UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 5, 2004
Crown Castle International Corp.
(Exact Name of Registrant as Specified in its Charter)
| 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
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.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
| (c) | Exhibits |
| Exhibit No. |
Description | |
| 99.1 | Press Release dated May 5, 2004 |
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 5, 2004, the Company issued a press release disclosing its financial results for the first quarter of 2004. The May 5 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
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.
| CROWN CASTLE INTERNATIONAL CORP. | ||
| By: | /s/ E. Blake Hawk | |
| Name: | E. Blake Hawk | |
| Title: | Executive Vice President and General Counsel | |
Date: May 5, 2004
3
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press Release dated May 5, 2004 |
4
EXHIBIT 99.1
Crown Castle International
News Release
| Contacts: |
W. Benjamin Moreland, CFO | |
| Jay Brown, VP Finance | ||
| Crown Castle International Corp. | ||
| 713-570-3000 |
CROWN CASTLE INTERNATIONAL
REPORTS FIRST QUARTER 2004 RESULTS
May 5, 2004 – HOUSTON, TEXAS – Crown Castle International Corp. (NYSE:CCI) today reported results for the first quarter ended March 31, 2004.
Site rental and broadcast transmission revenue for the first quarter of 2004 increased 18.6% percent to $219.4 million, up $34.4 million from $185.0 million for the same period in the prior year. Operating income improved to $26.7 million in the first quarter of 2004 from $11.8 million in the first quarter of 2003, an increase of $14.8 million.
Net loss was $65.0 million for the first quarter of 2004, inclusive of $24.4 million in losses from the retirement of debt securities, compared to a net loss of $69.0 million for the same period in 2003. Net loss after deduction of dividends on preferred stock was $74.7 million in the first quarter of 2004, inclusive of $24.4 million in losses from the retirement of debt securities, compared to a loss of $83.4 million for the same period last year, inclusive of $3.3 million in gains from the retirement of preferred securities. First quarter net loss per share was $(0.34) compared to a loss per share of $(0.38) in last year’s first quarter.
Net cash from operating activities for the first quarter of 2004 improved $21.0 million to $26.9 million from $5.9 million for the same period last year. Free cash flow, defined as net cash from operating activities less capital expenditures, for the first quarter of 2004 improved $54.4 million, to a source of cash of $7.5 million from a use of cash of $46.9 million in the first quarter of 2003.
OPERATING RESULTS
US site rental revenue for the first quarter of 2004 increased $12.8 million, or 11.9%, to $120.7 million, from $107.8 million for the same period in 2003, and UK site rental and broadcast transmission revenue for the first quarter of 2004 increased $19.3 million, or 27.1%, to $90.4
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million, from $71.1 million for the same period in 2003. These revenue results approximate same tower sales as over 99% of Crown Castle’s sites were in operation for the 12 months preceding March 31, 2004.
“During the first quarter, our core business continued to produce strong growth,” stated John P. Kelly, President and Chief Executive Officer of Crown Castle. “Thus far during 2004, we have experienced a 25% increase in US leasing compared to last year’s volume and we are encouraged by the leasing activity in the UK and Australia.
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 22.2% to $136.4 million, up $24.8 million in the first quarter of 2004 from the same period in 2003. During the past 12 months, Crown Castle’s operating 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.
For the first quarter of 2004, US capital expenditures were $6.3 million and UK capital expenditures were $12.7 million. During the first quarter of 2004, Crown Castle developed 26 sites in the UK under our agreement with British Telecom.
“During the last four quarters, we have added approximately $100 million of annualized recurring tower gross margin,” stated W. Benjamin Moreland, Chief Financial Officer of Crown Castle. “Most of this growth has occurred through the addition of revenue on our existing sites and managing our costs. We remain focused on producing meaningful growth in free cash flow per share through the combination of continued strong operational growth and balance sheet enhancements.”
During the first quarter of 2004, Crown Castle repaid $15.0 million of its Crown Atlantic credit facility, bringing the remaining balance to $180.0 million. Crown Castle had approximately $574.0 million of total liquidity, comprised of approximately $171.5 million of cash and cash equivalents and total availability under its OpCo and Crown Atlantic credit facilities of approximately $402.5 million.
Also, during the first quarter of 2004, Crown Castle purchased $245.1 million of the face value of its 9% Senior Notes and 9½% Senior Notes (“Senior Notes”), $135.6 million and $109.5 million, respectively, at a combined loss of $24.1 million. These purchases were related to the closing of previously announced tender offers for the Senior Notes in December 2003. Crown Castle also purchased $1.5 million of its 10?% Senior Discount Notes and $1.0 million of its 11¼% Senior Discount Notes (“Senior Discount Notes”) at a combined loss of $0.2 million.
Page 3 of 6
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.
The following table sets forth Crown Castle’s current outlook (dollars in millions):
| Second 2004 |
Full Year 2004 | |||||
| Site rental and broadcast transmission revenue |
$ | 218 to 222 | $ | 875 to 885 | ||
| Net cash provided by operating activities |
$ | 75 to 85 | $ | 240 to 250 | ||
| Capital expenditures |
$ | 22 to 27 | $ | 70 to 90 | ||
| Free Cash Flow |
$ | 48 to 58 | $ | 150 to 160 | ||
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.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, May 6, 2004, at 9:30 a.m. eastern time to discuss first quarter results and Crown Castle’s Outlook. Please dial 303-262-2190 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 11:30 a.m. eastern time on Thursday, May 6, 2004, through 11:59 p.m. eastern time on Thursday, May 13, 2004, and may be accessed by dialing 303-590-3000 using passcode 576555. An audio archive will also be available on the company’s website at www.crowncastle.com shortly after the call and will be accessible for approximately 90 days.
Crown Castle engineers, deploys, owns and operates technologically advanced shared wireless infrastructure, including extensive networks of towers 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
Page 4 of 6
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.
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 | |||||
| March 31, 2004 |
March 31, 2003 | |||||
| Net cash provided by operating activities |
$ | 26,917 | $ | 5,932 | ||
| Less: Capital expenditures |
(19,448) | (52,849) | ||||
| Free Cash Flow |
$ | 7,469 | $ | (46,917) | ||
| (In millions of dollars) | Q2 2004 |
Full Year 2004 | ||||
| Net cash provided by operating activities |
$ | 75 to 85 | $ |
240 to 250 | ||
| Less: Capital expenditures |
$ | (22) to (27) | $ | (70) to (90) | ||
| Free Cash Flow |
$ | 48 to 58 | $ | 150 to 160 | ||
Page 5 of 6
Adjusted EBITDA is computed as follows:
| Three Months Ended March 31, |
||||||||
| (in thousands of dollars) |
2004 |
2003 |
||||||
| Net loss |
$ | (64,967 | ) | $ | (69,016 | ) | ||
| Cumulative effect of change in accounting principle |
— | 2,035 | ||||||
| Minority interests |
1,346 | 557 | ||||||
| Provision for income taxes |
5,955 | 3,966 | ||||||
| Interest expense and amortization of deferred financing costs |
59,506 | 72,638 | ||||||
| Interest and other income (expense) |
24,829 | 1,642 | ||||||
| Depreciation, amortization and accretion |
84,822 | 80,357 | ||||||
| Non-cash general and administrative compensation charges |
2,696 | 2,431 | ||||||
| Asset write-down charges |
1,948 | — | ||||||
| Restructuring charges (credits) |
(33 | ) | — | |||||
| Adjusted EBITDA |
$ | 116,102 | $ | 94,610 | ||||
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) revenues, (iv) net cash provided by operating activities, (v) capital expenditures, and (vi) free cash flow, including free cash flow 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:
| Ø | 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. |
| Ø | 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. |
| Ø | Our business depends on the demand for wireless communications and towers, and we may be adversely affected by any slowdown in such demand. |
| Ø | The loss, consolidation, network sharing or financial instability of any of our limited number of customers may materially decrease revenues. |
| Ø | An economic or wireless telecommunications industry slowdown may materially and adversely affect our business and the business of our customers. |
| Ø | We operate in a competitive industry and some of our competitors have significantly more resources or less debt than we do. |
| Ø | Technology changes may significantly reduce the demand for site leases and negatively impact our revenues. |
| Ø | 2.5G/3G and other technologies, including digital terrestrial television, may not deploy or be adopted by customers as rapidly or in the manner projected. |
| Ø | We generally lease or sublease the land under our sites and towers and may not be able to maintain these leases. |
| Ø | Our international operations expose us to changes in foreign currency exchange rates. |
| Ø | We may need additional financing, which may not be available for strategic growth opportunities or contractual obligations. |
| Ø | Fluctuations in market interest rates may increase interest expense relating to our floating rate indebtedness. |
| Ø | Laws and regulations, which may change at any time and with which we may fail to comply, regulate our business. |
| Ø | Our network services business has historically experienced significant volatility in demand, which reduces the predictability of our results. |
| Ø | We are heavily dependent on our senior management. |
| Ø | We may suffer from future claims if radio frequency emissions from equipment on our sites and towers are demonstrated to cause negative health effects. |
Page 6 of 6
| Ø | 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. |
| Ø | Sales or issuances of a substantial number of shares of our common stock may adversely affect the market price of our common stock. |
| Ø | Disputes with customers and suppliers may adversely affect results. |
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 Securities and Exchange Commission.
Crown Castle International Corp.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND OTHER FINANCIAL DATA
(in thousands, except per share data)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Net revenues: |
||||||||
| Site rental and broadcast transmission |
$ | 219,377 | $ | 184,960 | ||||
| Network services and other |
29,110 | 31,764 | ||||||
| Total net revenues |
248,487 | 216,724 | ||||||
| Costs of operations: |
||||||||
| Site rental and broadcast transmission |
82,987 | 73,360 | ||||||
| Network services and other |
25,316 | 24,942 | ||||||
| Total costs of operations |
108,303 | 98,302 | ||||||
| General and administrative |
23,643 | 22,192 | ||||||
| Corporate development |
439 | 1,620 | ||||||
| Restructuring charges (credits) |
(33 | ) | — | |||||
| Asset write-down charges |
1,948 | — | ||||||
| Non-cash general and administrative compensation charges |
2,696 | 2,431 | ||||||
| Depreciation, amortization and accretion |
84,822 | 80,357 | ||||||
| Operating income |
26,669 | 11,822 | ||||||
| Interest and other income (expense) |
(24,829 | ) | (1,642 | ) | ||||
| Interest expense and amortization of deferred financing costs |
(59,506 | ) | (72,638 | ) | ||||
| Loss before income taxes, minority interests and cumulative effect of change in accounting principle |
(57,666 | ) | (62,458 | ) | ||||
| Provision for income taxes |
(5,955 | ) | (3,966 | ) | ||||
| Minority interests |
(1,346 | ) | (557 | ) | ||||
| Loss before cumulative effect of change in accounting principle |
(64,967 | ) | (66,981 | ) | ||||
| Cumulative effect of change in accounting principle for asset retirement obligations, net of related tax benefit of $636 |
— | (2,035 | ) | |||||
| Net loss |
(64,967 | ) | (69,016 | ) | ||||
| Dividends on preferred stock, net of gains on purchases of preferred stock |
(9,696 | ) | (14,371 | ) | ||||
| Net loss after deduction of dividends on preferred stock, net of gains on purchases of preferred stock |
$ | (74,663 | ) | $ | (83,387 | ) | ||
| Per common share – basic and diluted: |
||||||||
| Loss before cumulative effect of change in accounting principle |
$ | (0.34 | ) | $ | (0.37 | ) | ||
| Cumulative effect of change in accounting principle |
— | (0.01 | ) | |||||
| Net loss |
$ | (0.34 | ) | $ | (0.38 | ) | ||
| Common shares outstanding – basic and diluted |
219,294 | 216,958 | ||||||
| Adjusted EBITDA (before restructuring and asset write-down charges): |
||||||||
| Site rental and broadcast transmission |
$ | 128,347 | $ | 104,149 | ||||
| Network services and other (before corporate development expenses) |
(11,806 | ) | (7,919 | ) | ||||
| Adjusted EBITDA before corporate development expenses |
116,541 | 96,230 | ||||||
| Corporate development |
(439 | ) | (1,620 | ) | ||||
| Total Adjusted EBITDA |
$ | 116,102 | $ | 94,610 | ||||
Crown Castle International Corp.
Condensed Consolidated Balance Sheet
(in thousands)
| March 31, 2004 |
December 31, 2003 | |||||
| ASSETS | ||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 171,485 | $ | 462,427 | ||
| Receivables, net of allowance for doubtful accounts |
84,987 | 82,053 | ||||
| Inventories |
17,435 | 15,542 | ||||
| Prepaid expenses and other current assets |
81,195 | 81,738 | ||||
| Total current assets |
355,102 | 641,760 | ||||
| Property and equipment, net of accumulated depreciation |
4,700,727 | 4,741,945 | ||||
| Goodwill |
1,235,433 | 1,206,713 | ||||
| Deferred financing costs and other assets, net of accumulated amortization |
155,618 | 147,173 | ||||
| $ | 6,446,880 | $ | 6,737,591 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 37,235 | $ | 40,749 | ||
| Accrued interest |
31,230 | 49,063 | ||||
| Accrued compensation and related benefits |
7,857 | 19,117 | ||||
| Deferred rental revenues and other accrued liabilities |
274,089 | 267,459 | ||||
| Long-term debt, current maturities |
46,461 | 267,142 | ||||
| Total current liabilities |
396,872 | 643,530 | ||||
| Long-term debt, less current maturities |
3,138,866 | 3,182,850 | ||||
| Other liabilities |
222,162 | 211,763 | ||||
| Total liabilities |
3,757,900 | 4,038,143 | ||||
| Minority interests |
210,317 | 208,333 | ||||
| Redeemable preferred stock |
507,037 | 506,702 | ||||
| Stockholders’ equity |
1,971,626 | 1,984,413 | ||||
| $ | 6,446,880 | $ | 6,737,591 | |||
Crown Castle International Corp.
Condensed Consolidated Statement of Cash flows
(in thousands)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (64,967 | ) | $ | (69,016 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
| Depreciation, amortization and accretion |
84,822 | 80,357 | ||||||
| Losses on purchases of long-term debt |
24,367 | — | ||||||
| Amortization of deferred financing costs and discounts on long-term debt |
2,960 | 17,488 | ||||||
| Non-cash general and administrative compensation charges |
2,696 | 2,431 | ||||||
| Asset write-down charges |
1,948 | — | ||||||
| Minority interests |
1,346 | 557 | ||||||
| Equity in losses (earnings) and write-downs of unconsolidated affiliates |
1,173 | 2,453 | ||||||
| Cumulative effect of change in accounting principle |
— | 2,035 | ||||||
| Changes in assets and liabilities: |
||||||||
| Decrease in accrued interest |
(17,833 | ) | (28,307 | ) | ||||
| Decrease in accounts payable |
(4,306 | ) | (12,248 | ) | ||||
| Increase (decrease) in deferred rental revenues and other liabilities |
(2,068 | ) | 8,051 | |||||
| (Increase) decrease in receivables |
(1,697 | ) | 2,595 | |||||
| Increase in inventories, prepaid expenses and other assets |
(1,524 | ) | (464 | ) | ||||
| Net cash provided by operating activities |
26,917 | 5,932 | ||||||
| Cash flows from investing activities: |
||||||||
| Proceeds from disposition of property and equipment |
755 | 7,472 | ||||||
| Capital expenditures |
(19,448 | ) | (52,849 | ) | ||||
| Investments in affiliates and other |
(14,028 | ) | (250 | ) | ||||
| Maturities of investments |
— | 93,496 | ||||||
| Purchases of investments |
— | (56,063 | ) | |||||
| Net cash used for investing activities |
(32,721 | ) | (8,194 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from issuance of capital stock |
3,562 | 1,055 | ||||||
| Purchases of long-term debt |
(267,359 | ) | — | |||||
| Net borrowings (payments) under revolving credit agreements |
(15,000 | ) | (22,895 | ) | ||||
| Purchases of capital stock |
(4,108 | ) | (13,558 | ) | ||||
| Principal payments on long-term debt |
(2,750 | ) | — | |||||
| Incurrence of financing costs |
(412 | ) | — | |||||
| Net cash used for financing activities |
(286,067 | ) | (35,398 | ) | ||||
| Effect of exchange rate changes on cash |
929 | (1,562 | ) | |||||
| Net decrease in cash and cash equivalents |
(290,942 | ) | (39,222 | ) | ||||
| Cash and cash equivalents at beginning of period |
462,427 | 516,172 | ||||||
| Cash and cash equivalents at end of period |
$ | 171,485 | $ | 476,950 | ||||
| Supplemental disclosure of cash flow information: |
||||||||
| Interest paid |
$ | 71,904 | $ | 81,415 | ||||
| Income taxes paid |
153 | 117 | ||||||
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(in $ thousands)
| 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 | % | ||||
| Quarter Ended 3/31/04 |
|||||||||||
| US |
UK |
AUS |
CCIC |
||||||||
| Revenues |
|||||||||||
| Site Rental |
120,695 | 90,408 | 8,274 | 219,377 | |||||||
| Services |
13,499 | 14,407 | 1,204 | 29,110 | |||||||
| Total Revenues |
134,194 | 104,815 | 9,478 | 248,487 | |||||||
| Operating Expenses |
|||||||||||
| Site Rental |
37,233 | 42,052 | 3,702 | 82,987 | |||||||
| Services |
10,268 | 14,320 | 728 | 25,316 | |||||||
| Total Operating Expenses |
47,501 | 56,372 | 4,430 | 108,303 | |||||||
| General & Administrative |
|||||||||||
| Site Rental |
4,242 | 1,421 | 2,380 | 8,043 | |||||||
| Services |
14,988 | 612 | — | 15,600 | |||||||
| Total General & Administrative |
19,230 | 2,033 | 2,380 | 23,643 | |||||||
| Operating Cash Flow |
|||||||||||
| Site Rental |
79,220 | 46,935 | 2,192 | 128,347 | |||||||
| Services |
(11,757 | ) | (525 | ) | 476 | (11,806 | ) | ||||
| Total Pre-Overhead Cash Flow |
67,463 | 46,410 | 2,668 | 116,541 | |||||||
| Corporate Overhead |
439 | — | — | 439 | |||||||
| Adjusted EBITDA |
67,024 | 46,410 | 2,668 | 116,102 | |||||||
| Quarter Ended 3/31/04 |
||||||||||||
| US |
UK |
AUS |
CCIC |
|||||||||
| Gross Margins: |
||||||||||||
| Site Rental |
69 | % | 53 | % | 55 | % | 62 | % | ||||
| Services |
24 | % | 1 | % | 40 | % | 13 | % | ||||
| Operating Cash Flow Margins |
||||||||||||
| Site Rental |
66 | % | 52 | % | 26 | % | 59 | % | ||||
| Services |
-87 | % | -4 | % | 40 | % | -41 | % | ||||
| Adjusted EBITDA Margin |
50 | % | 44 | % | 28 | % | 47 | % | ||||
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to GAAP
Financial Measure:
(in $ thousands)
| Quarter Ended |
||||||||||||||||
| 06/30/2003 |
09/30/2003 |
12/31/2003 |
03/31/2004 |
|||||||||||||
| Net loss |
$ | (80,831 | ) | $ | (99,678 | ) | $ | (148,840 | ) | $ | (64,967 | ) | ||||
| Cumulative effect of change in accounting principle for asset retirement obligations, net of related income tax benefits |
— | — | — | — | ||||||||||||
| Minority interests |
730 | (151 | ) | 1,258 | 1,346 | |||||||||||
| Provision for income taxes |
3,418 | 4,236 | (4,102 | ) | 5,955 | |||||||||||
| Interest expense, amortization of deferred financing costs and dividends on preferred stock |
72,576 | 70,788 | 73,645 | 59,506 | ||||||||||||
| Interest and other income (expense) |
10,382 | 34,845 | 101,605 | 24,829 | ||||||||||||
| Depreciation, amortization and accretion |
80,513 | 80,389 | 82,893 | 84,822 | ||||||||||||
| Non-cash general and administrative compensation charges |
7,695 | 10,444 | 84 | 2,696 | ||||||||||||
| Asset write-down charges |
1,380 | 6,137 | 6,800 | 1,948 | ||||||||||||
| Restructuring charges (credits) |
2,349 | (1,058 | ) | 0 | (33 | ) | ||||||||||
| Adjusted EBITDA |
$ | 98,212 | $ | 105,952 | $ | 113,343 | $ | 116,102 | ||||||||
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
Restricted and Unrestricted Subsidiaries
(in $ thousands)
| 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 | % | |||||
| Quarter Ended 3/31/04 |
||||||||||||
| Restricted* |
Crown Atlantic |
Other |
CCIC |
|||||||||
| Revenues |
||||||||||||
| Site Rental |
191,304 | 28,073 | — | 219,377 | ||||||||
| Services |
27,585 | 1,525 | — | 29,110 | ||||||||
| Total Revenues |
218,889 | 29,598 | — | 248,487 | ||||||||
| Operating Expenses |
||||||||||||
| Site Rental |
73,479 | 9,508 | — | 82,987 | ||||||||
| Services |
23,693 | 1,623 | — | 25,316 | ||||||||
| Total Operating Expenses |
97,172 | 11,131 | — | 108,303 | ||||||||
| General & Administrative |
||||||||||||
| Site Rental |
7,584 | 459 | 8,043 | |||||||||
| Services |
12,937 | 989 | 1,674 | 15,600 | ||||||||
| Total General & Administrative |
20,521 | 1,448 | 1,674 | 23,643 | ||||||||
| Operating Cash Flow |
||||||||||||
| Site Rental |
110,241 | 18,106 | — | 128,347 | ||||||||
| Services |
(9,045 | ) | (1,087 | ) | (1,674 | ) | (11,806 | ) | ||||
| Total Pre-Overhead Cash Flow |
101,196 | 17,019 | (1,674 | ) | 116,541 | |||||||
| Corporate Overhead |
439 | — | — | 439 | ||||||||
| Adjusted EBITDA |
100,757 | 17,019 | (1,674 | ) | 116,102 | |||||||
| Quarter Ended 3/31/04 |
||||||||||||
| Restricted* |
Crown Atlantic |
Other |
CCIC |
|||||||||
| Gross Margins: |
||||||||||||
| Site Rental |
62 | % | 66 | % | — | 62 | % | |||||
| Services |
14 | % | -6 | % | — | 13 | % | |||||
| Operating Cash Flow Margins |
||||||||||||
| Site Rental |
58 | % | 64 | % | — | 59 | % | |||||
| Services |
-33 | % | -71 | % | — | -41 | % | |||||
| Adjusted EBITDA Margin |
46 | % | 58 | % | N/A | 47 | % | |||||
* Pro forma for the inclusion of CCUK
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to GAAP
Financial Measure:
(in $ thousands)
| Quarter Ended |
||||||||||||||||
| 06/30/2003 |
09/30/2003 |
12/31/2003 |
03/31/2004 |
|||||||||||||
| Net loss |
$ | (80,831 | ) | $ | (99,678 | ) | $ | (148,840 | ) | $ | (64,967 | ) | ||||
| Cumulative effect of change in accounting principle for asset retirement obligations, net of related income tax benefits |
— | — | — | — | ||||||||||||
| Minority interests |
730 | (151 | ) | 1,258 | 1,346 | |||||||||||
| Provision for income taxes |
3,418 | 4,236 | (4,102 | ) | 5,955 | |||||||||||
| Interest expense, amortization of deferred financing costs and dividends on preferred stock |
72,576 | 70,788 | 73,645 | 59,506 | ||||||||||||
| Interest and other income (expense) |
10,382 | 34,845 | 101,605 | 24,829 | ||||||||||||
| Depreciation, amortization and accretion |
80,513 | 80,389 | 82,893 | 84,822 | ||||||||||||
| Non-cash general and administrative compensation charges |
7,695 | 10,444 | 84 | 2,696 | ||||||||||||
| Asset write-down charges |
1,380 | 6,137 | 6,800 | 1,948 | ||||||||||||
| Restructuring charges (credits) |
2,349 | (1,058 | ) | 0 | (33 | ) | ||||||||||
| Adjusted EBITDA |
$ | 98,212 | $ | 105,952 | $ | 113,343 | $ | 116,102 | ||||||||
CCI FACT SHEET Q1 2004
$ in thousands
| Q1 ‘03 |
Q1 ‘04 |
% Change |
|||||||
| CCUSA and Crown Atlantic |
|||||||||
| Site Rental Revenue |
$ | 107,849 | $ | 120,695 | 12 | % | |||
| Ending Sites |
10,797 | 10,602 | -2 | % | |||||
| CCUK |
|||||||||
| Site Rental & Broadcast Transmission Revenue |
$ | 71,125 | $ | 90,408 | 27 | % | |||
| Ending Sites |
3,428 | 3,513 | 2 | % | |||||
| CCAUS |
|||||||||
| Site Rental Revenue |
$ | 5,986 | $ | 8,274 | 38 | % | |||
| Ending Sites |
1,387 | 1,388 | 0 | % | |||||
| TOTAL CCIC |
|||||||||
| Site Rental & Broadcast Transmission Revenue |
$ | 184,960 | $ | 219,377 | 19 | % | |||
| Ending Sites |
15,612 | 15,503 | -1 | % | |||||
| Ending Cash and Investments |
$ | 555,214 | $ | 171,485 | |||||
| Debt |
|||||||||
| Bank Debt |
$ | 1,069,215 | $ | 1,467,000 | |||||
| Bonds |
$ | 2,143,062 | $ | 1,718,327 | |||||
| 12 3/4% Preferred Stock |
$ | 245,839 | $ | 0 | |||||
| 6 1/4% & 8 1/4% Convertible Preferred Stock |
$ | 505,698 | $ | 507,037 | |||||
| Total Debt |
$ | 3,963,814 | $ | 3,692,364 | |||||
| Leverage Ratios |
|||||||||
| Net Bank Debt / EBITDA* |
1.4X | 2.8X | |||||||
| Net Bank Debt + Bonds + Preferred / EBITDA* |
7.7X | 6.5X | |||||||
| Total Net Debt / EBITDA* |
9.0X | 7.6X | |||||||
| *Last Quarter Annualized Adjusted EBITDA |
$ | 378,440 | $ | 464,408 | |||||