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Crown Castle Reports Second Quarter 2018 Results and Raises Outlook for Full Year 2018

HOUSTON, July 18, 2018 (GLOBE NEWSWIRE) -- Crown Castle International Corp. (NYSE:CCI) ("Crown Castle") today reported results for the quarter ended June 30, 2018.

2018 Outlook for Organic Contribution to Site Rental Revenues, Growth in Site Rental Revenues ($ in millions)
2018 Outlook for Organic Contribution to Site Rental Revenues, Growth in Site Rental Revenues ($ in millions)


2018 Outlook for AFFO growth ($ in millions)
2018 Outlook for AFFO growth ($ in millions)


"We delivered another terrific quarter of results, and remain on track to generate attractive growth in cash flows and dividends per share for the full year 2018," stated Jay Brown, Crown Castle’s Chief Executive Officer. "Over the past two decades, we have built and acquired an unmatched portfolio of more than 40,000 towers and 60,000 route miles of dense, high capacity fiber in the top U.S. markets, where we see the greatest long-term demand from multiple customers.  We believe our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks, is the best strategy to pursue this significant growth opportunity while generating high returns for our shareholders by sharing our assets among multiple tenants.  Based on our experience, we believe that the U.S. represents the best market in the world for communications infrastructure ownership and we have a differentiated strategy to pursue that compelling opportunity.  With the positive momentum we continue to see in our towers and fiber segments, we remain dedicated to investing in our business to generate future growth while delivering near-term dividend per share growth of 7% to 8% per year."

RESULTS FOR THE QUARTER
The table below sets forth select financial results for the three month period ended June 30, 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 Midpoint
Q2 2018
Outlook(b)
Actual
Compared to
Outlook
Q2 2018 Q2 2017 Change % Change
Site rental revenues $1,169 $869 +$300 +35 $1,158 +$11
Net income (loss) $180 $112 +$68 +61 % $152 +$28
Adjusted EBITDA(a) $769 $589 +$180 +31 % $762 +$7
AFFO(a)(c) $546 $440 +$106 +24 % $544 +$2
Weighted-average common shares outstanding - diluted 416 366 +50 +14 % 416

Note: Figures may not tie due to rounding.

  1. See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein.
  2. As issued on April 18, 2018.
  3. Attributable to CCIC common stockholders.

HIGHLIGHTS FROM THE QUARTER

  • Site rental revenues.  Site rental revenues grew approximately 35%, or $300 million, from second quarter 2017 to second quarter 2018, inclusive of approximately $49 million in Organic Contribution to Site Rental Revenues plus $231 million in contributions from acquisitions and other items, plus a $20 million increase in straight-lined revenues.  The $49 million in Organic Contribution to Site Rental Revenues represents approximately 5.6% growth, comprised of approximately 8% growth from new leasing activity and contracted tenant escalations, net of approximately 2.5% from tenant non-renewals.  When compared to the prior second quarter 2018 Outlook, site rental revenues benefited by approximately $9 million of additional straight-lined revenues primarily resulting from term extensions associated with leasing activity.
  • Net income.  Net income for second quarter 2018 was $180 million, compared to $112 million during the same period a year ago.
  • Adjusted EBITDA.  When compared to the second quarter 2018 Outlook, Adjusted EBITDA benefited by approximately $9 million of additional straight-lined revenues, partially offset by the timing of certain network services contribution that is now expected to contribute to Adjusted EBITDA during the remainder of 2018.
  • Capital expenditures.  Capital expenditures during the quarter were $393 million, comprised of $10 million of land purchases, $26 million of sustaining capital expenditures, $356 million of revenue generating capital expenditures and $1 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.  During the quarter, Crown Castle increased the commitments under its Senior Unsecured Revolving Credit Facility by $750 million and extended the maturity date on its Senior Unsecured Credit Facility to June 2023.  In July, Crown Castle issued $1.0 billion of Senior Secured Tower Revenue Notes with net proceeds from the offering and cash on hand used to retire $1.0 billion of existing Senior Secured Tower Revenue Notes.  With these financings, the weighted average maturity of outstanding debt was extended to 6.5 years while the weighted average interest rate was reduced to 3.9%.

"The momentum we see across the business has translated into solid financial results and an 11% year-over-year growth in dividends per share during the first half of 2018, demonstrating how well positioned Crown Castle is to capitalize on the positive tailwinds creating demand for our communications infrastructure," stated Dan Schlanger, Crown Castle's Chief Financial Officer.  "With our recent refinancings, we have increased our financial flexibility, positioning us to continue to invest in our business and create significant value for our shareholders by leveraging our leading portfolio of towers and high-capacity fiber assets."

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 Securities and Exchange Commission ("SEC").

The following table sets forth Crown Castle's current Outlook for third quarter 2018 and full year 2018:

(in millions) Third Quarter 2018 Full Year 2018
Site rental revenues $1,172 to $1,182 $4,673 to $4,703
Site rental cost of operations(a) $345 to $355 $1,382 to $1,412
Net income (loss) $126 to $151 $603 to $663
Adjusted EBITDA(b) $785 to $795 $3,132 to $3,162
Interest expense and amortization of deferred financing costs(c) $156 to $166 $627 to $657
FFO(b)(d) $490 to $500 $2,014 to $2,044
AFFO(b)(d) $568 to $578 $2,263 to $2,293
Weighted-average common shares outstanding - diluted(e) 416 415
  1. Exclusive of depreciation, amortization and accretion.
  2. See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein.
  3. See reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
  4. Attributable to CCIC common stockholders.
  5. The assumption for third quarter 2018 and full year 2018 diluted weighted-average common shares outstanding is based on the diluted common shares outstanding as of June 30, 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 second quarter 2018, the midpoints of third quarter 2018 Outlook for Adjusted EBITDA and AFFO are expected to benefit from a higher network services contribution and lower cash tax payments.

Full Year 2018 Outlook
The 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) Current
Full Year
2018
Outlook
Full Year
2017 Actual
Change % Change Previous
Full Year
2018
Outlook(d)
Current
Compared to
Previous
Outlook
Site rental revenues $4,688 $3,669 +$1,019 +28 $4,662 +$26
Net income (loss) $633 $445 +$188 +42 % $629 +$4
Adjusted EBITDA(a) $3,147 $2,482 +$665 +27 % $3,120 +$27
AFFO(a)(b) $2,278 $1,860 +$418 +22 % $2,278
Weighted-average common shares outstanding - diluted(c) 415 383 +32 +8 % 415
  1. See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein.
  2. Attributable to CCIC common stockholders.
  3. The assumption for full year 2018 diluted weighted-average common shares outstanding is based on diluted common shares outstanding as of June 30, 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.
  4. As issued on April 18, 2018.
     
  • The chart below reconciles the components of expected growth in site rental revenues from 2017 to 2018 of $1,005 million to $1,035 million, inclusive of expected Organic Contribution to Site Rental Revenues during 2018 of $190 million to $220 million.
  • The increases in full year 2018 Outlook reflect a higher expected contribution from straight-lined revenues.  The increase to expected straight-lined revenues primarily reflects the impact of term extensions associated with leasing activity.

A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/c1f978e3-c552-43c5-a17a-d30c509e141b

  • 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 $400 million to $430 million

A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/378f1a8b-4f75-4c51-801e-90ae4a87e990

  • Additional information is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website.

CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, July 19, 2018, at 10:30 a.m. Eastern time to discuss its second quarter 2018 results.  The conference call may be accessed by dialing 877-260-1479 and asking for the Crown Castle call (access code 9212580) 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, July 19, 2018, through 1:30 p.m. Eastern time on Wednesday, October 17, 2018, and may be accessed by dialing 888-203-1112 and using access code 9212580.  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 CASTLE
Crown 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 sustaining capital expenditures (comprised of capital improvement capital expenditures and corporate capital expenditures).

Funds from Operations. We define Funds from Operations as net income plus real estate related depreciation, amortization and accretion and asset write-down charges, less noncontrolling interest and cash paid for preferred stock dividends, and is a measure of funds from operations attributable to CCIC common stockholders.

Organic Contribution to Site Rental Revenues. We define the Organic Contribution to Site Rental Revenues as the sum of the change in GAAP site rental revenues related to (1) new leasing activity, including revenues from the construction of small cells and the impact of prepaid rent, (2) escalators and less (3) non-renewals of customer contracts.

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 interests (which primarily relate to land assets under towers as we seek to manage our interests in the land beneath our towers) and other capital projects.

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 Twelve
Months Ended
  June 30, 2018   June 30, 2017   December 31, 2017
(in millions)          
Net income (loss) $ 180     $ 112     $ 445  
Adjustments to increase (decrease) net income (loss):          
Asset write-down charges 6     4     17  
Acquisition and integration costs 8     8     61  
Depreciation, amortization and accretion 379     296     1,242  
Amortization of prepaid lease purchase price adjustments 5     5     20  
Interest expense and amortization of deferred financing costs(a) 158     142     591  
(Gains) losses on retirement of long-term obligations 3         4  
Interest income (1 )   (1 )   (19 )
Other (income) expense     1     (1 )
(Benefit) provision for income taxes 5     5     26  
Stock-based compensation expense 26     17     96  
Adjusted EBITDA(b)(c) $ 769     $ 589     $ 2,482  
  1. See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
  2. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA.
  3. 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:

  Q3 2018   Full Year 2018
(in millions) Outlook   Outlook
Net income (loss) $ 126   to $ 151   $ 603   to $ 663
Adjustments to increase (decrease) net income (loss):              
Asset write-down charges $ 9   to $ 11   $ 25   to $ 35
Acquisition and integration costs $ 16   to $ 20   $ 45   to $ 55
Depreciation, amortization and accretion $ 378   to $ 398   $ 1,513   to $ 1,548
Amortization of prepaid lease purchase price adjustments $ 4   to $ 6   $ 19   to $ 21
Interest expense and amortization of deferred financing costs(a) $ 156   to $ 166   $ 627   to $ 657
(Gains) losses on retirement of long-term obligations $ 33   to $ 33   $ 107   to $ 107
Interest income $ (1 ) to $ 1   $ (4 ) to $ 0
Other (income) expense $ (1 ) to $ 3   $ 2   to $ 4
(Benefit) provision for income taxes $ 7   to $ 11   $ 24   to $ 32
Stock-based compensation expense $ 25   to $ 29   $ 101   to $ 109
Adjusted EBITDA(b)(c) $ 785   to $ 795   $ 3,132   to $ 3,162
  1. See the reconciliation of "components of historical interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
  2. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA.
  3. 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 Six Months Ended   For the Twelve
Months Ended
(in millions) June 30, 2018   June 30, 2017   June 30, 2018   June 30, 2017   December 31, 2017
Net income (loss) $ 180     $ 112     $ 294     $ 231     $ 445  
Real estate related depreciation, amortization and accretion 367     289     726     569     1,211  
Asset write-down charges 6     4     9     5     17  
Dividends on preferred stock (28 )       (57 )       (30 )
FFO(a)(b)(c)(d)(e) $ 525     $ 405     $ 973     $ 806     $ 1,643  
                   
FFO (from above) $ 525     $ 405     $ 973     $ 806     $ 1,643  
Adjustments to increase (decrease) FFO:                  
Straight-lined revenue (20 )   1     (36 )        
Straight-lined expense 23     23     47     46     93  
Stock-based compensation expense 26     17     52     42     96  
Non-cash portion of tax provision (7 )   (5 )   (3 )   (1 )   9  
Non-real estate related depreciation, amortization and accretion 12     7     27     15     31  
Amortization of non-cash interest expense 1     3     4     5     9  
Other (income) expense     1     1     (4 )   (2 )
(Gains) losses on retirement of long-term obligations 3         74     4     4  
Acquisition and integration costs 8     8     14     14     61  
Capital improvement capital expenditures (18 )   (9 )   (31 )   (16 )   (41 )
Corporate capital expenditures (8 )   (10 )   (17 )   (19 )   (44 )
AFFO(a)(b)(c)(d)(e) $ 546     $ 440     $ 1,104     $ 890     $ 1,860  
  1. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO.
  2. FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid.
  3. Diluted weighted-average common shares outstanding were 416 million, 366 million, 413 million, 364 million and 383 million for the three months ended June 30, 2018 and 2017, the six months ended June 30, 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.
  4. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
  5. Attributable to CCIC common stockholders.

Reconciliation of Current Outlook for FFO and AFFO:

  Q3 2018   Full Year 2018
(in millions) Outlook   Outlook
Net income (loss) $ 126   to $ 151     $ 603   to $ 663  
Real estate related depreciation, amortization and accretion $ 370   to $ 380     $ 1,469   to $ 1,489  
Asset write-down charges $ 9   to $ 11     $ 25   to $ 35  
Dividends on preferred stock $ (28 ) to $ (28 )   $ (113 ) to $ (113 )
FFO(a)(b)(c)(d)(e) $ 490   to $ 500     $ 2,014   to $ 2,044  
               
FFO (from above) $ 490   to $ 500     $ 2,014   to $ 2,044  
Adjustments to increase (decrease) FFO:              
Straight-lined revenue $ (18 ) to $ (8 )   $ (65 ) to $ (45 )
Straight-lined expense $ 16   to $ 26     $ 79   to $ 99  
Stock-based compensation expense $ 25   to $ 29     $ 101   to $ 109  
Non-cash portion of tax provision $ 1   to $ 11     $ 0   to $ 15  
Non-real estate related depreciation, amortization and accretion $ 8   to $ 18     $ 44   to $ 59  
Amortization of non-cash interest expense $ (1 ) to $ 4     $ 2   to $ 12  
Other (income) expense $ (1 ) to $ 3     $ 2   to $ 4  
(Gains) losses on retirement of long-term obligations $ 33   to $ 33     $ 107   to $ 107  
Acquisition and integration costs $ 16   to $ 20     $ 45   to $ 55  
Capital improvement capital expenditures $ (14 ) to $ (4 )   $ (71 ) to $ (56 )
Corporate capital expenditures $ (26 ) to $ (16 )   $ (59 ) to $ (44 )
AFFO(a)(b)(c)(d)(e) $ 568   to $ 578     $ 2,263   to $ 2,293  
  1. The assumption for third 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 June 30, 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.
  2. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO.
  3. FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid.
  4. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
  5. Attributable to CCIC common stockholders.

For Comparative Purposes - Reconciliation of Previous Outlook for Adjusted EBITDA:

  Previously Issued   Previously Issued
  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 $ 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(a)(b) $ 757   to $ 767   $ 3,097   to $ 3,142
  1. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA.
  2. 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
  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) $ 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) $ 539   to $ 549     $ 2,255   to $ 2,300  
  1. Previously issued second quarter 2018 and full year 2018 Outlook assumes diluted weighted-average common shares outstanding as of March 31, 2018 of 416 million and 415 million, 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.
  2. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO.
  3. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
  4. Attributable to CCIC common stockholders.

The components of changes in site rental revenues for the quarters ended June 30, 2018 and 2017 are as follows:

  Three Months Ended June 30,
(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) $ 870     $ 788  
       
New leasing activity(b)(c) 51     45  
Escalators 20     21  
Non-renewals (22 )   (24 )
Organic Contribution to Site Rental Revenues(d) 49     42  
Straight-lined revenues associated with fixed escalators 20     (1 )
Acquisitions(e) 231     40  
Other      
Total GAAP site rental revenues $ 1,169     $ 869  
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues 34.5 %    
Organic Contribution to Site Rental Revenues(d)(f) 5.6 %    
  1. 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.
  2. Includes revenues from amortization of prepaid rent in accordance with GAAP.
  3. Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators.
  4. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein.
  5. 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.
  6. 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 2018 Outlook
Components of changes in site rental revenues(a):      
Prior year site rental revenues exclusive of straight-lined revenues associated with fixed escalators(b)(c) $ 3,186     $3,670 
       
New leasing activity(b)(c)   166     $190-$220
Escalators   84     $80-$90
Non-renewals   (90 )   ($90)-($80)
Organic Contribution to Site Rental Revenues(d)   160     $190-$220
Straight-lined revenues associated with fixed escalators       $45-$65
Acquisitions(e)   323     $745-$765
Other        — 
Total GAAP site rental revenues $ 3,669     $4,673-$4,703
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues(f)      27.8%
Organic Contribution to Site Rental Revenues(d)(f)(g)      5.6%
  1. 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.
  2. Includes revenues from amortization of prepaid rent in accordance with GAAP.
  3. Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators.
  4. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein.
  5. 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 Outlook. 
  6. Calculated based on midpoint of Full Year 2018 Outlook.
  7. 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) June 30, 2018   June 30, 2017
Interest expense on debt obligations $ 157     $ 139  
Amortization of deferred financing costs and adjustments on long-term debt, net 5     5  
Other, net (4 )   (2 )
Interest expense and amortization of deferred financing costs $ 158     $ 142  

Components of Current Outlook for Interest Expense and Amortization of Deferred Financing Costs:

  Q3 2018   Full Year 2018
(in millions) Outlook   Outlook
Interest expense on debt obligations $ 157   to $ 162     $ 630   to $ 640  
Amortization of deferred financing costs and adjustments on long-term debt, net $ 4   to $ 7     $ 19   to $ 24  
Other, net $ (5 ) to $ (3 )   $ (17 ) to $ (12 )
Interest expense and amortization of deferred financing costs $ 156   to $ 166     $ 627   to $ 657  

Debt balances and maturity dates as of June 30, 2018 are as follows:

(in millions) Face Value   Final Maturity
Bank debt - variable rate:      
2016 Revolver $ 315   Jun. 2023
2016 Term Loan A 2,386   Jun. 2023
Total bank debt 2,701    
Securitized debt - fixed rate:      
Secured Notes, Series 2009-1, Class A-1(a) 23   Aug. 2019
Secured Notes, Series 2009-1, Class A-2(a) 70   Aug. 2029
Tower Revenue Notes, Series 2010-6(b) 1,000   Aug. 2040
Tower Revenue Notes, Series 2015-1(b) 300   May 2042
Tower Revenue Notes, Series 2015-2(b) 700   May 2045
Total securitized debt 2,093    
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   Feb. 2023
3.800% Senior Notes 1,000   Feb. 2028
Total bonds 11,050    
Capital leases and other obligations 222   Various
Total Debt $ 16,066    
Less: Cash and Cash Equivalents(c) $ 206    
Net Debt $ 15,860    
  1. 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.
  2. The Senior Secured Tower Revenue Notes Series 2015-1 and 2015-2 have anticipated repayment dates in 2022 and 2025, respectively.  In July 2018, the Company issued $1.0 billion of Senior Secured Tower Revenue Notes, Series 2018-1 and Series 2018-2 with anticipated repayment dates in 2023 and 2028, respectively.  The Company used the proceeds from such offering, together with cash on hand, to repay the previously outstanding Senior Secured Tower Revenue Notes, Series 2010-6, which had an anticipated repayment date in 2020.
  3. Excludes restricted cash.

Net Debt to Last Quarter Annualized Adjusted EBITDA is computed as follows:

(dollars in millions) For the Three Months Ended June 30, 2018
Total face value of debt $ 16,066  
Ending cash and cash equivalents(a) 206  
Total Net Debt $ 15,860  
   
Adjusted EBITDA for the three months ended June 30, 2018 $ 769  
Last quarter annualized Adjusted EBITDA 3,076  
Net Debt to Last Quarter Annualized Adjusted EBITDA 5.2 x
  1. Excludes restricted cash.

Components of Capital Expenditures:

  For the Three Months Ended
(in millions) June 30, 2018   June 30, 2017
  Towers Fiber Other Total   Towers Fiber Other Total
Discretionary:                  
Purchases of land interests $ 10   $   $   $ 10     $ 21   $   $   $ 21  
Communications infrastructure construction and improvements 77   279     356     76   184     260  
Sustaining:                  
Capital improvement and corporate 11   11   4   26     9   4   6   19  
Integration     1   1            
Total $ 98   $ 289   $ 5   $ 393     $ 107   $ 188   $ 6   $ 301  

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 growth, including growth in our cash flows and dividends per share, long-term prospects and the trends impacting our business, (4) the potential benefits and contributions which may be derived from our recent acquisitions, such as Lightower, including the contribution to or impact on our financial or operating results, inclusive of site rental revenues, Adjusted EBITDA, AFFO and Organic Contribution to Site Rental Revenues, (5) impact of the recent refinancings and the potential benefits which may be derived therefrom, (6) leasing environment and activity, including the contribution to our financial or operating results therefrom, (7) our investments in our business and communications infrastructure assets and the potential growth, returns and benefits therefrom, (8) our dividends and our dividend growth rate and targets, (9) strategic position of and demand for our communications infrastructure and services, (10) cash flows, (11) tenant non-renewals, including the impact thereof, (12) capital expenditures, including sustaining capital expenditures, (13) straight-line adjustments, (14) site rental revenues and estimated growth thereof, (15) site rental cost of operations, (16) net income (loss), (17) Adjusted EBITDA, including the impact thereon of timing items, (18) expenses, including interest expense, and amortization of deferred financing costs, (19) FFO, (20) AFFO and estimated growth thereof, (21) Organic Contribution to Site Rental Revenues, (22) our weighted-average common shares outstanding, including on a diluted basis, (23) network services contribution and (24) 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)


  June 30, 2018   December 31, 2017
       
ASSETS      
Current assets:      
Cash and cash equivalents $ 206     $ 314  
Restricted cash 125     121  
Receivables, net 455     398  
Prepaid expenses 197         162  
Other current assets 181     139  
Total current assets 1,164     1,134  
Deferred site rental receivables 1,303     1,300  
Property and equipment, net 13,218     12,933  
Goodwill 10,075     10,021  
Other intangible assets, net 5,729     5,962  
Long-term prepaid rent and other assets, net 885     879  
Total assets $ 32,374     $ 32,229  
       
LIABILITIES AND EQUITY      
Current liabilities:      
Accounts payable $ 272     $ 249  
Accrued interest 154     132  
Deferred revenues 476     457  
Other accrued liabilities 272     339  
Current maturities of debt and other obligations 112     115  
Total current liabilities 1,286     1,292  
Debt and other long-term obligations 15,844     16,044  
Other long-term liabilities 2,678     2,554  
Total liabilities 19,808     19,890  
Commitments and contingencies      
CCIC stockholders' equity:      
Common stock, $0.01 par value; 600 shares authorized; shares issued and outstanding: June 30, 2018—415 and December 31, 2017—406 4     4  
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value; 20 shares authorized; shares issued and outstanding: June 30, 2018—2 and December 31, 2017—2; aggregate liquidation value: June 30, 2018—$1,650 and December 31, 2017—$1,650      
Additional paid-in capital 17,711     16,844  
Accumulated other comprehensive income (loss) (5 )   (4 )
Dividends/distributions in excess of earnings (5,144 )   (4,505 )
Total equity 12,566     12,339  
Total liabilities and equity $ 32,374     $ 32,229  


CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Amounts in millions, except per share amounts)


  Three Months Ended June 30,   Six Months Ended June 30,
  2018   2017   2018   2017
Net revenues:              
Site rental $ 1,169     $ 869     $ 2,323     $ 1,726  
Network services and other 161     169     307     328  
Net revenues 1,330     1,038     2,630     2,054  
Operating expenses:              
Costs of operations (exclusive of depreciation, amortization and accretion):              
Site rental 355     269     702     534  
Network services and other 99     104     185     203  
General and administrative 138     98     273     199  
Asset write-down charges 6     4     9     5  
Acquisition and integration costs 8     8     14     14  
Depreciation, amortization and accretion 379     296     753     584  
Total operating expenses 985     779     1,936     1,539  
Operating income (loss) 345     259     694     515  
Interest expense and amortization of deferred financing costs (158 )   (142 )   (318 )   (276 )
Gains (losses) on retirement of long-term obligations (3 )       (74 )   (4 )
Interest income 1     1     2     1  
Other income (expense)     (1 )   (1 )   4  
Income (loss) from continuing operations before income taxes 185     117     303     240  
Benefit (provision) for income taxes (5 )   (5 )   (9 )   (9 )
Net income (loss) 180     112     294     231  
Dividends on preferred stock (28 )       (57 )    
Net income (loss) attributable to CCIC common stockholders $ 152     $ 112     $ 237     $ 231  
               
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders, basic $ 0.37     $ 0.31     $ 0.58     $ 0.64  
Net income (loss) attributable to CCIC common stockholders, diluted $ 0.36     $ 0.31     $ 0.57     $ 0.64  
               
Weighted-average common shares outstanding:              
Basic 415     364     412     363  
Diluted 416     366     413     364  


CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)(a)
(In millions of dollars)


  Six Months Ended June 30,
  2018   2017
Cash flows from operating activities:      
Net income (loss) $ 294     $ 231  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:      
Depreciation, amortization and accretion 753     584  
(Gains) losses on retirement of long-term obligations 74     4  
Amortization of deferred financing costs and other non-cash interest 4     5  
Stock-based compensation expense 47     45  
Asset write-down charges 9     5  
Deferred income tax (benefit) provision 1      
Other non-cash adjustments, net 1     (3 )
Changes in assets and liabilities, excluding the effects of acquisitions:      
Increase (decrease) in liabilities 78     17  
Decrease (increase) in assets (150 )   43  
Net cash provided by (used for) operating activities 1,111     931  
Cash flows from investing activities:      
Payments for acquisitions, net of cash acquired (18 )   (2,104 )
Capital expenditures (763 )   (563 )
Other investing activities, net 3     (8 )
Net cash provided by (used for) investing activities (778 )   (2,675 )
Cash flows from financing activities:      
Proceeds from issuance of long-term debt 1,743     1,345  
Principal payments on debt and other long-term obligations (47 )   (60 )
Purchases and redemptions of long-term debt (1,318 )    
Borrowings under revolving credit facility 485     1,755  
Payments under revolving credit facility (1,150 )   (1,405 )
Payments for financing costs (20 )   (11 )
Net proceeds from issuance of common stock 841     464  
Purchases of common stock (34 )   (23 )
Dividends/distributions paid on common stock (879 )   (696 )
Dividends paid on preferred stock (57 )    
Net cash provided by (used for) financing activities (436 )   1,369  
Net increase (decrease) in cash, cash equivalents, and restricted cash (103 )   (375 )
Effect of exchange rate changes (1 )   1  
Cash, cash equivalents, and restricted cash at beginning of period(a) 440     697  
Cash, cash equivalents, and restricted cash at end of period(a) $ 336     $ 323  
Supplemental disclosure of cash flow information:      
Interest paid 292     260  
Income taxes paid 12     10  
  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 June 30, 2018   Three Months Ended June 30, 2017
  Towers   Fiber   Other   Consolidated Total   Towers   Fiber   Other   Consolidated Total
Segment site rental revenues $ 771     $ 398         $ 1,169     $ 718     $ 151         $ 869  
Segment network services and other revenue 158     3         161     158     11         169  
Segment revenues 929     401         1,330     876     162         1,038  
Segment site rental cost of operations 216     130         346     211     52         263  
Segment network services and other cost of operations 94     3         97     96     8         104  
Segment cost of operations(a) 310     133         443     307     60         367  
Segment site rental gross margin(b) 555     268         823     507     99         606  
Segment network services and other gross margin(b) 64             64     62     3         65  
Segment general and administrative expenses(a) 27     44         71     23     19         42  
Segment operating profit(b) 592     224         816     546     83         629  
Other general and administrative expenses(a)         $ 47     47             $ 41     41  
Stock-based compensation expense         26     26             17     17  
Depreciation, amortization and accretion         379     379             296     296  
Interest expense and amortization of deferred financing costs         158     158             142     142  
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(c)         21     21             16     16  
Income (loss) from continuing operations before income taxes             $ 185                 $ 117  
  1. Segment cost of operations excludes (1) stock-based compensation expense of $6 million and $2 million for the three months ended June 30, 2018 and 2017, respectively and (2) prepaid lease purchase price adjustments of $5 million for both of the three months ended June 30, 2018 and 2017.  General and administrative expenses exclude stock-based compensation expense of $20 million and $15 million for the three months ended June 30, 2018 and 2017, respectively.
  2. 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.
  3. See condensed consolidated statement of operations for further information.
SEGMENT OPERATING RESULTS
  Six Months Ended June 30, 2018   Six Months Ended June 30, 2017
  Towers   Fiber   Other   Consolidated Total   Towers   Fiber   Other   Consolidated Total
Segment site rental revenues $ 1,536     $ 787         $ 2,323     $ 1,434     $ 292         $ 1,726  
Segment network services and other revenue 300     7         307     308     20         328  
Segment revenues 1,836     794         2,630     1,742     312         2,054  
Segment site rental cost of operations 427     256         683     420     99         519  
Segment network services and other cost of operations 176     5         181     185     17         202  
Segment cost of operations(a) 603     261         864     605     116         721  
Segment site rental gross margin(b) 1,109     531         1,640     1,014     193         1,207  
Segment network services and other gross margin(b) 124     2         126     123     3         126  
Segment general and administrative expenses(a) 53     87         140     47     36         83  
Segment operating profit(b) 1,180     446         1,626     1,090     160         1,250  
Other general and administrative expenses(a)         $ 94     94             $ 80     80  
Stock-based compensation expense         52     52             42     42  
Depreciation, amortization and accretion         753     753             584     584  
Interest expense and amortization of deferred financing costs         318     318             276     276  
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(c)         106     106             28     28  
Income (loss) from continuing operations before income taxes             $ 303                 $ 240  
  1. Segment cost of operations excludes (1) stock-based compensation expense of $13 million and $6 million for the six months ended June 30, 2018 and 2017, respectively and (2) prepaid lease purchase price adjustments of $10 million for both of the six months ended June 30, 2018 and 2017.  General and administrative expenses exclude stock-based compensation expense of $39 million and $36 million for the six months ended June 30, 2018 and 2017, respectively.
  2. 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.
  3. See condensed consolidated statement of operations for further information.
 Contacts: Dan Schlanger, CFO and Treasurer
  Ben Lowe, VP Corporate Finance
  Crown Castle International Corp.
  713-570-3050

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Source: Crown Castle International Corporation