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): November 3, 2009
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 No.) |
| 1220 Augusta Drive Suite 500 Houston, TX |
77057 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (713) 570-3000
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On November 3, 2009, the Company issued a press release disclosing its financial results for the third quarter of 2009. The November 3 press release is furnished herewith as Exhibit 99.1 to this Form 8-K.
ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
As described in Item 2.02 of this Report, the following exhibit is furnished as part of this Current Report on Form 8-K:
| Exhibit No. | Description | |
99.1
|
Press Release dated November 3, 2009 |
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: November 3, 2009
3
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Press Release dated November 3, 2009 |
4
Exhibit 99.1
| Contacts: | Jay Brown, CFO | |||
| Fiona McKone, VP — Finance | ||||
FOR IMMEDIATE RELEASE
|
Crown Castle International Corp. |
|||
| 713-570-3050 |
CROWN CASTLE INTERNATIONAL
REPORTS THIRD QUARTER 2009 RESULTS;
PROVIDES 2010 OUTLOOK
REPORTS THIRD QUARTER 2009 RESULTS;
PROVIDES 2010 OUTLOOK
November 3, 2009 — HOUSTON, TEXAS — Crown Castle International Corp. (NYSE:CCI) today
reported results for the quarter ended September 30, 2009.
“We had another excellent quarter of record results, exceeding the high-end 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 industry, driven by the increasing demand for wireless communication services,
including fourth generation wireless data services. Along with the third quarter results, we are
announcing our full year 2010 Outlook, which suggests recurring cash flow growth of approximately
16%.”
CONSOLIDATED FINANCIAL RESULTS
Total revenue for the third quarter of 2009 increased 12% to $429.1 million from $384.3
million in the same period in 2008. Site rental revenue for the third quarter of 2009 increased
$42.5 million, or 12%, to $396.5 million from $354.0 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 $43.3 million, or 18%, to $281.6 million in the third quarter of 2009 from $238.2 million
in the same period in 2008. Adjusted EBITDA for the third quarter of 2009 increased $42.8 million,
or 20%, to $260.5 million from $217.7 million in the same period in 2008.
News Release continued:
Recurring cash flow, defined as Adjusted EBITDA less interest expense and sustaining capital
expenditures, increased 16% from $123.5 million in the third
quarter of 2008 to $143.8 million for the third quarter of 2009. Weighted average common shares outstanding was 286.7
million for the third quarter of 2009, as compared to 283.6 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 $0.50 in the third quarter of 2009, up 15% compared to $0.44
in the third quarter of 2008.
Net loss attributable to CCIC stockholders was $31.6 million for the third quarter of 2009,
inclusive of $58.3 million of losses on interest rate swaps, compared to a net loss attributable to
CCIC stockholders of $32.2 million for the same period in 2008. Net loss attributable to CCIC
stockholders after deduction of dividends on preferred stock was $36.8 million in the third quarter
of 2009, compared to a net loss attributable to CCIC stockholders after deduction of dividends on
preferred stock of $37.4 million for the same period in 2008. Net loss attributable to CCIC common
stockholders per common share was $0.13 for each of the third quarter of 2009 and the third quarter
2008.
FINANCING AND INVESTING ACTIVITIES
“I am very pleased with our third quarter results, our ability to increase our Outlook for the
balance of 2009 and our continued successful financing activities,” stated Jay Brown, Chief
Financial Officer of Crown Castle. “Our recently completed $500 million of 7.125% senior notes,
together with the $2.35 billion we refinanced earlier this year, have allowed us to extend our debt
maturities over multiple years and eliminated any requirement to access the credit markets for
almost five years. Furthermore, based on the improved credit markets, we believe our current
refinancing options for the remaining portion of our debt have been greatly enhanced. As we look
forward to 2010, I anticipate we will be in a position to resume investing the majority of our cash
flow in activities, such as share purchases, tower acquisitions and land purchases that we believe
will increase long-term recurring cash flow per share.”
During the third quarter of 2009, Crown Castle issued $250 million of senior secured notes in
two classes, A-1 and A-2. The Class A-1 Notes consist of $175 million of 6.25% Notes that fully
amortize during the period beginning in January 2010 and ending on the final maturity date in
August 2019. The Class A-2 Notes consist of $75 million of 9.0% Notes that fully amortize during
the period beginning in September 2019 and ending on the final maturity date in August 2029. In
July 2009, the proceeds of these notes were used to repay, in full, $221.5 million of previously
outstanding Commercial Mortgage Pass-Through Certificates, Series 2004-2, issued in 2004 by Global Signal
Trust II and due in December 2009.
Page 2 of 12
News Release continued:
Also, during the third quarter of 2009, Crown Castle purchased, at par, $186.5 million of the
Senior Secured Tower Revenue Notes, Series 2005-1 due in June 2035 (“June 2035 Notes”). Since
October 1, 2009, Crown Castle has purchased, at par, $6.3 million of the June 2035 Notes. Pro
forma for these purchases, Crown Castle has $1,691.4 million of June 2035 Notes outstanding.
On October 20, 2009, Crown Castle issued $500 million of 7.125% senior notes due in 2019. The
proceeds of these notes will be used for general corporate purposes, which may include the
repayment or repurchase of certain outstanding indebtedness of its subsidiaries.
As of September 30, 2009, pro forma for the completion of the $500 million of 7.125% senior
notes offering, and after taking into account the aforementioned purchases in October by Crown
Castle of the June 2035 Notes, Crown Castle has approximately $750 million in cash and cash
equivalents (excluding restricted cash) and $188 million of availability under its $188 million
revolving credit facility.
During the third quarter of 2009, Crown Castle invested approximately $32.4 million in capital
expenditures. Capital expenditures were comprised of $5.5 million of sustaining capital
expenditures and $26.9 million of revenue generating capital expenditures, of which $1.0 million
was spent on land purchases, $21.2 million on existing sites and $4.7 million on the construction
and acquisition of new sites.
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, Wednesday November 4, 2009.
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”).
The following Outlook table is based on current expectations and assumptions. The Outlook
table includes the interest expense associated with the $500 million of 7.125% senior notes issued
in October 2009, and assumes a US dollar to Australian dollar exchange rate of 0.88 US dollars to
1.00 Australian dollar for fourth quarter 2009 and full year 2010 Outlook.
Page 3 of 12
News Release continued:
For the purposes of this Outlook, interest expense is based on interest charges on debt
outstanding as of November 3, 2009 and does not assume additional debt repayments beyond the
aforementioned purchases disclosed in this release.
As reflected in the following table, Crown Castle has increased the midpoint of its full year
2009 Outlook, previously issued on July 29, 2009, for site rental revenue by $14.5 million, site
rental gross margin by $17.5 million, Adjusted EBITDA by $20.5 million and recurring cash flow by
$20.5 million.
The following table sets forth Crown Castle’s current Outlook for the fourth quarter of 2009,
full year 2009 and full year 2010:
| (in millions, except per | ||||||
| share amounts) | Fourth Quarter 2009 | Full Year 2009 | Full Year 2010 | |||
Site rental revenue |
$397 to $402 | $1,537 to $1,542 | $1,645 to $1,665 | |||
Site rental cost of operations |
$115 to $120 | $453 to $458 | $460 to $480 | |||
Site rental gross margin |
$280 to $285 | $1,083 to $1,088 | $1,175 to $1,195 | |||
Adjusted EBITDA |
$259 to $264 | $1,008 to $1,013 | $1,095 to $1,115 | |||
Interest expense and amortization of
deferred financing costs(a) |
$117 to $121 | $444 to $448 | $448 to $458 | |||
Sustaining capital expenditures |
$10 to $12 | $26 to $28 | $27 to $32 | |||
Recurring cash flow |
$129 to $134 | $536 to $541 | $612 to $632 | |||
Net income (loss) after deduction of
dividends on preferred stock |
$(15) to $7 | $(165) to $(142) | $(16) to $68 | |||
Net income (loss) per share(b) |
$(0.05) to $0.02 | $(0.58) to $(0.49) | $(0.06) to $0.24 |
| (a) | Inclusive of approximately $18 million, $62 million, and $52 million, respectively, of
non-cash expense. |
|
| (b) | Represents net income (loss) per common share, based on 286.9 million shares outstanding as
of September 30, 2009. |
Page 4 of 12
News Release continued:
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Wednesday, November 4, 2009, at 10:30 a.m.
eastern time. The conference call may be accessed by dialing 480-629-9031 and asking for the Crown
Castle call at least 30 minutes prior to the start time. The conference call may also be accessed
live over the Internet by logging onto the web at http://investor.crowncastle.com. Any
supplemental materials for the call will be posted at the Crown Castle website at
http://investor.crowncastle.com.
A telephonic replay of the conference call will be available from 12:30 p.m. eastern time on
Wednesday, November 4, 2009, through 11:59 p.m. eastern time on Thursday, November 12, 2009, and
may be accessed by dialing 303-590-3030 using access code 4173226. An audio archive will also be
available on the company’s website at http://investor.crowncastle.com shortly after the call and
will be accessible for approximately 90 days.
Crown Castle owns, operates, and leases towers and other communication structures for wireless
communications. Crown Castle offers significant wireless communications coverage to 91 of the top
100 US markets and to substantially all of the Australian population. Crown Castle owns, operates
and manages over 22,000 and approximately 1,600 wireless communication sites in the US and
Australia, respectively. For more information on Crown Castle, please visit
http://www.crowncastle.com.
Page 5 of 12
News Release continued:
The components of interest expense and amortization of deferred financing costs are as follows:
| For the Three Months Ended | ||||||||
| September 30, | September 30, | |||||||
| (in millions) | 2009 | 2008 | ||||||
Interest expense on debt obligations |
$ | 94.2 | $ | 81.9 | ||||
Amortization of deferred financing costs |
6.8 | 3.8 | ||||||
Amortization of discounts on long-term debt |
3.5 | — | ||||||
Amortization of interest rate swaps |
6.1 | 0.8 | ||||||
Amortization of purchase price adjustments on long-term debt |
0.1 | 0.9 | ||||||
Other |
0.5 | 0.7 | ||||||
| $ | 111.2 | $ | 88.1 | |||||
The components of interest expense and amortization of deferred financing costs are forecasted as
follows:
| Q4 2009 | Full Year 2009 | Full Year 2010 | ||||
| (in millions) | Outlook | Outlook | Outlook | |||
Interest expense on debt obligations |
$100 to $102 | $382 to $387 | $392 to $412 | |||
Amortization of deferred financing costs |
$6 to $8 | $26 to $28 | $17 to $22 | |||
Amortization of discounts on long-term debt |
$3 to $4 | $11 to $13 | $14 to $16 | |||
Amortization of interest rate swaps |
$5 to $7 | $18 to $20 | $5 to $25 | |||
Amortization of purchase price adjustments on long-term debt |
— | $1 to $2 | — | |||
Other |
$0 to $1 | $1 to $3 | $1 to $3 | |||
| $117 to $121 | $444 to $448 | $448 to $458 | ||||
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, interest expense and amortization of deferred financing costs, gains (losses) on
purchases and redemptions of debt, net gain (loss) on interest rate swaps, impairment of
available-for-sale securities, interest and other income (expense), benefit (provision) for income
taxes, 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 operating results or cash flow from operations (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 other companies in the tower
sector. The tables set forth below reconcile these non-GAAP financial measures to comparable GAAP
financial measures.
Page 6 of 12
News Release continued:
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, 2009 and 2008 are computed as follows:
| For the Three Months Ended | ||||||||
| September 30, | September 30, | |||||||
| (in millions, except per share amounts) | 2009 | 2008 | ||||||
Net income (loss) |
$ | (31.1 | ) | $ | (32.2 | ) | ||
Adjustments to increase (decrease) net income (loss): |
||||||||
Asset write-down charges |
3.1 | 2.9 | ||||||
Depreciation, amortization and accretion |
131.4 | 131.7 | ||||||
Interest expense and amortization of deferred financing costs |
111.2 | 88.1 | ||||||
Impairment of available-for-sale securities |
— | 23.7 | ||||||
Gains (losses) on purchases and redemption of debt |
4.8 | — | ||||||
Net gain (loss) on interest rate swaps |
58.3 | (2.4 | ) | |||||
Interest and other income (expense) |
(2.6 | ) | 0.9 | |||||
Benefit (provision) for income taxes |
(21.8 | ) | (2.1 | ) | ||||
Stock-based compensation charges |
7.2 | 7.1 | ||||||
Adjusted EBITDA |
$ | 260.5 | $ | 217.7 | ||||
Less: Interest expense and amortization of deferred
financing costs |
111.2 | 88.1 | ||||||
Less: Sustaining capital expenditures |
5.5 | 6.1 | ||||||
Recurring cash flow |
$ | 143.8 | $ | 123.5 | ||||
Weighted average common shares outstanding — basic and
diluted |
286.7 | 283.6 | ||||||
Recurring cash flow per share |
$ | 0.50 | $ | 0.44 | ||||
Adjusted EBITDA and recurring cash flow for the quarter ending December 31, 2009 and the years
ending December 31, 2009 and December 31, 2010 are forecasted as follows:
| Q4 2009 | Full Year 2009 | Full Year 2010 | ||||
| (in millions) | Outlook | Outlook | Outlook | |||
Net income (loss) |
$(10) to $12 | $(144) to $(121) | $5 to $89 | |||
Adjustments to increase (decrease) net income (loss): |
||||||
Asset write-down charges |
$3 to $6 | $17 to $20 | $8 to $20 | |||
Gains (losses) on purchases and redemptions of debt |
$0 to $1 | $90 to $91 | $0 to $0 | |||
Depreciation, amortization and accretion |
$130 to $135 | $526 to $531 | $520 to $540 | |||
Interest and other income (expense) |
$(2) to $1 | $(8) to $(5) | $(8) to $4 | |||
Net gain (loss) on interest rate swaps (a) |
$(5) to $5 | $109 to $119 | $(20) to $20 | |||
Interest expense and amortization of deferred financing costs(b) |
$117 to $121 | $444 to $448 | $448 to $458 | |||
Benefit (provision) for income taxes |
$3 to $(9) | $(75) to $(86) | $50 to $13 | |||
Stock-based compensation charges |
$6 to $9 | $31 to $34 | $28 to $35 | |||
Adjusted EBITDA |
$259 to $264 | $1,008 to $1,013 | $1,095 to $1,115 | |||
Less: Interest expense and amortization of deferred financing costs(b) |
$117 to $121 | $444 to $448 | $448 to $458 | |||
Less: Sustaining capital expenditures |
$10 to $12 | $26 to $28 | $27 to $32 | |||
Recurring cash flow |
$129 to $134 | $536 to $541 | $612 to $632 | |||
| (a) | Based on the interest rates and yield curves in effect as of November 2, 2009. |
|
| (b) | Inclusive of approximately $18 million, $62, million and $52 million, respectively, of non-cash
expense. |
Page 7 of 12
Other Calculations:
Sustaining capital expenditures for the quarters ended September 30, 2009 and September 30,
2008 is computed as follows:
| For the Three Months Ended | ||||||||
| September 30, | September 30, | |||||||
| (in millions) | 2009 | 2008 | ||||||
Capital Expenditures |
$ | 32.4 | $ | 140.3 | ||||
Less: Revenue enhancing on existing sites |
21.2 | 21.7 | ||||||
Less: Land purchases |
1.0 | 63.8 | ||||||
Less: New site acquisition and construction |
4.7 | 48.7 | ||||||
Sustaining capital expenditures |
$ | 5.5 | $ | 6.1 | ||||
Site rental gross margin for the quarter ending December 31, 2009 and for the years ending
December 31, 2009 and December 31, 2010 is forecasted as follows:
| Q4 2009 | Full Year 2009 | Full Year 2010 | ||||
| (in millions) | Outlook | Outlook | Outlook | |||
Site rental revenue
|
$397 to $402 | $1,537 to $1,542 | $1,645 to $1,665 | |||
Less: Site rental cost of operations
|
$115 to $120 | $453 to $458 | $460 to $480 | |||
Site rental gross margin
|
$280 to $285 | $1,083 to $1,088 | $1,175 to $1,195 | |||
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 of our business and the fundamentals of
our industry, (ii) demand for wireless communication services, (iii) the use of proceeds of the
$500 million issuance of senior notes, (iv) the repayment, repurchase or refinancing of our debt,
including alternatives and timing with respect thereto, (v) our investments of cash from cash flows
and other sources, including the availability and type of investments and the impact and return on
our investments, (vi) cash, cash equivalents and revolving credit facility availability, (vii)
currency exchange rates, (viii) site rental revenues, (ix) site rental cost of operations, (x) site
rental gross margin, (xi) Adjusted EBITDA, (xii) interest expense and amortization of deferred
financing costs, (xiii) capital expenditures, including sustaining capital expenditures, (xiv)
recurring cash flow, including on a per share basis, (xv) net income (loss), including on a per
share basis, and (xvi) 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:
| • | We have a substantial amount of indebtedness, a significant portion of which we
anticipate refinancing or repaying within the next three years. In the event we do
not repay or refinance such indebtedness, we could face substantial liquidity issues
and might be required to issue equity securities or securities convertible into equity
securities, or sell some of our assets to meet our debt payment obligations. |
||
| • | Our substantial level of indebtedness could adversely affect our ability to react
to changes in our business, and the terms of our debt instruments limit our ability to
take a number of actions that our management might otherwise believe to be in our best
interests. In addition, if we fail to comply with our covenants, our debt could be
accelerated. |
||
| • | Our interest rate swaps are currently in a substantial liability position and will
need to be cash settled within the next three years, which could adversely affect our
financial condition. |
||
| • | Our business depends on the demand for wireless communications and towers, and we
may be adversely affected by any slowdown in such demand. |
Page 8 of 12
News Release continued:
| • | A substantial portion of our revenues is derived from a small number of customers,
and the loss, consolidation or financial instability of, or network sharing among, any
of our limited number of customers may materially decrease revenues. |
||
| • | Consolidation among our customers may result in duplicate or overlapping parts of
networks, which may result in a reduction of sites and have a negative effect on
revenues and cash flows. |
||
| • | Sales or issuances of a substantial number of shares of our common stock may
adversely affect the market price of our common stock. |
||
| • | A wireless communications industry slowdown may materially and adversely affect our
business (including reducing demand for our towers and network services) and the
business of our customers. |
||
| • | As a result of competition in our industry, including from some competitors with
significantly more resources or less debt than we have, we may find it more difficult
to achieve favorable rental rates on our towers. |
||
| • | New technologies may significantly reduce demand for our towers and negatively
impact our revenues. |
||
| • | New wireless technologies may not deploy or be adopted by customers as rapidly or
in the manner projected. |
||
| • | If we fail to retain rights to the land under our towers, our business may be
adversely affected. |
||
| • | If we are unable to raise capital in the future when needed, we may not be able to
fund future growth opportunities. |
||
| • | Our lease relating to our Spectrum has certain risk factors different from our core
tower business, including that the Spectrum lease may not be renewed or continued,
that the option to acquire the Spectrum may not be exercised, and that the Spectrum
may not be deployed, which may result in the revenues derived from the Spectrum being
less than those that may otherwise have been anticipated. |
||
| • | If we fail to comply with laws and regulations which regulate our business and
which may change at any time, we may be fined or even lose our right to conduct some
of our business. |
||
| • | Our network services business has historically experienced significant volatility
in demand, which reduces the predictability of our results. |
||
| • | If radio frequency emissions from wireless handsets or equipment on our towers are
demonstrated to cause negative health effects, potential future claims could adversely
affect our operations, costs and revenues. |
||
| • | Certain provisions of our certificate of incorporation, bylaws and operative
agreements and domestic and international competition laws may make it more difficult
for a third party to acquire control of us or for us to acquire control of a third
party, even if such a change in control would be beneficial to our stockholders. |
||
| • | We are exposed to counterparty risk through our interest rate swaps and a
counterparty default could adversely affect our financial condition. |
||
| • | We may be adversely affected by our exposure to changes in foreign currency
exchange rates relating to our operations in Australia. |
Should one or more of these or other risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those expected. More
information about potential risk factors which could affect our results is included in our filings
with the SEC.
Page 9 of 12
News Release continued:
|
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (in thousands) |
| September 30, | December 31, | |||||||
| 2009 | 2008 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 268,831 | $ | 155,219 | ||||
Restricted cash |
182,718 | 147,852 | ||||||
Receivables, net of allowance for doubtful accounts |
33,382 | 37,621 | ||||||
Deferred income tax assets |
99,153 | 28,331 | ||||||
Prepaid expenses, deferred site rental receivables and other current assets |
91,209 | 116,145 | ||||||
Total current assets |
675,293 | 485,168 | ||||||
Restricted cash |
5,000 | 5,000 | ||||||
Property and equipment, net |
4,926,598 | 5,060,126 | ||||||
Goodwill |
1,984,183 | 1,983,950 | ||||||
Other intangible assets, net |
2,443,134 | 2,551,332 | ||||||
Deferred site rental receivables, deferred financing costs and other assets,
net of accumulated amortization |
449,011 | 276,146 | ||||||
| $ | 10,483,219 | $ | 10,361,722 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable and other accrued liabilities |
$ | 148,972 | $ | 141,389 | ||||
Deferred revenues |
170,063 | 174,213 | ||||||
Interest rate swaps |
212,563 | 52,539 | ||||||
Short-term debt, current maturities of debt and other obligations |
113,106 | 466,217 | ||||||
Total current liabilities |
644,704 | 834,358 | ||||||
Debt and other long-term obligations |
6,022,444 | 5,635,972 | ||||||
Deferred income tax liability |
95,248 | 40,446 | ||||||
Interest rate swaps |
187,388 | 488,632 | ||||||
Other liabilities |
366,494 | 331,723 | ||||||
Total liabilities |
7,316,278 | 7,331,131 | ||||||
Redeemable preferred stock |
315,422 | 314,726 | ||||||
CCIC Stockholders’ equity |
2,852,238 | 2,715,865 | ||||||
Noncontrolling interest |
(719 | ) | — | |||||
Total equity |
2,851,519 | 2,715,865 | ||||||
| $ | 10,483,219 | $ | 10,361,722 | |||||
Page 10 of 12
News Release continued:
|
|
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, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Net revenues: |
||||||||||||||||
Site rental |
$ | 396,466 | $ | 353,984 | $ | 1,140,577 | $ | 1,047,540 | ||||||||
Network services and other |
32,613 | 30,364 | 101,286 | 86,942 | ||||||||||||
Total net revenues |
429,079 | 384,348 | 1,241,863 | 1,134,482 | ||||||||||||
Costs of operations (exclusive of depreciation, amortization and
accretion): |
||||||||||||||||
Site rental |
114,899 | 115,758 | 337,979 | 341,884 | ||||||||||||
Network services and other |
21,613 | 20,541 | 64,683 | 60,772 | ||||||||||||
Total costs of operations |
136,512 | 136,299 | 402,662 | 402,656 | ||||||||||||
General and administrative |
39,230 | 37,437 | 113,969 | 110,915 | ||||||||||||
Asset write-down charges |
3,073 | 2,902 | 14,459 | 9,199 | ||||||||||||
Acquisition and integration costs |
— | — | — | 2,504 | ||||||||||||
Depreciation, amortization and accretion |
131,463 | 131,714 | 396,236 | 395,643 | ||||||||||||
Operating income (loss) |
118,801 | 75,996 | 314,537 | 213,565 | ||||||||||||
Interest expense and amortization of deferred financing costs |
(111,169 | ) | (88,138 | ) | (327,006 | ) | (266,040 | ) | ||||||||
Impairment of available-for-sale securities |
— | (23,718 | ) | — | (23,718 | ) | ||||||||||
Gains (losses) on purchases and redemptions of debt |
(4,848 | ) | — | (90,174 | ) | — | ||||||||||
Net gain (loss) on interest rate swaps |
(58,327 | ) | 2,404 | (114,060 | ) | 2,404 | ||||||||||
Interest and other income (expense) |
2,569 | (847 | ) | 5,572 | 1,669 | |||||||||||
Income (loss) before income taxes |
(52,974 | ) | (34,303 | ) | (211,131 | ) | (72,120 | ) | ||||||||
Benefit (provision) for income taxes |
21,836 | 2,096 | 78,276 | 87,079 | ||||||||||||
Net income (loss) |
(31,138 | ) | (32,207 | ) | (132,855 | ) | 14,959 | |||||||||
Less: Net income (loss) attributable to the noncontrolling interest |
501 | — | (375 | ) | — | |||||||||||
Net income (loss) attributable to CCIC stockholders |
(31,639 | ) | (32,207 | ) | (132,480 | ) | 14,959 | |||||||||
Dividends on preferred stock |
(5,202 | ) | (5,201 | ) | (15,604 | ) | (15,604 | ) | ||||||||
Net income (loss) attributable to CCIC stockholders after deduction
of dividends on preferred stock |
$ | (36,841 | ) | $ | (37,408 | ) | (148,084 | ) | (645 | ) | ||||||
Net income (loss) attributable to CCIC common stockholders, after
deduction of dividends on preferred stock, per common share — basic
and diluted |
$ | (0.13 | ) | $ | (0.13 | ) | $ | (0.52 | ) | $ | — | |||||
Weighted average common shares outstanding — basic and diluted (in
thousands) |
286,707 | 283,573 | 286,356 | 280,780 | ||||||||||||
Adjusted EBITDA |
$ | 260,549 | $ | 217,712 | $ | 749,807 | $ | 641,725 | ||||||||
Stock-based compensation expenses: |
||||||||||||||||
Site rental cost of operations |
$ | 231 | $ | 178 | 700 | 686 | ||||||||||
Network services and other cost of operations |
298 | 217 | 893 | 588 | ||||||||||||
General and administrative |
6,683 | 6,705 | 22,982 | 19,540 | ||||||||||||
Total |
$ | 7,212 | $ | 7,100 | $ | 24,575 | $ | 20,814 | ||||||||
Page 11 of 12
News Release continued:
|
|
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (in thousands) |
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2009 | 2008 | |||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ | (132,855 | ) | $ | 14,959 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating
activities: |
||||||||
Depreciation, amortization and accretion |
396,236 | 395,643 | ||||||
Gains (losses) on purchases and redemptions of long-term debt |
90,174 | — | ||||||
Amortization of deferred financing costs and other non-cash interest |
43,549 | 18,846 | ||||||
Stock-based compensation expense |
21,810 | 18,386 | ||||||
Asset write-down charges |
14,459 | 9,199 | ||||||
Deferred income tax (benefit) provision |
(83,531 | ) | (87,063 | ) | ||||
Impairment of available-for-sale securities |
— | 23,718 | ||||||
Income (expense) from forward-starting interest rate swaps |
111,396 | 2,404 | ||||||
Other adjustments, net |
179 | (1,665 | ) | |||||
Changes in assets and liabilities, excluding the effects of acquisitions: |
||||||||
Increase (decrease) in liabilities |
3,205 | 17,619 | ||||||
Decrease (increase) in assets |
(70,949 | ) | (66,291 | ) | ||||
Net cash provided by (used for) operating activities |
393,673 | 345,755 | ||||||
Cash flows from investing activities: |
||||||||
Proceeds from disposition of property and equipment |
3,374 | 1,117 | ||||||
Payments for acquisitions (net of cash acquired) of businesses |
(2,581 | ) | (27,736 | ) | ||||
Capital expenditures |
(111,297 | ) | (342,737 | ) | ||||
Net cash provided by (used for) investing activities |
(110,504 | ) | (369,356 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of long-term debt |
2,228,848 | — | ||||||
Proceeds from issuance of capital stock |
16,742 | 7,775 | ||||||
Principal payments on long-term debt |
(4,875 | ) | (4,875 | ) | ||||
Purchases and redemptions of long-term debt |
(2,131,910 | ) | — | |||||
Purchases of capital stock |
(1,231 | ) | (44,383 | ) | ||||
Borrowings under revolving credit agreements |
50,000 | 85,000 | ||||||
Payments under revolving credit agreements |
(219,400 | ) | — | |||||
Payments for financing costs |
(59,000 | ) | (1,538 | ) | ||||
Net decrease (increase) in restricted cash |
(31,061 | ) | (4,378 | ) | ||||
Dividends on preferred stock |
(14,908 | ) | (14,908 | ) | ||||
Net cash provided by (used for) financing activities |
(166,795 | ) | 22,693 | |||||
Effect of exchange rate changes on cash |
(2,762 | ) | (1,233 | ) | ||||
Net increase (decrease) in cash and cash equivalents |
113,612 | (2,141 | ) | |||||
Cash and cash equivalents at beginning of period |
155,219 | 75,245 | ||||||
Cash and cash equivalents at end of period |
$ | 268,831 | $ | 73,104 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Interest paid |
$ | 257,567 | $ | 247,300 | ||||
Income taxes paid |
5,130 | 4,190 | ||||||
Page 12 of 12
CCI FACT SHEET Q3 2008 to Q3
2009
dollars in millions
dollars in millions
| Q3’08 | Q3’09 | %Change | ||||||||||
CCUSA |
||||||||||||
Site Rental Revenues |
$ | 332.7 | $ | 376.3 | 13 | % | ||||||
Ending Sites |
22,477 | 22,385 | 0 | % | ||||||||
CCAL |
||||||||||||
Site Rental Revenues |
$ | 21.3 | $ | 20.2 | -5 | % | ||||||
Ending Sites |
1,594 | 1,595 | 0 | % | ||||||||
TOTAL CCIC |
||||||||||||
Site Rental Revenues |
$ | 354.0 | $ | 396.5 | 12 | % | ||||||
Ending Sites |
24,071 | 23,980 | 0 | % | ||||||||
Ending Cash and Cash Equivalents |
$ | 73.1 | * | $ | 268.8 | * | ||||||
Debt (1)
|
||||||||||||
Bank Debt |
$ | 800.3 | $ | 633.8 | ||||||||
Securitized Debt & Other |
$ | 5,296.0 | $ | 5,614.3 | ||||||||
Total Debt |
$ | 6,096.3 | $ | 6,248.1 | ||||||||
Net Leverage Ratios |
||||||||||||
Net Bank Debt + Bonds / EBITDA |
6.9 | X | 5.7 | X | ||||||||
Last Quarter Annualized
Adjusted EBITDA |
$ | 870.8 | $ | 1,042.2 | ||||||||
| * | Excludes Restricted Cash
|
|
| (1) |
— Based on face values
|
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(dollars in millions)
Summary Fact Sheet
(dollars in millions)
| Quarter Ended 12/31/08 |
Quarter Ended 3/31/09 |
Quarter Ended 6/30/09 |
Quarter Ended 9/30/09 |
|||||||||||||||||||||||||||||||||||||||||||||
| CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | |||||||||||||||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||||||||||||||||||||||||||
Site Rental |
$ | 339.3 | $ | 15.8 | $ | 355.1 | $ | 350.7 | $ | 17.0 | $ | 367.7 | $ | 358.5 | $ | 17.9 | $ | 376.4 | $ | 376.3 | $ | 20.2 | $ | 396.5 | ||||||||||||||||||||||||
Services |
34.6 | 2.4 | 37.0 | 33.5 | 1.8 | 35.3 | 32.1 | 1.3 | 33.4 | 31.2 | 1.4 | 32.6 | ||||||||||||||||||||||||||||||||||||
Total Revenues |
373.9 | 18.2 | 392.1 | 384.2 | 18.8 | 403.0 | 390.6 | 19.2 | 409.8 | 407.5 | 21.6 | 429.1 | ||||||||||||||||||||||||||||||||||||
Operating Expenses |
||||||||||||||||||||||||||||||||||||||||||||||||
Site Rental |
109.2 | 5.0 | 114.2 | 105.0 | 4.7 | 109.7 | 108.0 | 5.4 | 113.4 | 108.6 | 6.3 | 114.9 | ||||||||||||||||||||||||||||||||||||
Services |
20.8 | 0.9 | 21.7 | 21.0 | 1.1 | 22.1 | 19.9 | 1.1 | 21.0 | 20.7 | 0.9 | 21.6 | ||||||||||||||||||||||||||||||||||||
Total Operating Expenses |
130.0 | 5.9 | 135.9 | 126.0 | 5.8 | 131.8 | 127.9 | 6.5 | 134.4 | 129.3 | 7.2 | 136.5 | ||||||||||||||||||||||||||||||||||||
General & Administrative |
35.4 | 3.3 | 38.7 | 33.4 | 3.3 | 36.7 | 34.1 | 4.0 | 38.1 | 36.4 | 2.9 | 39.3 | ||||||||||||||||||||||||||||||||||||
Add: Stock-Based Compensation |
7.5 | 0.4 | 7.9 | 7.0 | 0.9 | 7.9 | 8.1 | 1.4 | 9.5 | 6.8 | 0.4 | 7.2 | ||||||||||||||||||||||||||||||||||||
Adjusted EBITDA |
$ | 216.0 | $ | 9.4 | $ | 225.4 | $ | 231.8 | $ | 10.6 | $ | 242.4 | $ | 236.7 | $ | 10.1 | $ | 246.8 | $ | 248.6 | $ | 11.9 | $ | 260.5 | ||||||||||||||||||||||||
| Quarter Ended 12/31/08 |
Quarter Ended 3/31/09 |
Quarter Ended 6/30/09 |
Quarter Ended 9/30/09 |
|||||||||||||||||||||||||||||||||||||||||||||
| CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | |||||||||||||||||||||||||||||||||||||
Gross Margins: |
||||||||||||||||||||||||||||||||||||||||||||||||
Site Rental |
68 | % | 68 | % | 68 | % | 70 | % | 72 | % | 70 | % | 70 | % | 70 | % | 70 | % | 71 | % | 69 | % | 71 | % | ||||||||||||||||||||||||
Services |
40 | % | 63 | % | 41 | % | 37 | % | 39 | % | 37 | % | 38 | % | 15 | % | 37 | % | 34 | % | 36 | % | 34 | % | ||||||||||||||||||||||||
Adjusted EBITDA Margin |
58 | % | 52 | % | 57 | % | 60 | % | 56 | % | 60 | % | 61 | % | 53 | % | 60 | % | 61 | % | 55 | % | 61 | % | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to GAAP Financial Measure:
(dollars in millions)
(dollars in millions)
| Quarter Ended | ||||||||||||||||
| 12/31/2008 | 3/31/2009 | 6/30/2009 | 9/30/2009 | |||||||||||||
Net income (loss) |
$ | (63.8 | ) | $ | 10.1 | $ | (111.8 | ) | $ | (31.1 | ) | |||||
Adjustments to increase (decrease) net income (loss): |
||||||||||||||||
Asset write-down charges |
7.7 | 4.1 | 7.3 | 3.1 | ||||||||||||
Acquisition and integration costs |
0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
Depreciation, amortization and accretion |
130.8 | 133.2 | 131.6 | 131.4 | ||||||||||||
Gains (losses) on purchases and redemptions of debt |
0.0 | (13.4 | ) | 98.7 | 4.8 | |||||||||||
Interest and other income (expense) |
(0.5 | ) | 0.2 | (3.3 | ) | (2.6 | ) | |||||||||
Net gain (loss) on interest rate swaps |
40.3 | (3.8 | ) | 59.5 | 58.3 | |||||||||||
Interest expense, amortization of deferred
financing costs |
88.1 | 105.6 | 110.2 | 111.2 | ||||||||||||
Impairment of available-for-sale securities |
32.2 | 0.0 | 0.0 | 0.0 | ||||||||||||
Benefit (provision) for income taxes |
(17.3 | ) | (1.5 | ) | (54.9 | ) | (21.8 | ) | ||||||||
Stock-based compensation |
7.9 | 7.9 | 9.5 | 7.2 | ||||||||||||
Adjusted EBITDA |
$ | 225.4 | $ | 242.4 | $ | 246.8 | $ | 260.5 | ||||||||