Crown Castle International Q3 FFO Rises; Updates FY13 Outlook

(RTTNews) - Crown Castle International Corp. (CCI) reported that its third quarter of 2013 Funds from Operations or FFO increased 23% to $272 million from $221 million in the third quarter of 2012. FFO per share increased 22% to $0.93 from $0.76 in the third quarter of 2012.

Adjusted Funds from Operations or AFFO increased 38% to $318 million in the third quarter of 2013, compared to $230 million in the third quarter of 2012. Adjusted Funds from Operations per share increased 38% to $1.09 in the third quarter of 2013, compared to $0.79 in the third quarter of 2012.

Net income attributable to stockholders for the third quarter was $45.84 million or $0.16 per share, up from $42.04 million or $0.14 per share last year.

Net revenue for the third quarter increased to $748.98 million from $621.34 million for the same period in 2012. Site rental revenue for the third quarter of 2013 increased $82 million, or 15%, to $621 million from $539 million for the same period in the prior year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.17 per share and revenues of $730.80 million for the third-quarter. Analysts' estimates typically exclude special items.

On Sunday, Crown Castle entered into a definitive agreement with AT&T to acquire the exclusive right to lease and operate approximately 9,700 AT&T towers in the US for a weighted average term of approximately 28 years for cash consideration of $4.85 billion. In addition, Crown Castle will have the option, primarily between 2032 and 2048, to purchase the leased towers at the end of the respective lease terms for aggregate option payments of approximately $4.2 billion. Crown Castle expects to fund the transaction with cash on hand and equity and debt financing, including borrowings under its revolving credit facility. The transaction is expected to close in the fourth quarter of 2013.

On September 9, 2013, Crown Castle announced it expects to elect Real Estate Investment Trust or "REIT" status beginning with the taxable year commencing January 1, 2014. Subject to the successful completion and financing of the aforementioned AT&T tower transaction, Crown Castle expects to initiate a quarterly dividend of 35 cents per share beginning in the first quarter of 2014.

"Given the significant anticipated cash flow from our existing business and future cash flows from the AT&T towers, we expect to be able to continue to make significant investments to enhance the long-term growth of our business while providing investors with a meaningful dividend. Based on our expectation for growth in our business, we believe that we can grow our dividend over the next five years by at least 15% annually," said Jay Brown, Crown Castle's Chief Financial Officer.

For the fourth-quarter, the company expects FFO to be $271 million to $276 million, and AFFO per share of $1.09 to $1.11. Net income per share is expected to be between $0.10 and $0.24. Site rental revenues for the fourth-quarter are expected to be $625 million to $630 million. Analysts expect the company to report earnings of $0.17 per share and revenues of $725.88 million for the fourth-quarter.

The company said it has increased the midpoint of its full year 2013 Outlook for site rental revenue by $5 million, and AFFO by $41 million.

Looking ahead for 2013, the company now expects net income of $147 million to $187 million, income per share of $0.50 to $0.64, AFFO of $1.230 billion to $1.235 billion and Site rental revenues of $2.478 billion to $2.483 billion. Analysts expect the company to report earnings of $0.56 per share and revenues of $2.94 billion for fiscal 2013.

Previously, the company expected earnings of $0.40 to $0.73 per share and AFFO of $4.07 to $4.10 per share for the full year 2013.

For 2014, the company now expects net income of $199 million to $340 million, AFFO of $1.546 billion to $1.561 billion and Site rental revenues of $2.967 billion to $2.982 billion. Analysts expect the company to report earnings of $1.17 per share and revenues of $3.06 billion for fiscal 2014.

The company stated that Outlook for fourth quarter and full year 2013 does not include any impact from the AT&T tower transaction.