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): January 27, 2010
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 January 27, 2010, the Company issued a press release disclosing its financial results for the fourth quarter and year ended 2009. The January 27 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 January 27, 2010 |
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.
1
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: January 27, 2010
2
EXHIBIT INDEX
Exhibit No.
|
Description | |
99.1
|
Press Release dated January 27, 2010 |
3
Exhibit 99.1
| Contacts: | Jay Brown, CFO | |||
| Fiona McKone, VP — Finance | ||||
| Crown Castle International Corp. | ||||
FOR IMMEDIATE RELEASE
|
713-570-3050 |
CROWN CASTLE INTERNATIONAL REPORTS
FOURTH QUARTER AND FULL YEAR 2009 RESULTS
FOURTH QUARTER AND FULL YEAR 2009 RESULTS
January 27, 2010 — HOUSTON, TEXAS — Crown Castle International Corp. (NYSE:CCI) today
reported results for the quarter and year ended December 31, 2009.
“Our excellent fourth quarter and full year results are only a small part of what Crown Castle
accomplished during the last 12 months,” stated Ben Moreland, President and Chief Executive
Officer. “We began the year with four clear goals: first, to refinance maturing debt obligations
into a properly laddered structure without incurring equity dilution; second, to maximize leasing
opportunities through superior execution for customers; third, to reduce risk through deleveraging;
and fourth, to position Crown Castle to return to allocating investment capital in a way that
maximizes long-term recurring cash flow per share. Through the tireless efforts of our employees,
Crown Castle distinguished itself by achieving each of these goals and more in 2009. We are very
pleased with these results and look forward to 2010.”
CONSOLIDATED FINANCIAL RESULTS
Total revenue for the fourth quarter of 2009 increased 13% to $443.5 million from $392.0
million in the same period in 2008. Site rental revenue for the fourth quarter of 2009 increased
$47.6 million, or 13%, to $402.6 million from $355.0 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 $284.0 million in the fourth quarter of 2009 from $240.8
million in the same period in 2008. Adjusted EBITDA for the fourth quarter of 2009 increased $38.2
million, or 17%, to $263.6 million from $225.4 million in the same period in 2008.
Recurring cash flow, defined as Adjusted EBITDA less interest expense and sustaining capital
expenditures increased 6% to $132.2 million for the fourth quarter of 2009, compared to $125.1
million in the fourth quarter of 2008. Weighted average common shares outstanding was 287.4
million for the fourth quarter of 2009, compared to 285.7 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 $0.46 in the fourth quarter of 2009, compared to $0.44 in the fourth
quarter of 2008.
News Release continued:
Net income attributable to CCIC stockholders was $18.1 million for the fourth quarter of 2009,
inclusive of $21.0 million of gains on interest rate swaps, compared to a net loss attributable to
CCIC stockholders of $63.8 million for the same period in 2008. Net income attributable to CCIC
stockholders after deduction of dividends on preferred stock was $12.9 million in the fourth
quarter of 2009, compared to a net loss attributable to CCIC stockholders after deduction of
dividends on preferred stock of $69.0 million for the same period in 2008. Net income attributable
to CCIC common stockholders per common share was $0.04 for the fourth quarter of 2009, compared to
a net loss attributable to CCIC common stockholders per common share of $0.24 in the fourth quarter
2008.
Site rental revenues for full year 2009 increased 10% to $1.543 billion, up $140.6 million
from $1.403 billion for full year 2008. Site rental gross margin for full year 2009 increased 15%
to $1.087 billion, up $140.2 million from $946.4 million for full year 2008. Adjusted EBITDA for
full year 2009 increased $146.2 million, or 17%, to $1.013 billion, up from $867.1 million for full
year 2008.
Recurring cash flow increased $53.4 million, or 11%, from $485.9 million for full year 2008 to
$539.3 million for full year 2009. Recurring cash flow per share was $1.88 in full year 2009,
compared to $1.72 for full year 2008.
Net loss attributable to CCIC stockholders was $114.3 million for full year 2009, inclusive of
$93.0 million of losses on interest rate swaps and $91.1 million of losses on purchases and
redemption of debt, compared to a net loss attributable to CCIC stockholders of $48.9 million for
full year 2008. Net loss attributable to CCIC stockholders after deduction of dividends on
preferred stock was $135.1 million for full year 2009, compared to a net loss attributable to CCIC
stockholders after deduction of dividends on preferred stock of $69.7 million for full year 2008.
Net loss attributable to CCIC common stockholders per common share was $0.47 for full year 2009,
compared to a net loss attributable to CCIC common stockholders per common share of $0.25 for full
year 2008.
Page 2 of 14
News Release continued:
FINANCING AND INVESTING ACTIVITIES
“I am very pleased with our fourth quarter and full year results and the accomplishment of our
previously stated refinancing goals to extend our debt maturities, spread the debt maturities over
multiple years and maintain flexibility to invest our cash flow while achieving the lowest possible
interest cost,” stated Jay Brown, Chief Financial Officer of Crown Castle. “I believe that the
recently completed financing of $1.9 billion of notes by certain of our subsidiaries contributed to
the achievement of all of these goals, extending the maturities to five, seven and ten years and
achieving a weighted average interest rate of 5.75%. Since the fourth quarter of 2008, we have
raised $5.2 billion of debt and reduced our pro forma net debt to Adjusted EBITDA ratio from 6.6
times to 5.7 times. Further, we extended the weighted average years to expected maturity for debt
we refinanced from approximately eighteen months to nearly eight years. I believe the result of
our successful refinancing activities is that we have reduced our balance sheet risk and are
well-positioned to resume investing our cash flow in activities, such as share purchases, tower
acquisitions and land purchases, that we believe will enhance long-term growth in recurring cash
flow per share.”
During the fourth quarter of 2009, Crown Castle issued $500 million of 7.125% Senior Notes due
2019 and increased its revolving credit facility to $400 million while extending the maturity to
September 30, 2013.
On January 15 2010, Crown Castle issued, at par, $1.9 billion of Senior Secured Tower Revenue
Notes (“January 2010 Notes”) in three classes, C-2015, C-2017 and C-2020. The Class C-2015 notes
consist of $300 million of notes having an interest rate of 4.5% and an expected life of five years
with a final maturity date in January 2035. The Class C-2017 notes consist of $350 million of
notes having an interest rate of 5.5% and an expected life of seven years with a final maturity
date in January 2037. The Class C-2020 notes consist of $1.25 billion of notes having an interest
rate of 6.1% and an expected life of ten years with a final maturity date in January 2040. The
proceeds of these notes were used to repay in full the remaining $1.64 billion outstanding of the
Senior Secured Tower Revenue Notes, Series 2005-1 (“June 2005 Notes”), which is net of the $261.0
million of such notes that Crown Castle purchased in the open market during 2009.
During the fourth quarter of 2009, Crown Castle purchased $59.1 million of the June 2005 Notes
for $59.8 million. Since January 1, 2010, Crown Castle has purchased $461.3 million of its senior
and senior secured notes. These purchases were comprised of $223.6 million face value of the
Senior Secured Tower Revenue Notes, Series 2006-1 (“November 2006 Notes”) (purchased for $236.4
million), $199.6 million face value of the 7.75% Senior Secured Notes (purchased for $216.8
million), $33.1 million face value of the 9% Senior Notes (purchased for $35.9 million), and
$5 million face value of the 2009-1, Class A-2 Notes (purchased for $5.3 million). After giving
effect to these purchases, the following table presents the outstanding principal of the various
debt issuances from which such purchases were made:
Page 3 of 14
News Release continued:
| (in millions) | Face Value | Remaining Principal | ||||||
| Issue | Repurchased | Outstanding | ||||||
November 2006 Notes |
$ | 223.6 | $ | 1,326.4 | ||||
7.75% Senior Secured Notes |
$ | 199.6 | $ | 1,000.4 | ||||
9% Senior Notes |
$ | 33.1 | $ | 866.9 | ||||
2009-1, 9% Class A-2 Notes |
$ | 5.0 | $ | 70.0 | ||||
As of December 31, 2009, pro forma for the completion of the $1.9 billion January 2010 Notes
offering, and after taking into account the aforementioned debt purchases in January 2010, Crown
Castle has approximately $480 million in cash and cash equivalents (excluding restricted cash) and
$400 million of availability under its revolving credit facility.
During the fourth quarter of 2009, Crown Castle invested approximately $62.2 million in
capital expenditures. Capital expenditures were comprised of $12.6 million of sustaining capital
expenditures and $49.6 million of revenue generating capital expenditures, of which $19.4 million
was spent on land purchases, $27.0 million on existing sites and $3.2 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, Thursday January 28, 2010.
Page 4 of 14
News Release continued:
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 $1.9 billion January 2010 Notes and assumes
a US dollar to Australian dollar exchange rate of 0.88 US dollars to 1.00 Australian dollar for
first quarter 2010 and full year 2010 Outlook.
The Outlook for full year 2010 interest expense includes approximately $38 million related to
the amortization of certain non-cash charges for forward-starting interest rate swaps,
predominately interest rate swaps associated with the June 2005 Notes (“2005 Swaps”) that were
entered into to hedge interest rate risk on the refinancing of the 2005 Notes. As described above,
Crown Castle has issued $1.9 billion of 2010 Notes to refinance its 2005 Notes. The pricing of the
2010 Notes occurred on January 8, 2010. The 2005 Swaps had a fair value of $155.3 million upon
cessation of hedge accounting for such swaps, which occurred primarily on January 8, 2010. The
non-cash interest charge of $38 million, included in the 2010 Outlook, primarily represents the
2010 amortization portion of the fair value of the 2005 Swaps when hedge accounting ceased. The
2005 Swaps have not yet cash settled. The actual cash settlement amount for the 2005 Swaps will
not be determined until the settlement date of the 2005 Swaps, which have a contractual settlement
date of June 15, 2010. The non-cash interest charge related to the 2005 Swaps will not change
regardless of the actual settlement amount of the 2005 Swaps. Further, any differential between
the settlement value and the fair value on January 8, 2010 of the 2005 Swaps will be recorded to
other income (expense) and will not impact interest expense.
Page 5 of 14
News Release continued:
For the purposes of this Outlook, interest expense is based on debt outstanding as of January
27, 2010.
The following table sets forth Crown Castle’s current Outlook for the first quarter of 2010
and full year 2010:
| (in millions, except per share amounts) | First Quarter 2010 | Full Year 2010 | |||||||||
Site rental revenues |
$ | 403 to $408 | $ | 1,645 to $1,665 | |||||||
Site rental cost of operations |
$ | 113 to $118 | $ | 460 to $480 | |||||||
Site rental gross margin |
$ | 287 to $292 | $ | 1,175 to $1,195 | |||||||
Adjusted EBITDA |
$ | 267 to $272 | $ | 1,095 to $1,115 | |||||||
Interest expense and amortization
of deferred financing costs(a)(b) |
$ | 119 to $124 | $ | 476 to $486 | |||||||
Sustaining capital expenditures |
$ | 6 to $8 | $ | 27 to $32 | |||||||
Recurring cash flow |
$ | 137 to $142 | $ | 583 to $603 | |||||||
Net income (loss) after deduction
of dividends on preferred stock |
$(72) to $(42) | $(60) to $2 | |||||||||
Net income (loss) per share(c) |
$(0.25) to $(0.15) | $(0.21) to $0.01 | |||||||||
| (a) | Inclusive of $18 million and $70 million, respectively, of non-cash expense. |
||
| (b) | Approximately $9.5 million and $38 million, respectively, of the total non-cash expense
relates to the amortization of interest rate swaps, virtually all of which will not cash
settle until some future date. |
||
| (c) | Represents net income (loss) per common share, based on 288.6 million shares
outstanding as of December 31, 2009. |
Page 6 of 14
News Release continued:
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, January 28, 2010, at 11:00 a.m.
eastern time. The conference call may be accessed by dialing 480-629-9867 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 1.00 p.m. eastern time on
Thursday, January 28, 2010, through 11:59 p.m. eastern time on Friday, February 5, 2010, and may be
accessed by dialing 303-590-3030 using access code 4200189. 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 92 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 7 of 14
News Release continued:
The components of interest expense and amortization of deferred financing costs are as follows:
| For the Three Months Ended | ||||||||
| December 31, | December 31, | |||||||
| (in millions) | 2009 | 2008 | ||||||
Interest expense on debt obligations |
$ | 101.0 | $ | 82.1 | ||||
Amortization of deferred financing costs |
7.1 | 3.8 | ||||||
Amortization of discounts on long-term debt |
3.6 | — | ||||||
Amortization of interest rate swaps |
6.6 | 0.8 | ||||||
Amortization of purchase price adjustments on long-term debt |
— | 0.9 | ||||||
Other |
0.5 | 0.5 | ||||||
| $ | 118.8 | $ | 88.1 | |||||
The components of interest expense and amortization of deferred financing costs are forecasted as
follows:
| Q1 2010 | Full Year 2010 | |||||||
| (in millions) | Outlook | Outlook | ||||||
Interest expense on debt obligations |
$ | 103 to $106 | $ | 409 to $419 | ||||
Amortization of deferred financing costs |
$ | 3 to $5 | $ | 13 to $18 | ||||
Amortization of discounts on long-term debt |
$ | 3 to $4 | $ | 13 to $16 | ||||
Amortization of interest rate swaps |
$ | 9 to $10 | $ | 35 to $40 | ||||
Other |
$ | 0 to $1 | $ | 1 to $3 | ||||
| $ | 119 to $124 | $ | 476 to $486 | |||||
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 8 of 14
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 and
years ended December 31, 2009 and 2008 are computed as follows:
| For the Three Months Ended | For Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| (in millions, except per share amounts) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Net income (loss) |
$ | 18.7 | $ | (63.8 | ) | $ | (114.1 | ) | $ | (48.9 | ) | |||||
Adjustments to increase (decrease) net income (loss): |
||||||||||||||||
Asset write-down charges |
4.7 | 7.7 | 19.2 | 16.9 | ||||||||||||
Acquisition and integration costs |
— | — | — | 2.5 | ||||||||||||
Depreciation, amortization and accretion |
133.6 | 130.8 | 529.8 | 526.4 | ||||||||||||
Interest expense and amortization of deferred financing costs |
118.8 | 88.1 | 445.8 | 354.1 | ||||||||||||
Impairment of available-for-sale securities |
— | 32.2 | — | 56.0 | ||||||||||||
Gains (losses) on purchases and redemption of debt |
1.0 | — | 91.1 | — | ||||||||||||
Net gain (loss) on interest rate swaps |
(21.0 | ) | 40.3 | 93.0 | 37.9 | |||||||||||
Interest and other income (expense) |
0.3 | (0.5 | ) | (5.4 | ) | (2.1 | ) | |||||||||
Benefit (provision) for income taxes |
1.8 | (17.3 | ) | (76.4 | ) | (104.4 | ) | |||||||||
Stock-based compensation charges |
5.7 | 7.9 | 30.3 | 28.7 | ||||||||||||
Adjusted EBITDA |
$ | 263.6 | $ | 225.4 | $ | 1,013.3 | $ | 867.1 | ||||||||
Less: Interest expense and amortization of deferred
financing costs |
118.8 | 88.1 | 445.8 | 354.1 | ||||||||||||
Less: Sustaining capital expenditures |
12.6 | 12.2 | 28.2 | 27.1 | ||||||||||||
Recurring cash flow |
$ | 132.2 | $ | 125.1 | $ | 539.3 | $ | 485.9 | ||||||||
Weighted average common shares outstanding — Basic |
287.4 | 285.7 | 286.6 | 282.0 | ||||||||||||
Recurring cash flow per share |
$ | 0.46 | $ | 0.44 | $ | 1.88 | $ | 1.72 | ||||||||
Adjusted
EBITDA and recurring cash flow for the quarter ending March 31,
2010 and the year ending
December 31, 2010 are forecasted as follows:
| Q1 2010 | Full Year 2010 | |||||||
| (in millions) | Outlook | Outlook | ||||||
Net income (loss)(a) |
$ | (67) to $(37) | $ | (39) to $23 | ||||
Adjustments to increase (decrease) net income (loss): |
||||||||
Asset write-down charges |
$ | 2 to $5 | $ | 8 to $20 | ||||
Gains (losses) on purchases and redemptions of debt |
$ | 53 to $63 | $ | 53 to $63 | ||||
Depreciation, amortization and accretion |
$ | 130 to $135 | $ | 520 to $540 | ||||
Interest and other income (expense)(a) |
$ | (2) to $1 | $ | (8) to $4 | ||||
Interest expense and amortization of deferred financing costs(b) |
$ | 119 to $124 | $ | 476 to $486 | ||||
Benefit (provision) for income taxes |
$ | 0 to $(3) | $ | 15 to $(14) | ||||
Stock-based compensation charges |
$ | 7 to $9 | $ | 28 to $35 | ||||
Adjusted EBITDA |
$ | 267 to $272 | $ | 1,095 to $1,115 | ||||
Less: Interest expense and amortization of deferred financing costs(b) |
$ | 119 to $124 | $ | 476 to $486 | ||||
Less: Sustaining capital expenditures |
$ | 6 to $8 | $ | 27 to $32 | ||||
Recurring cash flow |
$ | 137 to $142 | $ | 583 to $603 | ||||
| (a) | Exclusive of gains (losses) on interest rate swaps. |
|
| (b) | Inclusive of approximately $18 million and $70 million, respectively, of non-cash expense. |
Page 9 of 14
News Release continued:
Other Calculations:
Sustaining capital expenditures for the quarters and years ended December 31, 2009 and December
31, 2008 is computed as follows:
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| (in millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Capital Expenditures |
$ | 62.2 | $ | 108.0 | $ | 173.5 | $ | 450.7 | ||||||||
Less: Revenue enhancing on existing sites |
27.0 | 33.2 | 101.3 | 90.1 | ||||||||||||
Less: Land purchases |
19.4 | 36.8 | 25.4 | 201.2 | ||||||||||||
Less: New site acquisition and construction |
3.2 | 25.8 | 18.6 | 132.3 | ||||||||||||
Sustaining capital expenditures |
$ | 12.6 | $ | 12.2 | $ | 28.2 | $ | 27.1 | ||||||||
Site rental gross margin for the quarter ending March 31, 2010 and for the year ending December
31, 2010 is forecasted as follows:
| Q1 2010 | Full Year 2010 | |||||||
| (in millions) | Outlook | Outlook | ||||||
Site rental revenue |
$ | 403 to $408 | $ | 1,645 to $1,665 | ||||
Less: Site rental cost of operations |
$ | 113 to $118 | $ | 460 to $480 | ||||
Site rental gross margin |
$287 to $292 | $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) 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, (ii) the impact of debt refinancing activities, including with respect to the
reduction of risk, (iii) currency exchange rates, (iv) site rental revenues, (v) site rental cost
of operations, (vi) site rental gross margin, (vii) Adjusted EBITDA, (viii) interest expense and
amortization of deferred financing costs, (ix) capital expenditures, including sustaining capital
expenditures, (x) recurring cash flow, including on a per share basis, (xi) net income (loss),
including on a per share basis, and (xii) the utility of certain financial measures in analyzing
our results. Such forward-looking statements are subject to certain risks, uncertainties and
assumptions, including but not limited to prevailing market conditions and the following:
| • | Our 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. |
||
| • | We have a substantial amount of indebtedness, which we will need to refinance or
repay. 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 interest rate swaps are currently in a substantial liability position and will
need to be cash settled within the next two 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. |
||
| • | 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. |
Page 10 of 14
News Release continued:
| • | 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 new or renewing customer leases. |
||
| • | 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. |
||
| • | Our network services business has historically experienced significant volatility
in demand, which reduces the predictability of our results. |
||
| • | 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. |
||
| • | If radio frequency emissions from wireless handsets or equipment on our towers are
demonstrated to cause negative health effects, potential future claims could adversely
affect our operations, costs and revenues. |
||
| • | Certain provisions of our certificate of incorporation, bylaws and operative
agreements and domestic and international competition laws may make it more difficult
for a third party to acquire control of us or for us to acquire control of a third
party, even if such a change in control would be beneficial to our stockholders. |
||
| • | We may 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 11 of 14
News Release continued:
|
CROWN CASTLE INTERNATIONAL CORP. | |
| CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) | ||
| (in thousands) | ||
| December 31, | December 31, | |||||||
| 2009 | 2008 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 766,146 | $ | 155,219 | ||||
Restricted cash |
213,514 | 147,852 | ||||||
Receivables, net of allowance |
44,431 | 37,621 | ||||||
Deferred income tax assets |
76,089 | 28,331 | ||||||
Prepaid expenses, deferred site rental receivables and other current assets |
95,853 | 116,145 | ||||||
Total current assets |
1,196,033 | 485,168 | ||||||
Restricted cash |
5,000 | 5,000 | ||||||
Property and equipment, net |
4,895,983 | 5,060,126 | ||||||
Goodwill |
1,984,804 | 1,983,950 | ||||||
Other intangible assets, net |
2,405,422 | 2,551,332 | ||||||
Deferred site rental receivables, deferred financing costs and other assets,
net of accumulated amortization and allowance |
469,364 | 276,146 | ||||||
| $ | 10,956,606 | $ | 10,361,722 | |||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable and other accrued liabilities |
$ | 197,139 | $ | 141,389 | ||||
Deferred revenues |
179,649 | 174,213 | ||||||
Interest rate swaps |
160,121 | 52,539 | ||||||
Short-term debt, current maturities of debt and other obligations |
217,196 | 466,217 | ||||||
Total current liabilities |
754,105 | 834,358 | ||||||
Debt and other long-term obligations |
6,361,954 | 5,635,972 | ||||||
Deferred income tax liability |
74,117 | 40,446 | ||||||
Interest rate swaps |
140,481 | 488,632 | ||||||
Other liabilities |
374,210 | 331,723 | ||||||
Total liabilities |
7,704,867 | 7,331,131 | ||||||
Redeemable preferred stock |
315,654 | 314,726 | ||||||
CCIC Stockholders’ equity |
2,936,241 | 2,715,865 | ||||||
Noncontrolling interest |
(156 | ) | — | |||||
Total equity |
2,936,085 | 2,715,865 | ||||||
| $ | 10,956,606 | $ | 10,361,722 | |||||
Page 12 of 14
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 | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Net revenues: |
||||||||||||||||
Site rental |
$ | 402,615 | $ | 355,019 | $ | 1,543,192 | $ | 1,402,559 | ||||||||
Network services and other |
40,929 | 37,003 | 142,215 | 123,945 | ||||||||||||
Total net revenues |
443,544 | 392,022 | 1,685,407 | 1,526,504 | ||||||||||||
Costs of operations (exclusive of depreciation, amortization and
accretion): |
||||||||||||||||
Site rental |
118,581 | 114,239 | 456,560 | 456,123 | ||||||||||||
Network services and other |
28,125 | 21,680 | 92,808 | 82,452 | ||||||||||||
Total costs of operations |
146,706 | 135,919 | 549,368 | 538,575 | ||||||||||||
General and administrative |
39,103 | 38,671 | 153,072 | 149,586 | ||||||||||||
Asset write-down charges |
4,778 | 7,689 | 19,237 | 16,888 | ||||||||||||
Acquisition and integration costs |
— | — | — | 2,504 | ||||||||||||
Depreciation, amortization and accretion |
133,503 | 130,799 | 529,739 | 526,442 | ||||||||||||
Operating income (loss) |
119,454 | 78,944 | 433,991 | 292,509 | ||||||||||||
Interest expense and amortization of deferred financing costs |
(118,876 | ) | (88,074 | ) | (445,882 | ) | (354,114 | ) | ||||||||
Impairment of available-for-sale securities |
— | (32,151 | ) | — | (55,869 | ) | ||||||||||
Gains (losses) on purchases and redemptions of debt |
(905 | ) | 42 | (91,079 | ) | 42 | ||||||||||
Net gain (loss) on interest rate swaps |
21,094 | (40,292 | ) | (92,966 | ) | (37,888 | ) | |||||||||
Interest and other income (expense) |
(159 | ) | 432 | 5,413 | 2,101 | |||||||||||
Income (loss) before income taxes |
20,608 | (81,099 | ) | (190,523 | ) | (153,219 | ) | |||||||||
Benefit (provision) for income taxes |
(1,876 | ) | 17,282 | 76,400 | 104,361 | |||||||||||
Net income (loss) |
18,732 | (63,817 | ) | (114,123 | ) | (48,858 | ) | |||||||||
Less: Net income (loss) attributable to the noncontrolling interest. |
584 | — | 209 | — | ||||||||||||
Net income (loss) attributable to CCIC stockholders |
18,148 | (63,817 | ) | (114,332 | ) | (48,858 | ) | |||||||||
Dividends on preferred stock |
(5,202 | ) | (5,202 | ) | (20,806 | ) | (20,806 | ) | ||||||||
Net income (loss) attributable to CCIC stockholders after deduction
of dividends on preferred stock |
$ | 12,946 | $ | (69,019 | ) | $ | (135,138 | ) | (69,664 | ) | ||||||
Net income (loss) attributable to CCIC common stockholders, after
deduction of dividends on preferred stock, per common share: |
||||||||||||||||
Basic |
$ | 0.04 | $ | (0.24 | ) | $ | (0.47 | ) | $ | (0.25 | ) | |||||
Diluted |
$ | 0.04 | $ | (0.24 | ) | $ | (0.47 | ) | $ | (0.25 | ) | |||||
Weighted average common shares outstanding (in thousands): |
||||||||||||||||
Basic |
287,421 | 285,686 | 286,622 | 282,007 | ||||||||||||
Diluted |
290,470 | 285,686 | 286,622 | 282,007 | ||||||||||||
Adjusted EBITDA |
$ | 263,465 | $ | 225,385 | $ | 1,013,272 | $ | 867,110 | ||||||||
Stock-based compensation expenses: |
||||||||||||||||
Site rental cost of operations |
$ | 267 | $ | 249 | 967 | 935 | ||||||||||
Network services and other cost of operations |
314 | 281 | 1,207 | 870 | ||||||||||||
General and administrative |
5,149 | 7,423 | 28,131 | 26,962 | ||||||||||||
Total |
$ | 5,730 | $ | 7,953 | $ | 30,305 | $ | 28,767 | ||||||||
Page 13 of 14
News
Release continued:
|
|
CROWN CASTLE INTERNATIONAL CORP. | |
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) | ||
| (in thousands) | ||
| Twelve Months Ended | ||||||||
| December 30, | ||||||||
| 2009 | 2008 | |||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ | (114,123 | ) | $ | (48,858 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating
activities: |
||||||||
Depreciation, amortization and accretion |
529,739 | 526,442 | ||||||
Gains (losses) on purchases and redemptions of long-term debt |
91,079 | (42 | ) | |||||
Amortization of deferred financing costs and other non-cash interest |
61,357 | 24,830 | ||||||
Stock-based compensation expense |
29,225 | 25,896 | ||||||
Asset write-down charges |
19,237 | 16,888 | ||||||
Deferred income tax (benefit) provision |
(73,848 | ) | (113,557 | ) | ||||
Impairment of available-for-sale securities |
— | 55,869 | ||||||
Income (expense) from forward-starting interest rate swaps |
90,302 | 34,111 | ||||||
Other adjustments, net |
821 | (1,745 | ) | |||||
Changes in assets and liabilities, excluding the effects of acquisitions: |
||||||||
Increase (decrease) in liabilities |
59,757 | 77,106 | ||||||
Decrease (increase) in assets |
(122,290 | ) | (83,939 | ) | ||||
Net cash provided by (used for) operating activities |
571,256 | 513,001 | ||||||
Cash flows from investing activities: |
||||||||
Proceeds from disposition of property and equipment |
3,988 | 1,855 | ||||||
Payments for acquisitions (net of cash acquired) of businesses |
(2,598 | ) | (27,736 | ) | ||||
Capital expenditures |
(173,535 | ) | (450,732 | ) | ||||
Net cash provided by (used for) investing activities |
(172,145 | ) | (476,613 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of long-term debt |
2,726,348 | — | ||||||
Proceeds from issuance of capital stock |
45,049 | 8,444 | ||||||
Principal payments on long-term debt |
(6,500 | ) | (6,500 | ) | ||||
Purchases and redemptions of long-term debt |
(2,191,719 | ) | (282 | ) | ||||
Purchases of capital stock |
(3,003 | ) | (44,685 | ) | ||||
Borrowings under revolving credit agreements |
50,000 | 94,400 | ||||||
Payments under revolving credit agreements |
(219,400 | ) | — | |||||
Payments for financing costs |
(67,760 | ) | (1,527 | ) | ||||
Payments for interest rate swaps settlements |
(36,670 | ) | — | |||||
Net decrease (increase) in restricted cash |
(62,071 | ) | 17,745 | |||||
Dividends on preferred stock |
(19,878 | ) | (19,878 | ) | ||||
Net cash provided by (used for) financing activities |
214,396 | 47,717 | ||||||
Effect of exchange rate changes on cash |
(2,580 | ) | (4,131 | ) | ||||
Net increase (decrease) in cash and cash equivalents |
610,927 | 79,974 | ||||||
Cash and cash equivalents at beginning of period |
155,219 | 75,245 | ||||||
Cash and cash equivalents at end of period |
$ | 766,146 | $ | 155,219 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Interest paid |
$ | 331,681 | $ | 330,491 | ||||
Income taxes paid |
5,597 | 6,582 | ||||||
Page 14 of 14
CCI FACT SHEET Q4 2008 to Q4 2009
dollars in millions
dollars in millions
| Q4 ’08 | Q4 ’09 | % Change | ||||||||||
CCUSA |
||||||||||||
Site Rental Revenues |
$ | 339.3 | $ | 381.1 | 12 | % | ||||||
Ending Sites |
22,489 | 22,365 | -1 | % | ||||||||
CCAL |
||||||||||||
Site Rental Revenues |
$ | 15.8 | $ | 21.5 | 36 | % | ||||||
Ending Sites |
1,590 | 1,592 | 0 | % | ||||||||
TOTAL CCIC |
||||||||||||
Site Rental Revenues |
$ | 355.1 | $ | 402.6 | 13 | % | ||||||
Ending Sites |
24,079 | 23,957 | -1 | % | ||||||||
Ending Cash and Cash Equivalents |
$ | 155.2 | * | $ | 766.1 | * | ||||||
Debt (1) |
||||||||||||
Bank Debt |
$ | 808.0 | $ | 632.1 | ||||||||
Securitized Debt & Other |
$ | 5,299.5 | $ | 6,058.5 | ||||||||
Total Debt |
$ | 6,107.5 | $ | 6,690.6 | ||||||||
Net Leverage Ratios |
||||||||||||
Net Bank Debt + Bonds / EBITDA |
6.6X | 5.6X | ||||||||||
Last Quarter Annualized
Adjusted EBITDA |
$ | 901.5 | $ | 1,053.9 | ||||||||
| * | 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 3/31/09 | Quarter Ended 6/30/09 | Quarter Ended 9/30/09 | Quarter Ended 12/31/09 | |||||||||||||||||||||||||||||||||||||||||||||
| CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | |||||||||||||||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||||||||||||||||||||||||||
Site Rental |
350.7 | $ | 17.0 | $ | 367.7 | $ | 358.5 | $ | 17.9 | $ | 376.4 | $ | 376.3 | $ | 20.2 | $ | 396.5 | $ | 381.1 | $ | 21.5 | $ | 402.6 | |||||||||||||||||||||||||
Services |
33.5 | 1.8 | 35.3 | 32.1 | 1.3 | 33.4 | 31.2 | 1.4 | 32.6 | 37.8 | 3.1 | 40.9 | ||||||||||||||||||||||||||||||||||||
Total Revenues |
384.2 | 18.8 | 403.0 | 390.6 | 19.2 | 409.8 | 407.5 | 21.6 | 429.1 | 418.9 | 24.6 | 443.5 | ||||||||||||||||||||||||||||||||||||
Operating Expenses |
||||||||||||||||||||||||||||||||||||||||||||||||
Site Rental |
105.0 | 4.7 | 109.7 | 108.0 | 5.4 | 113.4 | 108.6 | 6.3 | 114.9 | 111.9 | 6.7 | 118.6 | ||||||||||||||||||||||||||||||||||||
Services |
21.0 | 1.1 | 22.1 | 19.9 | 1.1 | 21.0 | 20.7 | 0.9 | 21.6 | 26.8 | 1.3 | 28.1 | ||||||||||||||||||||||||||||||||||||
Total Operating Expenses |
126.0 | 5.8 | 131.8 | 127.9 | 6.5 | 134.4 | 129.3 | 7.2 | 136.5 | 138.7 | 8.0 | 146.7 | ||||||||||||||||||||||||||||||||||||
General & Administrative |
33.4 | 3.3 | 36.7 | 34.1 | 4.0 | 38.1 | 36.4 | 2.9 | 39.3 | 37.2 | 1.7 | 38.9 | ||||||||||||||||||||||||||||||||||||
Add: Stock-Based Compensation |
7.0 | 0.9 | 7.9 | 8.1 | 1.4 | 9.5 | 6.8 | 0.4 | 7.2 | 7.4 | (1.7 | ) | 5.7 | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA |
$ | 231.8 | $ | 10.6 | $ | 242.4 | $ | 236.7 | $ | 10.1 | $ | 246.8 | $ | 248.6 | $ | 11.9 | $ | 260.5 | $ | 250.4 | $ | 13.2 | $ | 263.6 | ||||||||||||||||||||||||
| Quarter Ended 3/31/09 | Quarter Ended 6/30/09 | Quarter Ended 9/30/09 | Quarter Ended 12/31/09 | |||||||||||||||||||||||||||||||||||||||||||||
| CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | CCUSA | CCAL | CCIC | |||||||||||||||||||||||||||||||||||||
Gross Margins: |
||||||||||||||||||||||||||||||||||||||||||||||||
Site Rental |
70 | % | 72 | % | 70 | % | 70 | % | 70 | % | 70 | % | 71 | % | 69 | % | 71 | % | 71 | % | 69 | % | 71 | % | ||||||||||||||||||||||||
Services |
37 | % | 39 | % | 37 | % | 38 | % | 15 | % | 37 | % | 34 | % | 36 | % | 34 | % | 29 | % | 58 | % | 31 | % | ||||||||||||||||||||||||
Adjusted EBITDA Margin |
60 | % | 56 | % | 60 | % | 61 | % | 53 | % | 60 | % | 61 | % | 55 | % | 61 | % | 60 | % | 54 | % | 59 | % | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA) to GAAP Financial Measure:
(dollars in millions)
(dollars in millions)
| Quarter Ended | ||||||||||||||||
| 3/31/2009 | 6/30/2009 | 9/30/2009 | 12/31/2009 | |||||||||||||
Net income (loss) |
$ | 10.1 | $ | (111.8 | ) | $ | (31.1 | ) | $ | 18.7 | ||||||
Adjustments to increase (decrease) net income (loss): |
||||||||||||||||
Asset write-down charges |
4.1 | 7.3 | 3.1 | 4.7 | ||||||||||||
Acquisition and integration costs |
0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
Depreciation, amortization and accretion |
133.2 | 131.6 | 131.4 | 133.6 | ||||||||||||
Gains (losses) on purchases and redemptions of debt |
(13.4 | ) | 98.7 | 4.8 | 1.0 | |||||||||||
Interest and other income (expense) |
0.2 | (3.3 | ) | (2.6 | ) | 0.3 | ||||||||||
Net gain (loss) on interest rate swaps |
(3.8 | ) | 59.5 | 58.3 | (21.0 | ) | ||||||||||
Interest expense, amortization of deferred
financing costs |
105.6 | 110.2 | 111.2 | 118.8 | ||||||||||||
Impairment of available-for-sale securities |
0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
Benefit (provision) for income taxes |
(1.5 | ) | (54.9 | ) | (21.8 | ) | 1.8 | |||||||||
Stock-based compensation |
7.9 | 9.5 | 7.2 | 5.7 | ||||||||||||
Adjusted EBITDA |
$ | 242.4 | $ | 246.8 | $ | 260.5 | $ | 263.6 | ||||||||