Crown Castle International Corp. (NYSE: CCI) ("Crown Castle") today
reported results for the quarter ended March 31, 2019.
"In the first quarter, we delivered solid
results that were in line with our expectations, positioning us
well to generate attractive growth in cash flows and dividends per
share for the full year 2019," stated Jay Brown, Crown Castle’s
Chief Executive Officer. "This continued growth reflects the strong
fundamentals we see across our business, including our major
customers spending to improve their current networks while
beginning to invest in 5G. We are excited about the
opportunity we see to leverage our unmatched portfolio of more than
40,000 towers and 70,000 route miles of dense, high capacity fiber
located in the top U.S. markets where we see the greatest long-term
demand. We continue to believe our ability to offer towers,
small cells and fiber solutions, which are all integral components
of communications networks and are shared among multiple tenants,
provides us the best opportunity to generate significant growth
while delivering high returns for our shareholders. Further,
we believe that the U.S. is the best market for communications
infrastructure ownership, and we are pursuing that compelling
opportunity with our comprehensive offering. With this
positive momentum across our towers and fiber segments, we remain
focused on investing in our business to generate future growth and
delivering dividend per share growth of 7% to 8% per year."
RESULTS FOR THE QUARTERThe
table below sets forth select financial results for the three month
period ended March 31, 2019 and 2018. For further
information, refer to the financial statements and non-GAAP,
segment and other calculation reconciliations included in this
press release.
(in millions) |
Actual |
Q1 2019 |
Q1 2018 |
Change |
% Change |
Site rental revenues |
$ |
1,219 |
$ |
1,153 |
+$ |
66 |
+6 |
% |
Net income (loss) |
$ |
210 |
$ |
114 |
+$ |
96 |
+84 |
% |
Adjusted EBITDA(a) |
$ |
821 |
$ |
763 |
+$ |
58 |
+8 |
% |
AFFO(a)(b) |
$ |
606 |
$ |
558 |
+$ |
48 |
+9 |
% |
Weighted-average common
shares outstanding - diluted |
|
417 |
|
410 |
|
+7 |
+2 |
% |
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) Attributable to CCIC common stockholders.
HIGHLIGHTS FROM THE QUARTER
- Site rental revenues. Site rental
revenues grew approximately 6%, or $66 million, from first quarter
2018 to first quarter 2019, inclusive of approximately $65 million
in Organic Contribution to Site Rental Revenues and a $1 million
increase in straight-lined revenues. The $65 million in
Organic Contribution to Site Rental Revenues represents
approximately 5.7% growth, comprised of approximately 9.5% growth
from new leasing activity and contracted tenant escalations, net of
approximately 3.8% from tenant non-renewals.
- Net income. Net income for the first
quarter 2019 was $210 million, compared to $114 million during the
same period a year ago.
- Capital expenditures. Capital
expenditures during the quarter were $480 million, comprised of $15
million of land purchases, $21 million of sustaining capital
expenditures, $442 million of revenue generating capital
expenditures and $2 million of integration capital
expenditures. The revenue generating capital expenditures of
$442 million includes $344 million attributable to Fiber and $98
million attributable to Towers.
- Common stock dividend. During the
quarter, Crown Castle paid common stock dividends of $1.125 per
common share, an increase of approximately 7% on a per share basis
compared to the same period a year ago.
- Financing activities. In February, Crown
Castle issued $1.0 billion in aggregate principal amount of senior
unsecured notes, with net proceeds from the offering used to repay
outstanding borrowings under its existing revolving credit
facility. In addition, in April, Crown Castle established an
unsecured commercial paper program ("CP Program"). Amounts
available under the CP Program may be borrowed, repaid and
re-borrowed from time to time, with the principal amount
outstanding at any time not to exceed $1.0 billion.
"We are excited about the positive long-term
industry fundamentals that are creating significant demand for our
communications infrastructure, which is translating into the higher
levels of new leasing activity we are experiencing this year across
our tower and fiber assets," stated Dan Schlanger, Crown Castle's
Chief Financial Officer. "With our recent financing
activities, we believe we are well positioned to continue to invest
in our business and create significant value for our shareholders
by leveraging our leading portfolio of towers and high-capacity
fiber assets."
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
Securities and Exchange Commission ("SEC").
The following table sets forth Crown Castle's
current Outlook for full year 2019, which is unchanged from our
previously provided full year 2019 Outlook:
(in millions) |
Full Year 2019 |
Site
rental revenues |
$ |
4,939 |
to |
$ |
4,984 |
Site
rental cost of operations(a) |
$ |
1,438 |
to |
$ |
1,483 |
Net
income (loss) |
$ |
781 |
to |
$ |
861 |
Adjusted EBITDA(b) |
$ |
3,344 |
to |
$ |
3,389 |
Interest expense and
amortization of deferred financing costs(c) |
$ |
687 |
to |
$ |
732 |
FFO(b)(d) |
$ |
2,293 |
to |
$ |
2,338 |
AFFO(b)(d) |
$ |
2,413 |
to |
$ |
2,458 |
Weighted-average common
shares outstanding - diluted(e) |
|
417 |
(a) Exclusive of depreciation, amortization and accretion.
(b) See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
(c) See reconciliation of "components of current outlook for
interest expense and amortization of deferred financing costs"
herein for a discussion of non-cash interest expense.
(d) Attributable to CCIC common stockholders.
(e) The assumption for full year 2019 diluted weighted-average
common shares outstanding is based on the diluted common shares
outstanding as of March 31, 2019. The diluted
weighted-average common shares outstanding does not include any
assumed conversion of preferred stock in the share count.
Full Year 2019 OutlookThe table below compares
the results for full year 2018, midpoint of the current full year
2019 Outlook and the midpoint of the previously provided full year
2019 Outlook for select metrics.
|
Midpoint of FY 2019 Outlook to FY 2018Actual
Comparison |
|
|
(in
millions) |
CurrentFull Year2019 Outlook |
Full Year2018 Actual |
Change |
% Change |
Previous Full Year 2019 Outlook(d) |
Current Compared to Previous Outlook |
Site rental revenues |
$ |
4,962 |
$ |
4,716 |
+$ |
246 |
+5 |
% |
$ |
4,962 |
— |
Net income (loss) |
$ |
821 |
$ |
671 |
+$ |
150 |
+22 |
% |
$ |
821 |
— |
Adjusted EBITDA(a) |
$ |
3,367 |
$ |
3,141 |
+$ |
226 |
+7 |
% |
$ |
3,367 |
— |
AFFO(a)(b) |
$ |
2,436 |
$ |
2,274 |
+$ |
162 |
+7 |
% |
$ |
2,436 |
— |
Weighted-average common
shares outstanding - diluted(c) |
|
417 |
|
415 |
|
+2 |
— |
|
|
417 |
— |
(a) See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
(b) Attributable to CCIC common stockholders.
(c) The assumption for full year 2019 diluted weighted-average
common shares outstanding is based on the diluted common shares
outstanding as of March 31, 2019. For all periods
presented, the diluted weighted-average common shares outstanding
does not include any assumed conversion of preferred stock in the
share count.
(d) As issued on January 23, 2019.
- At the midpoints, the expected Organic Contribution to Site
Rental Revenues from 2018 to 2019 represents 6.0% growth year over
year compared to 5.6% for full year 2018, comprised of
approximately 9.8% growth from new leasing activity and contracted
tenant escalations, net of approximately 3.8% from tenant
non-renewals.
- The chart below reconciles the components of expected growth in
site rental revenues from 2018 to 2019 of $223 million to $268
million, inclusive of expected Organic Contribution to Site Rental
Revenues during 2019 of $260 million to $300 million. Chart
1: http://www.globenewswire.com/NewsRoom/AttachmentNg/3941ab55-cd37-4928-a7fd-3d1e26e6c68a
- The chart below reconciles the components of expected growth in
AFFO from 2018 to 2019 of $140 million to $185 million.Chart
2: http://www.globenewswire.com/NewsRoom/AttachmentNg/d9360123-4a60-40cb-aae9-36de87535755
- 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, April 18,
2019, at 10:30 a.m. Eastern time to discuss its first quarter 2019
results. The conference call may be accessed by dialing
888-254-3590 and asking for the Crown Castle call (access code
2519856) at least 30 minutes prior to the start time. The
conference call may also be accessed live over the Internet at
investor.crowncastle.com. Supplemental materials for the call
have been posted on the Crown Castle website at
investor.crowncastle.com.
A telephonic replay of the conference call will
be available from 1:30 p.m. Eastern time on Thursday, April 18,
2019, through 1:30 p.m. Eastern time on Wednesday, July 17, 2019,
and may be accessed by dialing 888-203-1112 and using access code
2519856. An audio archive will also be available on the
company's website at investor.crowncastle.com shortly after the
call and will be accessible for approximately 90 days.
ABOUT CROWN CASTLECrown Castle
owns, operates and leases more than 40,000 cell towers and
approximately 70,000 route miles of fiber supporting small cells
and fiber solutions across every major U.S. market. This
nationwide portfolio of communications infrastructure connects
cities and communities to essential data, technology and wireless
service - bringing information, ideas and innovations to the people
and businesses that need them. 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 communications 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 2014.
In addition to the non-GAAP financial measures
used herein, we also provide Segment Site Rental Gross Margin,
Segment 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
communications 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 tenant 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, (gains) losses 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 sustaining capital expenditures (comprised of
maintenance 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 tenant 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 Services and Other Gross Margin.
We define Segment Services and Other Gross Margin as segment
services and other revenues less segment services and other cost of
operations, excluding stock-based compensation expense recorded in
consolidated services and other cost of operations.
Segment Operating Profit. We define
Segment Operating Profit as segment site rental gross margin plus
segment services and other gross margin, less selling, general and
administrative expenses attributable to the respective segment.
All of these measurements of profit or loss are
exclusive of depreciation, amortization and accretion, which are
shown separately. Additionally, certain costs are shared
across segments and are reflected in our segment measures through
consistently applied allocations using the rates at which
management has estimated the relative burden to each segment.
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 expansion or development of existing
communications infrastructure (including capital expenditures
related to (1) enhancing communications infrastructure assets in
order to add new tenants for the first time or support subsequent
tenant equipment augmentations, or (2) modifying the structure of a
communications infrastructure asset to accommodate additional
tenants), construction of new communications infrastructure, and,
to a lesser extent, purchases of land interests (which primarily
relate to land assets under towers as we seek to manage our
interests in the land beneath our towers) and other capital
projects.
Integration capital expenditures. We
define integration capital expenditures as those capital
expenditures made as a result of integrating acquired companies
into our business.
Sustaining capital expenditures. We define
sustaining capital expenditures as those capital expenditures not
otherwise categorized as either discretionary or integration
capital expenditures, such as (1) maintenance capital expenditures
on our communications infrastructure assets that enable our
tenants' ongoing quiet enjoyment of the communications
infrastructure and (2) corporate capital expenditures.
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 |
|
March 31, 2019 |
|
March 31, 2018 |
|
December 31, 2018 |
(in millions) |
|
|
|
|
|
Net income (loss) |
$ |
210 |
|
|
$ |
114 |
|
|
$ |
671 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
Asset
write-down charges |
6 |
|
|
3 |
|
|
26 |
|
Acquisition and integration costs |
4 |
|
|
6 |
|
|
27 |
|
Depreciation, amortization and accretion |
394 |
|
|
374 |
|
|
1,528 |
|
Amortization of prepaid lease purchase price adjustments |
5 |
|
|
5 |
|
|
20 |
|
Interest
expense and amortization of deferred financing costs(a) |
168 |
|
|
160 |
|
|
642 |
|
(Gains)
losses on retirement of long-term obligations |
1 |
|
|
71 |
|
|
106 |
|
Interest
income |
(2 |
) |
|
(1 |
) |
|
(5 |
) |
Other
(income) expense |
1 |
|
|
1 |
|
|
(1 |
) |
(Benefit)
provision for income taxes |
6 |
|
|
4 |
|
|
19 |
|
Stock-based compensation expense |
29 |
|
|
26 |
|
|
108 |
|
Adjusted EBITDA(b)(c) |
$ |
821 |
|
|
$ |
763 |
|
|
$ |
3,141 |
|
(a) See the reconciliation of "components of
historical 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:
|
Full Year 2019 |
(in
millions) |
Outlook |
Net income (loss) |
$ |
781 |
|
to |
$ |
861 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
Asset
write-down charges |
$ |
35 |
|
to |
$ |
45 |
|
Acquisition and integration costs |
$ |
15 |
|
to |
$ |
25 |
|
Depreciation, amortization and accretion |
$ |
1,606 |
|
to |
$ |
1,646 |
|
Amortization of prepaid lease purchase price adjustments |
$ |
19 |
|
to |
$ |
21 |
|
Interest
expense and amortization of deferred financing costs(a) |
$ |
687 |
|
to |
$ |
732 |
|
(Gains)
losses on retirement of long-term obligations |
$ |
(1 |
) |
to |
$ |
1 |
|
Interest
income |
$ |
(7 |
) |
to |
$ |
(3 |
) |
Other
(income) expense |
$ |
(1 |
) |
to |
$ |
1 |
|
(Benefit)
provision for income taxes |
$ |
17 |
|
to |
$ |
25 |
|
Stock-based compensation expense |
$ |
111 |
|
to |
$ |
116 |
|
Adjusted EBITDA(b)(c) |
$ |
3,344 |
|
to |
$ |
3,389 |
|
(a) See the reconciliation of "components of
current outlook for 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 Twelve Months Ended |
(in millions) |
March 31, 2019 |
|
March 31, 2018 |
|
December 31, 2018 |
Net income (loss) |
$ |
210 |
|
|
$ |
114 |
|
|
$ |
671 |
|
Real estate related
depreciation, amortization and accretion |
380 |
|
|
359 |
|
|
1,472 |
|
Asset write-down
charges |
6 |
|
|
3 |
|
|
26 |
|
Dividends on preferred
stock |
(28 |
) |
|
(28 |
) |
|
(113 |
) |
FFO(a)(b)(c)(d)(e) |
$ |
567 |
|
|
$ |
447 |
|
|
$ |
2,055 |
|
|
|
|
|
|
|
FFO (from above) |
$ |
567 |
|
|
$ |
447 |
|
|
$ |
2,055 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
Straight-lined revenue |
(17 |
) |
|
(16 |
) |
|
(72 |
) |
Straight-lined expense |
22 |
|
|
23 |
|
|
90 |
|
Stock-based compensation expense |
29 |
|
|
26 |
|
|
108 |
|
Non-cash
portion of tax provision |
5 |
|
|
4 |
|
|
2 |
|
Non-real
estate related depreciation, amortization and accretion |
14 |
|
|
15 |
|
|
56 |
|
Amortization of non-cash interest expense |
1 |
|
|
2 |
|
|
7 |
|
Other
(income) expense |
1 |
|
|
1 |
|
|
(1 |
) |
(Gains)
losses on retirement of long-term obligations |
1 |
|
|
71 |
|
|
106 |
|
Acquisition and integration costs |
4 |
|
|
6 |
|
|
27 |
|
Maintenance capital expenditures |
(16 |
) |
|
(13 |
) |
|
(64 |
) |
Corporate
capital expenditures |
(5 |
) |
|
(9 |
) |
|
(41 |
) |
AFFO(a)(b)(c)(d)(e) |
$ |
606 |
|
|
$ |
558 |
|
|
$ |
2,274 |
|
(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 417
million, 410 million and 415 million for the three months ended
March 31, 2019 and 2018, and the twelve months ended December
31, 2018, respectively. For all periods presented, the
diluted weighted-average common shares outstanding does not include
any assumed conversion of 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:
|
Full Year 2019 |
(in millions) |
Outlook |
Net income (loss) |
$ |
781 |
|
to |
$ |
861 |
|
Real estate related
depreciation, amortization and accretion |
$ |
1,557 |
|
to |
$ |
1,577 |
|
Asset write-down
charges |
$ |
35 |
|
to |
$ |
45 |
|
Dividends on preferred
stock |
$ |
(113 |
) |
to |
$ |
(113 |
) |
FFO(a)(b)(c)(d)(e) |
$ |
2,293 |
|
to |
$ |
2,338 |
|
|
|
|
|
FFO (from above) |
$ |
2,293 |
|
to |
$ |
2,338 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
Straight-lined revenue |
$ |
(50 |
) |
to |
$ |
(30 |
) |
Straight-lined expense |
$ |
70 |
|
to |
$ |
90 |
|
Stock-based compensation expense |
$ |
111 |
|
to |
$ |
116 |
|
Non-cash
portion of tax provision |
$ |
(4 |
) |
to |
$ |
6 |
|
Non-real
estate related depreciation, amortization and accretion |
$ |
49 |
|
to |
$ |
69 |
|
Amortization of non-cash interest expense |
$ |
(2 |
) |
to |
$ |
8 |
|
Other
(income) expense |
$ |
(1 |
) |
to |
$ |
1 |
|
(Gains)
losses on retirement of long-term obligations |
$ |
(1 |
) |
to |
$ |
1 |
|
Acquisition and integration costs |
$ |
15 |
|
to |
$ |
25 |
|
Maintenance capital expenditures |
$ |
(80 |
) |
to |
$ |
(70 |
) |
Corporate
capital expenditures |
$ |
(45 |
) |
to |
$ |
(35 |
) |
AFFO(a)(b)(c)(d)(e) |
$ |
2,413 |
|
to |
$ |
2,458 |
|
(a) The assumption for full
year 2019 diluted weighted-average common shares outstanding is 417
million based on the diluted common shares outstanding as of March
31, 2019. The diluted weighted-average common shares
outstanding does not include any assumed conversion of 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.
For Comparative Purposes - Reconciliation of Previous
Outlook for Adjusted EBITDA:
|
Previously Issued |
|
Full Year 2019 |
(in
millions) |
Outlook |
Net income (loss) |
$ |
781 |
|
to |
$ |
861 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
Asset
write-down charges |
$ |
35 |
|
to |
$ |
45 |
|
Acquisition and integration costs |
$ |
15 |
|
to |
$ |
25 |
|
Depreciation, amortization and accretion |
$ |
1,606 |
|
to |
$ |
1,646 |
|
Amortization of prepaid lease purchase price adjustments |
$ |
19 |
|
to |
$ |
21 |
|
Interest
expense and amortization of deferred financing costs |
$ |
687 |
|
to |
$ |
732 |
|
(Gains)
losses on retirement of long-term obligations |
$ |
0 |
|
to |
$ |
0 |
|
Interest
income |
$ |
(7 |
) |
to |
$ |
(3 |
) |
Other
(income) expense |
$ |
(1 |
) |
to |
$ |
1 |
|
(Benefit)
provision for income taxes |
$ |
17 |
|
to |
$ |
25 |
|
Stock-based compensation expense |
$ |
111 |
|
to |
$ |
116 |
|
Adjusted EBITDA(a)(b) |
$ |
3,344 |
|
to |
$ |
3,389 |
|
(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 |
|
Full Year 2019 |
(in millions) |
Outlook |
Net income (loss) |
$ |
781 |
|
to |
$ |
861 |
|
Real estate related
depreciation, amortization and accretion |
$ |
1,557 |
|
to |
$ |
1,577 |
|
Asset write-down
charges |
$ |
35 |
|
to |
$ |
45 |
|
Dividends on preferred
stock |
$ |
(113 |
) |
to |
$ |
(113 |
) |
FFO(a)(b)(c)(d) |
$ |
2,293 |
|
to |
$ |
2,338 |
|
|
|
|
|
FFO (from above) |
$ |
2,293 |
|
to |
$ |
2,338 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
Straight-lined revenue |
$ |
(50 |
) |
to |
$ |
(30 |
) |
Straight-lined expense |
$ |
70 |
|
to |
$ |
90 |
|
Stock-based compensation expense |
$ |
111 |
|
to |
$ |
116 |
|
Non-cash
portion of tax provision |
$ |
(4 |
) |
to |
$ |
6 |
|
Non-real
estate related depreciation, amortization and accretion |
$ |
49 |
|
to |
$ |
69 |
|
Amortization of non-cash interest expense |
$ |
(2 |
) |
to |
$ |
8 |
|
Other
(income) expense |
$ |
(1 |
) |
to |
$ |
1 |
|
(Gains)
losses on retirement of long-term obligations |
$ |
0 |
|
to |
$ |
0 |
|
Acquisition and integration costs |
$ |
15 |
|
to |
$ |
25 |
|
Maintenance capital expenditures |
$ |
(80 |
) |
to |
$ |
(70 |
) |
Corporate
capital expenditures |
$ |
(45 |
) |
to |
$ |
(35 |
) |
AFFO(a)(b)(c)(d) |
$ |
2,413 |
|
to |
$ |
2,458 |
|
(a) Previously issued full year 2019 Outlook
assumes diluted weighted-average common shares outstanding as of
December 31, 2018 of approximately 417 million. The
diluted weighted-average common shares outstanding does not include
any assumed conversion of 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) The above reconciliation
excludes line items included in our definition which are not
applicable for the periods shown.
(d) Attributable to CCIC common
stockholders.
The components of changes in site rental revenues for
the quarters ended March 31, 2019 and 2018 are as
follows:
|
Three Months Ended March 31, |
(dollars in
millions) |
2019 |
|
2018 |
Components of changes
in site rental revenues(a): |
|
|
|
Prior
year site rental revenues exclusive of straight-lined revenues
associated with fixed escalators(b)(c) |
$ |
1,137 |
|
|
$ |
856 |
|
|
|
|
|
New
leasing activity(b)(c) |
87 |
|
|
49 |
|
Escalators |
21 |
|
|
20 |
|
Non-renewals |
(43 |
) |
|
(22 |
) |
Organic
Contribution to Site Rental Revenues(d) |
65 |
|
|
47 |
|
Straight-lined revenues associated with fixed escalators |
17 |
|
|
16 |
|
Acquisitions(e) |
— |
|
|
234 |
|
Other |
— |
|
|
— |
|
Total GAAP site rental
revenues |
$ |
1,219 |
|
|
$ |
1,153 |
|
|
|
|
|
Year-over-year
changes in revenue: |
|
|
|
Reported GAAP site
rental revenues |
5.7 |
% |
|
|
Organic Contribution to
Site Rental Revenues(d)(f) |
5.7 |
% |
|
|
(a) Additional information regarding Crown Castle's site rental
revenues, including projected revenue from tenant 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.
(b) Includes revenues from amortization of prepaid rent in
accordance with GAAP.
(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) Represents the initial contribution of recent
acquisitions. The financial impact of recent acquisitions is
excluded from Organic Contribution to Site Rental Revenues until
the one-year anniversary of the acquisition.
(f) 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.
The components of the changes in site rental revenues
for the year ending December 31, 2019 are forecasted as
follows:
(dollars in
millions) |
Full Year 2018 |
|
Full Year2019 Outlook |
Components of changes
in site rental revenues(a): |
|
|
|
Prior
year site rental revenues exclusive of straight-lined revenues
associated with fixed escalators(b)(c) |
$ |
3,670 |
|
|
$ |
4,643 |
|
|
|
|
New
leasing activity(b)(c) |
|
213 |
|
|
350-380 |
Escalators |
|
83 |
|
|
85-95 |
Non-renewals |
|
(89 |
) |
|
(185)-(165) |
Organic
Contribution to Site Rental Revenues(d) |
|
207 |
|
|
260-300 |
Straight-lined revenues associated with fixed escalators |
|
72 |
|
|
30-50 |
Acquisitions(e) |
|
767 |
|
|
|
— |
Other |
|
— |
|
|
|
— |
Total GAAP site rental
revenues |
$ |
4,716 |
|
|
$4,939-$4,984 |
|
|
|
|
Year-over-year
changes in revenue: |
|
|
|
Reported GAAP site
rental revenues |
|
|
5.2%(f) |
Organic Contribution to
Site Rental Revenues(d)(g) |
|
|
6.0%(f) |
(a) Additional information regarding Crown Castle's site rental
revenues, including projected revenue from tenant 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.
(b) Includes revenues from amortization of prepaid rent in
accordance with GAAP.
(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) Represents the contribution from recent acquisitions.
The financial impact of recent acquisitions is excluded from
Organic Contribution to Site Rental Revenues until the one-year
anniversary of the acquisition, with the exception of the impact of
Lightower. To be consistent with prior presentations of the
2018 Outlook for Organic Contributions to Site Rental Revenues, the
entire contribution to growth in site rental revenues in 2018
attributable to Lightower is included within acquisitions.
(f) Calculated based on midpoint of full year 2019 Outlook.
(g) 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.
Components of Historical Interest
Expense and Amortization of Deferred Financing Costs:
|
For the Three Months Ended |
(in millions) |
March 31, 2019 |
|
March 31, 2018 |
Interest expense on
debt obligations |
$ |
167 |
|
|
$ |
158 |
|
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
5 |
|
|
5 |
|
Other, net |
(4 |
) |
|
(3 |
) |
Interest
expense and amortization of deferred financing costs |
$ |
168 |
|
|
$ |
160 |
|
Components of Current Outlook for
Interest Expense and Amortization of Deferred Financing
Costs:
|
Full Year 2019 |
(in millions) |
Outlook |
Interest expense on
debt obligations |
$ |
696 |
|
to |
$ |
716 |
|
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
$ |
17 |
|
to |
$ |
22 |
|
Other, net |
$ |
(19 |
) |
to |
$ |
(14 |
) |
Interest
expense and amortization of deferred financing costs |
$ |
687 |
|
to |
$ |
732 |
|
Debt balances and maturity dates as of
March 31, 2019 are as follows:
(in
millions) |
Face Value |
|
Final Maturity |
Cash and cash
equivalents(a) |
$ |
245 |
|
|
|
|
|
|
|
Tower Revenue Notes,
Series 2015-1(b) |
300 |
|
May
2042 |
Tower Revenue Notes,
Series 2015-2(b) |
700 |
|
May
2045 |
Tower Revenue Notes,
Series 2018-1(b) |
250 |
|
July
2043 |
Tower Revenue Notes,
Series 2018-2(b) |
750 |
|
July
2048 |
3.849% Secured
Notes |
1,000 |
|
Apr.
2023 |
Secured Notes, Series
2009-1, Class A-2(c) |
70 |
|
Aug.
2029 |
Finance leases and
other obligations |
227 |
|
|
Various |
Total secured
debt |
$ |
3,297 |
|
|
|
2016 Revolver |
645 |
|
|
June
2023 |
2016 Term Loan A |
2,341 |
|
June
2023 |
5.250% Senior
Notes |
1,650 |
|
Jan.
2023 |
4.875% Senior
Notes |
850 |
|
Apr.
2022 |
3.400% Senior
Notes |
850 |
|
Feb.
2021 |
4.450% Senior
Notes |
900 |
|
Feb.
2026 |
3.700% Senior
Notes |
750 |
|
June
2026 |
2.250% Senior
Notes |
700 |
|
Sept.
2021 |
4.000% Senior
Notes |
500 |
|
Mar.
2027 |
4.750% Senior
Notes |
350 |
|
May
2047 |
3.200% Senior
Notes |
750 |
|
Sept.
2024 |
3.650% Senior
Notes |
1,000 |
|
Sept.
2027 |
3.150% Senior
Notes |
750 |
|
July
2023 |
3.800% Senior
Notes |
1,000 |
|
Feb.
2028 |
4.300% Senior
Notes |
600 |
|
Feb.
2029 |
5.200% Senior
Notes |
400 |
|
Feb.
2049 |
Total unsecured
debt |
$ |
14,036 |
|
|
|
Total net
debt |
$ |
17,088 |
|
|
|
(a) Excludes restricted cash.
(b) The Senior Secured Tower Revenue Notes, Series 2015-1 and
2015-2 have anticipated repayment dates in 2022 and 2025,
respectively. The Senior Secured Tower Revenue Notes, Series
2018-1 and 2018-2 have anticipated repayment dates in 2023 and
2028, respectively.
(c) The Senior Secured Notes, 2009-1, Class A-2 principal
amortizes during the period beginning in September 2019 and ending
in August 2029.
Net Debt to Last Quarter Annualized Adjusted EBITDA is
computed as follows:
(dollars in
millions) |
For the Three Months Ended March 31, 2019 |
Total face value of
debt |
$ |
17,333 |
|
Ending cash and cash
equivalents(a) |
245 |
|
Total Net Debt |
$ |
17,088 |
|
|
|
Adjusted EBITDA for the
three months ended March 31, 2019 |
$ |
821 |
|
Last quarter annualized
Adjusted EBITDA |
3,284 |
|
Net Debt to
Last Quarter Annualized Adjusted EBITDA |
5.2 |
x |
(a) Excludes restricted cash.
Components of Capital
Expenditures:
|
For the Three Months Ended |
(in millions) |
March 31, 2019 |
|
March 31, 2018 |
|
Towers |
Fiber |
Other |
Total |
|
Towers |
Fiber |
Other |
Total |
Discretionary: |
|
|
|
|
|
|
|
|
|
Purchases
of land interests |
$ |
15 |
|
$ |
— |
|
$ |
— |
|
$ |
15 |
|
|
$ |
14 |
|
$ |
— |
|
$ |
— |
|
$ |
14 |
|
Communications infrastructure construction and improvements |
98 |
|
344 |
|
— |
|
442 |
|
|
75 |
|
253 |
|
— |
|
328 |
|
Sustaining: |
|
|
|
|
|
|
|
|
|
Maintenance and corporate |
6 |
|
11 |
|
4 |
|
21 |
|
|
7 |
|
9 |
|
6 |
|
22 |
|
Integration |
— |
|
— |
|
2 |
|
2 |
|
|
— |
|
— |
|
6 |
|
6 |
|
Total |
$ |
119 |
|
$ |
355 |
|
$ |
6 |
|
$ |
480 |
|
|
$ |
96 |
|
$ |
262 |
|
$ |
12 |
|
$ |
370 |
|
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 tenant and shareholder value which may
be derived from our business, assets, investments, acquisitions and
dividends, including on a long-term basis, (2) our strategy,
strategic position, business model and capabilities, the strength
of our business and fundamentals of our business and industry,
including spending by our major customers on network improvements
and investments in 5G, (3) our growth, including growth in our cash
flows and dividends per share, long-term prospects and the trends
impacting our business, (4) the potential benefits and
contributions which may be derived from our acquisitions, including
the contribution to or impact on our financial or operating
results, (5) leasing environment and activity, including the
contribution to our financial or operating results therefrom, (6)
our investments in our business and the potential growth, returns
and benefits therefrom, (7) our dividends and our dividend growth
rate, including its driving factors, and targets, (8) the strength
of the U.S. market for communications infrastructure ownership,
(9) our portfolio of assets, including demand therefor,
strategic position thereof and opportunities created thereby,
(10) benefits which may be derived from our financing
activities, (11) cash flows, (12) tenant non-renewals, including
the impact thereof, (13) capital expenditures, including sustaining
and discretionary 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, including the
impact of the timing of certain components thereof, (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) services contribution, including the timing
thereof, 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 communications
infrastructure, driven primarily by demand for data, and we may be
adversely affected by any slowdown in such demand.
Additionally, a reduction in the amount or change in the mix of
network investment by our tenants may materially and adversely
affect our business (including reducing demand for our
communications infrastructure or services).
- A substantial portion of our revenues is derived from a small
number of tenants, and the loss, consolidation or financial
instability of any of such tenants may materially decrease revenues
or reduce demand for our communications infrastructure and
services.
- 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.
- Our Fiber segment has expanded rapidly, and the Fiber business
model contains certain differences from our Towers business model,
resulting in different operational risks. If we do not
successfully operate our Fiber business model or identify or manage
the related operational risks, such operations may produce results
that are less than anticipated.
- Failure to timely and efficiently execute on our construction
projects could adversely affect our business.
- Our substantial level of indebtedness could adversely affect
our ability to react to changes in our business, and the terms of
our debt instruments and our 6.875% Mandatory Convertible Preferred
Stock 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 or securities convertible into 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 negotiate favorable rates on our new or renewing
tenant contracts.
- New technologies may reduce demand for our communications
infrastructure or negatively impact our revenues.
- If we fail to retain rights to our communications
infrastructure, including the land interests under our towers and
the right-of-way and other agreements related to our small cells
and fiber solutions, our business may be adversely affected.
- Our 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
tenants 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 communications 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 or other unforeseen
events that could adversely affect our operations, business, 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 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.
- If we fail to pay scheduled dividends on our 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.
- 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. Our
filings with the SEC are available through the SEC website at
www.sec.gov or through our investor relations website at
investor.crowncastle.com. We use our investor relations website to
disclose information about us that may be deemed to be material. We
encourage investors, the media and others interested in us to visit
our investor relations website from time to time to review
up-to-date information or to sign up for e-mail alerts to be
notified when new or updated information is posted on the site.
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)(Amounts in
millions, except par values) |
|
March 31, 2019 |
|
December 31, 2018 |
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
245 |
|
|
$ |
277 |
|
Restricted cash |
158 |
|
|
131 |
|
Receivables, net |
545 |
|
|
501 |
|
Prepaid
expenses(a) |
85 |
|
|
172 |
|
Other
current assets |
160 |
|
|
148 |
|
Total
current assets |
1,193 |
|
|
1,229 |
|
Deferred site rental
receivables |
1,373 |
|
|
1,366 |
|
Property and equipment,
net |
13,883 |
|
|
13,676 |
|
Operating lease
right-of-use assets(a) |
5,969 |
|
|
— |
|
Goodwill |
10,078 |
|
|
10,078 |
|
Other intangible
assets, net(a) |
5,178 |
|
|
5,516 |
|
Long-term prepaid rent
and other assets, net(a) |
104 |
|
|
920 |
|
Total
assets |
$ |
37,778 |
|
|
$ |
32,785 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
311 |
|
|
$ |
313 |
|
Accrued
interest |
107 |
|
|
148 |
|
Deferred
revenues |
502 |
|
|
498 |
|
Other
accrued liabilities(a) |
262 |
|
|
351 |
|
Current
maturities of debt and other obligations |
96 |
|
|
107 |
|
Current
portion of operating lease liabilities(a) |
287 |
|
|
— |
|
Total
current liabilities |
1,565 |
|
|
1,417 |
|
Debt and other
long-term obligations |
17,120 |
|
|
16,575 |
|
Operating lease
liabilities(a) |
5,338 |
|
|
— |
|
Other long-term
liabilities(a) |
2,009 |
|
|
2,759 |
|
Total
liabilities |
26,032 |
|
|
20,751 |
|
Commitments and
contingencies |
|
|
|
CCIC stockholders'
equity: |
|
|
|
Common
stock, $0.01 par value; 600 shares authorized; shares issued and
outstanding: March 31, 2019—416 and December 31,
2018—415 |
4 |
|
|
4 |
|
6.875%
Mandatory Convertible Preferred Stock, Series A, $0.01 par value;
20 shares authorized; shares issued and outstanding: March 31,
2019—2 and December 31, 2018—2; aggregate liquidation value:
March 31, 2019—$1,650 and December 31, 2018—$1,650 |
— |
|
|
— |
|
Additional paid-in capital |
17,769 |
|
|
17,767 |
|
Accumulated other comprehensive income (loss) |
(5 |
) |
|
(5 |
) |
Dividends/distributions in excess of earnings |
(6,022 |
) |
|
(5,732 |
) |
Total
equity |
11,746 |
|
|
12,034 |
|
Total
liabilities and equity |
$ |
37,778 |
|
|
$ |
32,785 |
|
(a) Effective January 1, 2019, we adopted new guidance on the
recognition, measurement, presentation and disclosure of
leases. The new guidance requires lessees to recognize a
right-of-use asset and a lease liability, initially measured at the
present value of the lease payments for all leases. The accounting
for lessors remained largely unchanged from previous
guidance. As a result of the new guidance for leases, certain
amounts related to our lessee arrangements that were previously
reported separately have been de-recognized and reclassified into
"operating lease right-of-use assets" on the condensed consolidated
balance sheet as of March 31, 2019.
CROWN CASTLE INTERNATIONAL CORP.CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)(Amounts
in millions, except per share amounts) |
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
Net revenues: |
|
|
|
Site
rental |
$ |
1,219 |
|
|
$ |
1,153 |
|
Services
and other |
207 |
|
|
146 |
|
Net
revenues |
1,426 |
|
|
1,299 |
|
Operating
expenses: |
|
|
|
Costs of
operations (exclusive of depreciation, amortization and
accretion): |
|
|
|
Site
rental |
361 |
|
|
347 |
|
Services
and other |
125 |
|
|
86 |
|
Selling,
general and administrative |
152 |
|
|
134 |
|
Asset
write-down charges |
6 |
|
|
3 |
|
Acquisition and integration costs |
4 |
|
|
6 |
|
Depreciation, amortization and accretion |
394 |
|
|
374 |
|
Total
operating expenses |
1,042 |
|
|
950 |
|
Operating income
(loss) |
384 |
|
|
349 |
|
Interest expense and
amortization of deferred financing costs |
(168 |
) |
|
(160 |
) |
Gains (losses) on
retirement of long-term obligations |
(1 |
) |
|
(71 |
) |
Interest income |
2 |
|
|
1 |
|
Other income
(expense) |
(1 |
) |
|
(1 |
) |
Income (loss) before
income taxes |
216 |
|
|
118 |
|
Benefit (provision) for
income taxes |
(6 |
) |
|
(4 |
) |
Net income (loss) |
210 |
|
|
114 |
|
Dividends on preferred
stock |
(28 |
) |
|
(28 |
) |
Net income (loss)
attributable to CCIC common stockholders |
$ |
182 |
|
|
$ |
86 |
|
|
|
|
|
Net income (loss)
attributable to CCIC common stockholders, per common share: |
|
|
|
Net
income (loss) attributable to CCIC common stockholders, basic |
$ |
0.44 |
|
|
$ |
0.21 |
|
Net
income (loss) attributable to CCIC common stockholders,
diluted |
$ |
0.44 |
|
|
$ |
0.21 |
|
|
|
|
|
Weighted-average common
shares outstanding: |
|
|
|
Basic |
415 |
|
|
409 |
|
Diluted |
417 |
|
|
410 |
|
|
CROWN CASTLE INTERNATIONAL CORP.CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)(In
millions of dollars) |
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
Net income (loss) |
$ |
210 |
|
|
$ |
114 |
|
Adjustments to
reconcile net income (loss) to net cash provided by (used for)
operating activities: |
|
|
|
Depreciation, amortization and
accretion |
394 |
|
|
374 |
|
(Gains) losses on retirement of
long-term obligations |
1 |
|
|
71 |
|
Amortization of deferred financing
costs and other non-cash interest |
1 |
|
|
2 |
|
Stock-based compensation
expense |
29 |
|
|
23 |
|
Asset write-down charges |
6 |
|
|
3 |
|
Deferred income tax (benefit)
provision |
1 |
|
|
1 |
|
Other non-cash adjustments,
net |
2 |
|
|
2 |
|
Changes in assets and liabilities,
excluding the effects of acquisitions: |
|
|
|
Increase (decrease) in
liabilities |
(70 |
) |
|
(90 |
) |
Decrease (increase) in assets |
(62 |
) |
|
(48 |
) |
Net cash provided by (used for)
operating activities |
512 |
|
|
452 |
|
Cash flows from
investing activities: |
|
|
|
Payments for acquisitions, net of
cash acquired |
(10 |
) |
|
(14 |
) |
Capital expenditures |
(480 |
) |
|
(370 |
) |
Other investing activities,
net |
1 |
|
|
— |
|
Net cash
provided by (used for) investing activities |
(489 |
) |
|
(384 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds from issuance of long-term
debt |
996 |
|
|
1,743 |
|
Principal payments on debt and
other long-term obligations |
(25 |
) |
|
(32 |
) |
Purchases and redemptions of
long-term debt |
(12 |
) |
|
(1,318 |
) |
Borrowings under revolving credit
facility |
710 |
|
|
170 |
|
Payments under revolving credit
facility |
(1,140 |
) |
|
(1,050 |
) |
Payments for financing costs |
(10 |
) |
|
(15 |
) |
Net proceeds from issuance of
common stock |
— |
|
|
843 |
|
Purchases of common stock |
(42 |
) |
|
(33 |
) |
Dividends/distributions paid on
common stock |
(477 |
) |
|
(443 |
) |
Dividends paid on preferred
stock |
(28 |
) |
|
(28 |
) |
Net cash provided by (used for)
financing activities |
(28 |
) |
|
(163 |
) |
Net increase
(decrease) in cash, cash equivalents, and restricted
cash |
(5 |
) |
|
(95 |
) |
Effect of
exchange rate changes on cash |
— |
|
|
— |
|
Cash, cash equivalents, and restricted cash at beginning of
period |
413 |
|
|
440 |
|
Cash, cash
equivalents, and restricted cash at end of period |
$ |
408 |
|
|
$ |
345 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Interest
paid |
208 |
|
|
185 |
|
Income
taxes paid |
— |
|
|
— |
|
CROWN CASTLE INTERNATIONAL CORP.SEGMENT
OPERATING RESULTS (UNAUDITED)(In millions of dollars) |
SEGMENT OPERATING RESULTS |
|
Three Months Ended March 31, 2019 |
|
Three Months Ended March 31, 2018 |
|
Towers |
|
Fiber |
|
Other |
|
Consolidated Total |
|
Towers |
|
Fiber |
|
Other |
|
Consolidated Total |
Segment site rental
revenues |
$ |
805 |
|
|
$ |
414 |
|
|
|
|
$ |
1,219 |
|
|
$ |
764 |
|
|
$ |
389 |
|
|
|
|
$ |
1,153 |
|
Segment services and
other revenues |
203 |
|
|
4 |
|
|
|
|
207 |
|
|
142 |
|
|
4 |
|
|
|
|
146 |
|
Segment revenues |
1,008 |
|
|
418 |
|
|
|
|
1,426 |
|
|
906 |
|
|
393 |
|
|
|
|
1,299 |
|
Segment site rental
cost of operations |
211 |
|
|
140 |
|
|
|
|
351 |
|
|
211 |
|
|
126 |
|
|
|
|
337 |
|
Segment services and
other cost of operations |
121 |
|
|
3 |
|
|
|
|
124 |
|
|
82 |
|
|
2 |
|
|
|
|
84 |
|
Segment cost of
operations(a)(b) |
332 |
|
|
143 |
|
|
|
|
475 |
|
|
293 |
|
|
128 |
|
|
|
|
421 |
|
Segment site rental
gross margin(c) |
594 |
|
|
274 |
|
|
|
|
868 |
|
|
553 |
|
|
263 |
|
|
|
|
816 |
|
Segment services and
other gross margin(c) |
82 |
|
|
1 |
|
|
|
|
83 |
|
|
60 |
|
|
2 |
|
|
|
|
62 |
|
Segment selling,
general and administrative expenses(b) |
26 |
|
|
48 |
|
|
|
|
74 |
|
|
26 |
|
|
43 |
|
|
|
|
69 |
|
Segment operating
profit(c) |
650 |
|
|
227 |
|
|
|
|
877 |
|
|
587 |
|
|
222 |
|
|
|
|
809 |
|
Other selling, general
and administrative expenses(b) |
|
|
|
|
$ |
55 |
|
|
55 |
|
|
|
|
|
|
$ |
46 |
|
|
46 |
|
Stock-based
compensation expense |
|
|
|
|
29 |
|
|
29 |
|
|
|
|
|
|
26 |
|
|
26 |
|
Depreciation,
amortization and accretion |
|
|
|
|
394 |
|
|
394 |
|
|
|
|
|
|
374 |
|
|
374 |
|
Interest expense and
amortization of deferred financing costs |
|
|
|
|
168 |
|
|
168 |
|
|
|
|
|
|
160 |
|
|
160 |
|
Other (income) expenses
to reconcile to income (loss) before income taxes(d) |
|
|
|
|
15 |
|
|
15 |
|
|
|
|
|
|
85 |
|
|
85 |
|
Income (loss) before
income taxes |
|
|
|
|
|
|
$ |
216 |
|
|
|
|
|
|
|
|
$ |
118 |
|
(a) Exclusive of depreciation,
amortization and accretion shown separately.
(b) Segment cost of operations excludes (1)
stock-based compensation expense of $6 million and $7 million for
the three months ended March 31, 2019 and 2018, respectively, and
(2) prepaid lease purchase price adjustments of $5 million for both
of the three months ended March 31, 2019 and 2018. Selling, general
and administrative expenses exclude stock-based compensation
expense of $23 million and $19 million for the three months ended
March 31, 2019 and 2018, respectively.
(c) See "Non-GAAP Financial Measures,
Segment Measures and Other Calculations" herein for a discussion of
our definitions of segment site rental gross margin, segment
services and other gross margin and segment operating profit.
(d) See condensed consolidated statement of
operations for further information.
Contacts: Dan Schlanger,
CFO |
Ben Lowe, VP & Treasurer |
Crown Castle International Corp. |
713-570-3050 |
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