10-QPeriod: Q1 FY2009

CROWN CASTLE INC. Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 7, 2009For Securities:CCI

Summary

Crown Castle Inc. (CCI) reported its first quarter 2009 results, showing a significant shift from a net loss in the prior year to a net income attributable to common stockholders. This turnaround was driven by a 9% increase in consolidated net revenues, primarily from site rentals, bolstered by tenant additions on its towers and growth in network services. The company also benefited from gains on debt purchases and interest rate swaps. Despite a challenging credit market and global economic recession, CCI maintained a positive outlook on long-term wireless demand and expects continued growth in site rental revenues. The company's financial position saw a substantial increase in cash and cash equivalents, reaching $609.3 million by March 31, 2009, up from $155.2 million at the end of 2008. This was largely fueled by strong operating cash flows and strategic financing activities, including the issuance of new senior notes. CCI continues to manage its debt obligations prudently, with significant maturities extending beyond 2010, and is focused on capital allocation for debt repayment and strategic investments when market conditions allow.

Financial Highlights

25 data points
Beta

Revenue

$402.91M

Net Income

$10.58M

2.6% Net Margin

EPS (Diluted)

$0.02

Cash & Equivalents

$609.34M

Free Cash Flow

$118.06M

Financial Statements
Beta
Revenue$402.91M
SG&A Expenses$36.64M
Operating Expenses$305.66M
Operating Income$97.25M
Net Income$10.58M
EPS (Basic)$0.02
EPS (Diluted)$0.02
Shares Outstanding (Basic)285.91M
Shares Outstanding (Diluted)287.61M

Key Highlights

  • 1Net income attributable to CCIC common stockholders was $5.4 million for Q1 2009, a substantial improvement from a net loss of $18.4 million in Q1 2008.
  • 2Consolidated net revenues increased by 9% to $402.9 million in Q1 2009, primarily driven by a 7% rise in site rental revenues to $367.7 million.
  • 3Cash and cash equivalents significantly increased to $609.3 million as of March 31, 2009, compared to $155.2 million as of December 31, 2008.
  • 4The company issued $900 million of 9% senior notes in January 2009 and subsequently, in April 2009, issued $1.2 billion of 7.75% secured notes to repay existing debt and manage liquidity.
  • 5Operating income increased by 41% to $97.2 million in Q1 2009.
  • 6Adjusted EBITDA, a key non-GAAP metric for performance, grew by 15% to $242.4 million in Q1 2009.
  • 7Despite economic challenges, the company projects site rental revenues for 2009 between $1.500 billion and $1.515 billion, representing 7-8% growth from 2008.

Frequently Asked Questions

The primary driver was a significant increase in consolidated net revenues, up 9% year-over-year, largely due to growth in site rental income driven by tenant additions on its towers. Additionally, gains from debt repurchases and favorable movements in interest rate swaps contributed to the improved net income.

Crown Castle has actively managed its debt and liquidity by issuing new debt, including $900 million in 9% senior notes in January 2009 and $1.2 billion in 7.75% secured notes in April 2009. These issuances, along with strong operating cash flows, have been used to repay existing debt, extend maturities, and increase cash reserves. The company has also reduced discretionary capital expenditures to preserve liquidity.

Despite the ongoing global economic recession, Crown Castle anticipates site rental revenues for the full year 2009 to be between $1.500 billion and $1.515 billion, representing an expected growth rate of 7% to 8% compared to 2008. This optimism is based on the continued demand for wireless services and the recurring nature of its revenue streams.

CCUSA showed strong growth, with net revenues increasing by 11% and Adjusted EBITDA growing by 17%. In contrast, CCAL's performance was negatively impacted by foreign currency exchange rate fluctuations, leading to a decrease in net revenues by 19% and Adjusted EBITDA by 18%. However, new tenant additions in Australia partially mitigated these impacts.