Crown Castle Inc. · NYSE:CCI
Crown Castle — Crown Castle International — Investor Presentation (June 2003)
26 slides from Crown Castle's investor presentation, June 2003
Slide 1: Crown Castle International Corp.
Crown Castle International Corp. NYSE: CCI John P. Kelly W. Benjamin Moreland Chief Executive Officer Chief Financial Officer
Slide 2: Company Overview
Company Company Overview Overview Towers Annual Tower % of Total Revenue* Tower Revenue US 10,797 $431MM 58% UK 3,428 $285MM 39% AUS 1,387 $24MM 3% TOTALS 15,612 $740MM 100% *Q1 ‘03 Run-Rate shaping the wireless world SM 2
Slide 3: Q1 2003 Highlights
Q1 Q1 2003 2003 Highlights Highlights $ in millions $185 $160 First Quarter Highlights: • 15% year over year Site Rental & $112 Broadcast Transmission Revenue Growth $98 • Stable pricing in the US and UK • Exceeded free cash flow target • Eliminated near-term cash call from Free Cash Flow Verizon •
Slide 4: Free Cash Flow Progress
Free Free Cash Cash Flow Flow Progress Progress $ in millions $61 -$129 -$195 -$356 -$679 2H 00 1H 01 2H 01 1H 02 2H 02 shaping the wireless world SM 4
Slide 5: High Quality of Revenue
High High Quality Quality of of Revenue Revenue US Leasing Q1 2003 Total Site Rental and Broadcast Revenue 100% 15% 15% 18% 90% 23% 80% Non- 70% Investment Grade 60% 27% 50% Investment 85% 85% 82% 40% 77% Grade 73% 30% 20% 10% 0% Q2 '02 Q3 '02 Q4 '02 Q1 '03 % Big 6 % Other shaping the wireless world
Slide 6: Long-Term Contracted Revenue
Long-Term Long-Term Contracted Contracted Revenue Revenue % of Recurring Revenue* Details of Long-Term Lease Contracts 5-Year initial term with three or four 5-year renewal options Annual 3 – 5% escalation < 5 Years 19% Lease-specific permitted uses with regards to the respective tower 5 - 10 space,
Slide 7: Long-Term Control of Assets
Long-Term Long-Term Control Control of of Assets Assets < 5 Years 5% 5 - 10 Years 8% Owned Land We control 87% of our 19% 10 - 15 Years Sites for more than 18% 10 Years 20 + Years 15 - 20 Years 27% 23% shaping the wireless world SM 7
Slide 8: Tale of Two Businesses
Tale Tale of of Two Two Businesses Businesses Core Business Continues Strong Growth Tower Gross Margin $408 Service Gross Margin $400 $337 $300 $252 $ in millions $200 $154 $95 $100 $83 $48 $36 $0 1999 2000 2001 2002 shaping the wireless world SM 8
Slide 9: CCI's Future Direction
CCI’s Future Direction
Slide 10: CCI Key Initiatives
CCI CCI Key Key Initiatives Initiatives Organic revenue growth in tower business Grow recurring margins Allocate capital to projects with high incremental returns with low execution risks Extend revenue model around existing assets Transparent financial disclosure and industry leader in corporate go
Slide 11: Positive Results
Positive Positive Results Results • Growing free cash flow • Deleveraging the balance sheet • Protecting and enhancing the value of the common shareholder shaping the wireless world SM 11
Slide 12: Potential for Top-Line Growth
Potential Potential for for Top-Line Top-Line Growth Growth 1992 Total MOU’s Wireless MOU’s Grew 28% 700 from 6/30/01 to 6/30/02 1% 2001 Total MOU’s 99% 600 500 Wireless MOU's in billions 32.7% Wireless 400 Total MOU 17% growth 300 200 Wireline 100 83% 0 ) 91 93 95 97 99 01 (E 19 19 19 19 19 20 03 2
Slide 13: MOU's Require Cell Sites
MOU’s MOU’s Require Require Cell Cell Sites Sites 4,000 140,000 Total Cell Sites MOU’s Per Site (in thousands) MOU's Per Site (in thousands) 3,500 120,000 3,000 Total Cell Sites 100,000 2,500 80,000 2,000 60,000 1,500 40,000 1,000 20,000 500 0 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: C
Slide 14: Location, Location, Location
Location, Location, Location, Location, Location Location 2002 Revenue Market* % Portfolio per US Tower Top 25 Markets 30% $43,500 Top 100 Markets 71% $41,600 Top 150 Markets 80% $41,300 Markets 150 – 490 20% $35,000 *Markets defined as Basic Trading Areas, ranked by total population shaping the wir
Slide 15: Forecast for US Leasing
Forecast Forecast for for US US Leasing Leasing Demand for MOUs continues to be strong Recent carrier comments indicating need for additional sites New Monthly Lease Rates remain consistent Pressure on carriers to achieve Free Cash Flow Difficult capital markets for wireless telecom On Balance: Leas
Slide 16: Margin Expansion
Margin Margin Expansion Expansion Gross Margin Per US Tower ($) Gross Margin Per US Tower (% ) 65% 62% $25,200 58% $21,100 $13,900 FY '00 FY '01 FY '02 FY '00 FY '01 FY '02 Tower Business demonstrates strong Margin Expansion shaping the wireless world SM 16
Slide 17: Managing G&A Expenses
Managing Managing G&A G&A Expenses Expenses Total Annual G&A US Organization Per Tower* • Seven Areas $7,600 • Asset, Finance, and Sales $7,300 Functions in each Area UK Organization $6,500 • Four Areas • Telecom function largely decentralized into the Areas • Broadcast function largely 2000 2001 20
Slide 18: Disciplined Investment Strategy
Disciplined Disciplined Investment Investment Strategy Strategy Formalized Capital Committees review all capital expenditures Requirements for investment • 15%+ initial yield on investment • Low execution risk • More attractive than alternative uses shaping the wireless world SM 18
Slide 19: Acquisitions / Builds Have Slowed
Acquisitions Acquisitions // Builds Builds Have Have Slowed Slowed Acquired 15,578 Built 15,116 No BTS agreements remaining Beginning 12,918 Towers No building of speculative towers 7,488 All towers built exceed internal capital return rates 1,608 1998 1999 2000 2001 2002 shaping the wireless world
Slide 20: Minimal Required Capex
Minimal Minimal Required Required Capex Capex $800 Growth CapEx BT Payment $700 $680M Maintenance Capex $640M $600 $500 $ in millions $400 $300 $277M $200 $138M $105M $100 $0 2000 2001 2002 2003(E) 2004(E) *Based on the midpoint of CCI guidance issued 5/30/2003 shaping the wireless world SM 20
Slide 21: 2003 – 2004 Outlook
2003 – 2004 Outlook
Slide 22: Achievable Guidance
Achievable Achievable Guidance Guidance Free Cash Flow $100 in millions $90.0 Key Assumptions $80 Cash balances not currently $60 $44.0 invested at high-yielding $40 returns $20 75% of 2002 Leasing Activity $0 -$20 -$40 -$60 -$80 ($68.3) 2002 2003(E) 2004(E) *Based on the midpoint of CCI guidance is
Slide 23: Significant Expected Available Cash
Significant Significant Expected Expected Available Available Cash Cash $ in millions CFFO $189M Cash Available for: •Debt repurchases Available Cash •Expansion $149 •Acquisitions •Tower enhancements •Debt amortization Maintenance Capex $40 2003(E) shaping the wireless world SM 23
Slide 24: CCI's Compelling Business Model
CCI’s CCI’s Compelling Compelling Business Business Model Model 1. Long-term contracted revenue 2. Credit quality of revenue stream 3. Long-term control of assets 4. Relatively fixed operating costs 5. Minimal required capex 6. Potential for significant growth Top-line Free cash flow shaping the wir
Slide 25: Forward-Looking Information
Forward-Looking Forward-Looking Information Information This presentation contains numerous forward-looking statements, based on management's current beliefs and assumptions. The forward-looking statements involve expectations, projections and estimates regarding the wireless industry or Crown Castl
Slide 26: Forward-Looking Information
Forward-Looking Forward-Looking Information Information Certain Risks and Uncertainties • Demand for towers and wireless communication sites may be lower or slower than anticipated for numerous reasons, including reduced carrier expansion, carrier consolidation, network sharing, technology developme
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