10-Q/APeriod: Q2 FY2004

CROWN CASTLE INC. Quarterly Report (Amendment) for Q2 Ended Jun 30, 2004

Filed May 6, 2005For Securities:CCI

Summary

Crown Castle International Corp. (CCI) filed an Amendment No. 1 to its Form 10-Q for the quarterly period ended June 30, 2004, on May 6, 2005. This amendment primarily addresses a restatement of previously issued financial statements due to accounting errors related to lease accounting practices, specifically concerning tenant leases, ground leases, and depreciation. The restatement impacts prior periods and adjusts lease and depreciation expenses, leading to an increase in net losses for the periods presented. Key financial highlights for the six months ended June 30, 2004, include total revenues of $295.9 million. The company reported a net loss of $127.4 million for the same period, a significant portion of which is attributable to continuing operations. The filing also details the agreement to sell its UK subsidiary (CCUK) for $2.035 billion, which is expected to significantly impact the company's liquidity and capital structure upon closing.

Key Highlights

  • 1The company restated its financial statements for periods prior to and including June 30, 2004, to correct errors in lease accounting practices, affecting site rental revenues, ground lease expense, and depreciation.
  • 2The restatement resulted in an increase in net losses for the three and six months ended June 30, 2004, by $11.2 million ($0.05 per share) and $22.9 million ($0.10 per share) respectively.
  • 3Crown Castle International Corp. entered into a definitive agreement to sell its UK subsidiary (CCUK) for $2.035 billion, with a closing expected by September 30, 2004.
  • 4Proceeds from the CCUK sale are expected to be used to repay $1.275 billion of outstanding borrowings under the 2000 Credit Facility, with remaining funds for general corporate purposes.
  • 5For the six months ended June 30, 2004, total revenues were $295.9 million, an increase of $25.7 million compared to the prior year period.
  • 6The company reported a net loss of $127.4 million for the six months ended June 30, 2004, compared to a net loss of $173.7 million in the prior year period.
  • 7Net cash provided by operating activities decreased to $21.98 million for the six months ended June 30, 2004, from $31.64 million in the comparable prior year period.

Frequently Asked Questions

The financial statements were restated to correct accounting errors related to lease accounting practices, specifically affecting the accounting for tenant leases, ground leases, and depreciation. These corrections were prompted by a clarification from the SEC regarding existing accounting literature.

The restatement increased the net loss for the three months ended June 30, 2004, by approximately $11.2 million ($0.05 per share) and for the six months ended June 30, 2004, by approximately $22.9 million ($0.10 per share). These adjustments are non-cash in nature.

Crown Castle International Corp. has signed a definitive agreement to sell CCUK for $2.035 billion, with the transaction expected to close on or before September 30, 2004. This sale is a significant event that will impact the company's financial structure and liquidity.

A significant portion of the proceeds, approximately $1.275 billion, will be used to repay outstanding borrowings under the 2000 Credit Facility. The remaining proceeds are intended for general corporate purposes, which may include debt repayment or new business investments.