Crown Castle International Reports Second Quarter 2008 Results; Raises 2008 Outlook
HOUSTON, July 24, 2008 (PRIME NEWSWIRE) -- Crown Castle International Corp. (NYSE:CCI) today reported results for the quarter ended June 30, 2008.
"We had another excellent quarter, growing recurring cash flow per share by 34% over last year, significantly exceeding our internal target," stated Ben Moreland, President and Chief Executive Officer of Crown Castle. "This result of achieving approximately four times the rate of site rental revenue growth in recurring cash flow per share illustrates the efficiency of Crown Castle's capital structure. In addition, in the first half of 2008, we experienced an 11% increase in leasing activity and associated revenue in the U.S. compared to same period last year. We remain excited by the long-term growth prospects for site rental revenue from the continued deployment of wireless voice and data services and the migration from wireline to wireless telecommunications."
CONSOLIDATED FINANCIAL RESULTS
Site rental revenue for the second quarter of 2008 increased $26.2 million, or 8%, to $348.5 million from $322.3 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 $24.6 million, or 12%, to $234.8 million in the second quarter of 2008 from the same period in 2007. Adjusted EBITDA for the second quarter of 2008 increased $26.6 million, or 14%, to $213 million, from the same period in 2007.
Recurring cash flow, defined as Adjusted EBITDA less interest expense and sustaining capital expenditures, increased by 31% from $90.9 million in the second quarter of 2007 to $119.2 million for the second quarter of 2008. Basic weighted average common shares outstanding was 279.4 million for the second quarter of 2008, as compared to 282 million for the same period in the prior year. Recurring cash flow per share, defined as recurring cash flow divided by basic weighted average common shares outstanding, was $0.43 in the second quarter of 2008, up 34% compared to $0.32 in the second quarter of 2007.
Net income was $60.3 million for the second quarter of 2008, inclusive of the recognition of $74.9 million of tax benefits related to previously unrecognized U.S. net operating losses, compared to a net loss of $32.7 million for the same period in 2007. Net income after deduction of dividends on preferred stock was $55.1 million in the second quarter of 2008, inclusive of the recognition of tax benefits mentioned above, compared to a loss of $37.9 million for the same period last year. Diluted second quarter 2008 net income per common share was $0.19, compared to a diluted net loss per common share of $(0.13) in last year's second quarter.
SEGMENT RESULTS
U.S. site rental revenue for the second quarter of 2008 increased $25.3 million, or 8%, to $329 million, compared to second quarter 2007 U.S. site rental revenue of $303.7 million. U.S. site rental gross margin increased $24.8 million, or 13%, to $221.5 million from the same period in 2007.
Australia site rental revenue for the second quarter of 2008 increased $0.9 million, or 5%, to $19.6 million, compared to $18.7 million in the second quarter of 2007. Australia site rental gross margin for the second quarter of 2008 was $13.3 million, compared to $13.5 million in the second quarter of 2007. Australia site rental revenue and gross margin quarter over quarter comparisons to last year were adversely impacted by the timing of an annual customer payment, which was historically achieved in the second quarter but was achieved in the first quarter of 2008 in the amount of $2.7 million.
INVESTMENTS AND LIQUIDITY
During the second quarter of 2008, Crown Castle invested approximately $140.7 million in capital expenditures. Capital expenditures was comprised of $5 million of sustaining capital expenditures and $135.7 million of revenue generating capital expenditures, of which $73.5 million was spent on land purchases, $18.4 million on existing sites and $43.8 million on the construction and acquisition of new sites. As of June 30, 2008, Crown Castle has $100 million of undrawn capacity under its revolving credit facility.
"I am very pleased that in the second quarter we converted 100% of the year-over-year growth in site rental revenues into Adjusted EBITDA, reflecting the diligence with which we have managed our costs following the Global Signal acquisition," stated Jay Brown, Chief Financial Officer of Crown Castle. "Our long-standing strategy of investing cash, both from operations and borrowings, to maximize long-term cash flow per share coupled with the strong operating performance of our towers has delivered results above our targeted annual growth rate of 20% to 25% in recurring cash flow per share. Consistent with our past actions, during the second quarter of 2008, we invested approximately $141 million in our core tower business, including land purchases, construction of new sites and tower acquisitions. As presented in the Outlook table below, we have increased our 2008 Outlook largely based on the operating results from the first half of the year."
OUTLOOK
The following Outlook tables are based on current expectations and assumptions. The Outlook tables assume a U.S. dollar to Australian dollar exchange rate of 0.94 U.S. dollars to 1.00 Australian dollar for the second half of 2008.
As reflected in the following tables, Crown Castle has increased the approximate midpoint of its full year 2008 Outlook, previously issued on April 23, 2008, for site rental revenue by $5 million, site rental gross margin by $5 million and Adjusted EBITDA by $5 million.
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 tables set forth Crown Castle's current Outlook for the
third quarter of 2008 and full year 2008:
(in millions, except
per share amounts) Third Quarter 2008 Full Year 2008
------------------ --------------
Site rental revenue $351 to $356 $1,395 to $1,405
Site rental cost of
operations $113 to $117 $452 to $457
Site rental gross
margin $235 to $240 $947 to $952
Adjusted EBITDA $214 to $219 $865 to $870
Interest expense and
amortization of
deferred financing
costs(a) $88 to $91 $355 to $360
Sustaining capital
expenditures $8 to $10 $24 to $27
Recurring cash flow $116 to $121 $483 to $488
Net income (loss)
after deduction
of dividends on
preferred stock $(33) to $2 $(34) to $59
Net income (loss)
per share(b) $(0.12) to $0.01 $(0.12) to $0.21
(a) Inclusive of $6.3 million and $25.3 million, respectively, of
non-cash expense.
(b) Represents basic net income (loss) per common share, based on
279.6 million shares outstanding as of June 30, 2008.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Friday, July 25, 2008, at 10:30 a.m. eastern time to discuss second quarter 2008 results and Crown Castle's Outlook. Please dial 303-275-2170 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 12:30 p.m. eastern time on Friday, July 25, 2008 through 11:59 p.m. eastern time on Friday, August 1, 2008 and may be accessed by dialing 303-590-3000 using passcode 11116684#. An audio archive will also be available on Crown Castle's website at http://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. Crown Castle offers significant wireless communications coverage to 91 of the top 100 U.S. markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 22,000 and over 1,400 wireless communication sites in the U.S. and Australia, respectively. For more information on Crown Castle, please visit http://www.crowncastle.com.
Summary of Non-Cash Amounts in Tower Gross Margin
In accordance with applicable accounting standards, Crown Castle recognizes site rental revenues and ground lease expenses monthly on a straight-line basis, regardless of whether the receipts and payments are in equal monthly amounts. If, and to the extent the payment terms call for fixed escalations (as in fixed dollar or fixed percentage increases), the effect of such increases is recognized on a straight-line basis over the appropriate lease term. As a result of this accounting method, a portion of the revenue and expense recognized in a given period represents cash collected or paid in other periods.
A summary of the non-cash portions of our site rental revenue, ground lease expense, stock-based compensation for those employees directly related to U.S. tower operations, net amortization of below-market and above-market leases acquired, and resulting impact on site rental gross margins is as follows:
For the Three Months Ended
--------------------------
(in thousands) June 30, 2008
-------------
Non-cash portion of site rental
revenue attributable to rent free
periods and straight-line recognition
of revenue $ 10,460
Non-cash portion of ground lease
expense attributable to straight-line
recognition of expenses (8,812)
Stock-based compensation charges (210)
Net amortization of below-market and
above-market leases 153
------------
Non-cash impact on site rental
gross margin $ 1,591
============
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, integration costs, depreciation, amortization and accretion, losses on purchases and redemptions of debt, interest and other income (expense), interest expense and amortization of deferred financing costs, impairment of available-for-sale securities, benefit (provision) for income taxes, minority interests, cumulative effect of change in accounting principle, income (loss) from discontinued operations, and stock-based compensation expense. Adjusted EBITDA is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")).
Crown Castle defines recurring cash flow to be Adjusted EBITDA, less interest expense and less sustaining capital expenditures. Each of the amounts included in the calculation of recurring cash flow are computed in accordance with GAAP, with the exception of sustaining capital expenditures, which is not defined under GAAP. We define sustaining capital expenditures as capital expenditures (determined in accordance with GAAP) which do not increase the capacity or life of our revenue generating assets and include capitalized costs related to (i) maintenance activities on our towers, (ii) vehicles, (iii) information technology equipment, and (iv) office equipment. Recurring cash flow is not intended as an alternative measure of cash flow from operations or operating results (as determined in accordance with GAAP).
Adjusted EBITDA and recurring cash flow are presented as additional information because management believes these measures are useful indicators of the financial performance of our core businesses. In addition, Adjusted EBITDA is a measure of current financial performance used in our debt covenant calculations. Our measures of Adjusted EBITDA and recurring cash flow may not be comparable to similarly titled measures of other companies, including companies in the tower industry and in the historical financial statements of Global Signal. The tables set forth below reconcile these non-GAAP financial measures to comparable GAAP financial measures.
Reconciliations of Non-GAAP Financial Measures to Comparable
GAAP Financial Measures:
Adjusted EBITDA, recurring cash flow and recurring cash flow per
share for the quarters ended June 30, 2008 and 2007 are computed as
follows:
For the
Three Months Ended
-----------------------
June 30, June 30,
2008 2007
--------- ---------
(in thousands, except
per share amounts)
Net income (loss) $ 60,339 $ (32,740)
Adjustments to increase
(decrease) net income (loss):
Asset write-down charges 4,993 3,391
Integration costs(a) -- 5,069
Depreciation, amortization
and accretion 131,896 133,324
Interest and other income
(expense) (206) (2,906)
Interest expense and amortization
of deferred financing costs 88,757 88,790
Benefit (provision) for income taxes (80,324) (15,620)
Minority interests -- 390
Stock-based compensation charges(c) 7,559 6,682
--------- ---------
Adjusted EBITDA $ 213,014 $ 186,380
========= =========
Less: Interest expense and
amortization of deferred
financing costs 88,757 88,790
Less: Sustaining capital
expenditures 5,017 6,671
--------- ---------
Recurring cash flow $ 119,240 $ 90,919
========= =========
Weighted average common
shares outstanding - basic 279,428 282,025
Recurring cash flow per share $ 0.43 $ 0.32
========= =========
Adjusted EBITDA and recurring cash flow for the quarter ending
September 31, 2008 and the year ending December 31, 2008 are
forecasted as follows:
Q3 2008 Full Year 2008
------- --------------
(in millions) Outlook Outlook
------- -------
Net income (loss) $(28) to $7 $(13) to $80
Adjustments to increase
(decrease) net income (loss):
Asset write-down charges $2 to $4 $9 to $13
Integration costs -- $2 to $4
Depreciation, amortization
and accretion $130 to $140 $520 to $560
Interest and other income
(expense) $(3) to $0 $(9) to $(3)
Interest expense and amortization
of deferred financing costs(b) $88 to $91 $355 to $360
Benefit (provision) for
income taxes $(10) to $(1) $(110) to $(86)
Stock-based compensation
charges(c) $5 to $8 $23 to $30
-------- ----------
Adjusted EBITDA $214 to $219 $865 to $870
============ ============
Less: Interest expense
and amortization of
deferred financing
costs(b) $88 to $91 $355 to $360
Less: Sustaining capital
expenditures $8 to $10 $24 to $27
--------- ----------
Recurring cash flow $116 to $121 $483 to $488
============ ============
(a) Inclusive of stock-based compensation charges.
(b) Inclusive of $6.3 million and $25.3 million, respectively, from
non-cash expense.
(c) Exclusive of amounts included in integration costs.
Other Calculations:
Sustaining capital expenditures for the quarters ended June 30, 2008
and June 30, 2007 is computed as follows:
For the
Three Months Ended
------------------------
June 30, June 30,
2008 2007
--------- ---------
(in thousands)
Capital Expenditures $ 140,747 $ 77,745
Less: Revenue enhancing on
existing sites 18,356 5,955
Less: Land purchases 73,525 37,251
Less: New site acquisition and
construction 43,849 27,868
--------- ---------
Sustaining capital expenditures $ 5,017 $ 6,671
========= =========
Site rental gross margin for the quarter ending September 31, 2008
and for the year ending December 31, 2008 is forecasted as follows:
Q3 2008 Full Year 2008
------- --------------
(in millions) Outlook Outlook
------- -------
Site rental revenue $351 to $356 $1,395 to $1,405
Less: Site rental cost of
operations $113 to $117 $452 to $457
------------ ------------
Site rental gross margin $235 to $240 $947 to $952
============ ============
The Crown Castle International Corp. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3063
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 deployment of wireless services, (ii) migration from wireline to wireless telecommunications, (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) 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 business depends on the demand for wireless communications
and towers, and we may be adversely affected by any slowdown in
such demand.
-- A substantial portion of our revenues is derived from a small
number of customers, and the loss, consolidation or financial
instability of, or network sharing among, any of our limited
number of customers may materially decrease revenues.
-- Consolidation among our customers may result in duplicate or
overlapping parts of networks, which may result in a reduction of
sites and have a negative effect on revenues and cash flows.
-- Our substantial level of indebtedness may adversely affect our
ability to react to changes in our business, and we may be
limited in our ability to refinance our existing debt or use debt
to fund future capital needs.
-- A wireless communications industry slowdown may materially and
adversely affect our business (including reducing demand for our
towers and network services) and the business of our customers.
-- As a result of competition in our industry, including from some
competitors with significantly more resources or less debt than
we have, we may find it more difficult to achieve favorable
rental rates on our towers.
-- New technologies may significantly reduce demand for our towers
and negatively impact our revenues.
-- New wireless technologies may not deploy or be adopted by
customers as rapidly or in the manner projected.
-- If we fail to retain rights to the land under our towers, our
business may be adversely affected.
-- If we are unable to raise capital in the future when needed, we
may not be able to fund future growth opportunities.
-- FiberTower's business has certain risk factors different from our
core tower business, including an unproven business model, and
may produce results that are less than anticipated, resulting in
a write off of all or part of our investment in FiberTower.
-- Our lease relating to our Spectrum has certain risk factors
different from our core tower business, including that the
Spectrum lease may not be renewed or continued, that the option
to acquire the Spectrum may not be exercised, and that the
Spectrum may not be deployed, which may result in the revenues
derived from the Spectrum being less than those that may
otherwise have been anticipated.
-- If we fail to comply with laws and regulations which regulate our
business and which may change at any time, we may be fined or
even lose our right to conduct some of our business.
-- Sales or issuances of a substantial number of shares of our
common stock may adversely affect the market price of our common
stock.
-- Our network services business has historically experienced
significant volatility in demand, which reduces the
predictability of our results.
-- If radio frequency emissions from wireless handsets or equipment
on our towers are demonstrated to cause negative health effects,
potential future claims could adversely affect our operations,
costs and revenues.
-- Certain provisions of our certificate of incorporation, bylaws
and operative agreements and domestic and international
competition laws may make it more difficult for a third party to
acquire control of us or for us to acquire control of a third
party, even if such a change in control would be beneficial to
our stockholders.
-- We may suffer losses due to exposure to changes in foreign
currency exchange rates relating to our operations outside the
U.S.
Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors which could affect our results is included in our filings with the SEC.
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
AND OTHER FINANCIAL DATA
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------
2008 2007 2008 2007
--------------------------------------
Net revenues:
Site rental $348,523 $322,336 $693,556 $622,128
Network services and
other 30,990 20,534 56,578 36,451
-------- -------- -------- --------
Total net revenues 379,513 342,870 750,134 658,579
-------- -------- -------- --------
Costs of operations
(exclusive of depreciation,
amortization and accretion):
Site rental 113,746 112,166 226,126 218,761
Network services and other 21,820 14,679 40,231 26,452
-------- -------- -------- --------
Total costs of operations 135,566 126,845 266,357 245,213
-------- -------- -------- --------
General and administrative 38,492 36,327 73,478 71,329
Asset write-down charges 4,993 3,391 6,297 4,743
Integration costs -- 5,069 2,504 13,917
Depreciation, amortization
and accretion 131,896 133,324 263,929 272,017
-------- -------- -------- --------
Operating income (loss) 68,566 37,914 137,569 51,360
Interest and other income
(expense) 206 2,906 2,516 6,205
Interest expense and
amortization of deferred
financing costs (88,757) (88,790) (177,902) (170,805)
-------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes and
minority interests (19,985) (47,970) (37,817) (113,240)
Benefit (provision) for
income taxes 80,324 15,620 84,983 37,782
Minority interests -- (390) -- (173)
-------- -------- -------- --------
Net income (loss) 60,339 (32,740) 47,166 (75,631)
Dividends on preferred stock (5,201) (5,202) (10,403) (10,403)
-------- -------- -------- --------
Net income (loss) after
deduction of dividends on
preferred stock $ 55,138 $(37,942) $ 36,763 $(86,034)
======== ======== ======== ========
Net income (loss) per
common share:
Basic $ 0.20 $ (0.13) $ 0.13 $ (0.31)
Diluted $ 0.19 $ (0.13) $ 0.13 $ (0.31)
Weighted average common
shares outstanding:
Basic 279,428 282,025 279,384 277,741
Diluted 288,427 282,025 288,242 277,741
Adjusted EBITDA $213,014 $186,380 $424,013 $353,638
======== ======== ======== ========
Stock-based compensation
expenses:
Site rental cost of
operations $ 210 $ 128 $ 508 $ 194
Network services and other
cost of operations 238 106 371 175
General and administrative 7,111 6,448 12,835 11,232
Integration costs -- 159 -- 790
-------- -------- -------- --------
Total $ 7,559 $ 6,841 $ 13,714 $ 12,391
======== ======== ======== ========
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(in thousands)
June 30, December 31,
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 98,754 $ 75,245
Restricted cash 180,638 165,556
Receivables, net of allowance for
doubtful accounts 30,157 37,134
Prepaid expenses 81,589 72,518
Deferred income tax assets and
other current assets 148,136 146,802
----------- -----------
Total current assets 539,274 497,255
Restricted cash 5,000 5,000
Deferred site rental receivables 140,037 127,388
Available-for-sale securities, net 36,894 60,085
Property and equipment, net 5,061,982 5,051,055
Goodwill 1,970,501 1,970,501
Other intangible assets, net 2,609,636 2,676,288
Deferred financing costs and
other assets, net of accumulated
amortization 114,496 100,561
----------- -----------
$10,477,820 $10,488,133
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 33,153 $ 37,366
Deferred revenues and other
accrued liabilities 245,714 253,121
Short-term debt and current
maturities of long-term debt 156,500 81,500
----------- -----------
Total current liabilities 435,367 371,987
Long-term debt, less current
maturities 5,986,245 5,987,695
Deferred income tax liability 196,518 281,259
Deferred ground lease payables
and other liabilities 370,975 366,483
----------- -----------
Total liabilities 6,989,105 7,007,424
Redeemable preferred stock 314,262 313,798
Stockholders' equity 3,174,453 3,166,911
----------- -----------
$10,477,820 $10,488,133
=========== ===========
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended
June 30,
----------------------
2008 2007
--------- ---------
Cash flows from operating activities:
Net income (loss) $ 47,166 $ (75,631)
Adjustments to reconcile net
income (loss) to net cash
provided by (used for)
operating activities:
Depreciation, amortization
and accretion 263,929 272,017
Deferred income tax (benefit)
provision (83,312) (39,621)
Other adjustments, net 31,823 28,077
Changes in assets and liabilities,
excluding the effects of acquisitions:
Increase (decrease) in liabilities (6,193) (50,172)
Decrease (increase) in assets (37,302) (15,932)
--------- ---------
Net cash provided by (used for)
operating activities 216,111 118,738
--------- ---------
Cash flows from investing activities:
Proceeds from investments and
disposition of property and equipment 1,117 2,782
Payments for acquisitions (net
of cash acquired) of businesses -- (489,477)
Capital expenditures (202,434) (124,925)
Investments and loans -- (500)
--------- ---------
Net cash provided by (used for)
investing activities (201,317) (612,120)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of
long-term debt -- 650,000
Proceeds from issuance of
capital stock 6,506 13,334
Principal payments on long-term debt (3,250) --
Purchases of capital stock (44,338) (601,352)
Borrowings under revolving credit
agreements 75,000 --
Incurrence of financing costs (1,538) (8,779)
Net decrease (increase) in
restricted cash (15,082) (14,138)
Dividends on preferred stock (9,939) (9,940)
Capital distributions to minority
interest holders of CCAL -- (37,196)
--------- ---------
Net cash provided by (used for)
financing activities 7,359 (8,071)
--------- ---------
Effect of exchange rate changes
on cash 1,356 1,169
Net increase (decrease) in cash
and cash equivalents 23,509 (500,284)
Cash and cash equivalents at
beginning of period 75,245 592,716
--------- ---------
Cash and cash equivalents at end
of period $ 98,754 $ 92,432
========= =========
Supplemental disclosure of cash
flow information:
Interest paid $ 164,867 $ 150,565
Income taxes paid 3,382 2,099
CROWN CASTLE INTERNATIONAL CORP.
Summary Fact Sheet
(dollars in thousands)
Quarter Ended 9/30/07 Quarter Ended 12/31/07
-------------------------- --------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
-------------------------- --------------------------
Revenues
Site Rental $309,798 $ 16,999 $326,797 $316,750 $ 20,793 $337,543
Services 23,035 1,912 24,947 33,873 3,747 37,620
-------------------------- --------------------------
Total Revenues 332,833 18,911 351,744 350,623 24,540 375,163
Operating
Expenses
Site Rental 106,014 5,849 111,863 106,636 6,082 112,718
Services 15,864 1,168 17,032 19,906 2,352 22,258
-------------------------- --------------------------
Total Operating
Expenses 121,878 7,017 128,895 126,542 8,434 134,976
General &
Administrative 29,319 3,562 32,881 32,392 6,244 38,636
Add: Stock-
Based Compen-
sation (a) 5,373 439 5,812 5,164 2,510 7,674
-------------------------- --------------------------
Adjusted
EBITDA $187,009 $ 8,771 $195,780 $196,853 $ 12,372 $209,225
-------------------------- --------------------------
Gross Margins:
Site Rental 66% 66% 66% 66% 71% 67%
Services 31% 39% 32% 41% 37% 41%
Adjusted EBITDA
Margin 56% 46% 56% 56% 50% 56%
-------------------------- --------------------------
(a) Exclusive of expenses included in restructuring charges and
integration costs.
Quarter Ended 3/31/08 Quarter Ended 6/30/08
--------------------------- --------------------------
CCUSA CCAL CCIC CCUSA CCAL CCIC
--------------------------- --------------------------
Revenues
Site Rental $323,748 $ 21,285 $345,033 $328,952 $ 19,571 $348,523
Services 23,834 1,754 25,588 27,016 3,974 30,990
--------------------------- --------------------------
Total
Revenues 347,582 23,039 370,621 355,968 23,545 379,513
Operating
Expenses
Site Rental 106,432 5,948 112,380 107,474 6,272 113,746
Services 17,359 1,052 18,411 20,320 1,500 21,820
--------------------------- --------------------------
Total Oper-
ating Ex-
penses 123,791 7,000 130,791 127,794 7,772 135,566
General &
Administra-
tive 31,032 3,954 34,986 33,845 4,647 38,492
Add: Stock-
Based Compen-
sation (a) 5,418 737 6,155 6,622 937 7,559
--------------------------- --------------------------
Adjusted
EBITDA $198,177 $ 12,822 $210,999 $200,951 $ 12,063 $213,014
--------------------------- --------------------------
Gross Margins:
Site Rental 67% 72% 67% 67% 68% 67%
Services 27% 40% 28% 25% 62% 30%
Adjusted EBITDA
Margin 57% 56% 57% 56% 51% 56%
--------------------------- --------------------------
(a) Exclusive of expenses included in restructuring charges and
integration costs.
Reconciliation of Non-GAAP Financial Measure (Adjusted EBITDA)
to GAAP Financial Measure:
(dollars in thousands)
Quarter Ended
--------------------------------------
9/30/07 12/31/07 3/31/08 6/30/08
-------- -------- -------- --------
Net income (loss) $(67,013) $(80,169) $(13,173) $ 60,339
Adjustments to increase
(decrease) net income (loss):
Restructuring charges
(credits) (1) 3,191 -- -- --
Asset write-down charges 59,306 1,466 1,304 4,993
Integration costs (1) 4,749 6,752 2,504 --
Depreciation, amortization
and accretion 135,540 132,347 132,033 131,896
Interest and other income
(expense) (2,965) (181) (2,310) (206)
Interest expense, amortiza-
tion of deferred financing
costs 89,407 90,047 89,145 88,757
Impairment of available-for-
sale securities -- 75,623 -- --
Benefit (provision) for
income taxes (31,923) (24,334) (4,659) (80,324)
Minority interests (324) -- -- --
Stock-based compensation (2) 5,812 7,674 6,155 7,559
-------- -------- -------- --------
Adjusted EBITDA $195,780 $209,225 $210,999 $213,014
======== ======== ======== ========
(1) inclusive of stock-based compensation expenses
(2) exclusive of amounts included in restructuring charges
(credits) and integration costs
CCI FACT SHEET Q2 2007 to Q2 2008
(dollars in thousands) %
Q2 '07 Q2 '08 Change
--------------------------------
CCUSA
-----
Site Rental Revenue $ 303,665 $ 328,952 8%
Ending Sites 22,287 22,461 1%
CCAL
----
Site Rental Revenue $ 18,671 $ 19,571 5%
Ending Sites 1,438 1,449 1%
TOTAL CCIC
----------
Site Rental Revenue $ 322,336 $ 348,523 8%
Ending Sites 23,725 23,910 1%
Ending Cash and Cash Equivalents $ 92,432* $ 98,754*
Debt
Bank Debt $ 650,000 $ 791,875
Securitized Debt & Other Notes $5,347,184 $5,350,870
6 1/4% Convertible Preferred Stock $ 313,335 $ 314,262
---------- ----------
Total Debt $6,310,519 $6,457,007
Leverage Ratios
Net Bank Debt + Bonds / EBITDA 7.9X 7.1X
Total Net Debt / EBITDA 8.3X 7.5X
Last Quarter Annualized
Adjusted EBITDA $ 745,520 $ 852,056
* Excludes Restricted Cash
CONTACT: Crown Castle International Corp.
Jay Brown, CFO
Fiona McKone, VP - Finance
713-570-3000