10-QPeriod: Q1 FY2003

CROWN CASTLE INC. Quarterly Report for Q1 Ended Mar 31, 2003

Filed May 13, 2003For Securities:CCI

Summary

Crown Castle Inc. (CCI) reported its first quarter 2003 results, showing a shift in revenue mix with a significant increase in site rental and broadcast transmission revenues, which grew by 15.4% year-over-year. This growth was partially offset by a notable decrease in network services and other revenues, largely due to a strategic reduction in U.S. network services offerings. While the company improved its operating income to $11.8 million from a loss of $20.0 million in the prior year's quarter, the net loss attributable to common stockholders narrowed but remained substantial at $83.4 million. The company also provided updates on its joint ventures with Verizon, acquiring full ownership of Crown Castle GT and increasing its stake in Crown Castle Atlantic, and continued its focus on managing its significant debt load.

Key Highlights

  • 1Total revenues decreased slightly by 1.8% to $216.7 million due to a significant drop in network services and other revenue, partly offset by a 15.4% increase in site rental and broadcast transmission revenue.
  • 2Operating income improved substantially to $11.8 million from an operating loss of $20.0 million in the prior year quarter.
  • 3Net loss for the quarter narrowed to $69.0 million from $103.4 million in the prior year, with net loss per common share improving to $0.38 from $0.56.
  • 4The company is actively managing its debt, showing a decrease in interest expense and amortization of deferred financing costs by 4.8% year-over-year.
  • 5Crown Castle Inc. acquired full ownership of its Crown Castle GT joint venture with Verizon and increased its stake in Crown Castle Atlantic.
  • 6Significant capital expenditures of $52.8 million were made, primarily in the UK, for tower development and improvements.
  • 7The company adopted new accounting standards, including SFAS 143 for asset retirement obligations and SFAS 148 for stock-based compensation disclosures.

Frequently Asked Questions

Crown Castle's revenue mix shifted, with site rental and broadcast transmission revenues increasing by 15.4% to $185.0 million. However, this was offset by a significant decrease in network services and other revenues, which fell by $28.6 million to $31.8 million, largely due to strategic decisions to reduce U.S. network services.

The company has moved from an operating loss in the prior year's first quarter to an operating income of $11.8 million. While the net loss has narrowed to $69.0 million from $103.4 million, it remains substantial, resulting in a net loss per common share of $0.38.

Crown Castle acquired full ownership of its Crown Castle GT joint venture from Verizon and increased its equity interest in Crown Castle Atlantic. These transactions represent a consolidation of assets and a simplification of the company's joint venture structure.

Interest expense and amortization of deferred financing costs decreased by 4.8% due to debt repurchases, reductions in outstanding bank indebtedness, and lower interest rates. The company ended the quarter with $477.0 million in cash and cash equivalents, aiming to fund capital expenditures and debt service from operating cash flow.