10-QPeriod: Q2 FY2012

CROWN CASTLE INC. Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 6, 2012For Securities:CCI

Summary

Crown Castle International Corp. (CCI) reported a significant increase in total assets to $12.6 billion as of June 30, 2012, up from $10.5 billion at the end of 2011. This growth was primarily driven by substantial acquisitions, notably the NextG Networks acquisition for approximately $1 billion and the Wireless Capital Partners (WCP) acquisition for $214.7 million. These strategic moves, particularly in the distributed antenna systems (DAS) and small cell space, are expected to fuel future growth. The company also successfully refinanced its credit facility, raising $3.1 billion to fund these acquisitions and enhance its liquidity. Operationally, CCI demonstrated robust performance with net revenues growing by 14% to $1.14 billion for the six months ended June 30, 2012, compared to the same period in 2011. Site rental revenues, the core of its business, increased by 11%, reflecting strong demand for wireless infrastructure. Net income attributable to CCIC stockholders more than doubled to $166 million for the first half of 2012. The company's strategy focuses on leveraging its infrastructure for continued growth in wireless data usage, driven by smartphone adoption and network advancements.

Financial Statements
Beta
Revenue$585.51M
SG&A Expenses$47.08M
Operating Expenses$382.53M
Operating Income$202.98M
Interest Expense$120.63M
Net Income$116.01M
EPS (Basic)$0.40
EPS (Diluted)$0.40
Shares Outstanding (Basic)290.65M
Shares Outstanding (Diluted)291.20M

Key Highlights

  • 1Total assets surged by approximately 20% to $12.6 billion as of June 30, 2012, primarily due to significant acquisitions.
  • 2The company completed the acquisition of NextG Networks for approximately $1.0 billion and Wireless Capital Partners (WCP) for $214.7 million, expanding its small cell and DAS offerings.
  • 3A new $3.1 billion senior credit facility was established in January 2012, used to fund acquisitions and refinance existing debt, enhancing liquidity.
  • 4Net revenues increased by 14% to $1.14 billion for the six months ended June 30, 2012, driven by a 11% rise in site rental revenues.
  • 5Net income attributable to CCIC stockholders more than doubled to $166.0 million for the first six months of 2012.
  • 6Operating income grew by 21% to $405.2 million for the first six months of 2012.
  • 7The company successfully managed its debt, with 75% having fixed rates and long-dated maturities, while maintaining leverage ratios within covenant requirements.

Frequently Asked Questions

The substantial increase in total assets, from $10.5 billion to $12.6 billion, was primarily driven by two major acquisitions: NextG Networks for approximately $1.0 billion and Wireless Capital Partners (WCP) for $214.7 million. These acquisitions significantly expanded the company's portfolio, particularly in the areas of distributed antenna systems (DAS) and small cells.

Crown Castle experienced strong growth in the first half of 2012. Net revenues increased by 14% to $1.14 billion, with site rental revenues growing by 11%. Net income attributable to CCIC stockholders more than doubled to $166 million, indicating significant profitability improvement.

The acquisitions were financed through a combination of cash and a new $3.1 billion senior credit facility established in January 2012. This facility not only funded the acquisitions but also refinanced existing debt, extending maturity profiles and improving the company's liquidity. Goodwill and other intangible assets also saw a significant increase due to these acquisitions.

The company anticipates continued growth in its site rental business, projecting an approximate 13% increase from full year 2011 to full year 2012. This growth is expected to be driven by wireless network expansion, increasing smartphone penetration, the adoption of new technologies like 4G, and the company's ability to add new tenants to its existing infrastructure. The long-term nature of its customer contracts and contractual escalations provide a stable revenue stream.