Crown Castle International Corp. (NYSE: CCI) ("Crown Castle") today
reported results for the first quarter ended March 31, 2020
and maintained its full year 2020 Outlook.
(in millions, except per share amounts) |
Midpoint of Current Full Year2020 Outlook |
Full Year 2019 Actual |
% Change |
Previous Full Year 2020 Outlook(c) |
Current Compared to Previous Outlook |
Site rental revenues |
$5,360 |
$5,093 |
+5% |
$5,360 |
$— |
Net income (loss) |
$1,038 |
$860 |
+21% |
$1,038 |
$— |
Net income (loss) per
share—diluted(a) |
$2.32 |
$1.79 |
+30% |
$2.32 |
$— |
Adjusted EBITDA(b) |
$3,502 |
$3,299 |
+6% |
$3,502 |
$— |
AFFO(a)(b) |
$2,595 |
$2,371 |
+9% |
$2,595 |
$— |
AFFO per share(a)(b) |
$6.12 |
$5.68 |
+8% |
$6.12 |
$— |
- Attributable to CCIC common stockholders.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" included herein for further information and
reconciliation of this non-GAAP financial measure to net income
(loss).
- As issued on February 26, 2020.
"In the first quarter, we delivered strong
results that were in line with our expectations, positioning us to
generate attractive growth in cash flows and dividends per share
for full year 2020," stated Jay Brown, Crown Castle’s Chief
Executive Officer. "Our business continues to perform well during
this period of unprecedented uncertainty with COVID-19, and we are
focused on taking the appropriate steps to deliver on our long-term
annual dividend per share growth target of 7% to 8%. To this end,
we have prioritized the health and safety of our workforce, while
continuing to deliver critical infrastructure for our customers and
the communities in which we operate. I'd like to thank our team for
quickly adjusting to a new operating environment and prioritizing
the needs of our customers. Although COVID-19 has the potential to
create challenges in the near term, we remain confident our
long-term contracted revenues will allow us to deliver value to
shareholders through a high quality and growing dividend.
"We 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. We believe that
the U.S. represents the best market in the world for communications
infrastructure ownership, and we are pursuing that compelling
opportunity with our comprehensive offering. As we look forward to
what will likely be another decade-long investment cycle for our
customers with the deployment of 5G, I am excited about the
opportunity we see for Crown Castle to deliver long-term value to
our shareholders."
RESULTS FOR THE QUARTER
The table below sets forth select financial
results for the quarter ended March 31, 2020 and March 31,
2019.
(in millions, except per share amounts) |
Q1 2020 |
Q1 2019 |
Change |
% Change |
|
|
(As Restated)(c) |
|
|
Site rental revenues |
$1,310 |
$1,242 |
+$68 |
+5% |
Net income (loss) |
$185 |
$193 |
-$8 |
-4% |
Net income (loss) per share—diluted(a) |
$0.38 |
$0.40 |
-$0.02 |
-5% |
Adjusted EBITDA(b) |
$814 |
$804 |
+$10 |
+1% |
AFFO(a)(b) |
$593 |
$588 |
+$5 |
+1% |
AFFO per share(a)(b) |
$1.42 |
$1.41 |
+$0.01 |
+1% |
- Attributable to CCIC common stockholders.
- See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" included herein for further information and
reconciliation of this non-GAAP financial measure to net income
(loss).
- See our Annual Report on Form 10-K for the year ended December
31, 2019 for further information.
HIGHLIGHTS FROM THE QUARTER
- Site rental revenues. Site rental revenues
grew approximately 5.5%, or $68 million, from first quarter 2019 to
first quarter 2020, inclusive of approximately $71 million in
Organic Contribution to Site Rental Revenues and a $3 million
decrease in straight-lined revenues. The $71 million in Organic
Contribution to Site Rental Revenues represents approximately 5.8%
growth, comprised of approximately 9.9% growth from new leasing
activity and contracted tenant escalations, net of approximately
4.1% from tenant non-renewals.
- Capital Expenditures. Capital expenditures
during the quarter were $447 million, comprised of $13 million of
discretionary land purchases, $21 million of sustaining capital
expenditures and $413 million of discretionary capital
expenditures. The discretionary capital expenditures included
approximately $319 million attributable to Fiber and approximately
$87 million attributable to Towers.
- Common stock dividend. During the quarter,
Crown Castle paid common stock dividends of approximately $513
million in the aggregate, or $1.20 per common share, an increase of
approximately 7% on a per share basis compared to the same period a
year ago.
- Financing Activity. In April, Crown Castle
issued $1.25 billion in aggregate principal amount of senior
unsecured notes, with a combination of 10-year and 30-year
maturities, resulting in a weighted average maturity and coupon of
18 years and approximately 3.6%, respectively. Net proceeds from
the offering were used to repay outstanding borrowings under its
revolving credit facility, resulting in $5 billion of undrawn
capacity available under its revolving credit facility.
"The performance of our business during this
period of significant disruption highlights the durability in the
demand for our critical communications infrastructure and the
strength of our strategy," stated Dan Schlanger, Crown Castle's
Chief Financial Officer. "We took steps to further improve our
strong balance sheet position by opportunistically accessing the
bond market in April to repay existing borrowings under our
revolving credit facility. With an undrawn $5 billion revolving
credit facility combined with our investment grade balance sheet
and no debt maturities this year, we are well positioned to
continue to navigate the current environment while investing in new
assets that we believe will add to long-term growth in dividends
per share."
OUTLOOK
This Outlook section contains forward-looking
statements, and actual results may differ materially. Information
regarding potential risks which could cause actual results to
differ from the forward-looking statements herein is set forth
below and in Crown Castle's filings with the SEC.The following
table sets forth Crown Castle's current Outlook for full year 2020,
which remains unchanged from the previous full year 2020
Outlook:
(in millions) |
Full Year 2020 |
Site rental revenues |
$5,337 |
to |
$5,382 |
Site rental cost of operations(a) |
$1,482 |
to |
$1,527 |
Net income (loss) |
$998 |
to |
$1,078 |
Adjusted EBITDA(b) |
$3,479 |
to |
$3,524 |
Interest expense and
amortization of deferred financing costs(c) |
$691 |
to |
$736 |
FFO(b)(d) |
$2,449 |
to |
$2,494 |
AFFO(b)(d) |
$2,572 |
to |
$2,617 |
Weighted-average common shares
outstanding - diluted |
424 |
- 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 current outlook for
interest expense and amortization of deferred financing costs"
herein for a discussion of non-cash interest expense.
- Attributable to CCIC common stockholders.
Full Year 2020 OutlookThe table below compares
the results for full year 2019, the midpoint of the current full
year 2020 Outlook and the midpoint of our previous full year 2020
Outlook for select metrics.
(in millions, except per share amounts) |
Midpoint of Current Full Year2020 Outlook |
Full Year 2019 Actual |
Change |
% Change |
Midpoint of Previous Full Year 2020 Outlook(c) |
Current Compared to Previous Outlook |
Site rental revenues |
$5,360 |
$5,093 |
+$267 |
+5% |
$5,360 |
$— |
Net income (loss) |
$1,038 |
$860 |
+$178 |
+21% |
$1,038 |
$— |
Net income (loss) per
share—diluted(a) |
$2.32 |
$1.79 |
+$0.53 |
+30% |
$2.32 |
$— |
Adjusted EBITDA(b) |
$3,502 |
$3,299 |
+$203 |
+6% |
$3,502 |
$— |
AFFO(a)(b) |
$2,595 |
$2,371 |
+$224 |
+9% |
$2,595 |
$— |
AFFO per share(a)(b) |
$6.12 |
$5.68 |
+$0.44 |
+8% |
$6.12 |
$— |
- Attributable to CCIC common stockholders.
- See reconciliation of this non-GAAP financial measure to net
income (loss) and definition included herein.
- As issued on February 26, 2020.
- The 2020 Outlook also reflects the impact of the assumed
conversion of preferred stock in August 2020. This conversion is
expected to increase the diluted weighted average common shares
outstanding for 2020 by approximately 6 million and reduce the
annual preferred stock dividends paid by approximately $28 million
when compared to 2019.
- The chart below reconciles the components of expected growth in
site rental revenues from 2019 to 2020 of $250 million to $295
million, inclusive of expected Organic Contribution to Site Rental
Revenues during 2020 of $295 million to $335 million.Chart
1: https://www.globenewswire.com/NewsRoom/AttachmentNg/148d1e91-de62-424f-9a8f-56625850cfc4
- The chart below reconciles the components of expected growth in
AFFO from 2019 to 2020 of $195 million to $240 million.Chart
2: https://www.globenewswire.com/NewsRoom/AttachmentNg/55b7d288-2048-4fed-8808-8ad9c464df18
- Additional information is available in Crown Castle's quarterly
Supplemental Information Package posted in the Investors section of
our website.
CONFERENCE CALL DETAILSCrown
Castle has scheduled a conference call for Thursday, April 30,
2020, at 10:30 a.m. Eastern time to discuss its first quarter 2020
results. The conference call may be accessed by dialing
800-239-9838 and asking for the Crown Castle call (access code
2629992) 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 30,
2020, through 1:30 p.m. Eastern time on Wednesday, July 29, 2020,
and may be accessed by dialing 888-203-1112 and using access code
2629992. An audio archive will also be available on Crown Castle'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 80,000 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"), including
per share amounts, Funds from Operations ("FFO"), including per
share amounts, 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 non-GAAP financial measures 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. 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.
Our non-GAAP financial measures 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, including per share amounts, 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, including per share amounts, 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.
AFFO per share. We define AFFO per share as AFFO
divided by diluted weighted-average common shares outstanding.
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.
FFO per share. We define FFO per share as FFO
divided by the diluted weighted-average common shares
outstanding.
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
allocations that management believes to be reasonable.
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 primarily
consist of expansion or development of communications
infrastructure (including capital expenditures related to (1)
enhancing communications infrastructure 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) and
construction of new communications infrastructure. Discretionary
capital expenditures also include purchases of land interests
(which primarily relates to land assets under towers as we seek to
manage our interests in the land beneath our towers), certain
technology-related investments necessary to support and scale
future customer demand for our communications infrastructure, 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) ordinary corporate capital expenditures.
The tables set forth on the following pages
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, 2020 |
|
March 31, 2019 |
|
December 31, 2019 |
(in millions) |
|
|
(As Restated)(d) |
|
|
Net income (loss) |
$ |
185 |
|
|
$ |
193 |
|
|
$ |
860 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
Asset write-down charges |
4 |
|
|
6 |
|
|
19 |
|
Acquisition and integration costs |
5 |
|
|
4 |
|
|
13 |
|
Depreciation, amortization and accretion |
399 |
|
|
394 |
|
|
1,572 |
|
Amortization of prepaid lease purchase price adjustments |
5 |
|
|
5 |
|
|
20 |
|
Interest expense and amortization of deferred financing
costs(a) |
175 |
|
|
168 |
|
|
683 |
|
(Gains) losses on retirement of long-term obligations |
— |
|
|
1 |
|
|
2 |
|
Interest income |
(1 |
) |
|
(2 |
) |
|
(6 |
) |
Other (income) expense |
— |
|
|
1 |
|
|
(1 |
) |
(Benefit) provision for income taxes |
5 |
|
|
6 |
|
|
21 |
|
Stock-based compensation expense |
36 |
|
|
29 |
|
|
116 |
|
Adjusted EBITDA(b)(c) |
$ |
814 |
|
|
$ |
804 |
|
|
$ |
3,299 |
|
(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. (d)
See our Annual Report on Form 10-K for the year ended December 31,
2019 for further information.
Reconciliation of Current Outlook for Adjusted
EBITDA:
|
Full Year 2020 |
(in millions) |
Outlook |
Net income (loss) |
$998 |
to |
$1,078 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
Asset write-down charges |
$20 |
to |
$30 |
Acquisition and integration costs |
$7 |
to |
$17 |
Depreciation, amortization and accretion |
$1,503 |
to |
$1,598 |
Amortization of prepaid lease purchase price adjustments |
$18 |
to |
$20 |
Interest expense and amortization of deferred financing
costs(a) |
$691 |
to |
$736 |
(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 |
$16 |
to |
$24 |
Stock-based compensation expense |
$126 |
to |
$130 |
Adjusted EBITDA(b)(c) |
$3,479 |
to |
$3,524 |
(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 Historical FFO and
AFFO:
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
March 31, 2020 |
|
March 31, 2019 |
|
December 31, 2019 |
(in millions) |
|
|
(As Restated)(f) |
|
|
Net income (loss) |
$ |
185 |
|
|
$ |
193 |
|
|
$ |
860 |
|
Real estate related
depreciation, amortization and accretion |
386 |
|
|
380 |
|
|
1,517 |
|
Asset write-down charges |
4 |
|
|
6 |
|
|
19 |
|
Dividends/distributions on
preferred stock |
(28 |
) |
|
(28 |
) |
|
(113 |
) |
FFO(a)(b)(c)(d) |
$ |
547 |
|
|
$ |
550 |
|
|
$ |
2,284 |
|
Weighted-average common shares outstanding—diluted(e) |
418 |
|
|
417 |
|
|
418 |
|
FFO per share(a)(b)(c)(d)(e) |
$ |
1.31 |
|
|
$ |
1.32 |
|
|
$ |
5.47 |
|
|
|
|
|
|
|
FFO (from above) |
$ |
547 |
|
|
$ |
550 |
|
|
$ |
2,284 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
Straight-lined revenue |
(14 |
) |
|
(17 |
) |
|
(80 |
) |
Straight-lined expense |
20 |
|
|
22 |
|
|
93 |
|
Stock-based compensation expense |
36 |
|
|
29 |
|
|
116 |
|
Non-cash portion of tax provision |
4 |
|
|
5 |
|
|
5 |
|
Non-real estate related depreciation, amortization and
accretion |
13 |
|
|
14 |
|
|
55 |
|
Amortization of non-cash interest expense |
1 |
|
|
1 |
|
|
1 |
|
Other (income) expense |
— |
|
|
1 |
|
|
(1 |
) |
(Gains) losses on retirement of long-term obligations |
— |
|
|
1 |
|
|
2 |
|
Acquisition and integration costs |
5 |
|
|
4 |
|
|
13 |
|
Sustaining capital expenditures |
(21 |
) |
|
(21 |
) |
|
(117 |
) |
AFFO(a)(b)(c)(d) |
$ |
593 |
|
|
$ |
588 |
|
|
$ |
2,371 |
|
Weighted-average common shares outstanding—diluted(e) |
418 |
|
|
417 |
|
|
418 |
|
AFFO per share(a)(b)(c)(d)(e) |
$ |
1.42 |
|
|
$ |
1.41 |
|
|
$ |
5.68 |
|
(a) See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion of our definitions of FFO,
including per share amounts, and AFFO, including per share
amounts.(b) FFO and AFFO are reduced by cash paid for preferred
stock dividends during the period in which they are paid.(c)
Attributable to CCIC common stockholders.(d) The above
reconciliation excludes line items included in our definition which
are not applicable for the periods shown.(e) For all periods
presented, the diluted weighted-average common shares outstanding
does not include any assumed conversion of preferred stock in the
share count.(f) See our Annual Report on Form 10-K for the year
ended December 31, 2019 for further information.
Reconciliation of Current Outlook for
FFO and AFFO:
|
Full Year 2020 |
(in millions) |
Outlook |
Net income (loss) |
$998 |
to |
$1,078 |
Real estate related
depreciation, amortization and accretion |
$1,454 |
to |
$1,534 |
Asset write-down charges |
$20 |
to |
$30 |
Dividends/distributions on
preferred stock |
$(85) |
to |
$(85) |
FFO(a)(b)(c)(d) |
$2,449 |
to |
$2,494 |
Weighted-average common shares outstanding—diluted(e) |
424 |
FFO per share(a)(b)(c)(d)(e) |
$5.77 |
to |
$5.88 |
|
|
|
|
FFO (from above) |
$2,449 |
to |
$2,494 |
Adjustments to increase
(decrease) FFO: |
|
|
|
Straight-lined revenue |
$(53) |
to |
$(33) |
Straight-lined expense |
$70 |
to |
$90 |
Stock-based compensation expense |
$126 |
to |
$130 |
Non-cash portion of tax provision |
$(6) |
to |
$9 |
Non-real estate related depreciation, amortization and
accretion |
$49 |
to |
$64 |
Amortization of non-cash interest expense |
$(4) |
to |
$6 |
Other (income) expense |
$(1) |
to |
$1 |
(Gains) losses on retirement of long-term obligations |
$0 |
to |
$0 |
Acquisition and integration costs |
$7 |
to |
$17 |
Sustaining capital expenditures |
$(123) |
to |
$(103) |
AFFO(a)(b)(c)(d) |
$2,572 |
to |
$2,617 |
Weighted-average common shares outstanding—diluted(e) |
424 |
AFFO per share(a)(b)(c)(d)(e) |
$6.06 |
to |
$6.17 |
(a) See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion of our definitions of FFO,
including per share amounts, and AFFO, including per share
amounts.(b) FFO and AFFO are reduced by cash paid for preferred
stock dividends during the period in which they are paid.(c)
Attributable to CCIC common stockholders.(d) The above
reconciliation excludes line items included in our definition which
are not applicable for the periods shown.(e) The assumption for
diluted weighted-average common shares outstanding for full year
2020 Outlook is based on the diluted common shares outstanding as
of March 31, 2020 and is inclusive of the assumed conversion of
preferred stock in August 2020, which we expect to result in (1) an
increase in the diluted weighted-average common shares outstanding
by approximately 6 million shares and (2) a reduction in the amount
of annual preferred stock dividends paid by approximately $28
million when compared to full year 2019 actual results.
For Comparative Purposes - Reconciliation of Previous
Outlook for Adjusted EBITDA:
|
Previously Issued |
|
Full Year 2020 |
(in millions) |
Outlook |
Net income (loss) |
$998 |
to |
$1,078 |
Adjustments to increase
(decrease) net income (loss): |
|
|
|
Asset write-down charges |
$20 |
to |
$30 |
Acquisition and integration costs |
$7 |
to |
$17 |
Depreciation, amortization and accretion |
$1,503 |
to |
$1,598 |
Amortization of prepaid lease purchase price adjustments |
$18 |
to |
$20 |
Interest expense and amortization of deferred financing costs |
$691 |
to |
$736 |
(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 |
$16 |
to |
$24 |
Stock-based compensation expense |
$126 |
to |
$130 |
Adjusted EBITDA(a)(b) |
$3,479 |
to |
$3,524 |
(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 2020 |
(in millions) |
Outlook |
Net income (loss) |
$998 |
to |
$1,078 |
Real estate related
depreciation, amortization and accretion |
$1,454 |
to |
$1,534 |
Asset write-down charges |
$20 |
to |
$30 |
Dividends/distributions on
preferred stock |
$(85) |
to |
$(85) |
FFO(a)(b)(c)(d) |
$2,449 |
to |
$2,494 |
Weighted-average common shares outstanding—diluted(e) |
424 |
FFO per share(a)(b)(c)(d)(e) |
$5.77 |
to |
$5.88 |
|
|
|
|
FFO (from above) |
$2,449 |
to |
$2,494 |
Adjustments to increase
(decrease) FFO: |
|
|
|
Straight-lined revenue |
$(53) |
to |
$(33) |
Straight-lined expense |
$70 |
to |
$90 |
Stock-based compensation expense |
$126 |
to |
$130 |
Non-cash portion of tax provision |
$(6) |
to |
$9 |
Non-real estate related depreciation, amortization and
accretion |
$49 |
to |
$64 |
Amortization of non-cash interest expense |
$(4) |
to |
$6 |
Other (income) expense |
$(1) |
to |
$1 |
(Gains) losses on retirement of long-term obligations |
$0 |
to |
$0 |
Acquisition and integration costs |
$7 |
to |
$17 |
Sustaining capital expenditures |
$(123) |
to |
$(103) |
AFFO(a)(b)(c)(d) |
$2,572 |
to |
$2,617 |
Weighted-average common shares outstanding—diluted(e) |
424 |
AFFO per share(a)(b)(c)(d)(e) |
$6.06 |
to |
$6.17 |
(a) See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" herein for a discussion of our definitions of FFO,
including per share amounts, and AFFO, including per share
amounts.(b) FFO and AFFO are reduced by cash paid for preferred
stock dividends during the period in which they are paid.(c)
Attributable to CCIC common stockholders.(d) The above
reconciliation excludes line items included in our definition which
are not applicable for the periods shown.(e) The assumption for
diluted weighted-average common shares outstanding for full year
2020 Outlook is based on the diluted common shares outstanding as
of March 31, 2020 and is inclusive of the assumed conversion of
preferred stock in August 2020, which we expect to result in (1) an
increase in the diluted weighted-average common shares outstanding
by approximately 6 million shares and (2) a reduction in the amount
of annual preferred stock dividends paid by approximately $28
million when compared to full year 2019 actual results.
The components of changes in site rental
revenues for the quarters ended March 31, 2020 and 2019 are as
follows:
|
|
Three Months Ended March 31, |
|
|
|
2020 |
|
|
|
2019 |
|
(dollars in millions) |
|
|
|
|
|
(As Restated)(g) |
|
Components of changes in site
rental revenues(a): |
|
|
|
|
|
|
|
Prior year site rental revenues exclusive of straight-lined
revenues associated with fixed escalators(b)(c) |
$ |
1,225 |
|
|
$ |
1,156 |
|
|
|
|
|
New leasing activity(b)(c) |
99 |
|
|
92 |
|
Escalators |
22 |
|
|
21 |
|
Non-renewals |
(51 |
) |
|
(43 |
) |
Organic Contribution to Site Rental Revenues(d) |
71 |
|
|
70 |
|
Contribution from straight-lined revenues associated with fixed
escalators |
14 |
|
|
17 |
|
Acquisitions(e) |
— |
|
|
— |
|
Other |
— |
|
|
— |
|
Total GAAP site rental
revenues |
$ |
1,310 |
|
|
$ |
1,242 |
|
|
|
|
|
Year-over-year changes
in revenue: |
|
|
|
Reported GAAP site rental
revenues |
5.5 |
% |
|
|
Organic Contribution to Site
Rental Revenues(d)(f) |
5.8 |
% |
|
|
(a) Additional information regarding Crown Castle's site rental
revenues, including projected revenue from tenant licenses,
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.(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.(g) See our Annual Report on Form 10-K for the year
ended December 31, 2019 for further information.
The components of the changes in site
rental revenues for the year ending December 31, 2020 are
forecasted as follows:
(dollars in millions) |
Full Year 2020 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) |
$5,012 |
|
|
New leasing activity(b)(c) |
395-425 |
Escalators |
90-100 |
Non-renewals |
(195)-(175) |
Organic Contribution to Site Rental Revenues(d) |
295-335 |
Contribution from full year straight-lined revenues associated with
fixed escalators |
33-53 |
Acquisitions(e) |
— |
Other |
— |
Total GAAP site rental
revenues |
$5,337-$5,382 |
|
|
Year-over-year changes
in revenue: |
|
Reported GAAP site rental
revenues(f) |
5.1% |
Organic Contribution to Site
Rental Revenues(d)(f)(g) |
6.3% |
(a) Additional information regarding Crown Castle's site rental
revenues, including projected revenue from tenant licenses,
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.(f) Calculated based on
midpoint of full year 2020 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, 2020 |
|
|
March 31, 2019 |
|
Interest expense on debt
obligations |
$ |
174 |
|
|
$ |
167 |
|
Amortization of deferred
financing costs and adjustments on long-term debt, net |
5 |
|
|
5 |
|
Other, net |
(4 |
) |
|
(4 |
) |
Interest expense and
amortization of deferred financing costs |
$ |
175 |
|
|
$ |
168 |
|
Components of Current Outlook for
Interest Expense and Amortization of Deferred Financing
Costs:
|
Full Year 2020 |
(in millions) |
Outlook |
Interest expense on debt
obligations |
$703 |
to |
$723 |
Amortization of deferred
financing costs and adjustments on long-term debt, net |
$20 |
to |
$25 |
Other, net |
$(24) |
to |
$(19) |
Interest expense and
amortization of deferred financing costs |
$691 |
to |
$736 |
Debt balances and maturity dates as of
March 31, 2020 are as follows (a):
(in millions) |
Face Value |
|
Final Maturity |
Cash, cash equivalents
and restricted cash |
$ |
472 |
|
|
|
|
|
|
3.849% Secured Notes |
1,000 |
|
Apr. 2023 |
Secured Notes, Series 2009-1, Class A-2(b) |
66 |
|
Aug. 2029 |
Tower Revenue Notes, Series
2015-1(c) |
300 |
|
May 2042 |
Tower Revenue Notes, Series
2018-1(c) |
250 |
|
July 2043 |
Tower Revenue Notes, Series
2015-2(c) |
700 |
|
May 2045 |
Tower Revenue Notes, Series
2018-2(c) |
750 |
|
July 2048 |
Finance leases and other
obligations |
221 |
|
Various |
Total secured debt |
$ |
3,287 |
|
|
2016 Revolver |
1,270 |
|
June 2024 |
2016 Term Loan A |
2,297 |
|
June 2024 |
Commercial Paper Notes(d) |
— |
|
N/A |
3.400% Senior Notes |
850 |
|
Feb. 2021 |
2.250% Senior Notes |
700 |
|
Sept. 2021 |
4.875% Senior Notes |
850 |
|
Apr. 2022 |
5.250% Senior Notes |
1,650 |
|
Jan. 2023 |
3.150% Senior Notes |
750 |
|
July 2023 |
3.200% Senior Notes |
750 |
|
Sept. 2024 |
4.450% Senior Notes |
900 |
|
Feb. 2026 |
3.700% Senior Notes |
750 |
|
June 2026 |
4.000% Senior Notes |
500 |
|
Mar. 2027 |
3.650% Senior Notes |
1,000 |
|
Sept. 2027 |
3.800% Senior Notes |
1,000 |
|
Feb. 2028 |
4.300% Senior Notes |
600 |
|
Feb. 2029 |
3.100% Senior Notes |
550 |
|
Nov. 2029 |
4.750% Senior Notes |
350 |
|
May 2047 |
5.200% Senior Notes |
400 |
|
Feb. 2049 |
4.000% Senior Notes |
350 |
|
Nov. 2049 |
Total unsecured debt |
$ |
15,517 |
|
|
Total net debt |
$ |
18,332 |
|
|
(a) The table above does not reflect the Company's April
2020 issuance of senior notes and the associated use of proceeds,
including the repayment of outstanding balances under the 2016
Revolver.(b) The Senior Secured Notes, 2009-1, Class A-2
principal amortizes during the period beginning in September 2019
and ending in August 2029.(c) 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.(d) The maturities of the Commercial
Paper Notes, when outstanding, may vary but may not exceed 397 days
from the date of issue.
Net Debt to Last Quarter Annualized Adjusted EBITDA is
computed as follows:
(dollars in millions) |
For the Three Months Ended March 31, 2020 |
Total face value of debt |
$ |
18,804 |
|
Ending cash, cash equivalents
and restricted cash |
|
472 |
|
Total Net Debt |
$ |
18,332 |
|
|
|
Adjusted EBITDA for the three
months ended March 31, 2020 |
$ |
814 |
|
Last quarter annualized
Adjusted EBITDA |
3,256 |
|
Net Debt to Last
Quarter Annualized Adjusted EBITDA |
5.6 |
x |
Components of Capital
Expenditures:
|
For the Three Months Ended |
(in millions) |
March 31, 2020 |
|
March 31, 2019 |
|
|
Towers |
|
|
Fiber |
|
|
Other |
|
|
Total |
|
|
|
Towers |
|
|
Fiber |
|
|
Other |
|
|
Total |
|
Discretionary: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of land interests |
$ |
13 |
|
$ |
— |
|
$ |
— |
|
$ |
13 |
|
|
$ |
15 |
|
$ |
— |
|
$ |
— |
|
$ |
15 |
|
Communications infrastructure construction and improvements |
87 |
|
319 |
|
7 |
|
413 |
|
|
98 |
|
344 |
|
— |
|
442 |
|
Sustaining |
5 |
|
9 |
|
7 |
|
21 |
|
|
6 |
|
11 |
|
4 |
|
21 |
|
Integration |
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
2 |
|
2 |
|
Total |
$ |
105 |
|
$ |
328 |
|
$ |
14 |
|
$ |
447 |
|
|
$ |
119 |
|
$ |
355 |
|
$ |
6 |
|
$ |
480 |
|
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 news release contains forward-looking
statements and information that are based on our management's
current expectations as of the date of this news release.
Statements that are not historical facts are hereby identified as
forward-looking statements. In addition, words such as "estimate,"
"anticipate," "project," "plan," "intend," "believe," "expect,"
"likely," "predicted," "positioned," "continue," "target," and any
variations of these words and similar expressions are intended to
identify forward-looking statements. Such statements include our
Outlook and plans, projections, and estimates regarding (1)
potential benefits, growth, returns, opportunities and tenant and
shareholder value which may be derived from our business, assets,
investments, acquisitions and dividends, (2) our business,
strategy, business model and capabilities and the strength thereof,
(3) industry fundamentals and driving factors for improvements in
such fundamentals, (4) our customers' investment, including
investment cycles, in network improvements (including 5G), the
trends driving such improvements and opportunities created thereby,
(5) impact of the COVID-19 pandemic on our business, (6) our
long-term prospects and the trends impacting our business
(including growth in mobile data demand), (7) opportunities we see
to deliver long-term value to our shareholders, (8) our dividends
and our dividend (including on a per share basis) growth rate,
including its driving factors, and targets, (9) debt
maturities, (10) our portfolio of assets, including durability in
demand therefor, strategic position thereof and opportunities
created thereby, (11) assumed conversion of preferred stock
and the impact therefrom, (12) cash flows, including growth
thereof, (13) leasing activity, (14) tenant non-renewals,
including the impact and timing thereof, (15) capital expenditures,
including sustaining and discretionary capital expenditures, and
the timing thereof, (16) straight-line adjustments, (17) revenues
and growth thereof and benefits derived therefrom, (18) net
income (loss) (including on a per share basis) and growth thereof,
(19) Adjusted EBITDA, including the impact of the timing of
certain components thereof and growth thereof, (20) expenses,
including interest expense and amortization of deferred financing
costs, (21) FFO (including on a per share basis) and growth
thereof, (22) AFFO (including on a per share basis) and growth
thereof and corresponding driving factors, (23) Organic
Contribution to Site Rental Revenues and its components, including
contributions therefrom, (24) our weighted-average common shares
outstanding (including on a diluted basis) and growth thereof,
(25) services contribution, and (26) 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
lower 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, our business may be adversely affected.
- Our services business has historically experienced significant
volatility in demand, which reduces the predictability of our
results.
- The restatement of our previously issued financial statements,
the errors that resulted in such restatement, the material weakness
that was identified in our internal control over financial
reporting and the determination that our internal control over
financial reporting and disclosure controls and procedures were not
effective, could result in loss of investor confidence, shareholder
litigation or governmental proceedings or investigations, any of
which could cause the market value of our common stock or debt
securities to decline or impact our ability to access the capital
markets.
- 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 (prior to the automatic conversion in
August 2020), 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.
- The impact of COVID-19 and related risks could materially
affect our financial position, results of operations and cash
flows.
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, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
310 |
|
|
$ |
196 |
|
Restricted cash |
157 |
|
|
137 |
|
Receivables, net |
495 |
|
|
596 |
|
Prepaid expenses |
107 |
|
|
107 |
|
Other current assets |
178 |
|
|
168 |
|
Total current assets |
1,247 |
|
|
1,204 |
|
Deferred site rental
receivables |
1,428 |
|
|
1,424 |
|
Property and equipment,
net |
14,815 |
|
|
14,666 |
|
Operating lease right-of-use
assets |
6,198 |
|
|
6,133 |
|
Goodwill |
10,078 |
|
|
10,078 |
|
Other intangible assets,
net |
4,734 |
|
|
4,836 |
|
Other assets, net |
116 |
|
|
116 |
|
Total assets |
$ |
38,616 |
|
|
$ |
38,457 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
296 |
|
|
$ |
334 |
|
Accrued interest |
119 |
|
|
169 |
|
Deferred revenues |
741 |
|
|
657 |
|
Other accrued liabilities |
264 |
|
|
361 |
|
Current maturities of debt and other obligations |
949 |
|
|
100 |
|
Current portion of operating lease liabilities |
300 |
|
|
299 |
|
Total current liabilities |
2,669 |
|
|
1,920 |
|
Debt and other long-term
obligations |
17,746 |
|
|
18,021 |
|
Operating lease
liabilities |
5,567 |
|
|
5,511 |
|
Other long-term
liabilities |
2,513 |
|
|
2,516 |
|
Total liabilities |
28,495 |
|
|
27,968 |
|
Commitments and
contingencies |
|
|
|
CCIC stockholders'
equity: |
|
|
|
Common stock, $0.01 par value; 600 shares authorized; shares issued
and outstanding: March 31, 2020—417 and December 31,
2019—416 |
4 |
|
|
4 |
|
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par
value; 20 shares authorized; shares issued and outstanding: March
31, 2020—2 and December 31, 2019—2; aggregate liquidation
value: March 31, 2020—$1,650 and December 31, 2019—$1,650 |
— |
|
|
— |
|
Additional paid-in capital |
17,835 |
|
|
17,855 |
|
Accumulated other comprehensive income (loss) |
(6 |
) |
|
(5 |
) |
Dividends/distributions in excess of earnings |
(7,712 |
) |
|
(7,365 |
) |
Total equity |
10,121 |
|
|
10,489 |
|
Total liabilities and equity |
$ |
38,616 |
|
|
$ |
38,457 |
|
|
CROWN CASTLE INTERNATIONAL CORP. |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED) |
(Amounts in millions, except per share amounts) |
|
|
Three Months Ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
(As Restated)(a) |
|
Net revenues: |
|
|
|
|
|
|
|
Site rental |
$ |
1,310 |
|
|
$ |
1,242 |
|
Services and other |
111 |
|
|
166 |
|
Net revenues |
1,421 |
|
|
1,408 |
|
Operating expenses: |
|
|
|
Costs of operations (exclusive of depreciation, amortization and
accretion): |
|
|
|
Site rental |
375 |
|
|
361 |
|
Services and other |
99 |
|
|
124 |
|
Selling, general and administrative |
175 |
|
|
152 |
|
Asset write-down charges |
4 |
|
|
6 |
|
Acquisition and integration costs |
5 |
|
|
4 |
|
Depreciation, amortization and accretion |
399 |
|
|
394 |
|
Total operating expenses |
1,057 |
|
|
1,041 |
|
Operating income (loss) |
364 |
|
|
367 |
|
Interest expense and
amortization of deferred financing costs |
(175 |
) |
|
(168 |
) |
Gains (losses) on retirement
of long-term obligations |
— |
|
|
(1 |
) |
Interest income |
1 |
|
|
2 |
|
Other income (expense) |
— |
|
|
(1 |
) |
Income (loss) before income
taxes |
190 |
|
|
199 |
|
Benefit (provision) for income
taxes |
(5 |
) |
|
(6 |
) |
Net income (loss) |
185 |
|
|
193 |
|
Dividends/distributions on
preferred stock |
(28 |
) |
|
(28 |
) |
Net income (loss) attributable
to CCIC common stockholders |
$ |
157 |
|
|
$ |
165 |
|
|
|
|
|
Net income (loss) attributable
to CCIC common stockholders, per common share: |
|
|
|
Net income (loss) attributable to CCIC common stockholders,
basic |
$ |
0.38 |
|
|
$ |
0.40 |
|
Net income (loss) attributable to CCIC common stockholders,
diluted |
$ |
0.38 |
|
|
$ |
0.40 |
|
|
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
Basic |
416 |
|
|
415 |
|
Diluted |
418 |
|
|
417 |
|
(a) See our Annual Report on Form 10-K for the
year ended December 31, 2019 for further information.
|
|
|
|
|
|
|
|
CROWN CASTLE
INTERNATIONAL CORP. |
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) |
(In millions of
dollars) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
(As Restated)(a) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
185 |
|
|
$ |
193 |
|
Adjustments to reconcile net
income (loss) to net cash provided by (used for) operating
activities: |
|
|
|
Depreciation, amortization and accretion |
399 |
|
|
394 |
|
(Gains) losses on retirement of long-term obligations |
— |
|
|
1 |
|
Amortization of deferred financing costs and other non-cash
interest |
1 |
|
|
1 |
|
Stock-based compensation expense |
37 |
|
|
29 |
|
Asset write-down charges |
4 |
|
|
6 |
|
Deferred income tax (benefit) provision |
1 |
|
|
1 |
|
Other non-cash adjustments, net |
— |
|
|
2 |
|
Changes in assets and liabilities, excluding the effects of
acquisitions: |
|
|
|
Increase (decrease) in liabilities |
(68 |
) |
|
(53 |
) |
Decrease (increase) in assets |
94 |
|
|
(62 |
) |
Net cash provided by (used for) operating activities |
653 |
|
|
512 |
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
(447 |
) |
|
(480 |
) |
Payments for acquisitions, net of cash acquired |
(13 |
) |
|
(10 |
) |
Other investing activities, net |
(8 |
) |
|
1 |
|
Net cash provided by (used for) investing activities |
(468 |
) |
|
(489 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds from issuance of long-term debt |
— |
|
|
996 |
|
Principal payments on debt and other long-term obligations |
(26 |
) |
|
(25 |
) |
Purchases and redemptions of long-term debt |
— |
|
|
(12 |
) |
Borrowings under revolving credit facility |
1,340 |
|
|
710 |
|
Payments under revolving credit facility |
(595 |
) |
|
(1,140 |
) |
Net borrowings (repayments) under commercial paper program |
(155 |
) |
|
— |
|
Payments for financing costs |
— |
|
|
(10 |
) |
Purchases of common stock |
(73 |
) |
|
(42 |
) |
Dividends/distributions paid on common stock |
(513 |
) |
|
(477 |
) |
Dividends/distributions paid on preferred stock |
(28 |
) |
|
(28 |
) |
Net cash provided by (used for) financing activities |
(50 |
) |
|
(28 |
) |
Net increase
(decrease) in cash, cash equivalents, and restricted
cash |
135 |
|
|
(5 |
) |
Effect of exchange
rate changes on cash |
(1 |
) |
|
— |
|
Cash, cash equivalents, and restricted cash at beginning of
period |
338 |
|
|
413 |
|
Cash, cash
equivalents, and restricted cash at end of period |
$ |
472 |
|
|
$ |
408 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Interest paid |
223 |
|
|
208 |
|
Income taxes paid |
1 |
|
|
— |
|
(a) See our Annual Report on Form 10-K for the
year ended December 31, 2019 for further information.
|
CROWN CASTLE INTERNATIONAL CORP. |
SEGMENT OPERATING RESULTS (UNAUDITED) |
(In millions of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING RESULTS |
|
Three Months Ended March 31, 2020 |
|
Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
(As Restated)(e) |
|
Towers |
|
|
Fiber |
|
|
Other |
|
Consolidated Total |
|
|
Towers |
|
|
Fiber |
|
|
Other |
|
Consolidated Total |
|
Segment site rental
revenues |
$ |
867 |
|
|
$ |
443 |
|
|
|
|
$ |
1,310 |
|
|
$ |
828 |
|
|
$ |
414 |
|
|
|
|
$ |
1,242 |
|
Segment services and other
revenues |
108 |
|
|
3 |
|
|
|
|
111 |
|
|
162 |
|
|
4 |
|
|
|
|
166 |
|
Segment revenues |
975 |
|
|
446 |
|
|
|
|
1,421 |
|
|
990 |
|
|
418 |
|
|
|
|
1,408 |
|
Segment site rental cost of
operations |
214 |
|
|
152 |
|
|
|
|
366 |
|
|
211 |
|
|
140 |
|
|
|
|
351 |
|
Segment services and other
cost of operations |
95 |
|
|
2 |
|
|
|
|
97 |
|
|
120 |
|
|
3 |
|
|
|
|
123 |
|
Segment cost of
operations(a)(b) |
309 |
|
|
154 |
|
|
|
|
463 |
|
|
331 |
|
|
143 |
|
|
|
|
474 |
|
Segment site rental gross
margin(c) |
653 |
|
|
291 |
|
|
|
|
944 |
|
|
617 |
|
|
274 |
|
|
|
|
891 |
|
Segment services and other
gross margin(c) |
13 |
|
|
1 |
|
|
|
|
14 |
|
|
42 |
|
|
1 |
|
|
|
|
43 |
|
Segment selling, general and
administrative expenses(b) |
24 |
|
|
51 |
|
|
|
|
75 |
|
|
26 |
|
|
48 |
|
|
|
|
74 |
|
Segment operating
profit(c) |
642 |
|
|
241 |
|
|
|
|
883 |
|
|
633 |
|
|
227 |
|
|
|
|
860 |
|
Other selling, general and
administrative expenses(b) |
|
|
|
|
$ |
70 |
|
|
70 |
|
|
|
|
|
|
$ |
55 |
|
|
55 |
|
Stock-based compensation
expense |
|
|
|
|
36 |
|
|
36 |
|
|
|
|
|
|
29 |
|
|
29 |
|
Depreciation, amortization and
accretion |
|
|
|
|
399 |
|
|
399 |
|
|
|
|
|
|
394 |
|
|
394 |
|
Interest expense and
amortization of deferred financing costs |
|
|
|
|
175 |
|
|
175 |
|
|
|
|
|
|
168 |
|
|
168 |
|
Other (income) expenses to
reconcile to income (loss) before income taxes(d) |
|
|
|
|
13 |
|
|
13 |
|
|
|
|
|
|
15 |
|
|
15 |
|
Income (loss) before income
taxes |
|
|
|
|
|
|
$ |
190 |
|
|
|
|
|
|
|
|
$ |
199 |
|
(a) Exclusive of depreciation,
amortization and accretion shown separately.(b) Segment cost of
operations excludes (1) stock-based compensation expense of $6
million for both the three months ended March 31, 2020 and 2019 and
(2) prepaid lease purchase price adjustments of $5 million for both
the three months ended March 31, 2020 and 2019. Selling,
general and administrative expenses exclude stock-based
compensation expense of $30 million and $23 million for the three
months ended March 31, 2020 and 2019, 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.(e) See our
Annual Report on Form 10-K for the year ended December 31, 2019 for
further information.
Contacts: |
Dan Schlanger, CFO |
|
Ben Lowe, VP & Treasurer |
|
Crown Castle International
Corp. |
|
713-570-3050 |
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