Crown Castle International Corp. (NYSE:CCI) ("Crown Castle") today
reported results for the quarter ended September 30, 2017.
"We delivered another quarter of excellent
financial results that demonstrate the strong operating performance
of our business, exceeding our previously provided Outlook for site
rental revenues, net income, Adjusted EBITDA and AFFO," stated Jay
Brown, Crown Castle’s Chief Executive Officer. "We also increased
our quarterly common stock dividend by 11% to $1.05 per share,
reflecting our expectation of continued growth in 2018 and the
anticipated contribution from the pending acquisition of Lightower,
which we expect to close by year-end. Based on the strong
demand we see across each of towers, small cells and fiber, we
expect revenue growth to accelerate driven by an increase in new
leasing activity in 2018. Looking beyond 2018, we are excited
by the opportunity to leverage our leading asset portfolio to grow
our cash flows and deliver on our 7% to 8% long-term annual
dividend growth target by capitalizing on the expected exponential
growth in demand for data and connectivity. We believe the
combination of our unparalleled portfolio of assets and our
industry-leading capabilities across towers, small cells and fiber
positions us to meet the evolving needs of our customers while
delivering long-term value to our shareholders."
RESULTS FOR THE QUARTERThe
table below sets forth select financial results for the three month
period ended September 30, 2017 and September 30, 2016.
For further information, refer to the financial statements and
non-GAAP, segment and other calculation reconciliations included in
this press release.
(in millions) |
Actual |
MidpointQ3 2017 Outlook(b) |
Actual Compared to Outlook |
Q3 2017 |
Q3 2016 |
Change |
% Change |
Site rental
revenues |
$893 |
$812 |
+$81 |
10 |
% |
$891 |
+$ |
2 |
Net income (loss) |
$115 |
$98 |
+$17 |
17 |
% |
$100 |
+$ |
15 |
Adjusted EBITDA(a) |
$605 |
$564 |
+$41 |
7 |
% |
$603 |
+$ |
2 |
AFFO(a) |
$459 |
$416 |
+$43 |
10 |
% |
$450 |
+$ |
9 |
Weighted-average common
shares outstanding - diluted |
|
397 |
|
338 |
|
+59 |
17 |
% |
|
368 |
+ |
29 |
Note: Figures may not tie due to rounding.
(a) See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
(b) As issued on July 19, 2017.
HIGHLIGHTS FROM THE QUARTER
- Site rental revenues. Site rental
revenues grew approximately 10%, or $81 million, from third quarter
2016 to third quarter 2017, inclusive of approximately $41 million
in Organic Contribution to Site Rental Revenues plus $52 million in
contributions from acquisitions and other items, less a $12 million
reduction in straight-lined revenues. The $41 million in
Organic Contribution to Site Rental Revenues represents
approximately 5% growth, comprised of approximately 8% growth from
new leasing activity and contracted tenant escalations, net of
approximately 3% from tenant non-renewals.
- Net income (loss). Net income (loss) for
third quarter 2017 was $115 million.
- AFFO. AFFO for third quarter 2017
benefited from approximately $5 million in lower than expected
sustaining capital expenditures during the quarter. This
benefit is primarily attributable to timing, as the unspent amount
from third quarter 2017 is expected to be spent during fourth
quarter 2017.
- Capital expenditures and acquisitions.
Capital expenditures during the quarter were approximately $288
million, comprised of approximately $24 million of land purchases,
approximately $24 million of sustaining capital expenditures and
approximately $240 million of revenue generating capital
expenditures.
- Common stock dividend. During the
quarter, Crown Castle paid common stock dividends of approximately
$386 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 related to pending acquisition of
Lightower. During third quarter 2017, to fund the
pending acquisition of LTS Group Holdings LLC ("Lightower"), Crown
Castle issued $1.75 billion in aggregate principal amount of senior
unsecured notes, $1.65 billion in mandatory convertible preferred
stock and 40.15 million shares of common stock (collectively,
"Lightower Financings"). The common stock issuance raised
approximately $3.8 billion in net proceeds and increased the
weighted-average common shares outstanding on a diluted basis by 29
million and 17 million for third quarter 2017 and full year 2017,
respectively. Except for the impact related to the Lightower
Financings, the pending acquisition of Lightower did not contribute
to results during third quarter 2017. The acquisition of
Lightower is expected to close by year-end 2017, and Crown Castle
expects to use the proceeds from the Lightower Financings and
borrowings under its revolving credit facility to fund the
acquisition at close.
"Our excellent third quarter positions us to end
2017 on a strong note and provides us with momentum entering 2018,
as we expect the positive trends impacting our business to
continue," stated Dan Schlanger, Crown Castle's Chief Financial
Officer. "Further, as evidenced by our full year 2017 and
2018 Outlook, the strength of our business model and leadership
position across towers, small cells and fiber enable us to continue
to deliver on our growth targets, invest for the future and return
capital to investors through a substantial and growing
dividend. Since 2014, and inclusive of the dividend increase
we are announcing today, we have increased our dividend by a
compounded annual growth rate of approximately 9%, exceeding our
previous long-term target of 6% to 7% annual growth, and we are
well-positioned to meet our 7% to 8% long-term annual dividend
growth target into the future."
DIVIDEND INCREASE
ANNOUNCEMENTCrown Castle's Board of Directors has declared
a quarterly cash dividend of $1.05 per common share, representing
an increase of approximately 11% over the previous quarterly
dividend of $0.95 per share. The quarterly dividend will be payable
on December 29, 2017 to common stockholders of record at the close
of business on December 15, 2017. Future dividends are
subject to the approval of Crown Castle's Board of Directors.
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 fourth quarter 2017, full year 2017 and full
year 2018:
(in millions) |
Fourth Quarter 2017 |
Full Year 2017(a) |
Full Year 2018(a) |
Site
rental revenues |
$904 |
to |
$909 |
$3,522 |
to |
$3,527 |
$4,546 |
to |
$4,591 |
Site
rental cost of operations(b) |
$281 |
to |
$286 |
$1,096 |
to |
$1,101 |
$1,360 |
to |
$1,405 |
Net
income (loss) |
$91 |
to |
$116 |
$438 |
to |
$463 |
$515 |
to |
$595 |
Adjusted EBITDA(c) |
$624 |
to |
$629 |
$2,399 |
to |
$2,404 |
$3,013 |
to |
$3,058 |
Interest expense and
amortization of deferred financing costs(d) |
$159 |
to |
$164 |
$590 |
to |
$595 |
$644 |
to |
$689 |
FFO(c) |
$376 |
to |
$381 |
$1,590 |
to |
$1,595 |
$1,910 |
to |
$1,955 |
AFFO(c)(f) |
$430 |
to |
$435 |
$1,779 |
to |
$1,784 |
$2,219 |
to |
$2,264 |
Weighted-average common
shares outstanding - diluted(e) |
|
408 |
|
383 |
|
408 |
(a) Except for the impact related to the Lightower Financings,
the full year 2017 Outlook does not include any contribution from
the pending acquisition of Lightower, which is expected to close by
year-end 2017. Full year 2018 Outlook includes the expected
contribution from the pending acquisition of Lightower.
(b) Exclusive of depreciation, amortization and accretion.
(c) See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
(d) See reconciliation of "components of interest expense and
amortization of deferred financing costs" herein for a discussion
of non-cash interest expense.
(e) The assumption for fourth quarter 2017, full year 2017 and
full year 2018 diluted weighted-average common shares outstanding
is based on diluted common shares outstanding as of September 30,
2017. For all periods presented, the diluted weighted-average
common shares outstanding assumes no conversion of the 6.875%
Mandatory Convertible Preferred Stock in the share count.
(f) Our AFFO for historical periods may not be comparable to
those periods presented prospectively from and after January 1,
2018, including our full year 2018 Outlook herein. See
"Sustaining capital expenditures" and "Integration capital
expenditures" within "Non-GAAP Financial Measures, Segment Measures
and Other Calculations" for further information.
Full Year 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 toFY 2016 Actual
Comparison |
Previous Full Year 2017 Outlook(b) |
Current Compared to Previous Outlook |
(in
millions) |
Current Full Year2017Outlook |
Full Year 2016 Actual |
Change |
% Change |
Site rental
revenues |
$3,525 |
$3,233 |
+$292 |
+9 |
% |
$3,517 |
+$8 |
Net income (loss) |
$451 |
$357 |
+$94 |
+26 |
% |
$451 |
|
— |
Adjusted EBITDA(a) |
$2,402 |
$2,228 |
+$174 |
+8 |
% |
$2,402 |
|
— |
AFFO(a) |
$1,782 |
$1,610 |
+$172 |
+11 |
% |
$1,826 |
-$44 |
Weighted-average common
shares outstanding - diluted(c) |
|
383 |
|
341 |
|
+42 |
+12 |
% |
|
366 |
|
+17 |
(a) See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
(b) As issued on July 19, 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 September 30, 2017. For all periods
presented, the diluted weighted-average common shares outstanding
assumes no conversion of the 6.875% Mandatory Convertible Preferred
Stock in the share count.
- The updated full year 2017 Outlook primarily reflects higher
than expected results from the third quarter and an expectation of
continued strong leasing activity during the fourth quarter, offset
by higher repair and maintenance expenses associated with
hurricanes Harvey, Irma and Maria.
- The full year 2017 Outlook for AFFO is negatively impacted by
$44 million from interest expense, net of interest income, and cash
dividends paid on preferred stock as a result of the Lightower
Financings. Excluding the impact of the Lightower Financings,
the midpoint of the updated full year 2017 Outlook for AFFO is
unchanged compared to our previous full year 2017 Outlook at
approximately $1.826 billion. Except for the impact from the
Lightower Financings, the updated full year 2017 Outlook does not
include any contribution from the pending acquisition of Lightower,
which is expected to close by year-end 2017.
- The chart below reconciles the components of expected growth in
AFFO from 2016 to 2017 of approximately $172 million at the
midpoint.
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/5c1ee5f2-a3fd-40e9-a852-9deadbcd52f2
Full Year 2018 OutlookThe table below compares
the midpoint of the full year 2018 Outlook and the midpoint of the
currently provided full year 2017 Outlook for select metrics.
|
Midpoint of FY 2018 Outlook toMidpoint of FY 2017
Outlook |
(in
millions) |
CurrentFull Year2018 Outlook(a) |
CurrentFull Year2017 Outlook(a) |
Change |
% Change |
Site rental
revenues |
$4,569 |
$3,525 |
$1,044 |
+30 |
% |
Net income (loss) |
$555 |
$451 |
$104 |
+23 |
% |
Adjusted EBITDA(b) |
$3,036 |
$2,402 |
$634 |
+26 |
% |
AFFO(b)(d) |
$2,242 |
$1,782 |
$460 |
+26 |
% |
Weighted-average common
shares outstanding - diluted(c) |
|
408 |
|
383 |
|
+25 |
+7 |
% |
(a) Except for the impact related to the Lightower Financings,
the full year 2017 Outlook does not include any contribution from
the pending acquisition of Lightower, which is expected to close by
year-end 2017. Full year 2018 Outlook includes the expected
contribution from the pending acquisition of Lightower.
(b) See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
(c) The assumption for full year 2017 and full year 2018 diluted
weighted-average common shares outstanding is based on diluted
common shares outstanding as of September 30, 2017. For
all periods presented, the diluted weighted-average common shares
outstanding assumes no conversion of the 6.875% Mandatory
Convertible Preferred Stock in the share count.
(d) Our AFFO for historical periods may not be comparable to
those periods presented prospectively from and after January 1,
2018, including our full year 2018 Outlook herein. See
"Sustaining capital expenditures" and "Integration capital
expenditures" within "Non-GAAP Financial Measures, Segment Measures
and Other Calculations" for further information.
- The full year 2018 Outlook includes the expected contribution
from the pending acquisition of Lightower, which is assumed to
close on December 31, 2017 for purposes of the full year 2017
Outlook and full year 2018 Outlook. As previously disclosed,
for 2018, the pending acquisition of Lightower is expected to
contribute $850 million to $870 million in site rental revenues,
$163 million to $213 million in net income, $510 million to $530
million in Adjusted EBITDA and $465 million to $485 million in AFFO
before financing costs. Further, during 2018, Crown Castle
expects to incur integration costs of approximately $20 million to
$40 million and integration capital expenditures of approximately
$20 million to $25 million related to the pending acquisition of
Lightower.
- The chart below reconciles the components of expected growth in
site rental revenues from 2017 to 2018 of $1.020 billion to $1.065
billion, inclusive of expected Organic Contribution to Site Rental
Revenues during 2018 of $185 million to $225 million compared to
the midpoint of full year 2017 Outlook of $166 million.
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/0276ce80-dbf2-4672-9e62-bd36435236a8
- New leasing activity is expected to contribute $190 million to
$220 million to 2018 Organic Contribution to Site Rental Revenues,
consisting of new leasing activity from Towers of $100 million to
$115 million and Small Cells of $90 million to $105 million. In
comparison to full year 2017, Towers new leasing activity is
expected to be modestly higher, and Small Cells new leasing
activity is expected to increase by approximately $30 million.
- Acquisitions of FPL FiberNet Holdings, LLC ("FiberNet") and
Wilcon Holdings LLC ("Wilcon"), both of which closed during 2017,
and the pending acquisition of Lightower are collectively expected
to contribute between $885 million and $905 million to site rental
revenues during 2018.
- The chart below reconciles the components of expected growth in
AFFO from 2017 to 2018 of between $440 million and $480
million.
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/bb386893-b90a-417c-bd93-15e8cb787b6a
- Incremental contribution to AFFO from the pending acquisition
of Lightower is expected to be approximately $335 million to $355
million, net of the incremental financing expenses compared to
2017.
- 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 Thursday, October 19,
2017, at 10:30 a.m. Eastern time to discuss its third quarter 2017
results. The conference call may be accessed by dialing
888-211-9963 and asking for the Crown Castle call (access code
7075767) 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 Thursday, October 19,
2017, through 1:30 p.m. Eastern time on Wednesday, January 17,
2018, and may be accessed by dialing 888-203-1112 and using access
code 7075767. 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 over 60,000 route miles of fiber supporting small
cells following the completion of the Lightower acquisition, Crown
Castle is the nation's largest provider of shared wireless
infrastructure with a significant presence in the top 100 U.S.
markets. For more information on Crown Castle, please visit
www.crowncastle.com.
Non-GAAP Financial Measures, Segment 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 and
Organic Contribution to Site Rental Revenues may not be comparable
to similarly titled measures of other companies, including other
companies in the wireless infrastructure sector or other real
estate investment trusts ("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.
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.
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 it includes (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 excludes the impact of our (a)
asset base (primarily depreciation, amortization and accretion) and
(b) 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 Crown Castle 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 Crown
Castle. 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.
We define our non-GAAP financial measures,
segment measures and other calculations as follows:
Non-GAAP Financial Measures
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-lined 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 (i.e., sustaining capital expenditures).
See "Sustaining capital expenditures" and "Integration capital
expenditures" below for further information regarding our
calculation of certain components of AFFO.
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.
Segment Measures
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 consolidated site rental 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 consolidated network
services and other 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.
Other Calculations
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 those capital expenditures made
with respect to either (1) corporate capital expenditures, such as
buildings, information technology equipment and office equipment or
(2) capital improvement capital expenditures to our wireless
infrastructure assets that enable our customers' ongoing quiet
enjoyment of the wireless infrastructure. For periods
presented prior to 2018, integration capital expenditures are
included within sustaining capital expenditures, as discussed in
"Integration capital expenditures" below.
Integration capital expenditures. Upon the
closing of the pending Lightower acquisition, we anticipate
incurring initial capital expenditures related to integrating
Lightower into our existing business. We anticipate that the
majority of these expected capital expenditures will primarily
relate to the overall integration of Lightower’s information
technology assets into our business. We believe these
expenditures are not indicative of our ongoing financial
performance, and therefore their inclusion in our AFFO may hinder
usefulness to investors and other interested parties.
Moreover, integration capital expenditures were approximately $3.2
million, $0.1 million, and $0.1 million for the nine months ended
September 30, 2017 and the years ended December 31, 2016 and 2015,
respectively, and as such, we believe that these costs have not
previously been significant enough to warrant separate
consideration with regard to the impact to AFFO.
As such, for periods presented prior to 2018,
integration capital expenditures were included as a component
within sustaining capital expenditures. For periods presented
beginning January 1, 2018, including our full year 2018 Outlook
included herein, we no longer reflect integration capital
expenditures within sustaining capital expenditures and consider
integration capital expenditures as its own component of our
capital expenditures.
Because of our reclassification of integration
capital expenditures, our AFFO for historical periods may not be
comparable to those periods presented prospectively from and after
January 1, 2018, including our full year 2018 Outlook herein.
We define integration capital expenditures as
those capital expenditures made specifically with respect to recent
acquisitions that are essential to integrating acquired companies
into our business.
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, Segment
Measures and Other Calculations to Comparable GAAP Financial
Measures:
Reconciliation of Historical Adjusted
EBITDA:
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
September 30, 2017 |
|
September 30, 2016 |
|
December 31, 2016 |
(in millions) |
|
|
|
|
|
Net income (loss) |
$ |
115.2 |
|
|
$ |
98.4 |
|
|
$ |
357.0 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
Asset
write-down charges |
5.3 |
|
|
8.3 |
|
|
34.5 |
|
Acquisition and integration costs |
13.2 |
|
|
2.7 |
|
|
17.5 |
|
Depreciation, amortization and accretion |
296.0 |
|
|
280.8 |
|
|
1,108.6 |
|
Amortization of prepaid lease purchase price adjustments |
5.0 |
|
|
5.4 |
|
|
21.3 |
|
Interest
expense and amortization of deferred financing costs(a) |
154.1 |
|
|
129.9 |
|
|
515.0 |
|
Gains
(losses) on retirement of long-term obligations |
— |
|
|
10.3 |
|
|
52.3 |
|
Interest
income |
(11.2 |
) |
|
(0.2 |
) |
|
(0.8 |
) |
Other
income (expense) |
— |
|
|
0.8 |
|
|
8.8 |
|
Benefit
(provision) for income taxes |
2.4 |
|
|
5.0 |
|
|
16.9 |
|
Stock-based compensation expense |
24.7 |
|
|
22.6 |
|
|
96.5 |
|
Adjusted EBITDA(b)(c) |
$ |
604.8 |
|
|
$ |
564.1 |
|
|
$ |
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, Segment 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:
|
Q4 2017 |
|
Full Year 2017 |
|
Full Year 2018 |
(in
millions) |
Outlook |
|
Outlook |
|
Outlook |
Net income (loss) |
$ |
91 |
|
to |
$ |
116 |
|
$ |
438 |
|
to |
$ |
463 |
|
|
$ |
515 |
|
to |
$ |
595 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
Asset
write-down charges |
$ |
9 |
|
to |
$ |
11 |
|
$ |
19 |
|
to |
$ |
21 |
|
|
$ |
35 |
|
to |
$ |
45 |
Acquisition and integration costs |
$ |
11 |
|
to |
$ |
15 |
|
$ |
38 |
|
to |
$ |
42 |
|
|
$ |
64 |
|
to |
$ |
74 |
Depreciation, amortization and accretion |
$ |
296 |
|
to |
$ |
310 |
|
$ |
1,176 |
|
to |
$ |
1,190 |
|
|
$ |
1,508 |
|
to |
$ |
1,544 |
Amortization of prepaid lease purchase price adjustments |
$ |
4 |
|
to |
$ |
6 |
|
$ |
19 |
|
to |
$ |
21 |
|
|
$ |
19 |
|
to |
$ |
21 |
Interest
expense and amortization of deferred financing costs(a) |
$ |
159 |
|
to |
$ |
164 |
|
$ |
590 |
|
to |
$ |
595 |
|
|
$ |
644 |
|
to |
$ |
689 |
Gains
(losses) on retirement of long-term obligations |
$ |
0 |
|
to |
$ |
0 |
|
$ |
4 |
|
to |
$ |
4 |
|
|
$ |
0 |
|
to |
$ |
0 |
Interest
income |
$ |
(1 |
) |
to |
$ |
1 |
|
$ |
(14 |
) |
to |
$ |
(12 |
) |
|
$ |
(2 |
) |
to |
$ |
2 |
Other
income (expense) |
$ |
(1 |
) |
to |
$ |
3 |
|
$ |
(4 |
) |
to |
$ |
0 |
|
|
$ |
3 |
|
to |
$ |
5 |
Benefit
(provision) for income taxes |
$ |
3 |
|
to |
$ |
7 |
|
$ |
14 |
|
to |
$ |
18 |
|
|
$ |
32 |
|
to |
$ |
40 |
Stock-based compensation expense |
$ |
23 |
|
to |
$ |
25 |
|
$ |
89 |
|
to |
$ |
91 |
|
|
$ |
115 |
|
to |
$ |
120 |
Adjusted EBITDA(b)(c) |
$ |
624 |
|
to |
$ |
629 |
|
$ |
2,399 |
|
to |
$ |
2,404 |
|
|
$ |
3,013 |
|
to |
$ |
3,058 |
(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, Segment 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 Nine Months Ended |
|
For the Twelve Months Ended |
(in millions) |
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
|
December 31, 2016 |
Net income (loss) |
$ |
115.2 |
|
|
$ |
98.4 |
|
|
$ |
346.4 |
|
|
$ |
232.3 |
|
|
$ |
357.0 |
|
Real estate related
depreciation, amortization and accretion |
287.9 |
|
|
274.2 |
|
|
857.3 |
|
|
815.1 |
|
|
1,082.1 |
|
Asset write-down
charges |
5.3 |
|
|
8.3 |
|
|
10.3 |
|
|
28.3 |
|
|
34.5 |
|
Dividends on preferred
stock |
— |
|
|
(11.0 |
) |
|
— |
|
|
(33.0 |
) |
|
(44.0 |
) |
FFO(a)(b)(c)(d)(e) |
$ |
408.4 |
|
|
$ |
369.9 |
|
|
$ |
1,214.0 |
|
|
$ |
1,042.6 |
|
|
$ |
1,429.5 |
|
|
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
408.4 |
|
|
$ |
369.9 |
|
|
$ |
1,214.0 |
|
|
$ |
1,042.6 |
|
|
$ |
1,429.5 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
|
|
Straight-lined revenue |
3.4 |
|
|
(8.8 |
) |
|
3.0 |
|
|
(42.4 |
) |
|
(47.4 |
) |
Straight-lined expense |
24.0 |
|
|
23.5 |
|
|
69.9 |
|
|
71.1 |
|
|
94.2 |
|
Stock-based compensation expense |
24.7 |
|
|
22.6 |
|
|
66.5 |
|
|
75.3 |
|
|
96.5 |
|
Non-cash
portion of tax provision |
(1.5 |
) |
|
3.5 |
|
|
(2.7 |
) |
|
5.2 |
|
|
7.3 |
|
Non-real
estate related depreciation, amortization and accretion |
8.1 |
|
|
6.6 |
|
|
22.9 |
|
|
19.6 |
|
|
26.5 |
|
Amortization of non-cash interest expense |
2.4 |
|
|
3.3 |
|
|
7.6 |
|
|
11.3 |
|
|
14.3 |
|
Other
(income) expense |
— |
|
|
0.8 |
|
|
(3.5 |
) |
|
4.6 |
|
|
8.8 |
|
Gains
(losses) on retirement of long-term obligations |
— |
|
|
10.3 |
|
|
3.5 |
|
|
52.3 |
|
|
52.3 |
|
Acquisition and integration costs |
13.2 |
|
|
2.7 |
|
|
27.1 |
|
|
11.5 |
|
|
17.5 |
|
Capital
improvement capital expenditures |
(10.9 |
) |
|
(10.0 |
) |
|
(27.3 |
) |
|
(25.4 |
) |
|
(42.8 |
) |
Corporate
capital expenditures |
(13.4 |
) |
|
(8.5 |
) |
|
(32.4 |
) |
|
(22.4 |
) |
|
(46.9 |
) |
AFFO(a)(b)(c)(d)(e) |
$ |
458.5 |
|
|
$ |
415.8 |
|
|
$ |
1,348.6 |
|
|
$ |
1,203.5 |
|
|
$ |
1,609.9 |
|
(a) See "Non-GAAP Financial Measures, Segment 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 during the period in which they are paid.
(c) Diluted weighted-average common shares outstanding were
397.0 million, 338.4 million, 375.0 million, 337.1 million and
340.9 million for the three months ended September 30, 2017 and
2016, the nine months ended September 30, 2017 and 2016 and the
twelve months ended December 31, 2016, respectively. For
all periods presented, the diluted weighted-average common shares
outstanding assumes no conversion of the 6.875% Mandatory
Convertible Preferred Stock in the share count.
(d) The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.
(e) Attributable to CCIC common stockholders.
Reconciliation of Current Outlook for
FFO and AFFO:
|
Q4 2017 |
|
Full Year 2017 |
|
Full Year 2018 |
(in millions) |
Outlook |
|
Outlook |
|
Outlook |
Net income (loss) |
$ |
91 |
|
to |
$ |
116 |
|
|
$ |
438 |
|
to |
$ |
463 |
|
|
$ |
515 |
|
to |
$ |
595 |
|
Real estate related
depreciation, amortization and accretion |
$ |
290 |
|
to |
$ |
300 |
|
|
$ |
1,147 |
|
to |
$ |
1,157 |
|
|
$ |
1,442 |
|
to |
$ |
1,463 |
|
Asset write-down
charges |
$ |
9 |
|
to |
$ |
11 |
|
|
$ |
19 |
|
to |
$ |
21 |
|
|
$ |
35 |
|
to |
$ |
45 |
|
Dividends on preferred
stock |
$ |
(30 |
) |
to |
$ |
(30 |
) |
|
$ |
(30 |
) |
to |
$ |
(30 |
) |
|
$ |
(113 |
) |
to |
$ |
(113 |
) |
FFO(a)(b)(c)(d)(e) |
$ |
376 |
|
to |
$ |
381 |
|
|
$ |
1,590 |
|
to |
$ |
1,595 |
|
|
$ |
1,910 |
|
to |
$ |
1,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
376 |
|
to |
$ |
381 |
|
|
$ |
1,590 |
|
to |
$ |
1,595 |
|
|
$ |
1,910 |
|
to |
$ |
1,955 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
|
|
|
|
Straight-lined revenue |
$ |
5 |
|
to |
$ |
10 |
|
|
$ |
8 |
|
to |
$ |
13 |
|
|
$ |
57 |
|
to |
$ |
77 |
|
Straight-lined expense |
$ |
20 |
|
to |
$ |
25 |
|
|
$ |
90 |
|
to |
$ |
95 |
|
|
$ |
70 |
|
to |
$ |
90 |
|
Stock-based compensation expense |
$ |
23 |
|
to |
$ |
25 |
|
|
$ |
89 |
|
to |
$ |
91 |
|
|
$ |
115 |
|
to |
$ |
120 |
|
Non-cash
portion of tax provision |
$ |
(2 |
) |
to |
$ |
3 |
|
|
$ |
(4 |
) |
to |
$ |
1 |
|
|
$ |
(7 |
) |
to |
$ |
8 |
|
Non-real
estate related depreciation, amortization and accretion |
$ |
6 |
|
to |
$ |
10 |
|
|
$ |
29 |
|
to |
$ |
33 |
|
|
$ |
66 |
|
to |
$ |
81 |
|
Amortization of non-cash interest expense |
$ |
1 |
|
to |
$ |
6 |
|
|
$ |
9 |
|
to |
$ |
14 |
|
|
$ |
6 |
|
to |
$ |
16 |
|
Other
(income) expense |
$ |
(1 |
) |
to |
$ |
3 |
|
|
$ |
(4 |
) |
to |
$ |
0 |
|
|
$ |
3 |
|
to |
$ |
5 |
|
Gains
(losses) on retirement of long-term obligations |
$ |
0 |
|
to |
$ |
0 |
|
|
$ |
4 |
|
to |
$ |
4 |
|
|
$ |
0 |
|
to |
$ |
0 |
|
Acquisition and integration costs |
$ |
11 |
|
to |
$ |
15 |
|
|
$ |
38 |
|
to |
$ |
42 |
|
|
$ |
64 |
|
to |
$ |
74 |
|
Capital
improvement capital expenditures |
$ |
(11 |
) |
to |
$ |
(6 |
) |
|
$ |
(39 |
) |
to |
$ |
(34 |
) |
|
$ |
(73 |
) |
to |
$ |
(63 |
) |
Corporate
capital expenditures |
$ |
(19 |
) |
to |
$ |
(14 |
) |
|
$ |
(52 |
) |
to |
$ |
(47 |
) |
|
$ |
(53 |
) |
to |
$ |
(43 |
) |
AFFO(a)(b)(c)(d)(e)(f) |
$ |
430 |
|
to |
$ |
435 |
|
|
$ |
1,779 |
|
to |
$ |
1,784 |
|
|
$ |
2,219 |
|
to |
$ |
2,264 |
|
(a) The assumption for fourth quarter 2017, full
year 2017 and full year 2018 diluted weighted-average common shares
outstanding is 408.0 million, 383.4 million and 408.0 million,
respectively, based on diluted common shares outstanding as of
September 30, 2017. For all periods presented, the diluted
weighted-average common shares outstanding assumes no conversion of
6.875% Mandatory Convertible Preferred Stock in the share
count. (b) See "Non-GAAP Financial Measures, Segment Measures
and Other Calculations" herein for a discussion for our definitions
of FFO and AFFO.(c) FFO and AFFO are reduced by cash paid for
preferred stock dividends during the period in which they are paid.
(d) The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.(e)
Attributable to CCIC common stockholders.(f) Our AFFO for
historical periods may not be comparable to those periods presented
prospectively from and after January 1, 2018, including our full
year 2018 Outlook herein. See "Sustaining capital
expenditures" and "Integration capital expenditures" within
"Non-GAAP Financial Measures, Segment Measures and Other
Calculations" for further information.
For Comparative Purposes - Reconciliation of Previous
Outlook for Adjusted EBITDA:
|
Previously Issued |
|
Previously Issued |
|
Q3 2017 |
|
Full Year 2017 |
(in
millions) |
Outlook |
|
Outlook |
Net income (loss) |
$ |
90 |
|
to |
$ |
110 |
|
$ |
426 |
|
to |
$ |
476 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
Asset
write-down charges |
$ |
9 |
|
to |
$ |
11 |
|
$ |
20 |
|
to |
$ |
30 |
Acquisition and integration costs |
$ |
8 |
|
to |
$ |
12 |
|
$ |
28 |
|
to |
$ |
38 |
Depreciation, amortization and accretion |
$ |
296 |
|
to |
$ |
310 |
|
$ |
1,178 |
|
to |
$ |
1,208 |
Amortization of prepaid lease purchase price adjustments |
$ |
4 |
|
to |
$ |
6 |
|
$ |
19 |
|
to |
$ |
21 |
Interest
expense and amortization of deferred financing costs |
$ |
142 |
|
to |
$ |
147 |
|
$ |
552 |
|
to |
$ |
582 |
Gains
(losses) on retirement of long-term obligations |
$ |
0 |
|
to |
$ |
0 |
|
$ |
4 |
|
to |
$ |
4 |
Interest
income |
$ |
(1 |
) |
to |
$ |
1 |
|
$ |
(3 |
) |
to |
$ |
1 |
Other
income (expense) |
$ |
(1 |
) |
to |
$ |
3 |
|
$ |
(2 |
) |
to |
$ |
0 |
Benefit
(provision) for income taxes |
$ |
3 |
|
to |
$ |
7 |
|
$ |
14 |
|
to |
$ |
22 |
Stock-based compensation expense |
$ |
24 |
|
to |
$ |
26 |
|
$ |
89 |
|
to |
$ |
94 |
Adjusted EBITDA(a)(b) |
$ |
600 |
|
to |
$ |
605 |
|
$ |
2,389 |
|
to |
$ |
2,414 |
(a) See "Non-GAAP Financial Measures, Segment
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 |
|
Q3 2017 |
|
Full Year 2017 |
(in millions) |
Outlook |
|
Outlook |
Net income (loss) |
$ |
90 |
|
to |
$ |
110 |
|
|
$ |
426 |
|
to |
$ |
476 |
|
Real estate related
depreciation, amortization and accretion |
$ |
291 |
|
to |
$ |
301 |
|
|
$ |
1,154 |
|
to |
$ |
1,174 |
|
Asset write-down
charges |
$ |
9 |
|
to |
$ |
11 |
|
|
$ |
20 |
|
to |
$ |
30 |
|
FFO(a)(b)(c) |
$ |
404 |
|
to |
$ |
409 |
|
|
$ |
1,623 |
|
to |
$ |
1,653 |
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
404 |
|
to |
$ |
409 |
|
|
$ |
1,623 |
|
to |
$ |
1,653 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
Straight-lined revenue |
$ |
0 |
|
to |
$ |
5 |
|
|
$ |
4 |
|
to |
$ |
19 |
|
Straight-lined expense |
$ |
20 |
|
to |
$ |
25 |
|
|
$ |
81 |
|
to |
$ |
96 |
|
Stock-based compensation expense |
$ |
24 |
|
to |
$ |
26 |
|
|
$ |
89 |
|
to |
$ |
94 |
|
Non-cash
portion of tax provision |
$ |
(2 |
) |
to |
$ |
3 |
|
|
$ |
(6 |
) |
to |
$ |
4 |
|
Non-real
estate related depreciation, amortization and accretion |
$ |
5 |
|
to |
$ |
9 |
|
|
$ |
24 |
|
to |
$ |
34 |
|
Amortization of non-cash interest expense |
$ |
2 |
|
to |
$ |
5 |
|
|
$ |
9 |
|
to |
$ |
15 |
|
Other
(income) expense |
$ |
(1 |
) |
to |
$ |
3 |
|
|
$ |
(2 |
) |
to |
$ |
0 |
|
Gains
(losses) on retirement of long-term obligations |
$ |
0 |
|
to |
$ |
0 |
|
|
$ |
4 |
|
to |
$ |
4 |
|
Acquisition and integration costs |
$ |
8 |
|
to |
$ |
12 |
|
|
$ |
28 |
|
to |
$ |
38 |
|
Capital
improvement capital expenditures |
$ |
(15 |
) |
to |
$ |
(10 |
) |
|
$ |
(41 |
) |
to |
$ |
(31 |
) |
Corporate
capital expenditures |
$ |
(19 |
) |
to |
$ |
(14 |
) |
|
$ |
(53 |
) |
to |
$ |
(43 |
) |
AFFO(a)(b)(c) |
$ |
447 |
|
to |
$ |
452 |
|
|
$ |
1,813 |
|
to |
$ |
1,838 |
|
(a) Previously issued third quarter 2017 and
full year 2017 outlook assumes diluted common shares outstanding as
of June 30, 2017 of approximately 367.5 million and 365.7
million, respectively. (b) See "Non-GAAP Financial Measures,
Segment 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 September 30, 2017 and 2016 are as
follows:
|
Three Months Ended September 30, |
(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) |
$ |
803 |
|
|
$ |
737 |
|
|
|
|
|
New
leasing activity(a)(c) |
40 |
|
|
45 |
|
Escalators |
21 |
|
|
22 |
|
Non-renewals |
(20 |
) |
|
(20 |
) |
Organic
Contribution to Site Rental Revenues(d) |
41 |
|
|
47 |
|
Straight-lined revenues associated with fixed escalators |
(3 |
) |
|
9 |
|
Acquisitions and builds(b) |
52 |
|
|
19 |
|
Other |
— |
|
|
— |
|
Total GAAP site rental
revenues |
$ |
893 |
|
|
$ |
812 |
|
|
|
|
|
Year-over-year
changes in revenue: |
|
|
|
Reported GAAP site
rental revenues |
10.0 |
% |
|
|
Organic Contribution to
Site Rental Revenues(d)(e) |
5.1 |
% |
|
|
(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, Segment 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 and December 31, 2018
are forecasted as follows:
(in millions) |
Midpoint ofFull Year2017 Outlook |
|
Full Year 2018 Outlook |
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 |
|
|
$ |
3,534 |
|
|
|
|
|
New
leasing activity(a)(c) |
|
172 |
|
|
190-220 |
Escalators |
|
84 |
|
|
80-90 |
Non-renewals |
|
(90 |
) |
|
(95)-(75) |
Organic
Contribution to Site Rental Revenues(d) |
|
166 |
|
|
185-225 |
Straight-lined revenues associated with fixed escalators |
|
(10 |
) |
|
(65)-(45) |
Acquisitions and builds(b) |
|
183 |
|
|
885-905 |
Other |
|
— |
|
|
|
— |
|
Total GAAP site rental
revenues |
$ |
3,525 |
|
|
$4,546-$4,591 |
|
|
|
|
Year-over-year
changes in revenue:(f) |
|
|
|
Reported GAAP site
rental revenues |
|
9.0 |
% |
|
|
29.6 |
% |
Organic Contribution to
Site Rental Revenues(d)(e) |
|
5.2 |
% |
|
|
5.8 |
% |
(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, Segment 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 and
Full Year 2018 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) |
September 30, 2017 |
|
September 30, 2016 |
Interest expense on
debt obligations |
$ |
151.8 |
|
|
$ |
126.6 |
|
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
4.9 |
|
|
4.6 |
|
Other, net |
(2.5 |
) |
|
(1.3 |
) |
Interest
expense and amortization of deferred financing costs |
$ |
154.1 |
|
|
$ |
129.9 |
|
Components of Current Outlook for
Interest Expense and Amortization of Deferred Financing
Costs:
|
Q4 2017 |
|
Full Year 2017 |
|
Full Year 2018 |
(in millions) |
Outlook |
|
Outlook |
|
Outlook |
Interest expense on
debt obligations |
$ |
157 |
|
to |
$ |
162 |
|
|
$ |
580 |
|
to |
$ |
585 |
|
|
$ |
645 |
|
to |
$ |
665 |
|
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
$ |
4 |
|
to |
$ |
7 |
|
|
$ |
18 |
|
to |
$ |
21 |
|
|
$ |
17 |
|
to |
$ |
22 |
|
Other, net |
$ |
(3 |
) |
to |
$ |
(1 |
) |
|
$ |
(9 |
) |
to |
$ |
(7 |
) |
|
$ |
(11 |
) |
to |
$ |
(6 |
) |
Interest
expense and amortization of deferred financing costs |
$ |
159 |
|
to |
$ |
164 |
|
|
$ |
590 |
|
to |
$ |
595 |
|
|
$ |
644 |
|
to |
$ |
689 |
|
Debt balances and maturity dates as of
September 30, 2017 are as follows:
(in
millions) |
Face Value |
|
Final Maturity |
Bank debt - variable
rate: |
|
|
|
2016
Revolver |
$ |
— |
|
|
Aug.
2022 |
2016 Term
Loan A |
2,416.3 |
|
Aug.
2022 |
Total bank debt |
2,416.3 |
|
|
Securitized debt -
fixed rate: |
|
|
|
Secured
Notes, Series 2009-1, Class A-1(a) |
37.9 |
|
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 |
3,357.9 |
|
|
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 |
4.750%
Senior Notes |
350.0 |
|
May
2047 |
3.200%
Senior Notes |
750.0 |
|
Sept.
2024 |
3.650%
Senior Notes |
1,000.0 |
|
Sept.
2027 |
Total
bonds |
9,300.0 |
|
|
Capital leases and
other obligations |
237.7 |
|
|
Various |
Total Debt |
$ |
15,311.9 |
|
|
|
Less:
Cash and Cash Equivalents(c) |
$ |
6,719.1 |
|
|
|
Net Debt |
$ |
8,592.8 |
|
|
|
(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 September 30, 2017 |
Total face value of
debt |
$ |
15,311.9 |
|
Ending cash and cash
equivalents(a) |
6,719.1 |
|
Total Net Debt |
$ |
8,592.8 |
|
|
|
|
Adjusted EBITDA for the
three months ended September 30, 2017 |
$ |
604.8 |
|
Last quarter annualized
adjusted EBITDA |
2,419.2 |
|
Net Debt to
Last Quarter Annualized Adjusted EBITDA |
3.6x |
(b) |
(a) Excludes restricted cash.
(b) The Net Debt to Last Quarter Annualized Adjusted EBITDA
calculation does not give effect to (1) the pending Lightower
acquisition, as this pending acquisition is expected to close
during the fourth quarter of 2017 and (2) the Company's expected
use of cash proceeds from the Lightower Financings to fund the
pending Lightower acquisition.
Components of Capital
Expenditures:
|
For the Three Months Ended |
(in millions) |
September 30, 2017 |
|
September 30, 2016 |
|
Towers |
Small Cells |
Other |
Total |
|
Towers |
Small Cells |
Other |
Total |
Discretionary: |
|
|
|
|
|
|
|
|
|
Purchases
of land interests |
$ |
23.7 |
|
$ |
— |
|
$ |
— |
|
$ |
23.7 |
|
|
$ |
17.4 |
|
$ |
— |
|
$ |
— |
|
$ |
17.4 |
|
Wireless
infrastructure construction and improvements |
72.5 |
|
167.8 |
|
— |
|
240.3 |
|
|
76.6 |
|
108.6 |
|
— |
|
185.2 |
|
Sustaining: |
|
|
|
|
|
|
|
|
|
Capital
improvement and corporate |
12.5 |
|
3.9 |
|
7.9 |
|
24.2 |
|
|
9.7 |
|
3.2 |
|
5.6 |
|
18.5 |
|
Total |
$ |
108.6 |
|
$ |
171.7 |
|
$ |
7.9 |
|
$ |
288.2 |
|
|
$ |
103.7 |
|
$ |
111.8 |
|
$ |
5.6 |
|
$ |
221.1 |
|
Note: See "Non-GAAP Financial Measures, Segment Measures and
Other Calculations" herein for further discussion of our components
of capital expenditures.
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, opportunities and shareholder value which may be derived
from our business, assets, investments, acquisitions (including the
pending acquisition of Lightower) and dividends, including on a
long-term basis, (2) our strategy, strategic position, business
model and capabilities and the strength of our business, (3)
needs of and demand from our customers, and the benefits which may
be derived therefrom, (4) growth in demand for data and
connectivity and the benefits which may be derived therefrom, (5)
our growth, including our revenue growth, long-term prospects and
the trends impacting our business, (6) the pending acquisition of
Lightower, including financing and timing thereof, quality of
Lightower's assets, integration costs and capital expenditures
resulting therefrom and the potential benefits and contributions
which may be derived from such acquisition, including (a)
improvements to or enhancements of our asset portfolio, growth and
industry position and (b) contribution to or impact on our
financial or operating results, including site rental revenues,
Adjusted EBITDA, net income and AFFO, (7) use of proceeds from the
Lightower Financings, (8) leasing environment and activity, 9) our
investments, including in towers, small cells, fiber and other
assets, and the potential growth, returns and benefits therefrom,
(10) our dividends, including our dividend plans and the amount of
our dividends and dividend growth rate and targets, (11) demand for
our wireless infrastructure (including fiber and small cells) and
services, (12) tenant non-renewals, including the impact thereof,
(13) capital expenditures, including sustaining capital
expenditures and integration capital expenditures and the timing
thereof, (14) straight-line adjustments, (15) site rental revenues
and estimated growth thereof, (16) site rental cost of operations,
(17) net income (loss), (18) Adjusted EBITDA, (19) expenses,
including interest expense and amortization of deferred financing
costs, (20) FFO, (21) AFFO and estimated growth thereof, (22)
Organic Contribution to Site Rental Revenues, (23) our
weighted-average common shares outstanding, including on a diluted
basis, (24) network services contribution and (25) 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 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 certain 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 or 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 or 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.
- The pending Lightower acquisition may not be completed within
the expected timeframe, if at all, and the pendency of such
acquisition could adversely affect our business, financial
condition, results of operations and cash flows.
- We may fail to realize all of the anticipated benefits of the
pending Lightower acquisition or those benefits may take longer to
realize than expected. We may also encounter significant
difficulties in integrating Lightower’s business.
- 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 U.S. 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.
- If we fail to pay scheduled dividends on the 6.875% Mandatory
Convertible Preferred Stock, in cash, common stock, or any
combination of cash and common stock, we will be prohibited from
paying dividends on our common stock, which may jeopardize our
status as a REIT.
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 Securities and
Exchange Commission. As used in this release, the term
"including," and any variation thereof, means "including without
limitation."
|
CROWN CASTLE INTERNATIONAL CORP. |
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED) |
(in thousands, except share amounts) |
|
|
September 30, 2017 |
|
December 31, 2016 |
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
6,719,134 |
|
|
$ |
567,599 |
|
Restricted cash |
115,730 |
|
|
124,547 |
|
Receivables, net |
317,856 |
|
|
373,532 |
|
Prepaid
expenses |
167,235 |
|
|
128,721 |
|
Other
current assets |
154,600 |
|
|
130,362 |
|
Total
current assets |
7,474,555 |
|
|
1,324,761 |
|
Deferred site rental
receivables |
1,285,547 |
|
|
1,317,658 |
|
Property and equipment,
net |
10,599,604 |
|
|
9,805,315 |
|
Goodwill |
6,905,922 |
|
|
5,757,676 |
|
Other intangible
assets, net |
3,885,311 |
|
|
3,650,072 |
|
Long-term prepaid rent
and other assets, net |
860,817 |
|
|
819,610 |
|
Total
assets |
$ |
31,011,756 |
|
|
$ |
22,675,092 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
179,335 |
|
|
$ |
188,516 |
|
Accrued
interest |
99,467 |
|
|
97,019 |
|
Deferred
revenues |
387,447 |
|
|
353,005 |
|
Other
accrued liabilities |
268,424 |
|
|
221,066 |
|
Current
maturities of debt and other obligations |
114,198 |
|
|
101,749 |
|
Total
current liabilities |
1,048,871 |
|
|
961,355 |
|
Debt and other
long-term obligations |
15,090,217 |
|
|
12,069,393 |
|
Other long-term
liabilities |
2,200,336 |
|
|
2,087,229 |
|
Total
liabilities |
18,339,424 |
|
|
15,117,977 |
|
Commitments and
contingencies |
|
|
|
CCIC stockholders'
equity: |
|
|
|
Common
stock, $0.01 par value; 600,000,000 shares authorized; shares
issued and outstanding: September 30, 2017—406,274,802 and December
31, 2016—360,536,659 |
4,063 |
|
|
3,605 |
|
6.875%
Mandatory Convertible Preferred Stock, Series A, $0.01 par value;
20,000,000 shares authorized; shares issued and outstanding:
September 30, 2017—1,650,000 and December 31, 2016—0;
aggregate liquidation value: September 30, 2017—$1,650,000 and
December 31, 2016—$0 |
17 |
|
|
— |
|
Additional paid-in capital |
16,818,738 |
|
|
10,938,236 |
|
Accumulated other comprehensive income (loss) |
(4,959 |
) |
|
(5,888 |
) |
Dividends/distributions in excess of earnings |
(4,145,527 |
) |
|
(3,378,838 |
) |
Total
equity |
12,672,332 |
|
|
7,557,115 |
|
Total
liabilities and equity |
$ |
31,011,756 |
|
|
$ |
22,675,092 |
|
|
CROWN CASTLE INTERNATIONAL CORP. |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED) |
(in thousands, except share and per share
amounts) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net revenues: |
|
|
|
|
|
|
|
Site
rental |
$ |
892,763 |
|
|
$ |
812,032 |
|
|
$ |
2,618,505 |
|
|
$ |
2,415,926 |
|
Network
services and other |
170,475 |
|
|
179,984 |
|
|
499,010 |
|
|
472,883 |
|
Net
revenues |
1,063,238 |
|
|
992,016 |
|
|
3,117,515 |
|
|
2,888,809 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Costs of
operations (exclusive of depreciation, amortization and
accretion): |
|
|
|
|
|
|
|
Site
rental |
280,667 |
|
|
256,750 |
|
|
814,969 |
|
|
762,223 |
|
Network
services and other |
106,707 |
|
|
109,228 |
|
|
310,137 |
|
|
286,066 |
|
General
and administrative |
100,772 |
|
|
89,941 |
|
|
299,232 |
|
|
278,909 |
|
Asset
write-down charges |
5,312 |
|
|
8,339 |
|
|
10,284 |
|
|
28,251 |
|
Acquisition and integration costs |
13,180 |
|
|
2,680 |
|
|
27,080 |
|
|
11,459 |
|
Depreciation, amortization and accretion |
296,033 |
|
|
280,824 |
|
|
880,197 |
|
|
834,725 |
|
Total
operating expenses |
802,671 |
|
|
747,762 |
|
|
2,341,899 |
|
|
2,201,633 |
|
Operating income
(loss) |
260,567 |
|
|
244,254 |
|
|
775,616 |
|
|
687,176 |
|
Interest expense and
amortization of deferred financing costs |
(154,146 |
) |
|
(129,916 |
) |
|
(430,402 |
) |
|
(385,656 |
) |
Gains (losses) on
retirement of long-term obligations |
— |
|
|
(10,274 |
) |
|
(3,525 |
) |
|
(52,291 |
) |
Interest income |
11,188 |
|
|
175 |
|
|
12,585 |
|
|
454 |
|
Other income
(expense) |
(32 |
) |
|
(832 |
) |
|
3,462 |
|
|
(4,623 |
) |
Income (loss) before
income taxes |
117,577 |
|
|
103,407 |
|
|
357,736 |
|
|
245,060 |
|
Benefit (provision) for
income taxes |
(2,383 |
) |
|
(5,041 |
) |
|
(11,290 |
) |
|
(12,797 |
) |
Net income (loss) |
115,194 |
|
|
98,366 |
|
|
346,446 |
|
|
232,263 |
|
Dividends on preferred
stock |
(29,935 |
) |
|
(10,997 |
) |
|
(29,935 |
) |
|
(32,991 |
) |
Net income (loss)
attributable to CCIC common stockholders |
$ |
85,259 |
|
|
$ |
87,369 |
|
|
$ |
316,511 |
|
|
$ |
199,272 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to CCIC common stockholders, per common share: |
|
|
|
|
|
|
|
Net
income (loss) attributable to CCIC common stockholders, basic |
$ |
0.22 |
|
|
$ |
0.26 |
|
|
$ |
0.85 |
|
|
$ |
0.59 |
|
Net
income (loss) attributable to CCIC common stockholders,
diluted |
$ |
0.21 |
|
|
$ |
0.26 |
|
|
$ |
0.84 |
|
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding (in thousands): |
|
|
|
|
|
|
|
Basic |
395,359 |
|
|
337,564 |
|
|
373,561 |
|
|
336,426 |
|
Diluted |
397,035 |
|
|
338,409 |
|
|
374,992 |
|
|
337,076 |
|
CROWN CASTLE INTERNATIONAL CORP. |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED) |
(in thousands) |
|
|
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
Net income (loss) |
$ |
346,446 |
|
|
$ |
232,263 |
|
Adjustments to
reconcile net income (loss) to net cash provided by (used for)
operating activities: |
|
|
|
Depreciation, amortization and accretion |
880,197 |
|
|
834,725 |
|
Gains
(losses) on retirement of long-term obligations |
3,525 |
|
|
52,291 |
|
Amortization of deferred financing costs and other non-cash
interest |
7,637 |
|
|
11,293 |
|
Stock-based compensation expense |
67,264 |
|
|
60,402 |
|
Asset
write-down charges |
10,284 |
|
|
28,251 |
|
Deferred
income tax benefit (provision) |
330 |
|
|
6,626 |
|
Other
non-cash adjustments, net |
(3,159 |
) |
|
1,548 |
|
Changes
in assets and liabilities, excluding the effects of
acquisitions: |
|
|
|
Increase
(decrease) in liabilities |
61,988 |
|
|
122,944 |
|
Decrease
(increase) in assets |
42,779 |
|
|
(45,628 |
) |
Net cash provided by (used for) operating activities |
1,417,291 |
|
|
1,304,715 |
|
Cash flows from
investing activities: |
|
|
|
Payments
for acquisition of businesses, net of cash acquired |
(2,112,887 |
) |
|
(545,162 |
) |
Capital
expenditures |
(851,512 |
) |
|
(614,178 |
) |
Net
(payments) receipts from settled swaps |
(328 |
) |
|
8,141 |
|
Other
investing activities, net |
(6,147 |
) |
|
11,616 |
|
Net cash provided by (used for) investing activities |
(2,970,874 |
) |
|
(1,139,583 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds
from issuance of long-term debt |
3,092,323 |
|
|
5,201,010 |
|
Principal
payments on debt and other long-term obligations |
(89,817 |
) |
|
(69,717 |
) |
Purchases
and redemptions of long-term debt |
— |
|
|
(4,044,834 |
) |
Borrowings under revolving credit facility |
1,755,000 |
|
|
3,440,000 |
|
Payments
under revolving credit facility |
(1,755,000 |
) |
|
(4,155,000 |
) |
Payments
for financing costs |
(26,684 |
) |
|
(41,471 |
) |
Net
proceeds from issuance of common stock |
4,220,766 |
|
|
323,798 |
|
Net
proceeds from issuance of preferred stock |
1,607,759 |
|
|
— |
|
Purchases
of capital stock |
(23,037 |
) |
|
(24,759 |
) |
Dividends/distributions paid on common stock |
(1,082,015 |
) |
|
(896,628 |
) |
Dividends
paid on preferred stock |
— |
|
|
(32,991 |
) |
Net
(increase) decrease in restricted cash |
4,960 |
|
|
40 |
|
Net cash provided by (used for) financing activities |
7,704,255 |
|
|
(300,552 |
) |
Net increase
(decrease) in cash and cash equivalents - continuing
operations |
6,150,672 |
|
|
(135,420 |
) |
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 |
863 |
|
|
(321 |
) |
Cash and cash equivalents at beginning of
period |
567,599 |
|
|
178,810 |
|
Cash and cash
equivalents at end of period |
$ |
6,719,134 |
|
|
$ |
156,219 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Interest
paid |
420,317 |
|
|
357,094 |
|
Income
taxes paid |
13,853 |
|
|
11,740 |
|
CROWN CASTLE INTERNATIONAL CORP. |
SEGMENT OPERATING RESULTS
(UNAUDITED) |
(in thousands) |
|
SEGMENT OPERATING RESULTS |
|
Three Months Ended September 30, 2017 |
|
Three Months Ended September 30, 2016 |
|
Towers |
|
Small Cells |
|
Other |
|
Consolidated Total |
|
Towers |
|
Small Cells |
|
Other |
|
Consolidated Total |
Segment site rental
revenues |
$ |
724,813 |
|
|
$ |
167,950 |
|
|
|
|
$ |
892,763 |
|
|
$ |
709,603 |
|
|
$ |
102,429 |
|
|
|
|
$ |
812,032 |
|
Segment network
services and other revenue |
153,001 |
|
|
17,474 |
|
|
|
|
170,475 |
|
|
166,979 |
|
|
13,005 |
|
|
|
|
179,984 |
|
Segment revenues |
877,814 |
|
|
185,424 |
|
|
|
|
1,063,238 |
|
|
876,582 |
|
|
115,434 |
|
|
|
|
992,016 |
|
Segment site rental
cost of operations |
212,037 |
|
|
59,319 |
|
|
|
|
271,356 |
|
|
210,322 |
|
|
37,754 |
|
|
|
|
248,076 |
|
Segment network
services and other cost of operations |
90,845 |
|
|
14,245 |
|
|
|
|
105,090 |
|
|
97,395 |
|
|
10,194 |
|
|
|
|
107,589 |
|
Segment cost of
operations(a) |
302,882 |
|
|
73,564 |
|
|
|
|
376,446 |
|
|
307,717 |
|
|
47,948 |
|
|
|
|
355,665 |
|
Segment site rental
gross margin(b) |
512,776 |
|
|
108,631 |
|
|
|
|
621,407 |
|
|
499,281 |
|
|
64,675 |
|
|
|
|
563,956 |
|
Segment network
services and other gross margin(b) |
62,156 |
|
|
3,229 |
|
|
|
|
65,385 |
|
|
69,584 |
|
|
2,811 |
|
|
|
|
72,395 |
|
Segment general and
administrative expenses(a) |
22,490 |
|
|
18,415 |
|
|
41,085 |
|
|
81,990 |
|
|
22,225 |
|
|
14,480 |
|
|
35,526 |
|
|
72,231 |
|
Segment operating
profit(b) |
552,442 |
|
|
93,445 |
|
|
(41,085 |
) |
|
604,802 |
|
|
546,640 |
|
|
53,006 |
|
|
(35,526 |
) |
|
564,120 |
|
Stock-based
compensation expense |
|
|
|
|
24,681 |
|
|
24,681 |
|
|
|
|
|
|
22,594 |
|
|
22,594 |
|
Depreciation,
amortization and accretion |
|
|
|
|
296,033 |
|
|
296,033 |
|
|
|
|
|
|
280,824 |
|
|
280,824 |
|
Interest expense and
amortization of deferred financing costs |
|
|
|
|
154,146 |
|
|
154,146 |
|
|
|
|
|
|
129,916 |
|
|
129,916 |
|
Other (income) expenses
to reconcile to income (loss) before income taxes(c) |
|
|
|
|
12,365 |
|
|
12,365 |
|
|
|
|
|
|
27,379 |
|
|
27,379 |
|
Income (loss) before
income taxes |
|
|
|
|
|
|
$ |
117,577 |
|
|
|
|
|
|
|
|
$ |
103,407 |
|
(a) Segment cost of operations exclude (1)
stock-based compensation expense of $5.9 million and $4.9 million
for the three months ended September 30, 2017 and 2016,
respectively and (2) prepaid lease purchase price adjustments of
$5.0 million and $5.4 million for the three months ended September
30, 2017 and 2016, respectively. Segment general and
administrative expenses exclude stock-based compensation expense of
$18.8 million and $17.7 million for the three months ended
September 30, 2017 and 2016, respectively. (b) See "Non-GAAP
Financial Measures, Segment 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.
SEGMENT OPERATING RESULTS |
|
Nine Months Ended September 30, 2017 |
|
Nine Months Ended September 30, 2016 |
|
Towers |
|
Small Cells |
|
Other |
|
Consolidated Total |
|
Towers |
|
Small Cells |
|
Other |
|
Consolidated Total |
Segment site rental
revenues |
$ |
2,158,994 |
|
|
$ |
459,511 |
|
|
|
|
$ |
2,618,505 |
|
|
$ |
2,118,159 |
|
|
$ |
297,767 |
|
|
|
|
$ |
2,415,926 |
|
Segment network
services and other revenue |
460,593 |
|
|
38,417 |
|
|
|
|
499,010 |
|
|
434,042 |
|
|
38,841 |
|
|
|
|
472,883 |
|
Segment revenues |
2,619,587 |
|
|
497,928 |
|
|
|
|
3,117,515 |
|
|
2,552,201 |
|
|
336,608 |
|
|
|
|
2,888,809 |
|
Segment site rental
cost of operations |
632,705 |
|
|
158,426 |
|
|
|
|
791,131 |
|
|
625,331 |
|
|
109,402 |
|
|
|
|
734,733 |
|
Segment network
services and other cost of operations |
275,618 |
|
|
31,078 |
|
|
|
|
306,696 |
|
|
249,306 |
|
|
30,652 |
|
|
|
|
279,958 |
|
Segment cost of
operations(a) |
908,323 |
|
|
189,504 |
|
|
|
|
1,097,827 |
|
|
874,637 |
|
|
140,054 |
|
|
|
|
1,014,691 |
|
Segment site rental
gross margin(b) |
1,526,289 |
|
|
301,085 |
|
|
|
|
1,827,374 |
|
|
1,492,828 |
|
|
188,365 |
|
|
|
|
1,681,193 |
|
Segment network
services and other gross margin(b) |
184,975 |
|
|
7,339 |
|
|
|
|
192,314 |
|
|
184,736 |
|
|
8,189 |
|
|
|
|
192,925 |
|
Segment general and
administrative expenses(a) |
69,125 |
|
|
54,770 |
|
|
121,045 |
|
|
244,940 |
|
|
68,329 |
|
|
45,720 |
|
|
107,161 |
|
|
221,210 |
|
Segment operating
profit(b) |
1,642,139 |
|
|
253,654 |
|
|
(121,045 |
) |
|
1,774,748 |
|
|
1,609,235 |
|
|
150,834 |
|
|
(107,161 |
) |
|
1,652,908 |
|
Stock-based
compensation expense |
|
|
|
|
66,458 |
|
|
66,458 |
|
|
|
|
|
|
75,297 |
|
|
75,297 |
|
Depreciation,
amortization and accretion |
|
|
|
|
880,197 |
|
|
880,197 |
|
|
|
|
|
|
834,725 |
|
|
834,725 |
|
Interest expense and
amortization of deferred financing costs |
|
|
|
|
430,402 |
|
|
430,402 |
|
|
|
|
|
|
385,656 |
|
|
385,656 |
|
Other income (expenses)
to reconcile to income (loss) from continuing operations before
income taxes(c) |
|
|
|
|
39,955 |
|
|
39,955 |
|
|
|
|
|
|
112,170 |
|
|
112,170 |
|
Income (loss) from
continuing operations before income taxes |
|
|
|
|
|
|
$ |
357,736 |
|
|
|
|
|
|
|
|
$ |
245,060 |
|
(a) Segment cost of operations exclude (1)
stock-based compensation expense of $12.2 million and $17.6 million
for the nine months ended September 30, 2017 and 2016, respectively
and (2) prepaid lease purchase price adjustments of $15.1 million
and $16.0 million for the nine months ended September 30, 2017 and
2016, respectively. Segment general and administrative
expenses exclude stock-based compensation expense of $54.3 million
and $57.7 million for the nine months ended September 30, 2017 and
2016, respectively. (b) See "Non-GAAP Financial
Measures, Segment 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.
Contacts: Dan
Schlanger, CFO |
Son
Nguyen, VP & Treasurer |
Crown
Castle International Corp. |
713-570-3050 |
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