 benefited from $54.9 million in working capital improvements, including approximately $45 million of

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prepaid 2004 rent in the UK. For the fourth quarter of 2003, US capital expenditures were $5.3 million and UK capital expenditures were $17.0 million. During the fourth quarter of 2003, Crown Castle developed 15 sites in the UK under our agreement with British Telecom.

 

“We are pleased with the significant free cash flow generated in 2003,” stated John P. Kelly, President and Chief Executive Officer of Crown Castle. “Growth in the core business and the reduction of interest expense, capital expenditures, and working capital contributed to an increase in free cash flow in 2003. Based on current run-rate tower revenue and the positive impact of currency movements in the UK and Australia we have raised our 2004 outlook. While our 2004 outlook is currently based on the 2003 level of new leasing activity, we continue to see positive signs from the increase in site applications from our customers in the US, which may result in additional revenue. Likewise, in the UK, we continue to see significant activity as customers deploy their 3G networks. I am very pleased with the degree to which we exceeded our 2003 financial targets and look forward to further financial and operational accomplishments in 2004.”

 

BALANCE SHEET IMPROVEMENTS

 

“During the fourth quarter, we significantly reduced interest expense and increased free cash flow,” stated W. Benjamin Moreland, Chief Financial Officer of Crown Castle. “The net result of our refinancing activities during the fourth quarter was to reduce the interest rate by approximately 390 basis points on a portion of our debt, which will save us approximately $37 million per year in interest expense, bringing total annual interest expense to approximately $211 million. In addition, we have extended the maturities of our debt, including our convertible notes and preferred stock, such that 88% of the maturities are at 2010 and beyond. Given our current interest expense coverage and the maturity schedule of our debt, we are comfortable with our plan to continue to reduce our overall leverage through the expected growth in operating results and the investment of free cash flow to pay down debt. We are pleased to end 2003 with total debt and preferred stock of 7.7x fourth quarter annualized adjusted EBITDA, which is down 1.2x from 8.9x at the end of 2002.”

 

The following table sets forth Crown Castle’s reduction of interest expense (in millions):

 

		Run-Rate Q4 2002			Run-Rate Q1 2004			Net Change
Annualized interest expense*		$	304.7		$	211.4		$	(93.3	)

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*	Includes 12 3/4% Senior Exchangeable Preferred Stock dividends

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On October 10, 2003, Crown Castle announced the completion of an amended $1.6 billion credit facility for its restricted group operating company (“OpCo Facility”) and made certain changes to its capital structure. The OpCo Facility is comprised of a $192.5 million Term A loan, a $1.1 billion Term B loan and an unfunded $341 million revolving credit facility. Crown Castle also designated its UK subsidiary (“CCUK”) as a restricted subsidiary, repaid the CCUK senior credit facility and redeemed CCUK’s 9% Guaranteed Bonds due 2007.

 

On November 24, 2003, Crown Castle announced cash tender offers for its 10 ³/8% Senior Discount Notes and 11 ¹/4% Senior Discount Notes (together “Discount Notes”). The tender offers for these notes expired on December 23, 2003. During the fourth quarter, Crown Castle purchased $418.7 million of the 10 ³/8% Senior Discount Notes using $456.2 million in cash and $178.9 million of the 11 ¹/4% Senior Discount Notes using $200.2 million in cash. After adjusting for Discount Notes purchased after December 31, 2003, Crown Castle has $11.0 million and $10.1 million outstanding of its 10 ³/8% Senior Discount Notes and 11 ¹/4% Senior Discount Notes, respectively.

 

On December 5, 2003, Crown Castle announced cash tender offers for its 9% Senior Notes and 9.5% Senior Notes (together “Senior Notes”). The tender offers for these notes expired on January 6, 2004. During the fourth quarter, including Senior Notes received in connection with tender offers and open market purchases, Crown Castle purchased $136.0 million of the 9% Senior Notes using $145.6 million in cash and $97.5 million of the 9.5% Senior Notes using $106.4 million in cash. After adjusting for the settlement of the tenders, at December 31, 2003, Crown Castle had $26.1 million and $4.8 million outstanding of its 9% Senior Notes and 9.5% Senior Notes, respectively. Crown Castle recorded a loss on the extinguishment of debt of $119.7 million in the fourth quarter of 2003 based on the tendered Discount Notes and the Senior Notes that had been tendered at December 31, 2003. The Senior Notes tendered at December 31, 2003 were classified as current maturities of long-term debt at year-end. Crown Castle paid for these notes on January 7, 2004.

 

On December 15, 2003, Crown Castle redeemed all of the outstanding 12 ³/4% Senior Exchangeable Preferred Stock due 2010, which had an aggregate redemption value of $47.0 million, for $50.0 million based on the contractual call price of 106.375%.

 

Further, during the fourth quarter, Crown Castle sold $600 million of 7.5% Senior Notes. Crown Castle used the proceeds from these offerings along with existing cash balances for the redemption, tender and purchase of certain of its securities as described above.

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Also, during the fourth quarter of 2003, Crown Castle repaid $20 million of its Crown Atlantic credit facility, bringing the remaining balance to $195 million. After adjusting for the January settlement of the cash tender offers for its Senior Notes, at December 31, 2003, Crown Castle had approximately $585 million of total liquidity, comprised of approximately $189 million of cash and cash equivalents and total availability under its OpCo Facility and Crown Atlantic credit facility of approximately $396 million.

 

On February 12, 2004, Crown Castle received unanimous consent from its lenders to amend its Crown Atlantic credit facility to reduce the amount of the revolver from $301.1 million to $250 million.

 

OUTLOOK

 

The following statements and outlook table are based on current expectations and assumptions and assume a US dollar to UK pound exchange rate of 1.75 dollars to 1.00 pound and a US dollar to Australian dollar exchange rate of 0.70 US dollars to 1.00 Australian dollar. 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 are set forth below and in Crown Castle’s filings with the Securities and Exchange Commission.

 

Crown Castle has adjusted certain elements of its previously provided financial guidance for full year 2004, including increasing site rental and broadcast transmission revenue from between $810 million and $835 million to between $860 million and $870 million and increasing free cash flow from between $120 million and $140 million to between $145 million and $160 million for the full year 2004. Crown Castle’s outlook for net cash provided by operating activities is based on interest expense on its existing debt balances and does not include savings from interest expense reductions that may be achieved through further debt reductions and refinancings.

 

Crown Castle’s adjusted 2004 outlook includes an upward adjustment to site rental and broadcast transmission revenue based on fourth quarter 2003 run-rate site rental and broadcast transmission revenue and expected foreign exchange rates. Further, Crown Castle’s 2004 outlook assumes that leasing activity remains constant with 2003 leasing activity.

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The following table sets forth Crown Castle’s current outlook (dollars in millions):

 

		First Quarter 2004		Full Year 2004
Site rental and broadcast transmission revenue		$ 211 to 213		$ 860 to 870
Net cash provided by operating activities		$ (7) to 0		$ 235 to 250
Capital expenditures		$ 20 to 24		$ 70 to 90
Free Cash Flow		$ (35) to (25)		$ 145 to 160

 

CONFERENCE CALL DETAILS

 

Crown Castle has scheduled a conference call for Thursday, February 19, 2004 at 9:30 a.m. eastern time to discuss fourth quarter and year-end results and Crown Castle’s Outlook. Please dial 303-262-2211 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 through February 26, 2004 and may be accessed by calling 303-590-3000 and using pass code 567812. An audio archive will also be available on Crown Castle’s website at www.crowncastle.com shortly after the call and will be accessible for approximately 90 days. For more information, please contact Karen Roan at DRG&E at 1-713-529-6600 or email kcroan@drg-e.com.

 

Crown Castle engineers, deploys, owns and operates technologically advanced shared wireless infrastructure, including extensive networks of towers and rooftops as well as analog and digital audio and television broadcast transmission systems. Crown Castle offers near-universal broadcast coverage in the United Kingdom and significant wireless communications coverage to 68 of the top 100 United States markets, to substantially all of the UK population and to substantially all of the Australian population. Crown Castle owns, operates and manages over 15,500 wireless communication sites internationally. For more information on Crown Castle, visit: www.crowncastle.com.

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Non-GAAP Financial Measures:

 

This press release includes presentations of Free Cash Flow and Adjusted EBITDA, which are non-GAAP financial measures. Crown Castle defines Free Cash Flow as net cash provided by operating activities less capital expenditures (both amounts from the Consolidated Statement of Cash Flows). Crown Castle defines Adjusted EBITDA as net loss plus cumulative effect of change in accounting principle, minority interests, provision for income taxes, interest expense, amortization of deferred financing costs and dividends on preferred stock, interest and other income (expense), depreciation, amortization and accretion, non-cash general and administrative compensation charges, asset write-down charges and restructuring charges (credits). Free Cash Flow and Adjusted EBITDA are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with generally accepted accounting principles). Further, our measure of Free Cash Flow and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Free Cash Flow is presented as additional information because management believes it to be a useful indicator of our ability to execute our business strategy without reliance on additional borrowing or the use of our cash and liquid investments. Adjusted EBITDA is presented as additional information because management believes it to be a useful indicator of the current financial performance of our core businesses. In addition, Adjusted EBITDA is the measure of current financial performance generally used in our debt covenant calculations. The tables set forth below reconcile these non-GAAP financial measures to comparable GAAP financial measures. Our results under GAAP are set forth in the financial statements following this press release.

 

Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

 

Free Cash Flow is computed as follows:

 

(In thousands of dollars)		For the Three Months Ended
		Dec. 31, 2003				Dec. 31, 2002
Net cash provided by operating activities		$	115,985			$	126,559
Less: Capital expenditures			(23,697	)			(39,983	)
Free Cash Flow		$	92,288			$	86,576

 

(In millions of dollars)		Forecast Ranges for the Periods
		Q1 2004		Full Year 2004
Net cash provided by operating activities		$ (7) to 0		$ 235 to 250
Less: Capital expenditures		$ (20) to (24)		$ (70) to (90)
Free Cash Flow		$ (35) to (25)		$ 145 to 160

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Adjusted EBITDA is computed as follows:

 

(in thousands of dollars)		Three Months Ended December 31,								Twelve Months Ended December 31,
		2003				2002				2003				2002
Net loss		$	(171,358	)		$	(34,902	)		$	(420,883	)		$	(272,521	)
Cumulative effect of change in accounting principle			—				—				2,035				—
Minority interests			1,258				849				2,394				(2,498	)
Provision for income taxes			(4,102	)			6,832				7,518				12,276
Interest expense, amortization of deferred financing costs and dividends on preferred stock			73,645				71,736				289,647				302,570
Interest and other income (expense)			124,123				(48,089	)			170,992				(66,418	)
Depreciation, amortization and accretion			82,893				76,761				324,152				301,928
Non-cash general and administrative compensation charges			84				1,358				20,654				5,349
Asset write-down charges			6,800				8,550				14,317				55,796
Restructuring charges (credits)			—				10,538				1,291				17,147
Adjusted EBITDA		$	113,343			$	93,633			$	412,117			$	353,629

 

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 and estimates regarding (i) demand and application and leasing rates for our sites and towers, (ii) currency exchange rates, (iii) deployment of 3G networks by our customers, (iv) interest expense, (v) debt reduction and refinancings, (vi) revenues, (vii) net cash provided by operating activities, (viii) capital expenditures, and (ix) free cash flow. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including but not limited to prevailing market conditions and the following:

 

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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.

 

•

Restrictive covenants on our debt instruments may limit our ability to take actions that may be in our best interests. If we fail to comply with our covenants, our debt may be accelerated.

 

•

Our business depends on the demand for wireless communications and we may be adversely affected by any slowdown in such demand

 

•

The loss, consolidation, network sharing or financial instability of any of our limited number of customers may materially decrease revenues.

 

•

An economic or wireless telecommunications industry slowdown may materially and adversely affect our business and the business of our customers.

 

•

We operate in a competitive industry and some of our competitors have significantly more resources than we do.

 

•

Technology changes may significantly reduce the demand for towers and wireless communications sites.

 

•

2.5G/3G and other 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 sites and towers and may not be able to maintain these leases at commercially viable terms. The loss of any of our ground leases may result in retirement obligations.

 

•

Our international operations expose us to changes in foreign currency exchange rates.

 

•

We may need additional financing, which may not be available for strategic growth opportunities or contractual obligations.

 

•

Fluctuations in market interest rates could increase interest expense relating to our floating rate indebtedness.

 

•

Laws and regulations, which may change at any time and with which we may fail to comply, govern our business and industry.

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•

We are heavily dependent on our senior management.

 

•

We may suffer from future claims if radio frequency emissions from equipment on our sites and 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.

 

•

Sales or issuances, including as dividends, of a substantial number of shares of our common stock may adversely affect the market price of our common stock.

 

•

Disputes with customers and suppliers may adversely affect results.

 

•

Demand for our network services business is very volatile which causes our network services operating results to vary significantly for any particular period.

 

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 that could affect our results is included in our filings with the Securities and Exchange Commission.

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CROWN CASTLE INTERNATIONAL CORP.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

AND OTHER FINANCIAL DATA

(in thousands, except per share data)

 

		Three Months Ended December 31,								Years Ended December 31,
		2003				2002				2003				2002
Net revenues:
Site rental and broadcast transmission		$	213,971			$	179,280			$	786,788			$	677,839
Network services and other			39,875				48,681				143,560				223,694
Total net revenues			253,846				227,961				930,348				901,533
Costs of operations:
Site rental and broadcast transmission			83,425				71,421				307,511				270,024
Network services and other			30,089				39,215				110,268				176,175
Total costs of operations			113,514				110,636				417,779				446,199
General and administrative			25,002				22,241				94,888				94,222
Corporate development			1,987				1,451				5,564				7,483
Restructuring charges			—				10,538				1,291				17,147
Asset write-down charges			6,800				8,550				14,317				55,796
Non-cash general and administrative compensation charges			84				1,358				20,654				5,349
Depreciation, amortization and accretion			82,893				76,761				324,152				301,928
Operating income (loss)			23,566				(3,574	)			51,703				(26,591	)
Interest and other income (expense)			(124,123	)			48,089				(170,992	)			66,418
Interest expense, amortization of deferred financing costs and dividends on preferred stock			(73,645	)			(71,736	)			(289,647	)			(302,570	)
Loss before income taxes, minority interests and cumulative effect of change in accounting principle			(174,202	)			(27,221	)			(408,936	)			(262,743	)
Provision for income taxes			4,102				(6,832	)			(7,518	)			(12,276	)
Minority interests			(1,258	)			(849	)			(2,394	)			2,498
Loss before cumulative effect of change in accounting principle			(171,358	)			(34,902	)			(418,848	)			(272,521	)
Cumulative effect of change in accounting principle for asset retirement obligations, net of related tax benefit of $636			—				—				(2,035	)			—
Net loss			(171,358	)			(34,902	)			(420,883	)			(272,521	)
Dividends on preferred stock, net of gains (losses) on purchases of preferred stock			(9,997	)			30,672				(53,945	)			19,638
Net loss after deduction of dividends on preferred stock, net of gains (losses) on purchases of preferred stock		$	(181,355	)		$	(4,230	)		$	(474,828	)		$	(252,883	)
Per common share - basic and diluted:
Loss before cumulative effect of change in accounting principle		$	(0.83	)		$	(0.02	)		$	(2.18	)		$	(1.16	)
Cumulative effect of change in accounting principle			—				—				(0.01	)			—
Net loss		$	(0.83	)		$	(0.02	)		$	(2.19	)		$	(1.16	)
Common shares outstanding - basic and diluted			218,241				215,138				216,947				218,028
Adjusted EBITDA (before restructuring and asset write-down charges): Site rental and broadcast transmission		$	121,737			$	101,009			$	447,099			$	374,491
Network services and other (before corporate development expenses)			(6,407	)			(5,925	)			(29,418	)			(13,379	)
Adjusted EBITDA before corporate development expenses			115,330				95,084				417,68				361,112
Corporate development			(1,987	)			(1,451	)			(5,564	)			(7,483	)
Total Adjusted EBITDA		$	113,343			$	93,633			$	412,117			$	353,629

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CROWN CASTLE INTERNATIONAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands)

 

		December 31,
		2003			2002
ASSETS
Current assets:
Cash and cash equivalents		$	462,427		$	516,172
Receivables, net of allowance for doubtful accounts			82,053			135,864
Short-term investments			—			115,697
Inventories			15,542			45,616
Prepaid expenses and other current assets			81,738			53,732
Total current assets			641,760			867,081
Property and equipment, net of accumulated depreciation			4,741,945			4,828,033
Goodwill			1,206,713			1,067,041
Deferred financing costs and other assets, net of accumulated amortization			142,959			130,446
		$	6,733,377		$	6,892,601
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	40,749		$	63,852
Accrued interest			49,063			59,811
Accrued compensation and related benefits			19,117			14,661
Deferred rental revenues and other accrued liabilities			285,763			208,195
Long-term debt, current maturities			267,142			14,250
Total current liabilities			661,834			360,769
Long-term debt, less current maturities			3,182,850			3,212,710
Other liabilities			211,763			183,227
Total liabilities			4,056,447			3,756,706
Minority interests			208,333			171,383
Redeemable preferred stock			506,702			756,014
Stockholders’ equity			1,961,895			2,208,498
		$	6,733,377		$	6,892,601

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CROWN CASTLE INTERNATIONAL CORP.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

 

		Three Months Ended December 31,
		2003				2002
Cash flows from operating activities:
Net loss		$	(171,358	)		$	(34,902	)
Adjustments to reconcile net loss to net cash provided by operating activities:
(Gains) losses on purchases and redemption of long-term debt			119,688				(49,140	)
Depreciation, amortization and accretion			82,893				76,761
Amortization of deferred financing costs, discounts on long-term debt and dividends on preferred stock			17,633				19,708
Asset write-down charges			6,800				8,550
Losses on purchases and redemptions of preferred stock			3,085				—
Minority interests			1,258				849
Equity in losses (earnings) and write-downs of unconsolidated affiliates			1,010				1,398
Non-cash general and administrative compensation charges			84				1,358
Changes in assets and liabilities:
Increase in deferred rental revenues and other liabilities			39,241				8,316
Increase in accrued interest			15,377				27,277
Decrease in receivables			12,880				39,959
Decrease in accounts payable			(8,856	)			(13,350	)
(Increase) decrease in inventories, prepaid expenses and other assets			(3,750	)			39,775
Net cash provided by operating activities			115,985				126,559
Cash flows from investing activities:
Proceeds from disposition of property and equipment			1,828				7,845
Capital expenditures			(23,697	)			(39,983	)
Investments in affiliates and other			(63	)			2,647
Maturities of investments			—				29,500
Purchases of investments			—				(36,893	)
Acquisition of assets			—				(3,252	)
Net cash used for investing activities			(21,932	)			(40,136	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			1,302,000				—
Proceeds from issuance of capital stock			3,460				123
Purchases and redemptions of long-term debt			(913,171	)			(97,520	)
Principal payments on long-term debt			(102,750	)			(30,910	)
Net borrowings (payments) under revolving credit agreements			(94,948	)			—
Purchases and redemption of capital stock			(62,266	)			(49,017	)
Incurrence of financing costs			(22,093	)			(2,673	)
Net cash provided by (used for) financing activities			110,232				(179,997	)
Effect of exchange rate changes on cash			2,470				4,427
Net increase (decrease) in cash and cash equivalents			206,755				(89,147	)
Cash and cash equivalents at beginning of period			255,672				605,319
Cash and cash equivalents at end of period		$	462,427			$	516,172
Supplemental disclosure of cash flow information:
Interest paid		$	35,946			$	23,733
Income taxes paid			138				109

---

CROWN CASTLE INTERNATIONAL CORP.

Summary Fact Sheet

(in $ thousands)

 

		Quarter Ended 12/31/02
		US			UK		AUS		CCIC
Revenues
Site Rental		108,023			65,248		6,009		179,280
Services		27,651			20,372		658		48,681
Total Revenues		135,674			85,620		6,667		227,961
Operating Expenses
Site Rental		37,080			31,888		2,453		71,421
Services		21,914			16,850		451		39,215
Total Operating Expenses		58,994			48,738		2,904		110,636
General & Administrative
Site Rental		4,797			392		1,661		6,850
Services		15,220			171		—		15,391
Total General & Administrative		20,017			563		1,661		22,241
Operating Cash Flow
Site Rental		66,146			32,968		1,895		101,009
Services		(9,483	)		3,351		207		(5,925	)
Total Pre-Overhead Cash Flow		56,663			36,319		2,102		95,084
Corporate Overhead		1,451			—		—		1,451
Adjusted EBITDA		55,212			36,319		2,102		93,633

 

		Quarter Ended 12/31/02
		US			UK			AUS			CCIC
Gross Margins:
Site Rental		66	%		51	%		59	%		60	%
Services		21	%		17	%		31	%		19	%
Operating Cash Flow Margins
Site Rental		61	%		51	%		32	%		56	%
Services		-34	%		16	%		31	%		-12	%
Adjusted EBITDA Margin		41	%		42	%		32	%		41	%

 

		Quarter Ended 3/31/03
		US			UK		AUS		CCIC
Revenues
Site Rental		107,849			71,125		5,986		184,960
Services		16,135			14,845		784		31,764
Total Revenues		123,984			85,970		6,770		216,724
Operating Expenses
Site Rental		38,325			32,752		2,283		73,360
Services		11,036			13,331		575		24,942
Total Operating Expenses		49,361			46,083		2,858		98,302
General & Administrative
Site Rental		4,579			1,172		1,700		7,451
Services		14,239			502		—		14,741
Total General & Administrative		18,818			1,674		1,700		22,192
Operating Cash Flow
Site Rental		64,945			37,201		2,003		104,149
Services		(9,140	)		1,012		209		(7,919	)
Total Pre-Overhead Cash Flow		55,805			38,213		2,212		96,230
Corporate Overhead		1,620			—		—		1,620
Adjusted EBITDA		54,185			38,213		2,212		94,610

---

		Quarter Ended 3/31/03
		US			UK			AUS			CCIC
Gross Margins:
Site Rental		64	%		54	%		62	%		60	%
Services		32	%		10	%		27	%		21	%
Operating Cash Flow Margins
Site Rental		60	%		52	%		33	%		56	%
Services		-57	%		7	%		27	%		-25	%
Adjusted EBITDA Margin		44	%		44	%		33	%		44	%

---

		Quarter Ended 6/30/03
		US			UK		AUS		CCIC
Revenues
Site Rental		110,504			72,824		6,142		189,470
Services		18,771			15,102		858		34,731
Total Revenues		129,275			87,926		7,000		224,201
Operating Expenses
Site Rental		37,502			33,695		2,483		73,680
Services		12,234			14,434		585		27,253
Total Operating Expenses		49,736			48,129		3,068		100,933
General & Administrative
Site Rental		5,080			1,343		1,648		8,071
Services		15,492			575		—		16,067
Total General & Administrative		20,572			1,918		1,648		24,138
Operating Cash Flow
Site Rental		67,922			37,786		2,011		107,719
Services		(8,955	)		93		273		(8,589	)
Total Pre-Overhead Cash Flow		58,967			37,879		2,284		99,130
Corporate Overhead		918			—		—		918
Adjusted EBITDA		58,049			37,879		2,284		98,212

 

		Quarter Ended 6/30/03
		US			UK			AUS			CCIC
Gross Margins:
Site Rental		66	%		54	%		60	%		61	%
Services		35	%		4	%		32	%		22	%
Operating Cash Flow Margins
Site Rental		61	%		52	%		33	%		57	%
Services		-48	%		1	%		32	%		-25	%
Adjusted EBITDA Margin		45	%		43	%		33	%		44	%

 

		Quarter Ended 9/30/03
		US			UK		AUS		CCIC
Revenues
Site Rental		113,387			78,260		6,740		198,387
Services		16,361			19,794		1,035		37,190
Total Revenues		129,748			98,054		7,775		235,577
Operating Expenses
Site Rental		37,298			36,984		2,764		77,046
Services		9,668			17,806		510		27,984
Total Operating Expenses		46,966			54,790		3,274		105,030
General & Administrative
Site Rental		4,319			1,491		2,037		7,847
Services		15,066			643		—		15,709
Total General & Administrative		19,385			2,134		2,037		23,556
Operating Cash Flow
Site Rental		71,770			39,785		1,939		113,494
Services		(8,373	)		1,345		525		(6,503	)
Total Pre-Overhead Cash Flow		63,397			41,130		2,464		106,991
Corporate Overhead		1,039			—		—		1,039
Adjusted EBITDA		62,358			41,130		2,464		105,952

---

		Quarter Ended 9/30/03
		US			UK			AUS			CCIC
Gross Margins:
Site Rental		67	%		53	%		59	%		61	%
Services		41	%		10	%		51	%		25	%
Operating Cash Flow Margins
Site Rental		63	%		51	%		29	%		57	%
Services		-51	%		7	%		51	%		-17	%
Adjusted EBITDA Margin		48	%		42	%		32	%		45	%

 

		Quarter Ended 12/31/03
		US			UK		AUS		CCIC
Revenues
Site Rental		117,686			88,425		7,860		213,971
Services		17,561			21,503		811		39,875
Total Revenues		135,247			109,928		8,671		253,846
Operating Expenses
Site Rental		39,353			40,905		3,167		83,425
Services		11,604			17,951		534		30,089
Total Operating Expenses		50,957			58,856		3,701		113,514
General & Administrative
Site Rental		4,889			1,469		2,451		8,809
Services		15,561			632		—		16,193
Total General & Administrative		20,450			2,101		2,451		25,002
Operating Cash Flow
Site Rental		73,444			46,051		2,242		121,737
Services		(9,604	)		2,920		277		(6,407	)
Total Pre-Overhead Cash Flow		63,840			48,971		2,519		115,330
Corporate Overhead		1,987			—		—		1,987
Adjusted EBITDA		61,853			48,971		2,519		113,343

 

		Quarter Ended 12/31/03
		US			UK			AUS			CCIC
Gross Margins:
Site Rental		67	%		54	%		60	%		61	%
Services		34	%		17	%		34	%		25	%
Operating Cash Flow Margins
Site Rental		62	%		52	%		29	%		57	%
Services		-55	%		14	%		34	%		-16	%
Adjusted EBITDA Margin		46	%		45	%		29	%		45	%

---

CROWN CASTLE INTERNATIONAL CORP.

Summary Fact Sheet

Restricted and Unrestricted Subsidiaries

(in $ thousands)

 

		Quarter Ended 12/31/02
		Restricted*			Crown Atlantic		Other			CCIC
Revenues
Site Rental		154,932			24,348		—			179,280
Services		43,035			5,646		—			48,681
Total Revenues		197,967			29,994		—			227,961
Operating Expenses
Site Rental		61,786			9,635		—			71,421
Services		36,841			2,374		—			39,215
Total Operating Expenses		98,627			12,009		—			110,636
General & Administrative
Site Rental		6,398			452		—			6,850
Services		12,929			1,015		1,447			15,391
Total General & Administrative		19,327			1,467		1,447			22,241
Operating Cash Flow
Site Rental		86,748			14,261		—			101,009
Services		(6,735	)		2,257		(1,447	)		(5,925	)
Total Pre-Overhead Cash Flow		80,013			16,518		(1,447	)		95,084
Corporate Overhead		1,451			—		—			1,451
Adjusted EBITDA		78,562			16,518		(1,447	)		93,633

 

		Quarter Ended 12/31/02
		Restricted*			Crown Atlantic			Other		CCIC
Gross Margins:
Site Rental		60	%		60	%		—		60	%
Services		14	%		58	%		—		19	%
Operating Cash Flow Margins
Site Rental		56	%		59	%		—		56	%
Services		-16	%		40	%		—		-12	%
Adjusted EBITDA Margin		40	%		55	%		N/A		41	%

 

		Quarter Ended 3/31/03
		Restricted*			Crown Atlantic			Other			CCIC
Revenues
Site Rental		160,010			24,950			—			184,960
Services		29,081			2,683			—			31,764
Total Revenues		189,091			27,633			—			216,724
Operating Expenses
Site Rental		63,639			9,721			—			73,360
Services		23,225			1,717			—			24,942
Total Operating Expenses		86,864			11,438			—			98,302
General & Administrative
Site Rental		6,931			520			—			7,451
Services		12,363			1,101			1,277			14,741
Total General & Administrative		19,294			1,621			1,277			22,192
Operating Cash Flow
Site Rental		89,440			14,709			—			104,149
Services		(6,507	)		(135	)		(1,277	)		(7,919	)
Total Pre-Overhead Cash Flow		82,933			14,574			(1,277	)		96,230
Corporate Overhead		1,620			—			—			1,620
Adjusted EBITDA		81,313			14,574			(1,277	)		94,610

---

		Quarter Ended 3/31/03
		Restricted*			Crown Atlantic			Other		CCIC
Gross Margins:
Site Rental		60	%		61	%		—		60	%
Services		20	%		36	%		—		21	%
Operating Cash Flow Margins
Site Rental		56	%		59	%		—		56	%
Services		-22	%		-5	%		—		-25	%
Adjusted EBITDA Margin		43	%		53	%		N/A		44	%

 

		Quarter Ended 6/30/03
		Restricted*			Crown Atlantic		Other			CCIC
Revenues
Site Rental		164,168			25,302		—			189,470
Services		30,658			4,073		—			34,731
Total Revenues		194,826			29,375		—			224,201
Operating Expenses
Site Rental		64,572			9,108		—			73,680
Services		24,907			2,346		—			27,253
Total Operating Expenses		89,479			11,454		—			100,933
General & Administrative
Site Rental		7,552			519		—			8,071
Services		13,980			984		1,103			16,067
Total General & Administrative		21,532			1,503		1,103			24,138
Operating Cash Flow
Site Rental		92,044			15,675		—			107,719
Services		(8,229	)		743		(1,103	)		(8,589	)
Total Pre-Overhead Cash Flow		83,815			16,418		(1,103	)		99,130
Corporate Overhead		918			—		—			918
Adjusted EBITDA		82,897			16,418		(1,103	)		98,212

 

		Quarter Ended 6/30/03
		Restricted*			Crown Atlantic			Other		CCIC
Gross Margins:
Site Rental		61	%		64	%		—		61	%
Services		19	%		42	%		—		22	%
Operating Cash Flow Margins
Site Rental		56	%		62	%		—		57	%
Services		-27	%		18	%		—		-25	%
Adjusted EBITDA Margin		43	%		56	%		N/A		44	%

 

		Quarter Ended 9/30/03
		Restricted*			Crown Atlantic		Other			CCIC
Revenues
Site Rental		172,880			25,507		—			198,387
Services		33,828			3,362		—			37,190
Total Revenues		206,708			28,869		—			235,577
Operating Expenses
Site Rental		68,146			8,900		—			77,046
Services		27,155			829		—			27,984
Total Operating Expenses		95,301			9,729		—			105,030
General & Administrative
Site Rental		7,390			457		—			7,847
Services		13,307			988		1,414			15,709
Total General & Administrative		20,697			1,445		1,414			23,556
Operating Cash Flow
Site Rental		97,344			16,150		—			113,494
Services		(6,634	)		1,545		(1,414	)		(6,503	)
Total Pre-Overhead Cash Flow		90,710			17,695		(1,414	)		106,991
Corporate Overhead		1,039			—		—			1,039
Adjusted EBITDA		89,671			17,695		(1,414	)		105,952

---

		Quarter Ended 9/30/03
		Restricted*			Crown Atlantic			Other			CCIC
Gross Margins:
Site Rental		61	%		65	%		—			61	%
Services		20	%		75	%		—			25	%
Operating Cash Flow Margins
Site Rental		56	%		63	%		—			57	%
Services		-20	%		46	%		—			-17	%
Adjusted EBITDA Margin		43	%		61	%		N/A			45	%
		Quarter Ended 12/31/03
		Restricted*			Crown Atlantic			Other			CCIC
Revenues
Site Rental		186,472			27,499			—			213,971
Services		36,730			3,145			—			39,875
Total Revenues		223,202			30,644			—			253,846
Operating Expenses
Site Rental		73,629			9,796			—			83,425
Services		27,961			2,128			—			30,089
Total Operating Expenses		101,590			11,924			—			113,514
General & Administrative
Site Rental		8,238			571			—			8,809
Services		13,312			1,198			1,683			16,193
Total General & Administrative		21,550			1,769			1,683			25,002
Operating Cash Flow
Site Rental		104,605			17,132			—			121,737
Services		(4,543	)		(181	)		(1,683	)		(6,407	)
Total Pre-Overhead Cash Flow		100,062			16,951			(1,683	)		115,330
Corporate Overhead		1,987			—			—			1,987
Adjusted EBITDA		98,075			16,951			(1,683	)		113,343
		Quarter Ended 12/31/03
		Restricted*			Crown Atlantic			Other			CCIC
Gross Margins:
Site Rental		61	%		64	%		—			61	%
Services		24	%		32	%		—			25	%
Operating Cash Flow Margins
Site Rental		56	%		62	%		—			57	%
Services		-12	%		-6	%		—			-16	%
Adjusted EBITDA Margin		44	%		55	%		N/A			45	%

---

*	Pro forma for the inclusion of CCUK

---

CCI FACT SHEET Q4 2003

$ in thousands

 

		Q4 ‘02			Q4 ‘03			% Change
CCUSA and Crown Atlantic
Site Rental Revenue		$	108,023		$	117,686		9	%
Ending Sites			10,794			10,642		-1	%
CCUK
Site Rental & Broadcast Transmission Revenue		$	65,248		$	88,425		36	%
Ending Sites			3,397			3,487		3	%
CCAUS
Site Rental Revenue		$	6,009		$	7,860		31	%
Ending Sites			1,387			1,388		0	%
TOTAL CCIC
Site Rental & Broadcast Transmission
Revenue		$	179,280		$	213,971		19	%
Ending Sites			15,578			15,517		0	%
Ending Cash and Investments		$	631,869		$	462,427
Debt
Bank Debt		$	1,094,855		$	1,484,750
Bonds		$	2,132,105		$	1,965,242
12 3/4% Preferred Stock		$	250,650		$	0
6 1/4% & 8 1/4% Convertible Preferred Stock		$	505,364		$	506,702
Total Debt		$	3,982,974		$	3,956,694
Leverage Ratios
Net Bank Debt / EBITDA*			1.2X			2.3X
Net Bank Debt + Bonds + Preferred / EBITDA*			7.6X			6.6X
Total Net Debt / EBITDA*			8.9X			7.7X
*Last Quarter Annualized Adjusted EBITDA		$	374,532		$	453,372