EX-99.1 2 dex991.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION Unaudited Pro Forma Condensed Consolidated Financial Information

Exhibit 99.1

 

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed consolidated financial information is based on the historical financial statements of Crown Castle International Corp. and its majority and wholly owned subsidiaries (the “Company”), adjusted to give effect to the following transactions:

 

  (1) the sale of the Company’s UK subsidiary (“CCUK”) and

 

  (2) the repayment of the Company’s 2000 Credit Facility.

 

On June 28, 2004, the Company announced that it had signed a definitive agreement to sell CCUK to National Grid Transco Plc for $2.035 billion in cash. The closing date of the transaction, subject to certain approvals, is expected to be on or before September 30, 2004. In accordance with the terms of the Company’s 2000 Credit Facility, the Company will be required to use approximately $1.3 billion of the proceeds from the transaction to fully repay the outstanding borrowings under the 2000 Credit Facility.

 

The Unaudited Pro Forma Condensed Consolidated Statements of Operations Information for the year ended December 31, 2003 and the three months ended March 31, 2004 give effect to these transactions as if they had occurred as of January 1, 2003. The Unaudited Pro Forma Condensed Consolidated Balance Sheet Information as of March 31, 2004 gives effect to these transactions as if they had been completed as of March 31, 2004. The pro forma adjustments are described in the accompanying notes and are based upon available information and certain assumptions that management believes are reasonable.

 

Included in the notes accompanying the pro forma financial information are tables summarizing the unaudited pro forma results of operations information and balance sheet information for the Company and its subsidiaries that are restricted by covenants in our high yield debt instruments (the “Restricted Group”). These subsidiaries exclude Crown Atlantic and certain investment subsidiaries which are designated as unrestricted subsidiaries under our high yield debt instruments.

 

The pro forma financial information does not purport to represent what the Company’s results of operations or financial condition would actually have been had these transactions in fact occurred on such dates or to project the Company’s results of operations or financial condition for any future date or period. The pro forma financial information should be read in conjunction with the consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s most recent annual report on Form 10-K and quarterly report on Form 10Q.

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS INFORMATION

YEAR ENDED DECEMBER 31, 2003

(In thousands of dollars, except per share amounts)

 

     Historical
    

Adjustments

for CCUK

Sale (a)

     Adjustments
for Repayment
of 2000 Credit
Facility
     Pro Forma
  

Net revenues:

                                 

Site rental and broadcast transmission

    $ 786,788     $ (310,634 )   $ —       $ 476,154  

Network services and other

      143,560       (71,244 )     —         72,316  
    
 
 
 

Total net revenues

      930,348       (381,878 )     —         548,470  
    
 
 
 

Operating expenses:

                                 

Costs of operations (exclusive of depreciation, amortization and accretion):

                                 

Site rental and broadcast transmission

      307,511       (144,336 )     —         163,175  

Network services and other

      110,268       (63,522 )     —         46,746  

General and administrative

      94,888       (7,827 )     —         87,061  

Corporate development

      5,564       —         —         5,564  

Restructuring charges

      1,291       —         —         1,291  

Asset write-down charges

      14,317       —         —         14,317  

Non-cash general and administrative compensation charges

      20,654       (6,668 )     —         13,986  

Depreciation, amortization and accretion

      324,152       (79,702 )     —         244,450  
    
 
 
 
       878,645       (302,055 )     —         576,590  
    
 
 
 

Operating income (loss)

      51,703       (79,823 )     —         (28,120 )

Other income (expense):

                                 

Interest and other income (expense)

      (148,474 )     30,015       —         (118,459 )

Interest expense, amortization of deferred financing costs and dividends on preferred stock

      (289,647 )     30,813       40,189 (b)     (218,645 )
    
 
 
 

Income (loss) from continuing operations before income taxes, minority interests and cumulative effect of change in accounting principle

      (386,418 )     (18,995 )     40,189       (365,224 )

Provision for income taxes

      (7,518 )     7,053       —         (465 )

Minority interests

      (2,394 )     —         —         (2,394 )
    
 
 
 

Income (loss) from continuing operations before cumulative

effect of change in accounting principle

    $ (396,330 )   $ (11,942 )   $ 40,189     $ (368,083 )
    
 
 
 

Per common share – basic and diluted:

                                 

Loss from continuing operations before cumulative effect of change in accounting principle

    $ (2.08 )                   $ (1.95 )(c)
    
                 

Common shares outstanding – basic and diluted (in thousands)

      216,947                       216,947  
    
                 

 

See Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations Information.

 

2

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS INFORMATION

THREE MONTHS ENDED MARCH 31, 2004

(In thousands of dollars, except per share amounts)

 

     Historical
    

Adjustments

for CCUK

Sale (a)

     Adjustments
for Repayment
of 2000 Credit
Facility
     Pro Forma
  

Net revenues:

                                 

Site rental and broadcast transmission

    $ 219,377     $ (90,408 )   $ —       $ 128,969  

Network services and other

      29,110       (14,407 )     —         14,703  
    
 
 
 

Total net revenues

      248,487       (104,815 )     —         143,672  
    
 
 
 

Operating expenses:

                                 

Costs of operations (exclusive of depreciation, amortization and accretion):

                                 

Site rental and broadcast transmission

      82,987       (42,052 )     —         40,935  

Network services and other

      25,316       (14,320 )     —         10,996  

General and administrative

      23,643       (2,033 )     —         21,610  

Corporate development

      439       —         —         439  

Restructuring charges (credits)

      (33 )     —         —         (33 )

Asset write-down charges

      1,948       —         —         1,948  

Non-cash general and administrative compensation charges

      2,696       (481 )     —         2,215  

Depreciation, amortization and accretion

      84,822       (23,597 )     —         61,225  
    
 
 
 
       221,818       (82,483 )     —         139,335  
    
 
 
 

Operating income (loss)

      26,669       (22,332 )     —         4,337  

Other income (expense):

                                 

Interest and other income (expense)

      (24,829 )     (198 )     —         (25,027 )

Interest expense and amortization of deferred financing costs

      (59,506 )     2,184       16,067 (b)     (41,255 )
    
 
 
 

Income (loss) from continuing operations before income taxes and minority interests

      (57,666 )     (20,346 )     16,067       (61,945 )

Provision for income taxes

      (5,955 )     5,802       —         (153 )

Minority interests

      (1,346 )     —         —         (1,346 )
    
 
 
 

Income (loss) from continuing operations

    $ (64,967 )   $ (14,544 )   $ 16,067     $ (63,444 )
    
 
 
 

Per common share – basic and diluted:

                                 

Loss from continuing operations

    $ (0.34 )                   $ (0.33 )(c)
    
                 

Common shares outstanding – basic and diluted (in thousands)

      219,294                       219,294  
    
                 

 

See Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations Information.

 

3

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

INFORMATION

(In thousands of dollars, except per share amounts)

 

(a) Reflects the historical results of operations of CCUK for the periods indicated.
(b) Reflects:
  (1) decrease in interest expense as a result of the required repayment of the 2000 Credit Facility of $37,350 for the year ended December 31, 2003 and $15,231 for the three months ended March 31, 2004; and
  (2) the elimination of amortization of deferred financing costs related to the 2000 Credit Facility of $2,839 for the year ended December 31, 2003 and $836 for the three months ended March 31, 2004.
(c) A reconciliation of the numerators and denominators of the pro forma basic and diluted per share computations is as follows:

 

     Year Ended
December 31, 2003
    

Three Months Ended

March 31, 2004

  

Pro forma loss from continuing operations before cumulative effect of change in accounting principle

    $ (368,083 )   $ (63,444 )

Dividends on preferred stock

      (54,294 )     (9,696 )

Gains on purchases of preferred stock

      349       —    
    
 

Pro forma loss from continuing operations before cumulative effect of change in accounting principle applicable to common stock for basic and diluted computations

    $ (422,028 )   $ (73,140 )
    
 

Weighted-average number of common shares outstanding during the period for basic and diluted computations (in thousands)

      216,947       219,294  
    
 

Per common share – basic and diluted:

                 

Pro forma loss from continuing operations before cumulative effect of change in accounting principle

    $ (1.95 )   $ (0.33 )
    
 

 

4

The following tables summarize the unaudited pro forma results of operations information for the Restricted Group under our high yield debt instruments. Such information is not intended as an alternative measure of the operating results as would be determined in accordance with generally accepted accounting principles.

 

     Year Ended December 31, 2003
  
     Pro Forma
    

Exclusion of

Unrestricted

Subsidiaries

     Restricted Group
Pro Forma
  

Net Revenues:

                         

Site rental and broadcast transmission

    $ 476,154     $ (103,258 )   $ 372,896  

Network services and other

      72,316       (13,263 )     59,053  
    
 
 

Total net revenues

      548,470       (116,521 )     431,949  
    
 
 

Operating expenses:

                         

Costs of operations (exclusive of depreciation, amortization and accretion):

                         

Site rental and broadcast transmission

      163,175       (37,525 )     125,650  

Network services and other

      46,746       (7,020 )     39,726  

General and administrative

      87,061       (11,815 )     75,246  

Corporate development

      5,564       —         5,564  

Restructuring charges

      1,291       289       1,580  

Asset write-down charges

      14,317       (4,510 )     9,807  

Non-cash general and administrative compensation charges

      13,986       (1,352 )     12,634  

Depreciation, amortization and accretion

      244,450       (42,570 )     201,880  
    
 
 
       576,590       (104,503 )     472,087  
    
 
 

Operating income (loss)

      (28,120 )     (12,018 )     (40,138 )

Other income (expense):

                         

Interest and other income (expense)

      (118,459 )     7,812       (110,647 )

Interest expense, amortization of deferred financing costs and dividends on preferred stock

      (218,645 )     14,933       (203,712 )
    
 
 

Income (loss) from continuing operations before income taxes, minority interests and cumulative effect of change in accounting principle

      (365,224 )     10,727       (354,497 )

Provision for income taxes

      (465 )     —         (465 )

Minority interests

      (2,394 )     5,857       3,463  
    
 
 

Income (loss) from continuing operations before cumulative effect of change in accounting principle

    $ (368,083 )   $ 16,584     $ (351,499 )
    
 
 

 

5

     Three Months Ended March 31, 2004
  
     Pro Forma
    

Exclusion of

Unrestricted

Subsidiaries

     Restricted Group
Pro Forma
  

Net Revenues:

                         

Site rental and broadcast transmission

    $ 128,969     $ (28,073 )   $ 100,896  

Network services and other

      14,703       (1,525 )     13,178  
    
 
 

Total net revenues

      143,672       (29,598 )     114,074  
    
 
 

Operating expenses:

                         

Costs of operations (exclusive of depreciation, amortization and accretion):

                         

Site rental and broadcast transmission

      40,935       (9,508 )     31,427  

Network services and other

      10,996       (1,623 )     9,373  

General and administrative

      21,610       (3,122 )     18,488  

Corporate development

      439       —         439  

Restructuring charges (credits)

      (33 )     —         (33 )

Asset write-down charges

      1,948       (180 )     1,768  

Non-cash general and administrative compensation charges

      2,215       (174 )     2,041  

Depreciation, amortization and accretion

      61,225       (10,514 )     50,711  
    
 
 
       139,335       (25,121 )     114,214  
    
 
 

Operating income (loss)

      4,337       (4,477 )     (140 )

Other income (expense):

                         

Interest and other income (expense)

      (25,027 )     953       (24,074 )

Interest expense and amortization of deferred financing costs

      (41,255 )     2,680       (38,575 )
    
 
 

Income (loss) from continuing operations before income taxes and minority interests

      (61,945 )     (844 )     (62,789 )

Provision for income taxes

      (153 )     —         (153 )

Minority interests

      (1,346 )     2,474       1,128  
    
 
 

Income (loss) from continuing operations

    $ (63,444 )   $ 1,630     $ (61,814 )
    
 
 

 

6

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION

AS OF MARCH 31, 2004

(In thousands of dollars)

 

     Historical
   

Adjustments

for CCUK Sale

     Adjustments for
Repayment of
2000 Credit
Facility
     Pro Forma

Assets:

                              

Current assets:

                              

Cash and cash equivalents

    $ 171,485    $ 2,027,500 (a)   $ (1,287,000 )(f)   $ 911,985

Receivables, net

      84,987      (49,991 )(b)     —         34,996

Inventories

      17,435      (7,807 )(b)     —         9,628

Prepaid expenses and other current assets

      81,195      (48,306 )(b)     —         32,889
    
  
 
 

Total current assets

      355,102      1,921,396       (1,287,000 )     989,498

Property and equipment, net

      4,700,727      (999,309 )(b)     —         3,701,418

Goodwill

      1,235,433      (968,362 )(b)     —         267,071

Deferred financing costs and other assets, net

      155,618      (366 )(b)     (14,626 )(g)     140,626
    
  
 
 
     $ 6,446,880    $ (46,641 )   $ (1,301,626 )   $ 5,098,613
    
  
 
 

Liabilities and Stockholders’ Equity:

                              

Current liabilities:

                              

Accounts payable

    $ 37,235    $ (29,061 )(c)   $ —       $ 8,174

Accrued interest

      31,230      —         —         31,230

Accrued compensation and related benefits

      7,857      (2,238 )(c)     —         5,619

Deferred rental revenues and other accrued liabilities

      274,089      (159,109 )(d)     —         114,980

Long-term debt, current maturities

      46,461      —         (46,461 )(f)     —  
    
  
 
 

Total current liabilities

      396,872      (190,408 )     (46,461 )     160,003

Long-term debt, less current maturities

      3,138,866      —         (1,240,539 )(f)     1,898,327

Other liabilities

      222,162      (165,787 )(c)     —         56,375
    
  
 
 

Total liabilities

      3,757,900      (356,195 )     (1,287,000 )     2,114,705
    
  
 
 

Minority interests

      210,317      —         —         210,317

Redeemable preferred stock

      507,037      —         —         507,037

Stockholders’ equity

      1,971,626      309,554 (e)     (14,626 )(g)     2,266,554
    
  
 
 
     $ 6,446,880    $ (46,641 )   $ (1,301,626 )   $ 5,098,613
    
  
 
 

 

See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet Information.

 

7

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION

(In thousands of dollars)

 

(a)

    Reflects the following adjustments to cash and cash equivalents:         
    

(1)    Increase resulting from the proceeds of the sale of CCUK

    $ 2,035,000  
    

(2)    Decrease resulting from the payment of fees related to the sale of CCUK

      (7,500 )
         
    

Total adjustments to cash and cash equivalents

    $ 2,027,500  
         

(b)

    Reflects the decreases in assets resulting from the sale of CCUK.         

(c)

    Reflects the decreases in liabilities resulting from the sale of CCUK, other than deferred rental revenues and other liabilities (see note d).         

(d)

    Reflects the following adjustments to deferred rental revenues and other accrued liabilities:         
    

(1)    Decrease resulting from the sale of CCUK

    $ (171,109 )
    

(2)    Increase resulting from estimated alternative minimum tax liability related to the gain on sale of CCUK

      12,000  
         
    

Total adjustments to deferred rental revenues and other accrued liabilities

    $ (159,109 )
         

(e)

    Reflects the following adjustments to stockholders’ equity:         
    

(1)    Increase resulting from estimated gain on sale of CCUK, net of tax

    $ 558,951  
    

(2)    Increase resulting from minimum pension liability adjustment related to CCUK’s liabilities which is removed from accumulated other comprehensive income (loss) upon sale of CCUK

      11,660  
    

(3)    Decrease resulting from foreign currency translation adjustments related to CCUK’s assets and liabilities which are removed from accumulated other comprehensive income (loss) upon sale of CCUK

      (261,057 )
         
    

Total adjustments to stockholders’ equity

    $ 309,554  
         

(f)

    Reflects the decrease resulting from the required repayment of the 2000 Credit Facility.         

(g)

    Reflects the write-off of deferred financing costs related to the 2000 Credit Facility.         

 

The following table summarizes the adjustments for the CCUK sale, with increases to liabilities and stockholders’ equity balances shown as negative amounts:

 

8

     Adjustment Reference
        
     (a)(1), (e)(1)
     (a)(2), (e)(1)
     (b), (e)(1)
     (c), (e)(1)
     (d)(1), (e)(1)
     (d)(2), (e)(1)
     (e)(1), (e)(2)
     (e)(1), (e)(3)
     Total
  

Cash and cash equivalents

    $ 2,035,000     $ (7,500 )   $ —       $ —       $ —       $ —       $ —       $ —       $ 2,027,500  

Receivables, net

      —         —         (49,991 )     —         —         —         —         —         (49,991 )

Inventories

      —         —         (7,807 )     —         —         —         —         —         (7,807 )

Prepaid expenses and other current assets

      —         —         (48,306 )     —         —         —         —         —         (48,306 )

Property and equipment, net

      —         —         (999,309 )     —         —         —         —         —         (999,309 )

Goodwill

      —         —         (968,362 )     —         —         —         —         —         (968,362 )

Deferred financing costs and other assets, net

      —         —         (366 )     —         —         —         —         —         (366 )

Accounts payable

      —         —         —         29,061       —         —         —         —         29,061  

Accrued compensation and related benefits

      —         —         —         2,238       —         —         —         —         2,238  

Deferred rental revenues and other accrued liabilities

      —         —         —         —         171,109       (12,000 )     —         —         159,109  

Other liabilities

      —         —         —         165,787       —         —         —         —         165,787  

Stockholders’ equity:

                                                                         

Accumulated other comprehensive income (loss)

      —         —         —         —         —         —         (11,660 )     261,057       249,397  

Accumulated deficit

      (2,035,000 )     7,500       2,074,141       (197,086 )     (171,109 )     12,000       11,660       (261,057 )     (558,951 )
    
 
 
 
 
 
 
 
 
     $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —    
    
 
 
 
 
 
 
 
 

 

9

The following table summarizes the adjustments for the required repayment of the 2000 Credit Facility, with increases to liabilities and stockholders’ equity balances shown as negative amounts:

 

    

Adjustment

Reference

  
     (f), (g)
  

Cash and cash equivalents

    $ (1,287,000 )

Deferred financing costs and other assets, net

      (14,626 )

Long-term debt, current maturities

      46,461  

Long-term debt, less current maturities

      1,240,539  

Stockholders’ equity:

         

Accumulated deficit

      14,626  
    
     $ —    
    

 

The following table summarizes the unaudited pro forma balance sheet information for the Restricted Group under our high yield debt instruments. Such information is not intended as an alternative measure of financial position as would be determined in accordance with generally accepted accounting principles.

 

     As of March 31, 2004
     Pro Forma
   

Exclusion of

Unrestricted

Subsidiaries

     Restricted Group
Pro Forma

Assets:

                      

Cash and cash equivalents

    $ 911,985    $ (87,741 )   $ 824,244

Other current assets

      77,513      (6,707 )     70,806

Property and equipment, net

      3,701,418      (695,650 )     3,005,768

Investments in Unrestricted Subsidiaries

      —        519,582       519,582

Goodwill

      267,071      (55,377 )     211,694

Deferred financing costs and other assets, net

      140,626      (42,252 )     98,374
    
  
 
     $ 5,098,613    $ (368,145 )   $ 4,730,468
    
  
 

Liabilities and Stockholders’ Equity:

                      

Current liabilities

    $ 160,003    $ (19,859 )   $ 140,144

Long-term debt, less current maturities

      1,898,327      (180,000 )     1,718,327

Other liabilities

      56,375      (6,134 )     50,241

Minority interests

      210,317      (162,152 )     48,165

Redeemable preferred stock

      507,037      —         507,037

Stockholders’ equity

      2,266,554      —         2,266,554
    
  
 
     $ 5,098,613    $ (368,145 )   $ 4,730,468
    
  
 

 

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