UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period to
Commission File Number 001-16441
CROWN CASTLE INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
| Delaware | 76-0470458 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 510 Bering Drive Suite 500 Houston, Texas |
77057-1457 | |
| (Address of principal executive offices) | (Zip Code) | |
(713) 570-3000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Number of shares of common stock outstanding at July 30, 2004: 225,375,924
CROWN CASTLE INTERNATIONAL CORP.
2
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands of dollars, except share amounts)
| December 31, 2003 |
June 30, 2004 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 462,427 | $ | 232,503 | ||||
| Receivables: |
||||||||
| Trade, net of allowance for doubtful accounts of $7,603 and $6,866 at December 31, 2003 and June 30, 2004, respectively |
37,289 | 34,116 | ||||||
| Other |
930 | 1,536 | ||||||
| Inventories |
9,615 | 9,308 | ||||||
| Prepaid expenses and other current assets |
32,133 | 30,714 | ||||||
| Assets of discontinued operations (Notes 1 and 3) |
2,026,267 | 2,020,628 | ||||||
| Total current assets |
2,568,661 | 2,328,805 | ||||||
| Property and equipment, net of accumulated depreciation of $916,004 and $1,028,779 at December 31, 2003 and June 30, 2004, respectively |
3,755,073 | 3,622,355 | ||||||
| Goodwill |
267,071 | 267,071 | ||||||
| Deferred financing costs and other assets, net of accumulated amortization of $39,692 and $42,247 at December 31, 2003 and June 30, 2004, respectively |
146,786 | 151,975 | ||||||
| $ | 6,737,591 | $ | 6,370,206 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 9,785 | $ | 9,060 | ||||
| Accrued interest |
49,063 | 43,705 | ||||||
| Accrued compensation and related benefits |
13,397 | 10,392 | ||||||
| Deferred rental revenues and other accrued liabilities |
106,384 | 97,043 | ||||||
| Liabilities of discontinued operations (Notes 1 and 3) |
353,544 | 355,072 | ||||||
| Long-term debt, current maturities |
267,142 | 1,275,385 | ||||||
| Total current liabilities |
799,315 | 1,790,657 | ||||||
| Long-term debt, less current maturities |
3,182,850 | 1,898,752 | ||||||
| Other liabilities |
55,978 | 52,803 | ||||||
| Total liabilities |
4,038,143 | 3,742,212 | ||||||
| Commitments and contingencies |
||||||||
| Minority interests |
208,333 | 207,700 | ||||||
| Redeemable preferred stock |
506,702 | 507,371 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock, $.01 par value; 690,000,000 shares authorized; shares issued: |
||||||||
| December 31, 2003 – 220,758,321 and June 30, 2004 – 225,296,483 |
2,208 | 2,253 | ||||||
| Additional paid-in capital |
3,333,402 | 3,380,179 | ||||||
| Accumulated other comprehensive income (loss) |
257,435 | 271,273 | ||||||
| Unearned stock compensation |
(8,122 | ) | (16,683 | ) | ||||
| Accumulated deficit |
(1,600,510 | ) | (1,724,099 | ) | ||||
| Total stockholders’ equity |
1,984,413 | 1,912,923 | ||||||
| $ | 6,737,591 | $ | 6,370,206 | |||||
See condensed notes to consolidated financial statements.
3
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)
(In thousands of dollars, except per share amounts)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2003 |
2004 |
2003 |
2004 |
|||||||||||||
| Net revenues: |
||||||||||||||||
| Site rental |
$ | 116,646 | $ | 131,363 | $ | 230,481 | $ | 260,332 | ||||||||
| Network services and other |
19,629 | 18,513 | 36,548 | 33,216 | ||||||||||||
| 136,275 | 149,876 | 267,029 | 293,548 | |||||||||||||
| Operating expenses: |
||||||||||||||||
| Costs of operations (exclusive of depreciation, amortization and accretion): |
||||||||||||||||
| Site rental |
39,985 | 41,843 | 80,593 | 82,778 | ||||||||||||
| Network services and other |
12,819 | 12,272 | 24,430 | 23,268 | ||||||||||||
| General and administrative |
22,220 | 22,685 | 42,738 | 44,295 | ||||||||||||
| Corporate development |
918 | 371 | 2,538 | 810 | ||||||||||||
| Restructuring charges (credits) |
2,349 | — | 2,349 | (33 | ) | |||||||||||
| Asset write-down charges |
1,380 | 1,868 | 1,380 | 3,816 | ||||||||||||
| Non-cash general and administrative compensation charges |
5,834 | 6,203 | 7,728 | 8,418 | ||||||||||||
| Depreciation, amortization and accretion |
60,763 | 61,119 | 122,226 | 122,344 | ||||||||||||
| 146,268 | 146,361 | 283,982 | 285,696 | |||||||||||||
| Operating income (loss) |
(9,993 | ) | 3,515 | (16,953 | ) | 7,852 | ||||||||||
| Other income (expense): |
||||||||||||||||
| Interest and other income (expense) |
(8,271 | ) | (1,349 | ) | (10,834 | ) | (26,376 | ) | ||||||||
| Interest expense and amortization of deferred financing costs |
(63,809 | ) | (56,568 | ) | (127,520 | ) | (113,890 | ) | ||||||||
| Loss from continuing operations before income taxes, minority interests and cumulative effect of change in accounting principle |
(82,073 | ) | (54,402 | ) | (155,307 | ) | (132,414 | ) | ||||||||
| Provision for income taxes |
(127 | ) | (184 | ) | (243 | ) | (337 | ) | ||||||||
| Minority interests |
(730 | ) | (1,463 | ) | (1,287 | ) | (2,809 | ) | ||||||||
| Loss from continuing operations before cumulative effect of change in accounting principle |
(82,930 | ) | (56,049 | ) | (156,837 | ) | (135,560 | ) | ||||||||
| Income from discontinued operations, net of tax (Notes 1 and 3) |
2,099 | 16,455 | 7,541 | 30,999 | ||||||||||||
| Loss before cumulative effect of change in accounting principle |
(80,831 | ) | (39,594 | ) | (149,296 | ) | (104,561 | ) | ||||||||
| Cumulative effect of change in accounting principle for asset retirement obligations |
— | — | (551 | ) | — | |||||||||||
| Net loss |
(80,831 | ) | (39,594 | ) | (149,847 | ) | (104,561 | ) | ||||||||
| Dividends on preferred stock, net of gains (losses) on purchases of preferred stock |
(20,081 | ) | (9,332 | ) | (34,452 | ) | (19,028 | ) | ||||||||
| Net loss after deduction of dividends on preferred stock, net of gains (losses) on purchases of preferred stock |
$ | (100,912 | ) | $ | (48,926 | ) | $ | (184,299 | ) | $ | (123,589 | ) | ||||
| Net loss |
$ | (80,831 | ) | $ | (39,594 | ) | $ | (149,847 | ) | $ | (104,561 | ) | ||||
| Other comprehensive income (loss): |
||||||||||||||||
| Foreign currency translation adjustments |
81,786 | (38,058 | ) | 70,309 | 11,794 | |||||||||||
| Derivative instruments: |
||||||||||||||||
| Net change in fair value of cash flow hedging instruments |
(764 | ) | 604 | (1,475 | ) | 170 | ||||||||||
| Amounts reclassified into results of operations |
1,719 | 894 | 3,378 | 1,874 | ||||||||||||
| Comprehensive income (loss) |
$ | 1,910 | $ | (76,154 | ) | $ | (77,635 | ) | $ | (90,723 | ) | |||||
| Per common share – basic and diluted: |
||||||||||||||||
| Loss from continuing operations before cumulative effect of change in accounting principle |
$ | (0.48 | ) | $ | (0.29 | ) | $ | (0.88 | ) | $ | (0.70 | ) | ||||
| Income from discontinued operations |
0.01 | 0.07 | 0.03 | 0.14 | ||||||||||||
| Cumulative effect of change in accounting principle |
— | — | — | — | ||||||||||||
| Net loss |
$ | (0.47 | ) | $ | (0.22 | ) | $ | (0.85 | ) | $ | (0.56 | ) | ||||