Crown Castle International Corp. (NYSE:CCI) ("Crown Castle") today
reported results for the quarter ended March 31,
2017.
"Given the expected substantial increase in
mobile data demand over the coming years, we are excited about the
opportunities for growth we see as a result of our position as a
leading provider of wireless infrastructure in the US," stated Jay
Brown, Crown Castle’s Chief Executive Officer. "Our tower
business continues to see steady levels of activity in the short
term. Over the longer term, we believe there is an extended
runway of growth driven by positive industry developments,
including the deployment of FirstNet and spectrum from the recently
completed incentive auction. In our small cells business, our
contracted pipeline has reached record levels, with nearly 25,000
nodes expected to be installed over the next 18 to 24 months,
reflecting the confidence our customers have in our ability to
assist in deploying their wireless networks. Once completed,
this pipeline will double the number of small cell nodes we have
installed to date. To prepare for this anticipated level of
activity, we continue to invest in assets supporting our small cell
deployments, such as our recently announced agreement to acquire
Wilcon, as well as our node installation capabilities, including
the hiring of additional employees. As we scale our
organization to increase production toward our goal of 10,000 nodes
per year, we will incur additional costs that have been reflected
in our full year 2017 Outlook. We believe these investments will
allow us to extend our position as a leading provider of wireless
infrastructure while generating attractive returns on our
investments and delivering sustained growth in dividends per
share."
RESULTS FOR THE QUARTERThe
table below sets forth select financial results for the three month
period ended March 31, 2017. For further information,
refer to the financial statements and non-GAAP and other
calculation reconciliations included in this press
release.
(in millions) |
Actual |
Midpoint Q1 2017Outlook(b) |
ActualCompared to Outlook |
Q1 2017 |
Q1 2016 |
Change |
% Change |
Site rental
revenues |
$857 |
$799 |
+$58 |
7% |
$854 |
+$3 |
Site rental gross
margin |
$592 |
$547 |
+$45 |
8% |
$589 |
+$3 |
Net income (loss) |
$119 |
$48 |
+$71 |
148% |
$98 |
+$21 |
Adjusted EBITDA(a) |
$581 |
$539 |
+$42 |
8% |
$578 |
+$3 |
AFFO(a) |
$450 |
$395 |
+$55 |
14% |
$443 |
+$7 |
Weighted-average common
shares outstanding - diluted |
362 |
335 |
+27 |
8% |
361 |
+1 |
|
Note:
Figures may not tie due to rounding. |
(a) See
reconciliation of this non-GAAP financial measure to net income
(loss) included herein. |
(b) As
issued on January 25, 2017. |
HIGHLIGHTS FROM THE QUARTER
- Site rental revenues. Site rental
revenues grew approximately 7%, or $58 million, from first quarter
2016 to first quarter 2017, inclusive of approximately $34 million
in Organic Contribution to Site Rental Revenues plus $40 million in
contributions from acquisitions and other items, less a $16 million
reduction in straight-line revenues. The $34 million in
Organic Contribution to Site Rental Revenues represents
approximately 4% growth, comprised of approximately 8% growth from
new leasing activity and contracted tenant escalations, net of
approximately 4% from tenant non-renewals.
- Capital expenditures and acquisitions. Capital
expenditures during the quarter were approximately $262 million,
comprised of approximately $21 million of land purchases,
approximately $16 million of sustaining capital expenditures and
approximately $225 million of revenue generating capital
expenditures. During the quarter, Crown Castle also closed on
its previously announced acquisition of FiberNet for approximately
$1.5 billion.
- Common stock dividend. During the
quarter, Crown Castle paid common stock dividends of approximately
$348 million in the aggregate, or $0.95 per common share, an
increase of approximately 7% on a per share basis compared to the
same period a year ago.
- Financing activities. In January, Crown
Castle issued $500 million in aggregate principal amount of senior
unsecured notes and increased the size of its existing term loan
facility by $500 million. Proceeds from both transactions
were used to refinance existing debt. Further, Crown Castle
extended the maturity of its existing revolving credit and term
loan facilities from January 2021 to January 2022.
"The first quarter marked another strong quarter
of execution as we exceeded the high end of our guidance for site
rental revenues, site rental gross margin, Adjusted EBITDA and
AFFO," stated Dan Schlanger, Crown Castle's Chief Financial
Officer. "Driven by the strong results from the first quarter and
expected continued healthy leasing activity across both towers and
small cells, we are increasing our full year 2017 Outlook. We
believe the strength of our business, our flexible capital
structure and our low cost of capital position us to continue to
deliver consistent growth while allowing us to pursue attractive
growth opportunities that we believe will drive long-term growth in
dividends per share."
OUTLOOKThis Outlook section
contains forward-looking statements, and actual results may differ
materially. Information regarding potential risks which could
cause actual results to differ from the forward-looking statements
herein is set forth below and in Crown Castle's filings with the
SEC.
The following table sets forth Crown Castle's
current Outlook for second quarter 2017 and full year
2017:
(in millions) |
Second Quarter 2017 |
Full Year 2017 |
Site
rental revenues |
$866 |
to |
$871 |
$3,473 |
to |
$3,503 |
Site
rental cost of operations |
$275 |
to |
$280 |
$1,071 |
to |
$1,101 |
Site
rental gross margin |
$589 |
to |
$594 |
$2,387 |
to |
$2,417 |
Net
income (loss) |
$90 |
to |
$110 |
$427 |
to |
$477 |
Adjusted EBITDA(a) |
$584 |
to |
$589 |
$2,372 |
to |
$2,402 |
Interest expense and
amortization of deferred financing costs(b) |
$137 |
to |
$142 |
$542 |
to |
$572 |
FFO(a) |
$394 |
to |
$399 |
$1,623 |
to |
$1,653 |
AFFO(a) |
$433 |
to |
$438 |
$1,805 |
to |
$1,835 |
Weighted-average common
shares outstanding - diluted(c) |
362 |
362 |
|
(a) See
reconciliation of this non-GAAP financial measure to net income
(loss) included herein. |
(b) See
the reconciliation of "components of interest expense and
amortization of deferred financing costs" herein for a discussion
of non-cash interest expense. |
(c) The
assumption for second quarter 2017 and full year 2017 diluted
weighted-average common shares outstanding is based on diluted
common shares outstanding as of March 31, 2017. |
Full Year 2017 and Second Quarter 2017
Outlook
The table below compares the results for full
year 2016, the midpoint of the current full year 2017 Outlook and
the midpoint of the previously provided full year 2017 Outlook for
select metrics.
|
Midpoint of FY 2017 Outlook to FY 2016 Actual
Comparison |
Previous Full Year 2017 Outlook(b) |
Current Compared to Previous Outlook |
($ in
millions) |
Current Full Year2017 Outlook |
Full Year 2016 Actual |
Change |
% Change |
Site rental
revenues |
$3,488 |
$3,233 |
+$255 |
+8% |
$3,483 |
+$5 |
Site rental gross
margin |
$2,402 |
$2,210 |
+$192 |
+9% |
$2,406 |
-$4 |
Net income (loss) |
$452 |
$357 |
+$95 |
+27% |
$385 |
+$67 |
Adjusted EBITDA(a) |
$2,387 |
$2,228 |
+$159 |
+7% |
$2,373 |
+$14 |
AFFO(a) |
$1,820 |
$1,610 |
+$210 |
+13% |
$1,816 |
+$4 |
Weighted-average common
shares outstanding - diluted(c) |
362 |
341 |
+21 |
+6% |
361 |
+1 |
|
(a) See
reconciliation of this non-GAAP financial measure to net income
(loss) included herein. |
(b) As
issued on January 25, 2017. Represents midpoint of
Outlook. |
(c) The
assumption for full year 2017 diluted weighted-average common
shares outstanding is based on diluted common shares outstanding as
of March 31, 2017. |
- The increase in full year 2017 Outlook primarily reflects the
outperformance in the first quarter and an increase in expected
gross margin contribution from network services for the remainder
of the year. This increase is partially offset by higher
anticipated site rental costs of approximately $10 million for
additional employees and sustaining capital expenditures of
approximately $5 million related to additional office space
necessary to increase our small cell production to deliver on
contracts to build 25,000 new small cell nodes in 2018 and
beyond.
- The chart below reconciles the components of expected growth
from 2016 to 2017 in site rental revenues of $240 million to $270
million, including expected Organic Contribution to Site Rental
Revenues of approximately $140 million to $170 million. A photo
accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/7506bca9-fa9a-46ba-8352-f1376f1615df
- The chart below reconciles the components of expected growth in
AFFO from 2016 to 2017 of approximately $210 million at the
midpoint. A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/2c805144-94e0-4941-a128-3d293b1bc54a
- Network services gross margin contribution for full year 2017
is expected to be approximately $255 million to $270 million.
- The current full year 2017 Outlook does not include
contribution from the recently announced acquisition of Wilcon
Holdings LLC ("Wilcon"), which is expected to close in the third
quarter of 2017. In the first full year of Crown Castle’s
ownership, Wilcon is expected to contribute approximately $40
million to gross margin and approximately $10 million of general
and administrative expenses. Crown Castle anticipates
financing the transaction consistent with maintaining its current
investment grade credit metrics.
- Compared to first quarter 2017, the midpoint of second quarter
2017 Outlook for site rental gross margin, Adjusted EBITDA and AFFO
are expected to be impacted by certain seasonal or timing items,
including approximately $6 million, $8 million and $9 million of
higher repair and maintenance expense, sustaining capital
expenditures and cash tax payments, respectively.
- Additional information is available in Crown Castle's quarterly
Supplemental Information Package posted in the Investors section of
its website.
CONFERENCE CALL DETAILSCrown
Castle has scheduled a conference call for Tuesday, April 25, 2017,
at 10:30 a.m. Eastern time. The conference call may be
accessed by dialing 877-852-6561 and asking for the Crown Castle
call (access code 3891737) at least 30 minutes prior to the start
time. The conference call may also be accessed live over the
Internet at http://investor.crowncastle.com. Supplemental
materials for the call have been posted on the Crown Castle website
at http://investor.crowncastle.com.
A telephonic replay of the conference call will
be available from 1:30 p.m. Eastern time on Tuesday, April 25,
2017, through 1:30 p.m. Eastern time on Monday, July 24, 2017, and
may be accessed by dialing 888-203-1112 and using access code
3891737. An audio archive will also be available on the
company's website at http://investor.crowncastle.com shortly
after the call and will be accessible for approximately 90
days.
ABOUT CROWN CASTLECrown Castle
provides wireless carriers with the infrastructure they need to
keep people connected and businesses running. With approximately
40,000 towers and 27,500 route miles of fiber supporting small
cells, Crown Castle is the nation's largest provider of shared
wireless infrastructure with a significant presence in the top 100
US markets. For more information on Crown Castle, please
visit www.crowncastle.com.
Non-GAAP Financial Measures and Other
Calculations
This press release includes presentations of
Adjusted EBITDA, Adjusted Funds from Operations ("AFFO"), Funds
from Operations ("FFO"), and Organic Contribution to Site Rental
Revenues, which are non-GAAP financial measures. These
non-GAAP financial measures are not intended as alternative
measures of operating results or cash flow from operations (as
determined in accordance with Generally Accepted Accounting
Principles ("GAAP")).
Our measures of Adjusted EBITDA, AFFO, FFO,
Organic Contribution to Site Rental Revenues, Segment Site Rental
Gross Margin, Segment Network Services and Other Gross Margin and
Segment Operating Profit may not be comparable to similarly titled
measures of other companies, including other companies in the tower
sector or other REITs. Our definition of FFO is consistent
with guidelines from the National Association of Real Estate
Investment Trusts with the exception of the impact of income taxes
in periods prior to our REIT conversion.
Adjusted EBITDA, AFFO, FFO, and Organic
Contribution to Site Rental Revenues are presented as additional
information because management believes these measures are useful
indicators of the financial performance of our business.
Among other things, management believes that:
- Adjusted EBITDA is useful to investors or other interested
parties in evaluating our financial performance. Adjusted
EBITDA is the primary measure used by management (1) to evaluate
the economic productivity of our operations and (2) for purposes of
making decisions about allocating resources to, and assessing the
performance of, our operations. Management believes that
Adjusted EBITDA helps investors or other interested parties
meaningfully evaluate and compare the results of our operations (1)
from period to period and (2) to our competitors, by removing the
impact of our capital structure (primarily interest charges from
our outstanding debt) and asset base (primarily depreciation,
amortization and accretion) from our financial results.
Management also believes Adjusted EBITDA is frequently used by
investors or other interested parties in the evaluation of the
wireless infrastructure sector and other REITs to measure financial
performance without regard to items such as depreciation,
amortization and accretion which can vary depending upon accounting
methods and the book value of assets. In addition, Adjusted
EBITDA is similar to the measure of current financial performance
generally used in our debt covenant calculations. Adjusted
EBITDA should be considered only as a supplement to net income
computed in accordance with GAAP as a measure of our
performance.
- AFFO is useful to investors or other interested parties in
evaluating our financial performance. Management believes
that AFFO helps investors or other interested parties meaningfully
evaluate our financial performance as they include (1) the impact
of our capital structure (primarily interest expense on our
outstanding debt and dividends on our preferred stock) and (2)
sustaining capital expenditures, and exclude the impact of our (1)
asset base (primarily depreciation, amortization and accretion) and
(2) certain non-cash items, including straight-lined revenues and
expenses related to fixed escalations and rent free periods.
GAAP requires rental revenues and expenses related to leases that
contain specified rental increases over the life of the lease to be
recognized evenly over the life of the lease. In accordance
with GAAP, if payment terms call for fixed escalations, or rent
free periods, the revenue or expense is recognized on a
straight-lined basis over the fixed, non-cancelable term of the
contract. Management notes that the Company uses AFFO only as
a performance measure. AFFO should be considered only as a
supplement to net income computed in accordance with GAAP as a
measure of our performance and should not be considered as an
alternative to cash flows from operations or as residual cash flow
available for discretionary investment.
- FFO is useful to investors or other interested parties in
evaluating our financial performance. Management believes
that FFO may be used by investors or other interested parties as a
basis to compare our financial performance with that of other
REITs. FFO helps investors or other interested parties
meaningfully evaluate financial performance by excluding the impact
of our asset base (primarily depreciation, amortization and
accretion). FFO is not a key performance indicator used by the
Company. FFO should be considered only as a supplement to net
income computed in accordance with GAAP as a measure of our
performance and should not be considered as an alternative to cash
flow from operations.
- Organic Contribution to Site Rental Revenues is useful to
investors or other interested parties in understanding the
components of the year-over year changes in our site rental
revenues computed in accordance with GAAP. Management uses
the Organic Contribution to Site Rental Revenues to assess
year-over-year growth rates for our rental activities, to evaluate
current performance, to capture trends in rental rates, new leasing
activities and customer non-renewals in our core business, as well
to forecast future results. Organic Contribution to Site Rental
Revenues is not meant as an alternative measure of revenue and
should be considered only as a supplement in understanding and
assessing the performance of our site rental revenues computed in
accordance with GAAP.
In addition to the non-GAAP financial measures
used herein, we also provide Segment Site Rental Gross Margin,
Segment Network Services and Other Gross Margin and Segment
Operating Profit, which are key measures used by management to
evaluate our operating segments for purposes of making decisions
about allocating capital and assessing performance. These
segment measures are provided pursuant to GAAP requirements related
to segment reporting. In addition, we provide the components
of certain GAAP measures, such as capital expenditures.
We define our non-GAAP financial measures and
other measures as follows:
Adjusted EBITDA. We define Adjusted EBITDA as
net income (loss) plus restructuring charges (credits), asset
write-down charges, acquisition and integration costs,
depreciation, amortization and accretion, amortization of prepaid
lease purchase price adjustments, interest expense and amortization
of deferred financing costs, gains (losses) on retirement of
long-term obligations, net gain (loss) on interest rate swaps,
gains (losses) on foreign currency swaps, impairment of
available-for-sale securities, interest income, other income
(expense), benefit (provision) for income taxes, cumulative effect
of a change in accounting principle, income (loss) from
discontinued operations and stock-based compensation expense.
Adjusted Funds from Operations. We define
Adjusted Funds from Operations as FFO before straight-lined
revenue, straight-line expense, stock-based compensation expense,
non-cash portion of tax provision, non-real estate related
depreciation, amortization and accretion, amortization of non-cash
interest expense, other (income) expense, gain (loss) on retirement
of long-term obligations, net gain (loss) on interest rate swaps,
gains (losses) on foreign currency swaps, acquisition and
integration costs, and adjustments for noncontrolling interests,
and less capital improvement capital expenditures and corporate
capital expenditures.
Funds from Operations. We define Funds from
Operations as net income plus real estate related depreciation,
amortization and accretion and asset write-down charges, less
noncontrolling interest and cash paid for preferred stock
dividends, and is a measure of funds from operations attributable
to CCIC common stockholders.
Organic Contribution to Site Rental Revenues. We
define the Organic Contribution to Site Rental Revenues as the sum
of the change in GAAP site rental revenues related to (1) new
leasing activity including revenues from the construction of small
cells and the impact of prepaid rent, (2) escalators and less (3)
non-renewals of customer contracts.
Discretionary capital expenditures. We
define discretionary capital expenditures as those capital
expenditures made with respect to activities which we believe
exhibit sufficient potential to enhance long-term stockholder
value. They consist of (1) improvements to existing wireless
infrastructure and construction of new wireless infrastructure
(collectively referred to as "revenue generating") and (2)
purchases of land assets under towers as we seek to manage our
interests in the land beneath our towers.
Sustaining capital expenditures. We define
sustaining capital expenditures as either (1) corporate related
capital improvements, such as buildings, information technology
equipment and office equipment or (2) capital improvements to tower
sites that enable our customers' ongoing quiet enjoyment of the
tower.
Segment Site Rental Gross Margin. We
define Segment Site Rental Gross Margin as segment site rental
revenues less segment site rental cost of operations, excluding
stock-based compensation expense and prepaid lease purchase price
adjustments recorded in cost of operations.
Segment Network Services and Other Gross
Margin. We define Segment Network Services and Other Gross
Margin as segment network services and other revenues less segment
network services and other cost of operations, excluding
stock-based compensation expense recorded in cost of
operations.
Segment Operating Profit. We define
Segment Operating Profit as segment revenues less segment cost of
operations and segment general and administrative expenses,
excluding stock-based compensation expense and prepaid lease
purchase price adjustments recorded in cost of operations.
The tables set forth below reconcile the
non-GAAP financial measures used herein to comparable GAAP
financial measures. The components in these tables may not
sum to the total due to rounding.
Reconciliations of Non-GAAP Financial Measures to
Comparable GAAP Financial Measures and Other
Calculations:
Reconciliation of Historical Adjusted
EBITDA:
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
March 31, 2017 |
|
March 31, 2016 |
|
December 31, 2016 |
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
119.1 |
|
|
$ |
47.8 |
|
|
$ |
357.0 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
Asset
write-down charges |
0.6 |
|
|
8.0 |
|
|
34.5 |
|
Acquisition and integration costs |
5.7 |
|
|
5.6 |
|
|
17.5 |
|
Depreciation, amortization and accretion |
288.5 |
|
|
277.9 |
|
|
1,108.6 |
|
Amortization of prepaid lease purchase price adjustments |
5.1 |
|
|
5.2 |
|
|
21.3 |
|
Interest
expense and amortization of deferred financing costs(a) |
134.5 |
|
|
126.4 |
|
|
515.0 |
|
Gains
(losses) on retirement of long-term obligations |
3.5 |
|
|
30.6 |
|
|
52.3 |
|
Interest
income |
(0.4 |
) |
|
(0.2 |
) |
|
(0.8 |
) |
Other
income (expense) |
(4.6 |
) |
|
3.3 |
|
|
8.8 |
|
Benefit
(provision) for income taxes |
4.4 |
|
|
3.9 |
|
|
16.9 |
|
Stock-based compensation expense |
24.9 |
|
|
30.7 |
|
|
96.5 |
|
Adjusted EBITDA(b)(c) |
$ |
581.4 |
|
|
$ |
539.1 |
|
|
$ |
2,227.5 |
|
|
(a) See
the reconciliation of "components of interest expense and
amortization of deferred financing costs" herein for a discussion
of non-cash interest expense. |
(b) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion of our definition of Adjusted EBITDA. |
(c) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
Reconciliation of Current Outlook for Adjusted
EBITDA:
|
Q2 2017 |
|
Full Year 2017 |
(in
millions) |
Outlook |
|
Outlook |
Net income (loss) |
$90 |
to |
$110 |
|
$427 |
to |
$477 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
Asset
write-down charges |
$9 |
to |
$11 |
|
$26 |
to |
$36 |
|
Acquisition and integration costs |
$4 |
to |
$8 |
|
$15 |
to |
$25 |
|
Depreciation, amortization and accretion |
$288 |
to |
$302 |
|
$1,170 |
to |
$1,200 |
|
Amortization of prepaid lease purchase price adjustments |
$4 |
to |
$6 |
|
$19 |
to |
$21 |
|
Interest
expense and amortization of deferred financing costs(a) |
$137 |
to |
$142 |
|
$542 |
to |
$572 |
|
Gains
(losses) on retirement of long-term obligations |
$0 |
to |
$0 |
|
$4 |
to |
$4 |
|
Interest
income |
$(1) |
to |
$1 |
|
$(2) |
to |
$2 |
|
Other
income (expense) |
$(1) |
to |
$3 |
|
$(3) |
to |
$(1) |
|
Benefit
(provision) for income taxes |
$3 |
to |
$7 |
|
$15 |
to |
$23 |
|
Stock-based compensation expense |
$25 |
to |
$27 |
|
$97 |
to |
$102 |
|
Adjusted EBITDA(b)(c) |
$584 |
to |
$589 |
|
$2,372 |
to |
$2,402 |
|
|
(a) See
the reconciliation of "components of interest expense and
amortization of deferred financing costs" herein for a discussion
of non-cash interest expense. |
(b) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion of our definition of Adjusted EBITDA. |
(c) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
Reconciliation of Historical FFO and
AFFO:
|
For the Three Months Ended |
|
For the Twelve Months Ended |
(in millions) |
March 31,2017 |
|
March 31,2016 |
|
December 31, 2016 |
Net income (loss) |
$ |
119.1 |
|
|
$ |
47.8 |
|
|
$ |
|
357.0 |
|
Real estate related
depreciation, amortization and accretion |
281.2 |
|
|
271.5 |
|
|
1,082.1 |
|
Asset write-down
charges |
0.6 |
|
|
8.0 |
|
|
34.5 |
|
Dividends on preferred
stock |
— |
|
|
(11.0 |
) |
|
(44.0 |
) |
FFO(a)(b)(c)(d) |
$ |
400.9 |
|
|
$ |
316.3 |
|
|
$ |
1,429.5 |
|
|
|
|
|
|
|
FFO (from above) |
$ |
400.9 |
|
|
$ |
316.3 |
|
|
$ |
1,429.5 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
Straight-lined revenue |
(1.3 |
) |
|
(17.3 |
) |
|
(47.4 |
) |
Straight-lined expense |
23.2 |
|
|
23.8 |
|
|
94.2 |
|
Stock-based compensation expense |
24.9 |
|
|
30.7 |
|
|
96.5 |
|
Non-cash
portion of tax provision |
3.6 |
|
|
1.8 |
|
|
7.3 |
|
Non-real
estate related depreciation, amortization and accretion |
7.4 |
|
|
6.4 |
|
|
26.5 |
|
Amortization of non-cash interest expense |
2.8 |
|
|
4.2 |
|
|
14.3 |
|
Other
(income) expense |
(4.6 |
) |
|
3.3 |
|
|
8.8 |
|
Gains
(losses) on retirement of long-term obligations |
3.5 |
|
|
30.6 |
|
|
52.3 |
|
Acquisition and integration costs |
5.7 |
|
|
5.6 |
|
|
17.5 |
|
Capital
improvement capital expenditures |
(6.9 |
) |
|
(6.4 |
) |
|
(42.8 |
) |
Corporate
capital expenditures |
(9.2 |
) |
|
(3.7 |
) |
|
(46.9 |
) |
AFFO(a)(b)(c)(d) |
$ |
450.2 |
|
|
$ |
395.2 |
|
|
$ |
1,609.9 |
|
|
(a) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion of our definitions of FFO and AFFO. |
(b) FFO
and AFFO are reduced by cash paid for preferred stock
dividends. |
(c)
Diluted weighted-average common shares outstanding were 361.7
million, 334.9 million and 340.9 million for the three months ended
March 31, 2017 and 2016, and the twelve months ended December 31,
2016, respectively. |
(d) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
Reconciliation of Current Outlook for
FFO and AFFO:
|
Q2 2017 |
|
Full Year 2017 |
(in millions) |
Outlook |
|
Outlook |
Net income (loss) |
$90 |
to |
$110 |
|
|
$427 |
to |
$477 |
|
Real estate related
depreciation, amortization and accretion |
$283 |
to |
$293 |
|
|
$1,146 |
to |
$1,166 |
|
Asset write-down
charges |
$9 |
to |
$11 |
|
|
$26 |
to |
$36 |
|
FFO(a)(b)(c) |
$394 |
to |
$399 |
|
|
$1,623 |
to |
$1,653 |
|
|
|
|
|
|
|
|
|
FFO (from above) |
$394 |
to |
$399 |
|
|
$1,623 |
to |
$1,653 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
Straight-lined revenue |
$(2) |
to |
$3 |
|
|
$6 |
to |
$21 |
|
Straight-lined expense |
$21 |
to |
$26 |
|
|
$81 |
to |
$96 |
|
Stock-based compensation expense |
$25 |
to |
$27 |
|
|
$97 |
to |
$102 |
|
Non-cash
portion of tax provision |
$(7) |
to |
$(2) |
|
|
$(4) |
to |
$6 |
|
Non-real
estate related depreciation, amortization and accretion |
$5 |
to |
$9 |
|
|
$24 |
to |
$34 |
|
Amortization of non-cash interest expense |
$2 |
to |
$5 |
|
|
$8 |
to |
$14 |
|
Other
(income) expense |
$(1) |
to |
$2 |
|
|
$(3) |
to |
$(1) |
|
Gains
(losses) on retirement of long-term obligations |
$0 |
to |
$0 |
|
|
$4 |
to |
$4 |
|
Acquisition and integration costs |
$4 |
to |
$8 |
|
|
$15 |
to |
$25 |
|
Capital
improvement capital expenditures |
$(14) |
to |
$(9) |
|
|
$(41) |
to |
$(31) |
|
Corporate
capital expenditures |
$(15) |
to |
$(10) |
|
|
$(54) |
to |
$(44) |
|
AFFO(a)(b)(c) |
$433 |
to |
$438 |
|
|
$1,805 |
to |
$1,835 |
|
|
(a) The
assumption for second quarter 2017 and full year 2017 diluted
weighted-average common shares outstanding is 362 million based on
diluted common shares outstanding as of March 31, 2017. |
(b) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion for our definitions of FFO and AFFO. |
(c) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
For Comparative Purposes - Reconciliation of Previous
Outlook for Adjusted EBITDA:
|
Previously Issued |
|
Previously Issued |
|
Q1 2017 |
|
Full Year 2017 |
(in
millions) |
Outlook |
|
Outlook |
Net income (loss) |
$88 |
to |
$108 |
|
$360 |
to |
$410 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
Asset
write-down charges |
$9 |
to |
$11 |
|
$35 |
to |
$45 |
Acquisition and integration costs |
$5 |
to |
$8 |
|
$19 |
to |
$24 |
Depreciation, amortization and accretion |
$288 |
to |
$303 |
|
$1,217 |
to |
$1,243 |
Amortization of prepaid lease purchase price adjustments |
$4 |
to |
$6 |
|
$20 |
to |
$22 |
Interest
expense and amortization of deferred financing costs |
$132 |
to |
$137 |
|
$540 |
to |
$570 |
Interest
income |
$(1) |
to |
$0 |
|
$(1) |
to |
$1 |
Other
income (expense) |
$(1) |
to |
$2 |
|
$2 |
to |
$4 |
Benefit
(provision) for income taxes |
$2 |
to |
$6 |
|
$14 |
to |
$22 |
Stock-based compensation expense |
$23 |
to |
$25 |
|
$96 |
to |
$101 |
Adjusted EBITDA(a)(b) |
$575 |
to |
$580 |
|
$2,358 |
to |
$2,388 |
|
(a) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion of our definition of Adjusted EBITDA. |
(b) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
For Comparative Purposes -
Reconciliation of Previous Outlook for FFO and AFFO:
|
Previously Issued |
|
Previously Issued |
|
Q1 2017 |
|
Full Year 2017 |
(in millions) |
Outlook |
|
Outlook |
Net income (loss) |
$88 |
to |
$108 |
|
|
$360 |
to |
$410 |
|
Real estate related
depreciation, amortization and accretion |
$282 |
to |
$295 |
|
|
$1,193 |
to |
$1,214 |
|
Asset write-down
charges |
$9 |
to |
$11 |
|
|
$35 |
to |
$45 |
|
FFO(a)(b)(c) |
$395 |
to |
$400 |
|
|
$1,616 |
to |
$1,646 |
|
|
|
|
|
|
|
|
|
FFO (from above) |
$395 |
to |
$400 |
|
|
$1,616 |
to |
$1,646 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
Straight-line revenue |
$(4) |
to |
$1 |
|
|
$8 |
to |
$23 |
|
Straight-line expense |
$21 |
to |
$26 |
|
|
$80 |
to |
$95 |
|
Stock-based compensation expense |
$23 |
to |
$25 |
|
|
$96 |
to |
$101 |
|
Non-cash
portion of tax provision |
$0 |
to |
$5 |
|
|
$(3) |
to |
$12 |
|
Non-real
estate related depreciation, amortization and accretion |
$6 |
to |
$8 |
|
|
$24 |
to |
$29 |
|
Amortization of non-cash interest expense |
$3 |
to |
$6 |
|
|
$11 |
to |
$17 |
|
Other
(income) expense |
$(1) |
to |
$2 |
|
|
$2 |
to |
$4 |
|
Acquisition and integration costs |
$5 |
to |
$8 |
|
|
$19 |
to |
$24 |
|
Capital
improvement capital expenditures |
$(16) |
to |
$(11) |
|
|
$(50) |
to |
$(45) |
|
Corporate
capital expenditures |
$(7) |
to |
$(2) |
|
|
$(36) |
to |
$(31) |
|
AFFO(a)(b)(c) |
$440 |
to |
$445 |
|
|
$1,801 |
to |
$1,831 |
|
|
(a)
Previously issued first quarter 2017 and full year 2017 outlook
assumes diluted common shares outstanding as of December 31, 2016
of approximately 361 million shares. |
(b) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion for our definitions of FFO and AFFO. |
(c) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
The components of changes in site rental revenues for
the quarters ended March 31, 2017 and 2016 are as
follows:
|
Three Months Ended March 31, |
(in
millions) |
2017 |
|
2016 |
Components of
changes in site rental revenues(f): |
|
|
|
Prior
year site rental revenues exclusive of straight-line associated
with fixed escalators(a)(c) |
$ |
782 |
|
|
$ |
701 |
|
|
|
|
|
|
|
|
|
New
leasing activity(a)(c) |
41 |
|
|
47 |
|
Escalators |
21 |
|
|
23 |
|
Non-renewals |
(28 |
) |
|
(16 |
) |
Organic
Contribution to Site Rental Revenues(d) |
34 |
|
|
54 |
|
Straight-lined revenues associated with fixed escalators |
1 |
|
|
17 |
|
Acquisitions and builds(b) |
40 |
|
|
27 |
|
Other |
— |
|
|
— |
|
Total GAAP site rental
revenues |
$ |
857 |
|
|
$ |
799 |
|
|
|
|
|
Year-over-year
changes in revenue: |
|
|
|
Reported GAAP site
rental revenues |
7.3 |
% |
|
|
Organic Contribution to
Site Rental Revenues(d)(e) |
4.3 |
% |
|
|
|
(a)
Includes revenues from amortization of prepaid rent in accordance
with GAAP. |
(b) The
financial impact of acquisitions, as measured by the initial
contribution, and tower builds is excluded from Organic
Contribution to Site Rental Revenues until the one-year anniversary
of the acquisition or build. |
(c)
Includes revenues from the construction of new small cell nodes,
exclusive of straight-lined revenues related to fixed
escalators. |
(d) See
"Non-GAAP Financial Measures and Other Calculations" herein. |
(e)
Calculated as the percentage change from prior year site rental
revenues exclusive of straight-lined revenues associated with fixed
escalations compared to Organic Contribution to Site Rental
Revenues for the current period. |
(f)
Additional information regarding Crown Castle's site rental
revenues including projected revenue from customer licenses, tenant
non-renewals, straight-lined revenues and prepaid rent is available
in Crown Castle's quarterly Supplemental Information Package posted
in the Investors section of its website. |
The components of the changes in site rental revenues
for the year ending December 31, 2017 are forecasted as
follows:
|
|
|
|
(in millions) |
Full Year 2017 Outlook |
|
Full Year 2016 |
Components of changes
in site rental revenues(g): |
|
|
|
Prior
year site rental revenues exclusive of straight-line associated
with fixed escalators(a)(c) |
$3,186 |
|
$2,907 |
|
|
|
|
New
leasing activity(a)(c) |
155 -
175 |
|
174 |
Escalators |
80 -
85 |
|
89 |
Non-renewals |
(95) - (90) |
|
(74) |
Organic
Contribution to Site Rental Revenues(d) |
140 -
170 |
|
189 |
Straight-lined revenues associated with fixed escalators |
(20) -
(10) |
|
47 |
Acquisitions and builds(b) |
160 |
|
90 |
Other |
— |
|
— |
Total GAAP site rental
revenues |
$3,473 - $3,503 |
|
$3,233 |
|
|
|
|
Year-over-year
changes in revenue:(f) |
|
|
|
Reported GAAP site
rental revenues |
7.9% |
|
|
Organic Contribution to
Site Rental Revenues(d)(e) |
4.9% |
|
|
|
(a)
Includes revenues from amortization of prepaid rent in accordance
with GAAP.(b) The financial impact of acquisitions, as measured by
the initial contribution, and tower builds is excluded from Organic
Contribution to Site Rental Revenues until the one-year anniversary
of the acquisition or build.(c) Includes revenues from the
construction of new small cell nodes, exclusive of straight-lined
revenues related to fixed escalators.(d) See "Non-GAAP Financial
Measures and Other Calculations" herein.(e) Calculated as the
percentage change from prior year site rental revenues exclusive of
straight-lined revenues associated with fixed escalations compared
to Organic Contribution to Site Rental Revenues for the current
period.(f) Calculated based on midpoint of Full Year 2017
Outlook.(g) Additional information regarding Crown Castle's site
rental revenues including projected revenue from customer licenses,
tenant non-renewals, straight-lined revenues and prepaid rent is
available in Crown Castle's quarterly Supplemental Information
Package posted in the Investors section of its website. |
Components of Historical Interest
Expense and Amortization of Deferred Financing Costs:
|
For the Three Months Ended |
(in millions) |
March 31,2017 |
|
March 31,2016 |
|
Interest expense on
debt obligations |
$ |
131.7 |
|
|
$ |
122.2 |
|
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
4.6 |
|
|
5.1 |
|
Other, net |
(1.7 |
) |
|
(0.9 |
) |
Interest expense and
amortization of deferred financing costs |
$ |
134.5 |
|
|
$ |
126.4 |
|
Components of Current Outlook for
Interest Expense and Amortization of Deferred Financing
Costs:
|
Q2 2017 |
|
Full Year 2017 |
(in millions) |
Outlook |
|
Outlook |
Interest expense on
debt obligations |
$136 |
to |
$138 |
|
|
$538 |
|
to |
$553 |
|
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
$4 |
to |
$7 |
|
|
$17 |
|
to |
$21 |
|
Other, net |
$(2) |
to |
$(2) |
|
|
$(9) |
|
to |
$(7) |
|
Interest
expense and amortization of deferred financing costs |
$137 |
to |
$142 |
|
|
$542 |
|
to |
$572 |
|
Debt balances and maturity dates as of
March 31, 2017 are as follows:
(in
millions) |
Face Value |
|
Final Maturity |
Bank debt - variable
rate: |
|
|
|
2016
Revolver |
$ |
335.0 |
|
|
Jan.
2022 |
2016 Term
Loan A |
2,447.1 |
|
Jan.
2022 |
Total bank debt |
2,782.1 |
|
|
Securitized debt -
fixed rate: |
|
|
|
Secured
Notes, Series 2009-1, Class A-1(a) |
47.6 |
|
Aug.
2019 |
Secured
Notes, Series 2009-1, Class A-2(a) |
70.0 |
|
Aug.
2029 |
Tower
Revenue Notes, Series 2010-3(b) |
1,250.0 |
|
Jan.
2040 |
Tower
Revenue Notes, Series 2010-6(b) |
1,000.0 |
|
Aug.
2040 |
Tower
Revenue Notes, Series 2015-1(b) |
300.0 |
|
May
2042 |
Tower
Revenue Notes, Series 2015-2(b) |
700.0 |
|
May
2045 |
Total
securitized debt |
3,367.6 |
|
|
Bonds - fixed
rate: |
|
|
|
5.250% Senior Notes |
1,650.0 |
|
Jan.
2023 |
3.849%
Secured Notes |
1,000.0 |
|
Apr.
2023 |
4.875%
Senior Notes |
850.0 |
|
Apr.
2022 |
3.400%
Senior Notes |
850.0 |
|
Feb.
2021 |
4.450%
Senior Notes |
900.0 |
|
Feb.
2026 |
3.700%
Senior Notes |
750.0 |
|
June
2026 |
2.250%
Senior Notes |
700.0 |
|
Sept.
2021 |
4.000%
Senior Notes |
500.0 |
|
Mar.
2027 |
Total
bonds |
7,200.0 |
|
|
Capital leases and
other obligations |
233.9 |
|
|
Various |
Total Debt |
$ |
13,583.6 |
|
|
|
Less:
Cash and Cash Equivalents(c) |
$ |
205.2 |
|
|
|
Net Debt |
$ |
13,378.4 |
|
|
|
|
(a) The Senior Secured Notes, Series 2009-1, Class A-1
principal amortizes during the period beginning January 2010 and
ending in 2019 and the Senior Secured Notes, 2009-1, Class A-2
principal amortizes during the period beginning in 2019 and ending
in 2029.(b) The Senior Secured Tower Revenue Notes, Series 2010-3
and 2010-6 have anticipated repayment dates in 2020. The
Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 have
anticipated repayment dates in 2022 and 2025, respectively.(c)
Excludes restricted cash. |
Net Debt to Last Quarter Annualized Adjusted EBITDA is
computed as follows:
(in millions) |
For the Three Months Ended March 31, 2017 |
Total face value of
debt |
$ |
13,583.6 |
|
|
Ending cash and cash
equivalents(a) |
205.2 |
|
|
Total Net Debt |
$ |
13,378.4 |
|
|
|
|
|
Adjusted EBITDA for the
three months ended March 31, 2017 |
$ |
581.4 |
|
|
Last quarter annualized
adjusted EBITDA |
2,325.6 |
|
|
Net Debt to
Last Quarter Annualized Adjusted EBITDA |
5.8 |
x |
(b) |
|
(a)
Excludes restricted cash.(b) The Net Debt to Last Quarter
Annualized Adjusted EBITDA calculation does not give effect to a
full quarter of ownership of FiberNet, as this acquisition closed
on January 17, 2017. |
Components of Capital
Expenditures:
|
For the Three Months Ended |
|
March 31, 2017 |
|
March 31, 2016 |
|
Towers |
Small Cells |
Other |
Total |
|
Towers |
Small Cells |
Other |
Total |
Discretionary: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
of land interests |
$ |
21.1 |
|
$ |
— |
|
$ |
— |
|
$ |
21.1 |
|
|
$ |
21.3 |
|
$ |
— |
|
$ |
— |
|
$ |
21.3 |
|
Wireless
infrastructure construction and improvements |
73.9 |
|
151.3 |
|
— |
|
225.2 |
|
|
83.5 |
|
78.6 |
|
— |
|
162.1 |
|
Sustaining: |
|
|
|
|
|
|
|
|
|
Capital
improvement and corporate |
6.5 |
|
2.9 |
|
6.7 |
|
16.1 |
|
|
6.3 |
|
1.6 |
|
2.3 |
|
10.2 |
|
Total |
$ |
101.5 |
|
$ |
154.2 |
|
$ |
6.7 |
|
$ |
262.4 |
|
|
$ |
111.0 |
|
$ |
80.2 |
|
$ |
2.3 |
|
$ |
193.5 |
|
Cautionary Language Regarding
Forward-Looking Statements
This press release contains forward-looking
statements and information that are based on our management's
current expectations. Such statements include our Outlook and
plans, projections, and estimates regarding (1) potential benefits,
returns and shareholder value which may be derived from our
business, assets, investments, dividends and acquisitions,
including on a long-term basis, (2) our strategy, strategic
position and strength of our business, (3) carrier network
investments and upgrades, and the benefits which may be derived
therefrom, (4) demand for mobile data and wireless connectivity and
the benefits which may be derived therefrom, (5) our growth and
long-term prospects, (6) leasing activity, pipeline of deployment
commitments for our wireless infrastructure and our ability to
respond to, deploy or produce with respect thereto, (7) our
investments, including in towers, small cells, our capabilities and
other assets, and the potential growth, returns and benefits
therefrom, (8) our annual small cell node production, (9) our
dividends, including our dividend plans and the amount and growth
of our dividends, (10) demand for our wireless infrastructure and
services, (11) our capital structure, (12) tenant non-renewals,
including the impact and timing thereof, (13) capital expenditures,
including sustaining capital expenditures, (14) seasonal and timing
items, including repair and maintenance expense, sustaining capital
expenditures and tax payments, (15) straight-line adjustments, (16)
expenses and cost structure, (17) site rental revenues, (18) site
rental cost of operations, (19) site rental gross margin, (20)
network services gross margin, (21) net income (loss), (22)
Adjusted EBITDA, (23) interest expense and amortization of deferred
financing costs, (24) FFO, (25) AFFO, (26) Organic Contribution to
Site Rental Revenues and Organic Contribution to Site Rental
Revenue growth, (27) our common shares outstanding, including on a
diluted basis and (28) the utility of certain financial measures,
including non-GAAP financial measures. Such forward-looking
statements are subject to certain risks, uncertainties and
assumptions prevailing market conditions and the following:
- Our business depends on the demand for our wireless
infrastructure, driven primarily by demand for wireless
connectivity, and we may be adversely affected by any slowdown in
such demand. Additionally, a reduction in the amount or
change in the mix of carrier network investment may materially and
adversely affect our business (including reducing demand for new
tenant additions and network services).
- A substantial portion of our revenues is derived from a small
number of customers, and the loss, consolidation or financial
instability of any of our limited number of customers may
materially decrease revenues or reduce demand for our wireless
infrastructure and network services.
- The business model for small cells contains differences from
our traditional site rental business, resulting in different
operational risks. If we do not successfully operate that
business model or identify or manage those operational risks, such
operations may produce results that are less than anticipated.
- Our substantial level of indebtedness could adversely affect
our ability to react to changes in our business, and the terms of
our debt instruments limit our ability to take a number of actions
that our management might otherwise believe to be in our best
interests. In addition, if we fail to comply with our
covenants, our debt could be accelerated.
- We have a substantial amount of indebtedness. In the
event we do not repay or refinance such indebtedness, we could face
substantial liquidity issues and might be required to issue equity
securities or securities convertible into equity securities, or
sell some of our assets to meet our debt payment obligations.
- Sales or issuances of a substantial number of shares of our
common stock may adversely affect the market price of our common
stock.
- As a result of competition in our industry, we may find it more
difficult to achieve favorable rental rates on our new or renewing
tenant leases.
- New technologies may reduce demand for our wireless
infrastructure or negatively impact our revenues.
- The expansion and development of our business, including
through acquisitions, increased product offerings or other
strategic growth opportunities, may cause disruptions in our
business, which may have an adverse effect on our business,
operations or financial results.
- If we fail to retain rights to our wireless infrastructure,
including the land interests under our towers, our business may be
adversely affected.
- Our network services business has historically experienced
significant volatility in demand, which reduces the predictability
of our results.
- New wireless technologies may not deploy or be adopted by
customers as rapidly or in the manner projected.
- If we fail to comply with laws and regulations which regulate
our business and which may change at any time, we may be fined or
even lose our right to conduct some of our business.
- If radio frequency emissions from wireless handsets or
equipment on our wireless infrastructure are demonstrated to cause
negative health effects, potential future claims could adversely
affect our operations, costs or revenues.
- Certain provisions of our restated certificate of
incorporation, amended and restated by-laws and operative
agreements, and domestic and international competition laws may
make it more difficult for a third party to acquire control of us
or for us to acquire control of a third party, even if such a
change in control would be beneficial to our stockholders.
- We may be vulnerable to security breaches that could adversely
affect our business, operations, and reputation.
- Future dividend payments to our stockholders will reduce the
availability of our cash on hand available to fund future
discretionary investments, and may result in a need to incur
indebtedness or issue equity securities to fund growth
opportunities. In such event, the then current economic,
credit market or equity market conditions will impact the
availability or cost of such financing, which may hinder our
ability to grow our per share results of operations.
- Remaining qualified to be taxed as a REIT involves highly
technical and complex provisions of the US Internal Revenue
Code. Failure to remain qualified as a REIT would result in
our inability to deduct dividends to stockholders when computing
our taxable income, which would reduce our available cash.
- Complying with REIT requirements, including the 90%
distribution requirement, may limit our flexibility or cause us to
forgo otherwise attractive opportunities, including certain
discretionary investments and potential financing
alternatives.
- REIT related ownership limitations and transfer restrictions
may prevent or restrict certain transfers of our capital
stock.
Should one or more of these or other risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those expected. More
information about potential risk factors which could affect our
results is included in our filings with the SEC. As used in
this release, the term "including," and any variation thereof,
means "including without limitation."
The photos will also be available via AP PhotoExpress and
NewsCom.
Contacts:
Dan Schlanger, CFO Son
Nguyen, VP & Treasurer Crown Castle
International Corp. 713-570-3050
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)(in thousands, except share amounts
|
March 31, 2017 |
|
December 31, 2016 |
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
205,192 |
|
|
$ |
567,599 |
|
Restricted cash |
115,128 |
|
|
124,547 |
|
Receivables, net |
302,697 |
|
|
373,532 |
|
Prepaid
expenses |
153,337 |
|
|
128,721 |
|
Other
current assets |
140,095 |
|
|
130,362 |
|
Total
current assets |
916,449 |
|
|
1,324,761 |
|
Deferred site rental
receivables |
1,310,233 |
|
|
1,317,658 |
|
Property and equipment,
net |
10,293,693 |
|
|
9,805,315 |
|
Goodwill |
6,530,001 |
|
|
5,757,676 |
|
Other intangible
assets, net |
3,894,362 |
|
|
3,650,072 |
|
Long-term prepaid rent
and other assets, net |
832,104 |
|
|
819,610 |
|
Total
assets |
$ |
23,776,842 |
|
|
$ |
22,675,092 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
154,753 |
|
|
$ |
188,516 |
|
Accrued
interest |
84,218 |
|
|
97,019 |
|
Deferred
revenues |
366,758 |
|
|
353,005 |
|
Other
accrued liabilities |
183,584 |
|
|
221,066 |
|
Current
maturities of debt and other obligations |
112,882 |
|
|
101,749 |
|
Total
current liabilities |
902,195 |
|
|
961,355 |
|
Debt and other
long-term obligations |
13,380,091 |
|
|
12,069,393 |
|
Other long-term
liabilities |
2,131,076 |
|
|
2,087,229 |
|
Total
liabilities |
16,413,362 |
|
|
15,117,977 |
|
Commitments and
contingencies |
|
|
|
CCIC stockholders'
equity: |
|
|
|
Common
stock, $.01 par value; 600,000,000 shares authorized; shares issued
and outstanding: March 31, 2017—361,355,043 and December 31,
2016—360,536,659 |
3,614 |
|
|
3,605 |
|
Additional paid-in capital |
10,968,564 |
|
|
10,938,236 |
|
Accumulated other comprehensive income (loss) |
(5,713 |
) |
|
(5,888 |
) |
Dividends/distributions in excess of earnings |
(3,602,985 |
) |
|
(3,378,838 |
) |
Total
equity |
7,363,480 |
|
|
7,557,115 |
|
Total
liabilities and equity |
$ |
23,776,842 |
|
|
$ |
22,675,092 |
|
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (UNAUDITED)(in thousands, except share and per
share amounts)
|
Three Months Ended March 31, |
|
2017 |
|
2016 |
Net
revenues: |
|
|
|
|
|
|
|
Site
rental |
$ |
856,936 |
|
|
$ |
799,294 |
|
Network
services and other |
159,006 |
|
|
135,090 |
|
Net
revenues |
1,015,942 |
|
|
934,384 |
|
Operating
expenses: |
|
|
|
Costs of
operations (exclusive of depreciation, amortization and
accretion): |
|
|
|
Site
rental |
265,017 |
|
|
252,621 |
|
Network
services and other |
98,808 |
|
|
80,971 |
|
General
and administrative |
100,724 |
|
|
97,581 |
|
Asset
write-down charges |
645 |
|
|
7,959 |
|
Acquisition and integration costs |
5,650 |
|
|
5,638 |
|
Depreciation, amortization and accretion |
288,549 |
|
|
277,875 |
|
Total
operating expenses |
759,393 |
|
|
722,645 |
|
Operating income
(loss) |
256,549 |
|
|
211,739 |
|
Interest expense and
amortization of deferred financing costs |
(134,487 |
) |
|
(126,378 |
) |
Gains (losses) on
retirement of long-term obligations |
(3,525 |
) |
|
(30,550 |
) |
Interest income |
370 |
|
|
174 |
|
Other income
(expense) |
4,600 |
|
|
(3,273 |
) |
Income (loss) before
income taxes |
123,507 |
|
|
51,712 |
|
Benefit (provision) for
income taxes |
(4,369 |
) |
|
(3,872 |
) |
Net income (loss) |
119,138 |
|
|
47,840 |
|
Dividends on preferred
stock |
— |
|
|
(10,997 |
) |
Net income (loss)
attributable to CCIC common stockholders |
$ |
119,138 |
|
|
$ |
36,843 |
|
|
|
|
|
Net income (loss)
attributable to CCIC common stockholders, per common share: |
|
|
|
Net
income (loss) attributable to CCIC common stockholders, basic |
$ |
0.33 |
|
|
$ |
0.11 |
|
Net
income (loss) attributable to CCIC common stockholders,
diluted |
$ |
0.33 |
|
|
$ |
0.11 |
|
|
|
|
|
Weighted-average common
shares outstanding (in thousands): |
|
|
|
Basic |
360,832 |
|
|
334,155 |
|
Diluted |
361,727 |
|
|
334,929 |
|
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (UNAUDITED)(in thousands)
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
|
Cash flows from operating activities: |
|
|
|
|
Net income
(loss) |
$ |
119,138 |
|
|
$ |
47,840 |
|
|
Adjustments
to reconcile net income (loss) to net cash provided by (used for)
operating activities: |
|
|
|
|
Depreciation, amortization and accretion |
288,549 |
|
|
277,875 |
|
|
Gains (losses) on retirement of long-term obligations |
3,525 |
|
|
30,550 |
|
|
Amortization of deferred financing costs and other non-cash
interest |
2,836 |
|
|
4,211 |
|
|
Stock-based compensation expense |
22,226 |
|
|
19,895 |
|
|
Asset write-down charges |
645 |
|
|
7,959 |
|
|
Deferred income tax benefit (provision) |
149 |
|
|
1,860 |
|
|
Other non-cash adjustments, net |
(4,440 |
) |
|
2,166 |
|
|
Changes in assets and liabilities, excluding the effects of
acquisitions: |
|
|
|
|
Increase (decrease) in liabilities |
(61,096 |
) |
|
17,426 |
|
|
Decrease (increase) in assets |
74,560 |
|
|
27,874 |
|
|
Net cash provided by (used for) operating
activities |
446,092 |
|
|
437,656 |
|
|
Cash flows from investing activities: |
|
|
|
|
Payments for acquisition of businesses, net of cash
acquired |
(1,497,253 |
) |
|
(22,029 |
) |
|
Capital expenditures |
(262,415 |
) |
|
(193,489 |
) |
|
Net (payments) receipts from settled swaps |
(328 |
) |
|
8,141 |
|
|
Other investing activities, net |
(3,145 |
) |
|
(369 |
) |
|
Net cash provided by (used for) investing
activities |
(1,763,141 |
) |
|
(207,746 |
) |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from issuance of long-term debt |
997,890 |
|
|
3,496,901 |
|
|
Principal payments on debt and other long-term obligations |
(28,738 |
) |
|
(14,152 |
) |
|
Purchases and redemptions of long-term debt |
— |
|
|
(2,876,390 |
) |
|
Borrowings under revolving credit facility |
1,405,000 |
|
|
2,065,000 |
|
|
Payments under revolving credit facility |
(1,070,000 |
) |
|
(2,980,000 |
) |
|
Payments for financing costs |
(6,761 |
) |
|
(27,421 |
) |
|
Net proceeds from issuance of capital stock |
21,937 |
|
|
323,798 |
|
|
Purchases of capital stock |
(22,005 |
) |
|
(24,354 |
) |
|
Dividends/distributions paid on common stock |
(348,146 |
) |
|
(299,090 |
) |
|
Dividends paid on preferred stock |
— |
|
|
(10,997 |
) |
|
Net (increase) decrease in restricted cash |
5,039 |
|
|
1,113 |
|
|
Net cash provided by (used for) financing
activities |
954,216 |
|
|
(345,592 |
) |
|
Net
increase (decrease) in cash and cash equivalents - continuing
operations |
(362,833 |
) |
|
(115,682 |
) |
|
Discontinued operations: |
|
|
|
|
Net cash provided by (used for) investing
activities |
— |
|
|
113,150 |
|
|
Net
increase (decrease) in cash and cash equivalents - discontinued
operations |
— |
|
|
113,150 |
|
|
Effect of exchange rate changes |
426 |
|
|
(576 |
) |
|
Cash and cash equivalents at beginning of
period |
567,599 |
|
|
178,810 |
|
|
Cash and cash equivalents at end of period |
$ |
205,192 |
|
|
$ |
175,702 |
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
Interest paid |
144,452 |
|
|
111,469 |
|
|
Income taxes paid |
796 |
|
|
6,773 |
|
|
CROWN CASTLE INTERNATIONAL CORP.SEGMENT
OPERATING RESULTS (UNAUDITED)(in thousands)
SEGMENT OPERATING RESULTS |
|
Three Months Ended March 31, 2017 |
|
Three Months Ended March 31, 2016 |
|
Towers |
|
Small Cells |
|
Other |
|
Consolidated Total |
|
Towers |
|
Small Cells |
|
Other |
|
Consolidated Total |
Segment site rental
revenues |
$ |
716,536 |
|
|
$ |
140,400 |
|
|
|
|
$ |
856,936 |
|
|
$ |
702,840 |
|
|
$ |
96,454 |
|
|
|
|
$ |
799,294 |
|
Segment network
services and other revenue |
149,615 |
|
|
9,391 |
|
|
|
|
159,006 |
|
|
125,010 |
|
|
10,080 |
|
|
|
|
135,090 |
|
Segment revenues |
866,151 |
|
|
149,791 |
|
|
|
|
1,015,942 |
|
|
827,850 |
|
|
106,534 |
|
|
|
|
934,384 |
|
Segment site rental
cost of operations |
209,464 |
|
|
47,246 |
|
|
|
|
256,710 |
|
|
204,565 |
|
|
37,483 |
|
|
|
|
242,048 |
|
Segment network
services and other cost of operations |
88,936 |
|
|
8,229 |
|
|
|
|
97,165 |
|
|
69,989 |
|
|
8,035 |
|
|
|
|
78,024 |
|
Segment cost of
operations(a) |
298,400 |
|
|
55,475 |
|
|
|
|
353,875 |
|
|
274,554 |
|
|
45,518 |
|
|
|
|
320,072 |
|
Segment site rental
gross margin(b) |
507,072 |
|
|
93,154 |
|
|
|
|
600,226 |
|
|
498,275 |
|
|
58,971 |
|
|
|
|
557,246 |
|
Segment network
services and other gross margin(b) |
60,679 |
|
|
1,162 |
|
|
|
|
61,841 |
|
|
55,021 |
|
|
2,045 |
|
|
|
|
57,066 |
|
Segment general and
administrative expenses(a) |
23,760 |
|
|
17,689 |
|
|
39,206 |
|
|
80,655 |
|
|
23,599 |
|
|
15,522 |
|
|
36,071 |
|
|
75,192 |
|
Segment operating
profit(b) |
543,991 |
|
|
76,627 |
|
|
(39,206 |
) |
|
581,412 |
|
|
529,697 |
|
|
45,494 |
|
|
(36,071 |
) |
|
539,120 |
|
Stock-based
compensation expense |
|
|
|
|
24,942 |
|
|
24,942 |
|
|
|
|
|
|
30,705 |
|
|
30,705 |
|
Depreciation,
amortization and accretion |
|
|
|
|
288,549 |
|
|
288,549 |
|
|
|
|
|
|
277,875 |
|
|
277,875 |
|
Interest expense and
amortization of deferred financing costs |
|
|
|
|
134,487 |
|
|
134,487 |
|
|
|
|
|
|
126,378 |
|
|
126,378 |
|
Other (income) expenses
to reconcile to income (loss) before income taxes(c) |
|
|
|
|
9,927 |
|
|
9,927 |
|
|
|
|
|
|
52,450 |
|
|
52,450 |
|
Income (loss) before
income taxes |
|
|
|
|
|
|
$ |
123,507 |
|
|
|
|
|
|
|
|
$ |
51,712 |
|
|
(a)
Segment cost of operations exclude (1) stock-based compensation
expense of $4.9 million and $8.3 million for the three months ended
March 31, 2017 and 2016, respectively and (2) prepaid lease
purchase price adjustments of $5.1 million and $5.2 million for the
three months ended March 31, 2017 and 2016,
respectively. Segment general and administrative expenses
exclude stock-based compensation expense of $20.1 million and $22.4
million for the three months ended March 31, 2017 and 2016,
respectively. (b) See "Non-GAAP Financial Measures and Other
Calculations" herein for a discussion of our definitions of segment
site rental gross margin, segment network service and other gross
margin and segment operating profit.(c) See condensed consolidated
statement of operations for further information. |
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