HOUSTON, July 29, 2009 (GLOBE NEWSWIRE) -- Crown Castle International Corp. (NYSE:CCI) today reported results for the quarter ended June 30, 2009.
"We had an excellent second quarter, exceeding the top end of our 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. "Despite prevailing macroeconomic conditions, we continue to enjoy strong leasing demand for our towers, as evidenced by year-over-year revenue and Adjusted EBITDA growth of 8% and 16%, respectively. Importantly, these results were achieved almost entirely through organic growth on assets that we owned as of April 1, 2008. Furthermore, we expect net new tenant additions to be significantly higher in the second half of the year compared to the first half of 2009. In fact, application volume in the second quarter of 2009 was up 30% over application activity in the second quarter of 2008, which we expect to translate into revenue growth in the second half of the year. This activity is driven, in part, by the growing mobile Internet. Based on the strong results in the first half of the year, including the new tenant application volume, and our expectations for the second half of 2009, we have raised our full year 2009 Outlook, which now suggests annual site rental revenue and Adjusted EBITDA growth of 9% and 14%, respectively."
CONSOLIDATED FINANCIAL RESULTS
Site rental revenues for second quarter 2009 increased $27.9 million, or 8%, to $376.4 million from $348.5 million for the same period in the prior year. Site rental gross margin, defined as site rental revenues less site rental cost of operations, increased 12% to $263.1 million, up $28.3 million in the second quarter of 2009 from $234.8 million in the same period in 2008. Adjusted EBITDA for second quarter 2009 increased $33.9 million, or 16%, to $246.9 million, up from $213.0 million for the same period in 2008.
Recurring cash flow, defined as Adjusted EBITDA less interest expense less sustaining capital expenditures, increased from $119.2 million in the second quarter of 2008 to $131.5 million for the second quarter of 2009, up 10%. Recurring cash flow per share, defined as recurring cash flow divided by weighted average common shares outstanding, was $0.46 in the second quarter of 2009 compared to $0.43 in the second quarter of 2008, an increase of 8%.
For the second quarter of 2009, approximately 5% of Crown Castle's consolidated revenues were from its Australia subsidiary. Crown Castle's consolidated results were negatively impacted by the 19% decrease in the Australian dollar to U.S. dollar exchange rate from second quarter 2008 to second quarter 2009. Crown Castle's consolidated growth rates on a currency-neutral basis are as follows: site rental revenue 9%, site rental gross margin 13%, Adjusted EBITDA 17%, recurring cash flow 12%, and recurring cash flow per share 9%.
Net loss attributable to CCIC stockholders was $111.4 million for the second quarter of 2009, inclusive of $98.7 million of losses on purchases and early redemptions of debt and $59.5 million of unrealized losses on interest rate swaps, compared to a net income attributable to CCIC stockholders of $60.3 million for the same period in 2008, inclusive of the recognition of $74.9 million of tax benefits related to previously unrecognized U.S. net operating losses. Net loss attributable to CCIC stockholders after deduction of dividends on preferred stock was $116.6 million in the second quarter of 2009, compared to a net income attributable to CCIC stockholders after deduction of dividends on preferred stock of $55.1 million for the same period in 2008. Diluted second quarter 2009 net loss attributable to CCIC common stockholders per common share was $0.41, compared to a diluted net income attributable to CCIC common stockholders, after deduction of dividends on preferred stock, per common share of $0.19 in the second quarter of 2008.
SEGMENT RESULTS
U.S. site rental revenues for the second quarter of 2009 increased $29.5 million, or 9%, to $358.5 million, compared to second quarter 2008 U.S. site rental revenues of $329.0 million. U.S. site rental gross margin increased 13%, or $29.1 million, in second quarter 2009 to $250.5 million from $221.5 million in the same period in 2008.
On a currency-neutral basis, Australia site rental revenues and site rental gross margin for second quarter 2009 grew 14% and 17% over second quarter 2008. Australia site rental revenues for the second quarter of 2009 were $17.9 million, compared to $19.6 million in the second quarter of 2008. Australia site rental gross margin for second quarter 2009 was $12.5 million, compared to $13.3 million in the second quarter 2008.
INVESTMENTS AND LIQUIDITY
"I am very pleased with our second quarter financial results, our ability to increase our Outlook for the balance of 2009 and the continued progress that we have made to improve our balance sheet," stated Jay Brown, Chief Financial Officer of Crown Castle. "As I've previously discussed, the primary goals of our refinancing efforts have been 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. I believe that the recently announced financing of $250 million of structured notes by certain of our subsidiaries helps achieve all of these goals and potentially establishes an attractive template for future refinancings. Further, our 2009 financing activities have eliminated our requirement to access the credit markets for almost five years, as we are able to repay all of our debt maturities between now and 2014 with cash on-hand and anticipated cash flow."
During the second quarter of 2009, Crown Castle issued $1.2 billion of 7.75% senior secured notes due in 2017. The proceeds of these notes, combined with cash-on-hand, were used to repay, in full, the previously outstanding securitized notes due February 2011.
On July 20, 2009, Crown Castle priced, at par, $250 million of senior secured notes in two classes, A-1 and A-2. The Class A-1 Notes will consist of $175 million of 6.25% Notes and fully amortize during the period beginning in January 2010 and ending on the final maturity date in August 2019. The Class A-2 Notes will consist of $75 million of 9.0% Notes and fully amortize during the period beginning in September 2019 and ending on the final maturity date in August 2029. Crown Castle expects the $250 million notes to close on July 31, 2009. The proceeds are required to be used to repay, in full, the remaining $221.5 million outstanding of the Commercial Mortgage Pass-Through Certificates, Series 2004-2, issued in 2004 by Global Signal Trust II and due in December 2009 ("December 2009 Notes"), which is net of the $72 million of notes that Crown Castle purchased in the open market during the first quarter of 2009.
During the second quarter of 2009, Crown Castle purchased, at par, $15.8 million of the Senior Secured Tower Revenue Notes, Series 2005-1 due in June 2035 ("June 2035 Notes"). Since July 1, 2009, Crown Castle has purchased, at par, $180.4 million of the June 2035 Notes. Pro forma for these purchases, Crown Castle has $1,703.8 million of June 2035 Notes outstanding.
As of June 30, 2009, pro forma for the completion of the $250 million senior secured notes offering, and after taking into account the repayment of the December 2009 Notes and the aforementioned purchases in July by Crown Castle of the June 2035 Notes, Crown Castle expects to have approximately $177 million in cash and cash equivalents (excluding restricted cash) and $188 million of availability under its $188 million revolving credit facility.
During the second quarter of 2009, Crown Castle invested $39.6 million in capital expenditures, comprised of $5.1 million of sustaining capital expenditures and $34.5 million of revenue generating capital expenditures, of which $1.7 million was spent on land purchases, $28.2 million on existing sites, and $4.6 million on the construction and acquisition of new sites. Total capital expenditures were down approximately 72% from the same quarter in 2008.
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, July 30, 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 $250 million of senior secured notes to be issued in July 2009, and assumes a U.S. dollar to Australian dollar exchange rate of 0.79 U.S. dollars and 0.75 U.S. dollars to 1.00 Australian dollar for third quarter and full year 2009 Outlook, respectively.
For the purposes of this Outlook, interest expense is based on run-rate interest charges and does not assume early debt retirement prior to the maturity date, with the exception of the purchases to-date and the repayment of the $221.5 million December 2009 Notes, as discussed above.
As reflected in the following table, Crown Castle has increased the midpoint of its full year 2009 Outlook, previously issued on April 29, 2009, for site rental revenue by $17.5 million, site rental gross margin by $25.5 million, Adjusted EBITDA by $22.5 million and recurring cash flow by $20.5 million.
The following table sets forth Crown Castle's current Outlook for the
third quarter of 2009 and full year 2009:
(in millions, except per
share amounts) Third Quarter 2009 Full Year 2009
------------------ --------------
Site rental revenues $385 to $390 $1,520 to $1,530
Site rental cost of
operations $114 to $120 $455 to $460
Site rental gross margin $268 to $273 $1,063 to $1,073
Adjusted EBITDA $246 to $251 $985 to $995
Interest expense and
amortization of deferred
financing costs(a) $113 to $115 $441 to $446
Sustaining capital
expenditures $8 to $11 $26 to $31
Recurring cash flow $123 to $128 $513 to $523
Net income (loss)
attributable to CCIC
common stockholders
after deduction of
dividends on preferred
stock $(31) to $12 $(172) to $(81)
Net income (loss)
attributable to CCIC
common stockholders
per share(b) $(0.11) to $0.04 $(0.60) to $(0.28)
(a) Inclusive of approximately $17 million and approximately $60
million, respectively, of non-cash expense.
(b) Represents net income (loss) attributable to CCIC common
stockholders per common share, based on 286.5 million shares
outstanding as of June 30, 2009.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, July 30, 2009, at 10:30 a.m. eastern time. The conference call may be accessed by dialing 480-629-9678 and asking for the Crown Castle call at least 30 minutes prior to the start time. The conference call may also be accessed live over the Internet by logging onto the web at http://investor.crowncastle.com. Any supplemental materials for the call will be posted at the Crown Castle website at http://investor.crowncastle.com.
A telephonic replay of the conference call will be available from 12:30 p.m. eastern time on Thursday, July 30, 2009, through 11:59 p.m. eastern time on Thursday, August 6, 2009, and may be accessed by dialing 303-590-3030 using access code 4114093. 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 U.S. 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 U.S. and Australia, respectively. For more information on Crown Castle, please visit http://www.crowncastle.com.
The Crown Castle International Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3063
The components of interest expense and amortization of deferred
financing costs are as follows:
For the Three Months Ended
--------------------------
June 30, June 30,
2009 2008
--------- ---------
(in thousands)
Interest expense on debt
obligations $ 94,049 $ 82,492
Amortization of deferred financing
costs 6,739 3,842
Amortization of discounts on
long-term debt 3,151 --
Amortization of interest rate swaps 5,311 755
Amortization of purchase price
adjustments on long-term debt 571 943
Other 429 725
--------- ---------
$110,250 $ 88,757
========= =========
The components of interest expense and amortization of deferred
financing costs are forecasted as follows:
Full Year
Q3 2009 2009
Outlook Outlook
------------ ------------
(in millions)
Interest expense on
debt obligations $98 to $100 $380 to $385
Amortization of deferred
financing costs $6 to $8 $26 to $28
Amortization of discounts
on long-term debt $3 to $4 $11 to $13
Amortization of interest
rate swaps $4 to $6 $16 to $18
Amortization of purchase
price adjustments on
long-term debt $0 to $0 $0 to $0
Other $0 to $1 $1 to $3
------------ ------------
$113 to $115 $441 to $446
============ ============
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.
