Crown Castle International Corp. (NYSE:CCI) ("Crown Castle") today
reported results for the quarter ended March 31, 2018.
"After another quarter of very good financial
and operating performance in the first quarter, we remain excited
about the opportunities for our business to support growing data
demand in the U.S.," stated Jay Brown, Crown Castle’s Chief
Executive Officer. "We continue to see tremendous activity across
our unique portfolio of infrastructure assets. In our tower
business, we have recently signed comprehensive leasing agreements
with several of our largest customers, which we believe signals the
beginning of a sustained period of infrastructure investments by
our customers. In our fiber business, the volume of small
cell bookings in the first quarter was comparable to what we booked
during all of 2016, resulting in an increase in our contracted
pipeline to more than 30,000 nodes. We also continue to make
very good progress on integrating our recent fiber
acquisitions. We believe our unique value proposition as a
shared communications infrastructure provider will allow us to
translate the growing demand for data into growth in cash flows
and, thus, deliver on our 7% to 8% annual growth target in
dividends per share."
RESULTS FOR THE QUARTERThe
table below sets forth select financial results for the three month
period ended March 31, 2018 and 2017. For further
information, refer to the financial statements and non-GAAP,
segment and other calculation reconciliations included in this
press release.
(in millions) |
Actual |
MidpointQ1 2018Outlook(b) |
ActualCompared toOutlook |
Q1 2018 |
Q1 2017 |
$ Change |
% Change |
Site rental
revenues |
|
$1,153 |
|
$857 |
|
+$296 |
+35% |
|
|
$1,137 |
+$ |
16 |
Net income (loss) |
|
$114 |
|
$119 |
|
-$5 |
-4% |
|
|
$129 |
-$ |
15 |
Adjusted EBITDA(a) |
|
$763 |
|
$581 |
|
+$182 |
+31% |
|
|
$750 |
+$ |
13 |
AFFO(a)(c) |
|
$558 |
|
$450 |
|
+$108 |
+24% |
|
|
$543 |
+$ |
15 |
Weighted-average common
shares outstanding - diluted |
|
410 |
|
362 |
|
+48 |
+13% |
|
|
408 |
|
+2 |
Note: Figures may not tie due to rounding.
- See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
- As issued on January 24, 2018.
- Attributable to CCIC common stockholders.
HIGHLIGHTS FROM THE QUARTER
- Site rental revenues. Site rental
revenues grew approximately 35%, or $296 million, from first
quarter 2017 to first quarter 2018, inclusive of approximately $47
million in Organic Contribution to Site Rental Revenues plus $234
million in contributions from acquisitions and other items, plus a
$15 million increase in straight-lined revenues. The $47
million in Organic Contribution to Site Rental Revenues represents
approximately 5.5% growth, comprised of approximately 8% growth
from new leasing activity and contracted tenant escalations, net of
approximately 2.5% from tenant non-renewals. Site rental
revenues for first quarter 2018 benefited by approximately $12
million from a long-term agreement signed with AT&T ("AT&T
Agreement") that includes contracted new leasing activity across
towers and small cells.
- Net income. Net income for first quarter
2018 was $114 million and was impacted by approximately $71 million
of losses on the retirement of long-term obligations.
- Adjusted EBITDA. When compared to the
prior first quarter 2018 Outlook, Adjusted EBITDA benefited by
approximately $12 million from the AT&T Agreement.
- AFFO. When compared to the prior first
quarter 2018 Outlook, AFFO for first quarter 2018 benefited from
approximately $11 million of lower sustaining capital expenditures
due to timing as those expenditures are expected to occur later in
2018.
- Capital expenditures and acquisitions.
Capital expenditures during the quarter were approximately $370
million, comprised of approximately $14 million of land purchases,
approximately $22 million of sustaining capital expenditures,
approximately $328 million of revenue generating capital
expenditures and approximately $6 million of integration capital
expenditures.
- Common stock dividend. During the
quarter, Crown Castle paid common stock dividends of $1.05 per
common share, an increase of approximately 11% compared to the same
period a year ago.
- Financing activities. Crown Castle
issued $1.75 billion in aggregate principal amount of senior
unsecured notes in January and sold 7.765 million shares of its
common stock in March ("March Equity Offering"), resulting in
additional gross proceeds of approximately $850 million. Net
proceeds from both transactions were used for general corporate
purposes, including the repayment of existing indebtedness.
- Overall Results. Adjusted for the
benefit associated with the AT&T Agreement and the timing of
the sustaining capital expenditures, first quarter 2018 results
exceeded the midpoint of the prior first quarter 2018 Outlook for
site rental revenues, Adjusted EBITDA and AFFO.
"We believe we remain on track to deliver
another year of solid growth in 2018 following another quarter of
great execution by our team," stated Dan Schlanger, Crown Castle's
Chief Financial Officer. "We are excited about the
opportunity we see to generate compelling total returns for our
shareholders in the near to medium term through a combination of
dividends and growth, while at the same time making significant
investments in our business that we believe will generate
attractive returns longer term and support future growth in
dividends per share."
OUTLOOKThis Outlook section
contains forward-looking statements, and actual results may differ
materially. Information regarding potential risks which could
cause actual results to differ from the forward-looking statements
herein is set forth below and in Crown Castle's filings with the
Securities and Exchange Commission ("SEC").The following table sets
forth Crown Castle's current Outlook for second quarter 2018 and
full year 2018:
(in millions) |
Second Quarter 2018 |
Full Year 2018 |
Site
rental revenues |
|
$1,153 |
to |
$ |
1,163 |
|
$4,639 |
to |
$ |
4,684 |
Site
rental cost of operations(a) |
|
$348 |
to |
$ |
358 |
|
$1,375 |
to |
$ |
1,420 |
Net
income (loss) |
|
$139 |
to |
$ |
164 |
|
$589 |
to |
$ |
669 |
Adjusted EBITDA(b) |
|
$757 |
to |
$ |
767 |
|
$3,097 |
to |
$ |
3,142 |
Interest expense and
amortization of deferred financing costs(c) |
|
$154 |
to |
$ |
164 |
|
$616 |
to |
$ |
661 |
FFO(b)(d) |
|
$496 |
to |
$ |
506 |
|
$2,002 |
to |
$ |
2,047 |
AFFO(b)(d) |
|
$539 |
to |
$ |
549 |
|
$2,255 |
to |
$ |
2,300 |
Weighted-average common
shares outstanding - diluted(e) |
|
416 |
|
415 |
- Exclusive of depreciation, amortization and accretion.
- See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
- See reconciliation of "components of interest expense and
amortization of deferred financing costs" herein for a discussion
of non-cash interest expense.
- Attributable to CCIC common stockholders.
- The assumption for second quarter 2018 and full year 2018
diluted weighted-average common shares outstanding is based on the
diluted common shares outstanding as of March 31, 2018.
For all periods presented, the diluted weighted-average common
shares outstanding does not include any assumed conversion of
preferred stock in the share count.
- Compared to the first quarter 2018, the midpoint of second
quarter 2018 Outlook for Adjusted EBITDA and AFFO are expected to
be impacted by certain seasonal or timing items, including
approximately $6 million of higher repair and maintenance expenses,
$6 million of higher sustaining capital expenditures and $11
million of higher cash tax payments.
Full Year 2018 OutlookThe table below compares
the results for full year 2017, midpoint of the current full year
2018 Outlook and the midpoint of the previously provided full year
2018 Outlook for select metrics.
|
Midpoint of FY 2018 Outlook to FY 2017 Actual
Comparison |
|
|
(in
millions) |
CurrentFull Year2018 Outlook |
Full Year2017 Actual |
$ Change |
% Change |
PreviousFull Year2018 Outlook(d) |
CurrentComparedto Previous Outlook |
Site rental
revenues |
|
$4,662 |
|
$3,669 |
|
+$993 |
+27 |
% |
|
$4,605 |
|
+$57 |
Net income (loss) |
|
$629 |
|
$445 |
|
+$184 |
+41 |
% |
|
$551 |
|
+$78 |
Adjusted EBITDA(a) |
|
$3,120 |
|
$2,482 |
|
+$638 |
+26 |
% |
|
$3,072 |
|
+$48 |
AFFO(a)(b) |
|
$2,278 |
|
$1,860 |
|
+$418 |
+22 |
% |
|
$2,242 |
|
+$36 |
Weighted-average common
shares outstanding - diluted(c) |
|
415 |
|
383 |
|
+32 |
+8 |
% |
|
408 |
|
+7 |
- See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
- Attributable to CCIC common stockholders.
- The assumption for full year 2018 diluted weighted-average
common shares outstanding is based on diluted common shares
outstanding as of March 31, 2018. For all periods
presented, the diluted weighted-average common shares outstanding
does not include any assumed conversion of preferred stock in the
share count.
- As issued on January 24, 2018.
- The increases in full year 2018 Outlook primarily reflect the
expected impact of the recently signed customer agreements and the
March Equity Offering, as well as lower expected cash taxes,
partially offset by higher anticipated expenses and an increase in
expected floating interest rates when compared to the rates assumed
in the prior Outlook.
- The chart below reconciles the components of expected growth in
site rental revenues from 2017 to 2018 of $970 million to $1,015
million, inclusive of expected Organic Contribution to Site Rental
Revenues during 2018 of $185 million to $225 million.
A photo accompanying this announcement is available at
http://resource.globenewswire.com/Resource/Download/3107506c-a479-428a-97a1-de43e1cf2a6d
- For the above chart, the entire expected contribution to full
year 2018 Outlook for growth in site rental revenues from Lightower
is included within acquisitions.
- The chart below reconciles the components of expected growth in
AFFO from 2017 to 2018 of $395 million to $435 million.
A photo accompanying this announcement is available at
http://resource.globenewswire.com/Resource/Download/21ac09f3-7d6e-4913-bcc9-fde1dc196da1
- When compared to the previous full year 2018 Outlook, the
increase in expected growth in AFFO primarily reflects the March
Equity Offering and lower expected cash taxes, partially offset by
higher anticipated expenses and an increase in expected floating
interest rates when compared to the rates assumed in the prior
Outlook.
- 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 19,
2018, at 10:30 a.m. Eastern time to discuss its first quarter 2018
results. The conference call may be accessed by dialing
800-239-9838 and asking for the Crown Castle call (access code
3965492) 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, April 19,
2018, through 1:30 p.m. Eastern time on Wednesday, July 18, 2018,
and may be accessed by dialing 888-203-1112 and using access code
3965492. 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
owns, operates and leases more than 40,000 cell towers and
approximately 60,000 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 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
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 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, (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 capital improvement capital expenditures and
corporate capital expenditures (i.e., sustaining capital
expenditures).
Funds from Operations. We define Funds from
Operations as net income plus real estate related depreciation,
amortization and accretion and asset write-down charges, less
noncontrolling interest and cash paid for preferred stock
dividends, and is a measure of funds from operations attributable
to CCIC common stockholders.
Organic Contribution to Site Rental Revenues. We
define the Organic Contribution to Site Rental Revenues as the sum
of the change in GAAP site rental revenues related to (1) new
leasing activity, including revenues from the construction of small
cells and the impact of prepaid rent, (2) escalators and less (3)
non-renewals of customer contracts.
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 site rental gross margin plus
segment network services and other gross margin, less general and
administrative expenses attributable to the respective 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, construction of new communications
infrastructure, and, to a lesser extent, 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 or (2)
capital improvement capital expenditures on our communications
infrastructure assets that enable our customers' ongoing quiet
enjoyment of the communications infrastructure.
Integration capital expenditures. 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. The Company has changed its
presentation to millions and, as a result, any necessary rounding
adjustments have been made to prior year disclosed amounts.
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 TwelveMonths Ended |
|
March 31,2018 |
|
March 31,2017 |
|
December 31,2017 |
(in millions) |
|
|
|
|
|
Net income (loss) |
$ |
114 |
|
|
$ |
119 |
|
|
$ |
445 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
Asset
write-down charges |
3 |
|
|
1 |
|
|
17 |
|
Acquisition and integration costs |
6 |
|
|
6 |
|
|
61 |
|
Depreciation, amortization and accretion |
374 |
|
|
289 |
|
|
1,242 |
|
Amortization of prepaid lease purchase price adjustments |
5 |
|
|
5 |
|
|
20 |
|
Interest
expense and amortization of deferred financing costs(a) |
160 |
|
|
134 |
|
|
591 |
|
(Gains)
losses on retirement of long-term obligations |
71 |
|
|
4 |
|
|
4 |
|
Interest
income |
(1 |
) |
|
— |
|
|
(19 |
) |
Other
(income) expense |
1 |
|
|
(6 |
) |
|
(1 |
) |
(Benefit)
provision for income taxes |
4 |
|
|
4 |
|
|
26 |
|
Stock-based compensation expense |
26 |
|
|
25 |
|
|
96 |
|
Adjusted EBITDA(b)(c) |
$ |
763 |
|
|
$ |
581 |
|
|
$ |
2,482 |
|
- See the reconciliation of "components of interest expense and
amortization of deferred financing costs" herein for a discussion
of non-cash interest expense.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion of our definition of Adjusted
EBITDA.
- The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.
|
Reconciliation of Current Outlook for Adjusted
EBITDA: |
|
|
Q2 2018 |
|
Full Year 2018 |
(in
millions) |
Outlook |
|
Outlook |
Net income (loss) |
$139 to $164 |
|
$589 to $669 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
Asset
write-down charges |
$9 to $11 |
|
$28 to $38 |
Acquisition and integration costs |
$13 to $17 |
|
$45 to $55 |
Depreciation, amortization and accretion |
$373 to $393 |
|
$1,517 to $1,552 |
Amortization of prepaid lease purchase price adjustments |
$4 to $6 |
|
$19 to $21 |
Interest
expense and amortization of deferred financing costs(a) |
$154 to $164 |
|
$616 to $661 |
(Gains)
losses on retirement of long-term obligations |
$0 to $0 |
|
$71 to $71 |
Interest
income |
$(1) to $1 |
|
$(3) to $1 |
Other
(income) expense |
$(1) to $3 |
|
$3 to $5 |
(Benefit)
provision for income taxes |
$8 to $12 |
|
$28 to $36 |
Stock-based compensation expense |
$26 to $30 |
|
$104 to $112 |
Adjusted EBITDA(b)(c) |
$757 to $767 |
|
$3,097 to $3,142 |
- See the reconciliation of "components of historical interest
expense and amortization of deferred financing costs" herein for a
discussion of non-cash interest expense.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion of our definition of Adjusted
EBITDA.
- 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 TwelveMonths Ended |
(in millions) |
March 31,2018 |
|
March 31,2017 |
|
December 31,2017 |
Net income (loss) |
$ |
114 |
|
|
$ |
119 |
|
|
$ |
445 |
|
Real estate related
depreciation, amortization and accretion |
359 |
|
|
281 |
|
|
1,211 |
|
Asset write-down
charges |
3 |
|
|
1 |
|
|
17 |
|
Dividends on preferred
stock |
(28 |
) |
|
— |
|
|
(30 |
) |
FFO(a)(b)(c)(d)(e) |
$ |
447 |
|
|
$ |
401 |
|
|
$ |
1,643 |
|
|
|
|
|
|
|
FFO (from above) |
$ |
447 |
|
|
$ |
401 |
|
|
$ |
1,643 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
Straight-lined revenue |
(16 |
) |
|
(1 |
) |
|
— |
|
Straight-lined expense |
23 |
|
|
23 |
|
|
93 |
|
Stock-based compensation expense |
26 |
|
|
25 |
|
|
96 |
|
Non-cash
portion of tax provision |
4 |
|
|
4 |
|
|
9 |
|
Non-real
estate related depreciation, amortization and accretion |
15 |
|
|
8 |
|
|
31 |
|
Amortization of non-cash interest expense |
2 |
|
|
2 |
|
|
9 |
|
Other
(income) expense |
1 |
|
|
(6 |
) |
|
(2 |
) |
(Gains)
losses on retirement of long-term obligations |
71 |
|
|
4 |
|
|
4 |
|
Acquisition and integration costs |
6 |
|
|
6 |
|
|
61 |
|
Capital
improvement capital expenditures |
(13 |
) |
|
(7 |
) |
|
(41 |
) |
Corporate
capital expenditures |
(9 |
) |
|
(9 |
) |
|
(44 |
) |
AFFO(a)(b)(c)(d)(e) |
$ |
558 |
|
|
$ |
450 |
|
|
$ |
1,860 |
|
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion of our definitions of FFO and
AFFO.
- FFO and AFFO are reduced by cash paid for preferred stock
dividends during the period in which they are paid.
- Diluted weighted-average common shares outstanding were 410
million, 362 million and 383 million for the three months ended
March 31, 2018 and 2017, and the twelve months ended
December 31, 2017, 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.
- The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.
- Attributable to CCIC common stockholders.
|
Reconciliation of Current Outlook for FFO and
AFFO: |
|
|
Q2 2018 |
|
Full Year 2018 |
(in millions) |
Outlook |
|
Outlook |
Net income (loss) |
$139 to $164 |
|
$589 to $669 |
Real estate related
depreciation, amortization and accretion |
$363 to $373 |
|
$1,466 to $1,486 |
Asset write-down
charges |
$9 to $11 |
|
$28 to $38 |
Dividends on preferred
stock |
$(28) to $(28) |
|
$(113) to $(113) |
FFO(a)(b)(c)(d)(e) |
$496 to $506 |
|
$2,002 to $2,047 |
|
|
|
|
FFO (from above) |
$496 to $506 |
|
$2,002 to $2,047 |
Adjustments to increase
(decrease) FFO: |
|
|
|
Straight-lined revenue |
$(16) to $(6) |
|
$(39) to $(19) |
Straight-lined expense |
$17 to $27 |
|
$77 to $97 |
Stock-based compensation expense |
$26 to $30 |
|
$104 to $112 |
Non-cash
portion of tax provision |
$(7) to $3 |
|
$3 to $18 |
Non-real
estate related depreciation, amortization and accretion |
$10 to $20 |
|
$51 to $66 |
Amortization of non-cash interest expense |
$(1) to $4 |
|
$3 to $13 |
Other
(income) expense |
$(1) to $3 |
|
$3 to $5 |
(Gains)
losses on retirement of long-term obligations |
$0 to $0 |
|
$71 to $71 |
Acquisition and integration costs |
$13 to $17 |
|
$45 to $55 |
Capital
improvement capital expenditures |
$(19) to $(9) |
|
$(67) to $(52) |
Corporate
capital expenditures |
$(18) to $(8) |
|
$(64) to $(49) |
AFFO(a)(b)(c)(d)(e) |
$539 to $549 |
|
$2,255 to $2,300 |
- The assumption for second quarter 2018 and full year 2018
diluted weighted-average common shares outstanding is 416 million
and 415 million, respectively, based on diluted common shares
outstanding as of March 31, 2018. For all periods presented,
the diluted weighted-average common shares outstanding does not
include any assumed conversion of preferred stock in the share
count.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion for our definitions of FFO
and AFFO.
- FFO and AFFO are reduced by cash paid for preferred stock
dividends during the period in which they are paid.
- The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.
- Attributable to CCIC common stockholders.
|
For Comparative Purposes - Reconciliation of Previous
Outlook for Adjusted EBITDA: |
|
|
Previously Issued |
|
Previously Issued |
|
Q1 2018 |
|
Full Year 2018 |
(in
millions) |
Outlook |
|
Outlook |
Net income (loss) |
$116 to $141 |
|
$511 to $591 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
Asset
write-down charges |
$9 to $11 |
|
$35 to $45 |
Acquisition and integration costs |
$13 to $17 |
|
$45 to $55 |
Depreciation, amortization and accretion |
$380 to $400 |
|
$1,566 to $1,601 |
Amortization of prepaid lease purchase price adjustments |
$4 to $6 |
|
$19 to $21 |
Interest
expense and amortization of deferred financing costs |
$157 to $167 |
|
$642 to $687 |
(Gains)
losses on retirement of long-term obligations |
$0 to $0 |
|
$0 to $0 |
Interest
income |
$(1) to $1 |
|
$(2) to $2 |
Other
(income) expense |
$(1) to $3 |
|
$3 to $5 |
(Benefit)
provision for income taxes |
$8 to $12 |
|
$34 to $42 |
Stock-based compensation expense |
$27 to $31 |
|
$116 to $124 |
Adjusted EBITDA(a)(b) |
$745 to $755 |
|
$3,049 to $3,094 |
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion of our definition of Adjusted
EBITDA.
- The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.
|
For Comparative Purposes - Reconciliation of Previous
Outlook for FFO and AFFO: |
|
|
Previously Issued |
|
Previously Issued |
|
Q1 2018 |
|
Full Year 2018 |
(in millions) |
Outlook |
|
Outlook |
Net income (loss) |
$116 to $141 |
|
$511 to $591 |
Real estate related
depreciation, amortization and accretion |
$367 to $377 |
|
$1,500 to $1,520 |
Asset write-down
charges |
$9 to $11 |
|
$35 to $45 |
Dividends on preferred
stock |
$(28) to $(28) |
|
$(113) to $(113) |
FFO(a)(b)(c)(d) |
$477 to $487 |
|
$1,965 to $2,010 |
|
|
|
|
FFO (from above) |
$477 to $487 |
|
$1,965 to $2,010 |
Adjustments to increase
(decrease) FFO: |
|
|
|
Straight-lined revenue |
$(7) to $3 |
|
$21 to $41 |
Straight-lined expense |
$17 to $27 |
|
$72 to $92 |
Stock-based compensation expense |
$27 to $31 |
|
$116 to $124 |
Non-cash
portion of tax provision |
$3 to $13 |
|
$(8) to $7 |
Non-real
estate related depreciation, amortization and accretion |
$13 to $23 |
|
$66 to $81 |
Amortization of non-cash interest expense |
$0 to $5 |
|
$5 to $15 |
Other
(income) expense |
$(1) to $3 |
|
$3 to $5 |
(Gains)
losses on retirement of long-term obligations |
$0 to $0 |
|
$0 to $0 |
Acquisition and integration costs |
$13 to $17 |
|
$45 to $55 |
Capital
improvement capital expenditures |
$(22) to $(12) |
|
$(76) to $(61) |
Corporate
capital expenditures |
$(21) to $(11) |
|
$(56) to $(41) |
AFFO(a)(b)(c)(d) |
$538 to $548 |
|
$2,219 to $2,264 |
- Previously issued first quarter 2018 and full year 2018 Outlook
assumes diluted weighted-average common shares outstanding as of
December 31, 2017 of 408 million. For all periods
presented, the diluted weighted-average common shares outstanding
does not include any assumed conversion of preferred stock in the
share count.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion for our definitions of FFO
and AFFO.
- The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.
- Attributable to CCIC common stockholders.
|
The
components of changes in site rental revenues for the quarters
ended March 31, 2018 and 2017 are as follows: |
|
|
Three Months Ended March 31, |
(in millions) |
2018 |
|
2017 |
Components of changes
in site rental revenues(a): |
|
|
|
Prior
year site rental revenues exclusive of straight-lined revenues
associated with fixed escalators(b)(c) |
$ |
856 |
|
$ |
782 |
|
|
|
|
New
leasing activity(b)(c) |
49 |
|
41 |
Escalators |
20 |
|
21 |
Non-renewals |
(22) |
|
(28) |
Organic
Contribution to Site Rental Revenues(d) |
47 |
|
34 |
Straight-lined revenues associated with fixed escalators |
16 |
|
1 |
Acquisitions(e) |
234 |
|
40 |
Other |
— |
|
— |
Total GAAP site rental
revenues |
$ |
1,153 |
|
$ |
857 |
|
|
|
|
Year-over-year
changes in revenue: |
|
|
|
Reported GAAP site
rental revenues |
34.5% |
|
|
Organic Contribution to
Site Rental Revenues(d)(f) |
5.5% |
|
|
- 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.
- Includes revenues from amortization of prepaid rent in
accordance with GAAP.
- Includes revenues from the construction of new small cell
nodes, exclusive of straight-lined revenues related to fixed
escalators.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein.
- 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.
- 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, 2018 are forecasted as
follows: |
|
(dollars in
millions) |
Full Year 2017 |
|
Full Year 2018Outlook |
Components of changes
in site rental revenues(a): |
|
|
|
Prior
year site rental revenues exclusive of straight-lined revenues
associated with fixed escalators(b)(c) |
$3,186 |
|
$3,669 |
|
|
|
|
New
leasing activity(b)(c) |
166 |
|
190-220 |
Escalators |
84 |
|
80-90 |
Non-renewals |
(90) |
|
(95)-(75) |
Organic
Contribution to Site Rental Revenues(d) |
160 |
|
185-225 |
Straight-lined revenues associated with fixed escalators |
— |
|
20-40 |
Acquisitions(e) |
323 |
|
745-765 |
Other |
— |
|
— |
Total GAAP site rental
revenues |
$3,669 |
|
$4,639-$4,684 |
|
|
|
|
Year-over-year
changes in revenue: |
|
|
|
Reported GAAP site
rental revenues(f) |
|
|
27.1% |
Organic Contribution to
Site Rental Revenues(d)(f)(g) |
|
|
5.6% |
- 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.
- Includes revenues from amortization of prepaid rent in
accordance with GAAP.
- Includes revenues from the construction of new small cell
nodes, exclusive of straight-lined revenues related to fixed
escalators.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein.
- 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,
which has been reflected as a contribution from acquisitions for
the full year 2018.
- Calculated based on midpoint of Full Year 2018 Outlook.
- 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 31,2018 |
|
March 31,2017 |
Interest expense on
debt obligations |
$ |
158 |
|
$ |
132 |
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
5 |
|
4 |
Other, net |
(3) |
|
(2) |
Interest
expense and amortization of deferred financing costs |
$ |
160 |
|
$ |
134 |
|
Components of Current Outlook for Interest Expense and
Amortization of Deferred Financing Costs: |
|
|
Q2 2018 |
|
Full Year 2018 |
(in millions) |
Outlook |
|
Outlook |
Interest expense on
debt obligations |
$155 to $160 |
|
$620 to $640 |
Amortization of
deferred financing costs and adjustments on long-term debt,
net |
$3 to $6 |
|
$18 to $23 |
Other, net |
$(4) to $(2) |
|
$(15) to $(10) |
Interest
expense and amortization of deferred financing costs |
$154 to $164 |
|
$616 to $661 |
|
Debt balances and maturity dates as of
March 31, 2018 are as follows: |
|
(in
millions) |
Face Value |
|
Final Maturity |
Bank debt - variable
rate: |
|
|
|
2016
Revolver |
$ |
100 |
|
Aug.
2022 |
2016 Term
Loan A |
2,386 |
|
Aug.
2022 |
Total bank debt |
2,486 |
|
|
Securitized debt -
fixed rate: |
|
|
|
Secured
Notes, Series 2009-1, Class A-1(b) |
28 |
|
Aug.
2019 |
Secured
Notes, Series 2009-1, Class A-2(b) |
70 |
|
Aug.
2029 |
Tower
Revenue Notes, Series 2010-6(a) |
1,000 |
|
Aug.
2040 |
Tower
Revenue Notes, Series 2015-1(a) |
300 |
|
May
2042 |
Tower
Revenue Notes, Series 2015-2(a) |
700 |
|
May
2045 |
Total
securitized debt |
2,098 |
|
|
Bonds - fixed
rate: |
|
|
|
5.250% Senior Notes |
1,650 |
|
Jan.
2023 |
3.849%
Secured Notes |
1,000 |
|
Apr.
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 |
Total
bonds |
11,050 |
|
|
Capital leases and
other obligations |
228 |
|
Various |
Total Debt |
$ |
15,862 |
|
|
Less:
Cash and Cash Equivalents(c) |
$ |
220 |
|
|
Net Debt |
$ |
15,642 |
|
|
- The Senior Secured Tower Revenue Notes, Series 2010-6, Series
2015-1 and 2015-2 have anticipated repayment dates in 2020, 2022
and 2025, respectively.
- The Senior Secured Notes, Series 2009-1, Class A-1 principal
amortizes during the period beginning in 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.
- Excludes restricted cash.
|
Net
Debt to Last Quarter Annualized Adjusted EBITDA is computed as
follows: |
|
(dollars in
millions) |
For the Three MonthsEnded March 31, 2018 |
Total face value of
debt |
$ |
15,862 |
Ending cash and cash
equivalents(a) |
220 |
Total Net Debt |
$ |
15,642 |
|
|
Adjusted EBITDA for the
three months ended March 31, 2018 |
$ |
763 |
Last quarter annualized
Adjusted EBITDA |
3,052 |
Net Debt to
Last Quarter Annualized Adjusted EBITDA |
5.1x |
- Excludes restricted cash.
|
Components of Capital Expenditures: |
|
|
For the Three Months Ended |
(in millions) |
March 31, 2018 |
|
March 31, 2017 |
|
Towers |
Fiber |
Other |
Total |
|
Towers |
Fiber |
Other |
Total |
Discretionary: |
|
|
|
|
|
|
|
|
|
Purchases
of land interests |
$ |
14 |
|
$ |
— |
|
$ |
— |
|
$ |
14 |
|
|
$ |
21 |
|
$ |
— |
|
$ |
— |
|
$ |
21 |
|
Communications infrastructure construction and improvements |
75 |
|
253 |
|
— |
|
328 |
|
|
74 |
|
151 |
|
— |
|
225 |
|
Sustaining: |
|
|
|
|
|
|
|
|
|
Capital
improvement and corporate |
7 |
|
9 |
|
6 |
|
22 |
|
|
6 |
|
3 |
|
7 |
|
16 |
|
Integration |
— |
|
— |
|
6 |
|
6 |
|
|
— |
|
— |
|
— |
|
— |
|
Total |
$ |
96 |
|
$ |
262 |
|
$ |
12 |
|
$ |
370 |
|
|
$ |
101 |
|
$ |
154 |
|
$ |
7 |
|
$ |
262 |
|
|
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 customer and shareholder value which may
be derived from our business, assets, investments, acquisitions and
dividends, including on a long-and short-term basis, (2) our
strategy, strategic position, business model and capabilities and
the strength of our business, (3) our customers' investments and
the demand from our customers, and the benefits which may be
derived therefrom, (4) growth in demand for data 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 impact of and the benefits and contributions that
may be derived from the recent execution of leasing agreements with
our customers, including the AT&T Agreement, (7) integration of
our recent acquisitions, including Lightower, the progress thereof
and the potential benefits and contributions which may be derived
therefrom, including the contribution to or impact on our financial
or operating results, including site rental revenues, Adjusted
EBITDA, AFFO and Organic Contribution to Site Rental Revenues, (8)
anticipated impact of the March Equity Offering, (9) leasing
environment and activity, (10) our investments in our business and
communications infrastructure assets and the potential growth,
returns and benefits therefrom, (11) our dividends and our dividend
growth rate and targets, (12) strategic position of and demand for
our communications infrastructure (including fiber solutions and
small cells) and services, (13) cash flows, (14) tenant
non-renewals, including the impact thereof, (15) capital
expenditures, including sustaining capital expenditures, (16)
straight-line adjustments, (17) site rental revenues and estimated
growth thereof, (18) site rental cost of operations, (19) net
income (loss), (20) Adjusted EBITDA, including the impact
thereon of seasonal and timing items, (21) expenses, including
interest expense and repair and maintenance expenses, and
amortization of deferred financing costs, (22) cash tax payments,
(23) floating interest rates, (24) FFO, (25) AFFO (including the
impact thereon of seasonal and timing items) and estimated growth
thereof, (26) Organic Contribution to Site Rental Revenues, (27)
our weighted-average common shares outstanding, including on a
diluted basis, (28) network services contribution and
(29) 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 customers 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 such customers may materially decrease
revenues or reduce demand for our communications infrastructure and
network 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. Additionally, we may fail to realize all of the
anticipated benefits of the Lightower acquisition, or those
benefits may take longer to realize than expected.
- 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 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 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 that could adversely
affect our business, operations, and reputation.
- Future dividend payments to our stockholders will reduce the
availability of our cash on hand available to fund future
discretionary investments, and may result in a need to incur
indebtedness or issue equity securities to fund growth
opportunities. In such event, the then current economic,
credit market or equity market conditions will impact the
availability or cost of such financing, which may hinder our
ability to grow our per share results of operations.
- Remaining qualified to be taxed as a REIT involves highly
technical and complex provisions of the 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. 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 31,2018 |
|
December 31,2017 |
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
220 |
|
|
$ |
314 |
|
Restricted cash |
120 |
|
|
121 |
|
Receivables, net |
402 |
|
|
398 |
|
Prepaid
expenses |
175 |
|
|
162 |
|
Other
current assets |
157 |
|
|
139 |
|
Total
current assets |
1,074 |
|
|
1,134 |
|
Deferred site rental
receivables |
1,304 |
|
|
1,300 |
|
Property and equipment,
net |
13,051 |
|
|
12,933 |
|
Goodwill |
10,075 |
|
|
10,021 |
|
Other intangible
assets, net |
5,854 |
|
|
5,962 |
|
Long-term prepaid rent
and other assets, net |
892 |
|
|
879 |
|
Total
assets |
$ |
32,250 |
|
|
$ |
32,229 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
248 |
|
|
$ |
249 |
|
Accrued
interest |
104 |
|
|
132 |
|
Deferred
revenues |
465 |
|
|
457 |
|
Other
accrued liabilities |
240 |
|
|
339 |
|
Current
maturities of debt and other obligations |
130 |
|
|
115 |
|
Total
current liabilities |
1,187 |
|
|
1,292 |
|
Debt and other
long-term obligations |
15,616 |
|
|
16,044 |
|
Other long-term
liabilities |
2,615 |
|
|
2,554 |
|
Total
liabilities |
19,418 |
|
|
19,890 |
|
Commitments and
contingencies |
|
|
|
CCIC stockholders'
equity: |
|
|
|
Common
stock, $0.01 par value; 600 shares authorized; shares issued and
outstanding: March 31, 2018—415 andDecember 31, 2017—406 |
4 |
|
|
4 |
|
6.875%
Mandatory Convertible Preferred Stock, Series A, $0.01 par value;
20 shares authorized; shares issued andoutstanding: March 31,
2018—2 and December 31, 2017—2; aggregate liquidation value:
March 31, 2018—$1,650 and December 31, 2017—$1,650 |
— |
|
|
— |
|
Additional paid-in capital |
17,690 |
|
|
16,844 |
|
Accumulated other comprehensive income (loss) |
(4 |
) |
|
(4 |
) |
Dividends/distributions in excess of earnings |
(4,858 |
) |
|
(4,505 |
) |
Total
equity |
12,832 |
|
|
12,339 |
|
Total
liabilities and equity |
$ |
32,250 |
|
|
$ |
32,229 |
|
|
|
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (UNAUDITED)(Amounts in millions, except per
share amounts) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Net revenues: |
|
|
|
Site
rental |
$ |
1,153 |
|
|
$ |
857 |
|
Network
services and other |
146 |
|
|
159 |
|
Net
revenues |
1,299 |
|
|
1,016 |
|
Operating
expenses: |
|
|
|
Costs of
operations (exclusive of depreciation, amortization and
accretion): |
|
|
|
Site
rental |
347 |
|
|
265 |
|
Network
services and other |
86 |
|
|
99 |
|
General
and administrative |
134 |
|
|
101 |
|
Asset
write-down charges |
3 |
|
|
1 |
|
Acquisition and integration costs |
6 |
|
|
6 |
|
Depreciation, amortization and accretion |
374 |
|
|
289 |
|
Total
operating expenses |
950 |
|
|
761 |
|
Operating income
(loss) |
349 |
|
|
255 |
|
Interest expense and
amortization of deferred financing costs |
(160 |
) |
|
(134 |
) |
Gains (losses) on
retirement of long-term obligations |
(71 |
) |
|
(4 |
) |
Interest income |
1 |
|
|
— |
|
Other income
(expense) |
(1 |
) |
|
6 |
|
Income (loss) from
continuing operations before income taxes |
118 |
|
|
123 |
|
Benefit (provision) for
income taxes |
(4 |
) |
|
(4 |
) |
Net income (loss) |
114 |
|
|
119 |
|
Dividends on preferred
stock |
(28 |
) |
|
— |
|
Net income (loss)
attributable to CCIC common stockholders |
$ |
86 |
|
|
$ |
119 |
|
|
|
|
|
Net income (loss)
attributable to CCIC common stockholders, per common share: |
|
|
|
Net
income (loss) attributable to CCIC common stockholders, basic |
$ |
0.21 |
|
|
$ |
0.33 |
|
Net
income (loss) attributable to CCIC common stockholders,
diluted |
$ |
0.21 |
|
|
$ |
0.33 |
|
|
|
|
|
Weighted-average common
shares outstanding: |
|
|
|
Basic |
409 |
|
|
361 |
|
Diluted |
410 |
|
|
362 |
|
|
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (UNAUDITED)(a)(In millions of dollars) |
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Cash flows from
operating activities: |
|
|
|
Net income (loss) |
$ |
114 |
|
|
$ |
119 |
|
Adjustments to
reconcile net income (loss) to net cash provided by (used for)
operating activities: |
|
|
|
Depreciation, amortization and accretion |
374 |
|
|
289 |
|
(Gains)
losses on retirement of long-term obligations |
71 |
|
|
4 |
|
Amortization of deferred financing costs and other non-cash
interest |
2 |
|
|
2 |
|
Stock-based compensation expense |
23 |
|
|
22 |
|
Asset
write-down charges |
3 |
|
|
1 |
|
Deferred
income tax (benefit) provision |
1 |
|
|
— |
|
Other
non-cash adjustments, net |
2 |
|
|
(3 |
) |
Changes
in assets and liabilities, excluding the effects of
acquisitions: |
|
|
|
Increase
(decrease) in liabilities |
(90 |
) |
|
(60 |
) |
Decrease
(increase) in assets |
(48 |
) |
|
68 |
|
Net cash
provided by (used for) operating activities |
452 |
|
|
442 |
|
Cash flows from
investing activities: |
|
|
|
Payments
for acquisitions of businesses, net of cash acquired |
(14 |
) |
|
(1,497 |
) |
Capital
expenditures |
(370 |
) |
|
(262 |
) |
Other
investing activities, net |
— |
|
|
(4 |
) |
Net cash
provided by (used for) investing activities |
(384 |
) |
|
(1,763 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds
from issuance of long-term debt |
1,743 |
|
|
998 |
|
Principal
payments on debt and other long-term obligations |
(32 |
) |
|
(29 |
) |
Purchases
and redemptions of long-term debt |
(1,318 |
) |
|
— |
|
Borrowings under revolving credit facility |
170 |
|
|
1,405 |
|
Payments
under revolving credit facility |
(1,050 |
) |
|
(1,070 |
) |
Payments
for financing costs |
(15 |
) |
|
(7 |
) |
Net
proceeds from issuance of common stock |
843 |
|
|
22 |
|
Net
proceeds from issuance of preferred stock |
— |
|
|
— |
|
Purchases
of common stock |
(33 |
) |
|
(22 |
) |
Dividends/distributions paid on common stock |
(443 |
) |
|
(348 |
) |
Dividends
paid on preferred stock |
(28 |
) |
|
— |
|
Net cash
provided by (used for) financing activities |
(163 |
) |
|
949 |
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash |
(95 |
) |
|
(372 |
) |
Effect of
exchange rate changes |
— |
|
|
— |
|
Cash, cash equivalents, and restricted cash at beginning of
period(a) |
440 |
|
|
697 |
|
Cash, cash
equivalents, and restricted cash at end of period(a) |
$ |
345 |
|
|
$ |
325 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Interest
paid |
185 |
|
|
144 |
|
Income
taxes paid |
— |
|
|
1 |
|
- Effective January 1, 2018, the Company is required to explain
the change in restricted cash in addition to the change in cash and
cash equivalents in its condensed consolidated statement of cash
flows. The Company has applied this approach for all periods
presented.
|
CROWN CASTLE INTERNATIONAL
CORP.SEGMENT OPERATING RESULTS
(UNAUDITED)(In millions of dollars) |
|
SEGMENT OPERATING RESULTS |
|
Three Months Ended March 31, 2018 |
|
Three Months Ended March 31, 2017 |
|
Towers |
|
Fiber |
|
Other |
|
ConsolidatedTotal |
|
Towers |
|
Fiber |
|
Other |
|
ConsolidatedTotal |
Segment site rental
revenues |
$ |
764 |
|
|
$ |
389 |
|
|
|
|
$ |
1,153 |
|
|
$ |
717 |
|
|
$ |
140 |
|
|
|
|
$ |
857 |
|
Segment network
services and other revenue |
142 |
|
|
4 |
|
|
|
|
146 |
|
|
150 |
|
|
9 |
|
|
|
|
159 |
|
Segment revenues |
906 |
|
|
393 |
|
|
|
|
1,299 |
|
|
867 |
|
|
149 |
|
|
|
|
1,016 |
|
Segment site rental
cost of operations |
211 |
|
|
126 |
|
|
|
|
337 |
|
|
209 |
|
|
47 |
|
|
|
|
256 |
|
Segment network
services and other cost of operations |
82 |
|
|
2 |
|
|
|
|
84 |
|
|
89 |
|
|
8 |
|
|
|
|
97 |
|
Segment cost of
operations(a) |
293 |
|
|
128 |
|
|
|
|
421 |
|
|
298 |
|
|
55 |
|
|
|
|
353 |
|
Segment site rental
gross margin(b) |
553 |
|
|
263 |
|
|
|
|
816 |
|
|
508 |
|
|
93 |
|
|
|
|
601 |
|
Segment network
services and other gross margin(b) |
60 |
|
|
2 |
|
|
|
|
62 |
|
|
61 |
|
|
1 |
|
|
|
|
62 |
|
Segment general and
administrative expenses(a) |
26 |
|
|
43 |
|
|
|
|
69 |
|
|
24 |
|
|
18 |
|
|
|
|
42 |
|
Segment operating
profit(b) |
587 |
|
|
222 |
|
|
|
|
809 |
|
|
545 |
|
|
76 |
|
|
|
|
621 |
|
Unallocated general and
administrative expenses(a) |
|
|
|
|
$ |
46 |
|
|
46 |
|
|
|
|
|
|
$ |
39 |
|
|
39 |
|
Stock-based
compensation expense |
|
|
|
|
26 |
|
|
26 |
|
|
|
|
|
|
25 |
|
|
25 |
|
Depreciation,
amortization and accretion |
|
|
|
|
374 |
|
|
374 |
|
|
|
|
|
|
289 |
|
|
289 |
|
Interest expense and
amortization of deferred financing costs |
|
|
|
|
160 |
|
|
160 |
|
|
|
|
|
|
134 |
|
|
134 |
|
Other income (expenses)
to reconcile to income (loss) fromcontinuing operations before
income taxes(c) |
|
|
|
|
85 |
|
|
85 |
|
|
|
|
|
|
11 |
|
|
11 |
|
Income (loss) from
continuing operations before income taxes |
|
|
|
|
|
|
$ |
118 |
|
|
|
|
|
|
|
|
$ |
123 |
|
- Segment cost of operations excludes (1) stock-based
compensation expense of $7 million and $5 million for the three
months ended March 31, 2018 and 2017, respectively and (2) prepaid
lease purchase price adjustments of $5 million for both of the
three months ended March 31, 2018 and 2017. General and
administrative expenses exclude stock-based compensation expense of
$19 million and $20 million for the three months ended March 31,
2018 and 2017, respectively.
- 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 services and other gross
margin and segment operating profit.
- See condensed consolidated statement of operations for further
information
Contacts: Dan Schlanger, CFO and TreasurerBen Lowe, VP Corporate
FinanceCrown Castle International Corp.713-570-3050
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