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
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.
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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 athttp://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.
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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. |
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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 athttp://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.
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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.
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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. |
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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. |
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| | • | | 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. |
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| | • | | 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. |
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| | • | | Our business depends on the demand for wireless communications and towers, and we may be adversely affected by any slowdown in such demand. |
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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. |
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| | • | | 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. |
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| | • | | Sales or issuances of a substantial number of shares of our common stock may adversely affect the market price of our common stock. |
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| | • | | 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. |
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| | • | | 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. |
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| | • | | New technologies may significantly reduce demand for our towers and negatively impact our revenues. |
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| | • | | New wireless technologies may not deploy or be adopted by customers as rapidly or in the manner projected. |
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| | • | | If we fail to retain rights to the land under our towers, our business may be adversely affected. |
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| | • | | If we are unable to raise capital in the future when needed, we may not be able to fund future growth opportunities. |
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| | • | | 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. |
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| | • | | 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. |
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| | • | | Our network services business has historically experienced significant volatility in demand, which reduces the predictability of our results. |
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| | • | | 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. |
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| | • | | 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. |
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| | • | | We are exposed to counterparty risk through our interest rate swaps and a counterparty default could adversely affect our financial condition. |
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| | • | | 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.
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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 | |
| | | | | | | |
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| | | |
| | 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
| | | | | | | | | | | | | |
| | | 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)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 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)
| | | | | | | | | | | | | | | | | |
| | | 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 | |
| | | | | | | | | | | | | |
