8-KRegulation FDOther EventsExhibits & Filings

CROWN CASTLE INC. 8-K Report, Regulation FD Disclosure (Nov 10, 2004)

Filed November 10, 2004For Securities:CCI

Summary

Crown Castle International Corp. (CCI) announced on November 4, 2004, a significant transaction involving its Crown Castle Atlantic venture (Crown Atlantic). The company acquired a 37.245% interest in Crown Atlantic from Verizon Communications for $295 million in cash, inclusive of working capital adjustments. This acquisition brings CCI's ownership in Crown Atlantic to 100% initially. Furthermore, to comply with indenture requirements, CCI strategically re-structured its ownership. A wholly-owned restricted subsidiary acquired a 15% stake in Crown Atlantic from an unrestricted subsidiary for $118.8 million. This resulted in approximately 52% of Crown Atlantic being held by the restricted group, making its credit facility borrowings of $180 million now part of the restricted group's debt. The remaining 48% is held by an unrestricted subsidiary, whose funds are not subject to restricted payment tests and can be used for other corporate purposes, including share repurchases.

Key Highlights

  • 1Acquisition of 37.245% interest in Crown Atlantic from Verizon for $295 million cash.
  • 2Achieved 100% initial ownership of Crown Atlantic.
  • 3Strategic re-allocation of Crown Atlantic ownership to meet indenture requirements.
  • 4Approximately 52% of Crown Atlantic now held by CCI's restricted group.
  • 5Crown Atlantic's $180 million credit facility borrowings are now considered restricted debt.
  • 648% of Crown Atlantic remains with an unrestricted subsidiary, offering financial flexibility.
  • 7Pro forma cash and cash equivalents of $613.5 million as of September 30, 2004.

Frequently Asked Questions

Crown Castle announced the acquisition of a 37.245% stake in its Crown Atlantic venture from Verizon Communications for $295 million in cash. This move initially brought their ownership to 100%.

The restructuring was necessary to designate Crown Atlantic as a 'restricted subsidiary' for the purposes of the indentures governing Crown Castle's public debt. This involved a transfer of ownership between a restricted and an unrestricted subsidiary.

When Crown Atlantic is a restricted subsidiary, its outstanding borrowings, such as the $180 million on its credit facility, become part of Crown Castle's restricted group's debt. This can impact the company's ability to incur additional debt or make restricted payments under its indentures.

Funds held by the unrestricted subsidiary are not subject to the restricted payments test of the indentures. This provides Crown Castle with financial flexibility, allowing these funds to be used for various purposes, including the potential repurchase of its own common stock.