10-QPeriod: Q3 FY2001

CROWN CASTLE INC. Quarterly Report for Q3 Ended Sep 30, 2001

Filed November 13, 2001For Securities:CCI

Summary

Crown Castle International Corp. (CCI) reported its third-quarter and nine-month results for 2001. The company experienced significant revenue growth, driven by increases in both site rental and network services. However, this revenue growth was accompanied by a substantial increase in operating expenses, leading to a widened net loss for both the quarter and the year-to-date period. The company also incurred significant restructuring and asset write-down charges during the period. Despite the increased losses, Crown Castle is actively managing its capital structure, including recent debt and equity offerings to fund operations and capital expenditures. The company's liquidity remains a key focus, with substantial cash on hand, but also significant long-term debt and redeemable preferred stock. The unsuccessful acquisition of RaiWay S.p.A. had a notable impact on cash and escrow deposits during the period.

Key Highlights

  • 1Total net revenues increased by 25.1% for the third quarter ($218.4 million vs. $174.6 million) and by 47.7% for the first nine months ($660.8 million vs. $447.2 million) compared to the prior year periods.
  • 2The net loss widened significantly, with a loss of $110.3 million for the third quarter (vs. $53.0 million in Q3 2000) and $263.1 million for the nine months (vs. $145.8 million in the first nine months of 2000).
  • 3Operating expenses increased substantially, with 'Costs of operations' rising 30.7% for the quarter and 64.3% for the nine months, and 'Depreciation and amortization' increasing 20.4% for the quarter and 35.8% for the nine months.
  • 4The company recorded $19.3 million in restructuring charges and $16.0 million in asset write-down charges during the first nine months of 2001.
  • 5Long-term debt increased from $2,602.7 million at year-end 2000 to $3,374.7 million at September 30, 2001.
  • 6Cash and cash equivalents stood at $536.7 million as of September 30, 2001, a decrease from $453.8 million at December 31, 2000, despite significant financing activities.
  • 7The acquisition of 49% of RaiWay S.p.A. was not approved by Italian authorities, and the $383.8 million escrow deposit was returned in November 2001.

Frequently Asked Questions

Crown Castle International Corp. experienced strong revenue growth, with a 25.1% increase in the third quarter and a 47.7% increase for the first nine months of 2001 compared to the same periods in 2000. However, this revenue growth was outpaced by a significant rise in operating expenses, including costs of operations and depreciation & amortization, leading to a substantial widening of net losses. The net loss for the third quarter was $110.3 million, compared to $53.0 million in the prior year, and the nine-month net loss was $263.1 million, up from $145.8 million.

The company incurred significant restructuring charges of $19.3 million and asset write-down charges of $16.0 million during the first nine months of 2001. These charges are related to a business restructuring initiative announced in July 2001, which involved staff reductions, office closures, and write-downs of certain assets.

Crown Castle's long-term debt increased significantly, rising from $2,602.7 million at the end of 2000 to $3,374.7 million by September 30, 2001. While the company raised substantial capital through financing activities, including a public offering of common stock and issuance of senior notes, its cash and cash equivalents decreased from $453.8 million at year-end 2000 to $536.7 million at September 30, 2001. The company has considerable unused borrowing availability under its credit facilities but also faces significant debt service obligations.

The proposed acquisition of 49% of RaiWay S.p.A. did not receive approval from the Italian Minister of Communications. Consequently, the $383.8 million escrow deposit made for this transaction was returned to Crown Castle in November 2001. This event impacted the company's cash and investments during the reporting period.