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Crown Castle Reports Second Quarter 2016 Results and Raises Outlook for Full Year 2016

HOUSTON, July 21, 2016 (GLOBE NEWSWIRE) -- Crown Castle International Corp. (NYSE:CCI) ("Crown Castle") today reported results for the quarter ended June 30, 2016.    

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"With the backdrop of a healthy leasing environment, we were able to deliver strong operating and financial results in the second quarter and increase our Outlook for full year 2016," stated Jay Brown, Crown Castle’s Chief Executive Officer. "Our leading position in U.S. wireless infrastructure positions us to continue to benefit as wireless carriers upgrade and enhance their networks to meet increasing demand for wireless connectivity. This increasing demand, coupled with our ability to make investments with attractive returns, gives us confidence in our goal of growing dividends per share by 6% to 7% annually over the next several years."
           
RESULTS FOR THE QUARTER
In response to recent public comments and guidance by the Securities and Exchange Commission ("SEC") regarding the use of certain financial measures, Crown Castle has adjusted the presentation of its quarterly information as set forth in this press release and the supplemental materials referenced below.

The table below sets forth select financial results for the three month period ended June 30, 2016.  For further information, refer to the financial statements and non-GAAP and other calculation reconciliations included in this press release. 

(in millions) Actual Midpoint
Q2 2016
Outlook(b) 
Actual
Compared to
Outlook
Q2 2016  Q2 2015  $ Change  % Change 
Site rental revenues $ 805   $ 737   +$ 68     9 % $ 804     +$ 1  
Site rental gross margin $ 552   $ 500   +$ 52     10 % $ 550     +$ 2  
Net income (loss) $ 86   $ 1,154   -$ 1,068     -93 % $ 99     -$ 13  
Adjusted EBITDA(a) $ 550   $ 521   +$ 29     6 % $ 546     +$ 4  
AFFO(a)(c) $ 392   $ 342   +$ 50     15 % $ 392     +$ 1  
Weighted-average common shares outstanding - diluted   339     334   + 5     1 %   338     + 1  
Note: Figures may not tie due to rounding
(a) See reconciliation of this non-GAAP financial measure to net income (loss) included herein.
(b) As issued on April 21, 2016.
(c) Attributable to CCIC common stockholders.


HIGHLIGHTS FROM THE QUARTER

  • Site rental revenues.  Site rental revenues grew approximately 9%, or $68 million, from second quarter 2015 to second quarter 2016, inclusive of approximately $49 million in Organic Contribution to Site Rental Revenues plus $34 million in contributions from acquisitions and other items, less a $15 million reduction in straight-line revenues.  The $49 million in Organic Contribution to Site Rental Revenues represents approximately 7% growth, comprised of approximately 9.5% growth from new leasing activity and contracted tenant escalations, net of approximately 2.5% from tenant non-renewals. 
  • Net income (loss). Net income (loss) for second quarter 2015 includes approximately $1.0 billion in gains related to the sale of our Australian subsidiary ("CCAL").  Additionally, during second quarter 2016, Crown Castle incurred approximately $11 million in losses on retirement of long-term obligations related to refinancing activities during the quarter.
  • Capital expenditures. Capital expenditures during the quarter were approximately $200 million, comprised of approximately $19 million of land purchases, approximately $19 million of sustaining capital expenditures and approximately $161 million of revenue generating capital expenditures.
  • Common stock dividend.  During the quarter, Crown Castle paid common stock dividends of approximately $299 million in the aggregate, or $0.885 per common share, representing an increase of 8% from the quarterly common stock dividend paid per share in second quarter 2015.
  • Financing activities.  During the quarter, Crown Castle issued $1.0 billion in aggregate principal amount of senior unsecured notes, the proceeds of which were used to refinance existing debt.

"In the second quarter, we continued our focus on maintaining a strong balance sheet, as evidenced by our achievement of investment grade credit ratings," stated Dan Schlanger, Crown Castle’s Chief Financial Officer. "Our solid credit profile, underscored by the stability and quality of our cash flows, allows us to both return capital to our shareholders through a significant and growing dividend and invest in growth projects that we believe will generate attractive long-term returns, enhance our long-term growth in dividends per share and reinforce our leadership position in U.S. wireless infrastructure."

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 third quarter 2016 and full year 2016:  

(in millions) Third Quarter 2016 Full Year 2016
Site rental revenues $ 805   to $ 810   $ 3,213   to $ 3,233  
Site rental cost of operations $ 253   to $ 258   $ 1,007   to $ 1,027  
Site rental gross margin $ 549   to $ 554   $ 2,197   to $ 2,217  
Net income (loss) $ 91   to $ 111   $ 318   to $ 358  
Adjusted EBITDA(a) $ 557   to $ 562   $ 2,205   to $ 2,225  
Interest expense and amortization of deferred financing costs(b) $ 127   to $ 132   $ 508   to $ 528  
FFO(a)(d) $ 375   to $ 380   $ 1,421   to $ 1,441  
AFFO(a)(d) $ 400   to $ 405   $ 1,595   to $ 1,615  
Weighted-average common shares outstanding - diluted(c)   339     341  
 
(a) See reconciliation of this non-GAAP financial measure to net income (loss) included herein.
(b) See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
(c) The assumption for third quarter 2016 diluted weighted-average shares outstanding is based on diluted shares outstanding as of June 30, 2016. The assumption for full year 2016 diluted weighted-average shares outstanding is based on (1) diluted shares outstanding as of June 30, 2016 and (2) the assumed conversion of the mandatory convertible preferred stock in November 2016. 
(d) Attributable to CCIC common stockholders.


Full Year 2016 Outlook 

The table below compares the results for full year 2015, the midpoint of the current full year 2016 Outlook and the midpoint of the previously provided full year 2016 Outlook for select metrics:

   Midpoint of FY 2016 Outlook to FY 2015
Actual Comparison
Previous
Full Year
2016
Outlook(b)
Current
Compared
to Previous
Outlook
($ in millions) Current
Full Year
2016
Outlook
Full Year
2015
Actual
$ Change % Change
Site rental revenues $ 3,223   $ 3,018   +$ 205     +7 % $ 3,220   +$ 3  
Site rental gross margin $ 2,207   $ 2,055   +$ 152     +7 % $ 2,204   +$ 3  
Net income (loss) $ 338   $ 1,524   -$ 1,186     -78 % $ 375   -$ 37  
Adjusted EBITDA(a) $ 2,215   $ 2,119   +$ 96     +5 % $ 2,206   +$ 9  
AFFO(a)(d) $ 1,605   $ 1,437   +$ 168     +12 % $ 1,598   +$ 7  
Weighted-average common shares outstanding - diluted(c)   341     334    + 7     +2 %   340    + 1  
 
(a) See reconciliation of this non-GAAP financial measure to net income (loss) included herein.
(b) As issued on April 21, 2016.
(c) The assumption for full year 2016 diluted weighted-average shares outstanding is based on (1) diluted shares outstanding as of June 30, 2016 and (2) the assumed conversion of the mandatory convertible preferred stock in November 2016.
(d) Attributable to CCIC common stockholders.


  • The chart below reconciles the components of expected growth, at the midpoint, from 2015 to 2016 in site rental revenues of $205 million, including expected Organic Contribution to Site Rental Revenues of approximately $185 million.

    An infographic accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/33125a81-4d9d-46ad-a136-4f0181ac7367 

  • The expected decrease in net income from 2015 to 2016, at the midpoint, is primarily attributable to the previously referenced sale of CCAL, which generated gains of approximately $1.0 billion during 2015.

  • The chart below reconciles the components of expected growth in AFFO from 2015 to 2016 of approximately $168 million at the midpoint.

    An infographic accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/0cad4ca1-6cbe-4092-a35a-fa150d4dd787 

  • Additional information regarding Crown Castle's expectations for site rental revenue growth, including tenant non-renewals, 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 Friday, July 22, 2016, at 10:30 a.m. Eastern time.  The conference call may be accessed by dialing 888-218-8170 and asking for the Crown Castle call (access code 5264915) 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 Friday, July 22, 2016, through 1:30 p.m. Eastern time on Thursday, October 20, 2016 and may be accessed by dialing 888-203-1112 and using access code 5264915.  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 provides wireless carriers with the infrastructure they need to keep people connected and businesses running. With approximately 40,000 towers and 17,000 miles of fiber supporting small cells, Crown Castle is the nation's largest provider of shared wireless infrastructure with a significant presence in the top 100 US markets.  For more information on Crown Castle, please visit www.crowncastle.com.


Non-GAAP Financial 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, Organic Contribution to Site Rental Revenues, Segment Site Rental Gross Margin, Segment Network Services and Other Gross Margin and Segment Operating Profit, may not be comparable to similarly titled measures of other companies, including other companies in the tower sector or other REITs.  For periods prior to our REIT conversion, our FFO may not be comparable to FFO as defined by the National Association of Real Estate Investment Trusts as a result of the impact of income taxes.

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 excluding 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 REITs.  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 they include (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 exclude the impact of our (1) asset base (primarily depreciation, amortization and accretion) and (2) 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 the Company 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 the Company.  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.

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.

We define our non-GAAP financial measures and other measures as follows:

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-line expense, stock-based compensation expense, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, gain (loss) on retirement of long-term obligations, net gain (loss) on interest rate swaps, gains (losses) on foreign currency swaps, acquisition and integration costs, and adjustments for noncontrolling interests, and less capital improvement capital expenditures and corporate capital expenditures.

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.

Discretionary capital expenditures.  We define discretionary capital expenditures as those capital expenditures made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They consist of (1) improvements to existing wireless infrastructure and construction of new wireless infrastructure (collectively referred to as "revenue generating") and (2) purchases of land assets under towers as we seek to manage our interests in the land beneath our towers.

Sustaining capital expenditures.  We define sustaining capital expenditures as either (1) corporate related capital improvements, such as buildings, information technology equipment and office equipment or (2) capital improvements to tower sites that enable our customers' ongoing quiet enjoyment of the tower.

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 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 cost of operations.

Segment Operating Profit.  We define Segment Operating Profit as segment revenues less segment cost of operations and segment general and administrative expenses, excluding stock-based compensation expense and prepaid lease purchase price adjustments recorded in cost of operations.

The tables set forth below reconcile the non-GAAP financial measures used herein to comparable GAAP financial measures. The components in these tables may not sum to the total due to rounding.


Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures and Other Calculations:

Reconciliation of Historical Adjusted EBITDA:

  For the Three Months Ended   For the Twelve
Months Ended
  June 30, 2016   June 30, 2015   December 31, 2015
(in millions)          
Net income (loss) $ 86.1     $ 1,154.4     $ 1,524.3  
Adjustments to increase (decrease) net income (loss):          
Income (loss) from discontinued operations     (987.9 )   (999.0 )
Asset write-down charges 12.0     3.6     33.5  
Acquisition and integration costs 3.1     2.4     15.7  
Depreciation, amortization and accretion 276.0     253.2     1,036.2  
Amortization of prepaid lease purchase price adjustments 5.4     5.1     20.5  
Interest expense and amortization of deferred financing costs(a) 129.4     134.5     527.1  
Gains (losses) on retirement of long-term obligations 11.5     4.2     4.2  
Interest income (0.1 )   (0.3 )   (1.9 )
Other income (expense) 0.5     (60.0 )   (57.0 )
Benefit (provision) for income taxes 3.9     (4.1 )   (51.5 )
Stock-based compensation expense 22.0     16.0     67.1  
Adjusted EBITDA(b) $ 549.7     $ 520.9     $ 2,119.2  
                       
(a) See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
(b) 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 2016   Full Year 2016
(in millions) Outlook   Outlook
Net income (loss) $ 91    to $ 111     $ 318   to $ 358  
Adjustments to increase (decrease) net income (loss):              
Asset write-down charges $ 9    to $ 11     $ 35   to $ 45  
Acquisition and integration costs $ 3   to $ 6     $ 14   to $ 19  
Depreciation, amortization and accretion $ 275   to $ 290     $ 1,107   to $ 1,133  
Amortization of prepaid lease purchase price adjustments $ 4   to $ 6     $ 20   to $ 22  
Interest expense and amortization of deferred financing costs(a) $ 127   to $ 132     $ 508   to $ 528  
Gains (losses) on retirement of long-term obligations $ 0   to $ 0     $ 42   to $ 42  
Interest income $ (1 ) to $ 0     $ (1 ) to $ 0  
Other income (expense) $ (1 ) to $ 2     $ 4   to $ 6  
Benefit (provision) for income taxes $ 3   to $ 7     $ 15   to $ 23  
Stock-based compensation expense $ 21   to $ 23     $ 93   to $ 98  
Adjusted EBITDA(b) $ 557   to $ 562     $ 2,205   to $ 2,225  
                               
(a) See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
(b) 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, 2016   June 30, 2015   June 30, 2016   June 30, 2015   December 31, 2015
Net income(a) $ 86.1     $ 166.5     $ 133.9     $ 278.3     $ 525.3  
Real estate related depreciation, amortization and accretion 269.4     248.9     540.9     496.5     1,018.3  
Asset write-down charges 12.0     3.6     19.9     12.2     33.5  
Dividends on preferred stock (11.0 )   (11.0 )   (22.0 )   (22.0 )   (44.0 )
FFO(b)(c)(d)(e)(f) $ 356.4     $ 408.1     $ 672.7     $ 765.0     $ 1,533.1  
                   
FFO (from above) $ 356.4     $ 408.1     $ 672.7     $ 765.0     $ 1,533.1  
Adjustments to increase (decrease) FFO:                  
Straight-lined revenue (16.2 )   (31.3 )   (33.5 )   (61.9 )   (111.3 )
Straight-lined expense 23.9     25.0     47.6     49.6     98.7  
Stock-based compensation expense 22.0     16.0     52.7     32.8     67.1  
Non-cash portion of tax provision     (10.8 )   1.7     (14.4 )   (63.9 )
Non-real estate related depreciation, amortization and accretion 6.6     4.2     13.0     8.4     17.9  
Amortization of non-cash interest expense 3.8     12.1     8.0     23.8     37.1  
Other (income) expense 0.5     (60.0 )   3.8     (59.7 )   (57.0 )
Gains (losses) on retirement of long-term obligations 11.5     4.2     42.0     4.2     4.2  
Acquisition and integration costs 3.1     2.4     8.8     4.4     15.7  
Capital improvement capital expenditures (8.9 )   (10.7 )   (15.3 )   (18.2 )   (46.8 )
Corporate capital expenditures (10.2 )   (16.8 )   (13.9 )   (26.0 )   (58.1 )
AFFO(b)(c)(d)(e)(f) $ 392.5     $ 342.4     $ 787.6     $ 708.1     $ 1,436.6  
                                       
(a) Exclusive of income (loss) from discontinued operations and related noncontrolling interest of $988 million, $1.0 billion and $1.0 billion for the three months ended June 30, 2015, six months ended June 30, 2015 and twelve months ended December 31, 2015, respectively.
(b) See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO.
(c) FFO and AFFO are reduced by cash paid for preferred stock dividends. 
(d) Diluted weighted-average common shares outstanding were 338.6 million, 333.8 million, 336.7 million, 333.7 million and 334.1 million for the three months ended June 30, 2016 and 2015, the six months ended June 30, 2016 and 2015 and the twelve months ended December 31, 2015.  The diluted weighted-average common shares outstanding assumes no conversion of preferred stock in the share count.
(e) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
(f) Attributable to CCIC common stockholders.


Reconciliation of Current Outlook for FFO and AFFO:

  Q3 2016   Full Year 2016
(in millions) Outlook   Outlook
Net income $ 91   to $ 111     $ 318   to $ 358  
Real estate related depreciation, amortization and accretion $ 269   to $ 282     $ 1,083   to $ 1,104  
Asset write-down charges $ 9   to $ 11     $ 35   to $ 45  
Dividends on preferred stock $ (11 ) to $ (11 )   $ (44 ) to $ (44 )
FFO(a)(b)(c)(d)(e) $ 375   to $ 380     $ 1,421   to $ 1,441  
               
FFO (from above) $ 375   to $ 380     $ 1,421   to $ 1,441  
Adjustments to increase (decrease) FFO:              
Straight-lined revenue $ (13 ) to $ (8 )   $ (56 ) to $ (41 )
Straight-lined expense $ 21   to $ 26     $ 85   to $ 100  
Stock-based compensation expense $ 21   to $ 23     $ 93   to $ 98  
Non-cash portion of tax provision $ 1   to $ 6     $ 3   to $ 18  
Non-real estate related depreciation, amortization and accretion $ 6   to $ 8     $ 24   to $ 29  
Amortization of non-cash interest expense $ 3   to $ 6     $ 12   to $ 18  
Other (income) expense $ (1 ) to $ 2     $ 4   to $ 6  
Gains (losses) on retirement of long-term obligations $ 0   to $ 0     $ 42   to $ 42  
Acquisition and integration costs $ 3   to $ 6     $ 14   to $ 19  
Capital improvement capital expenditures $ (13 ) to $ (11 )   $ (41 ) to $ (36 )
Corporate capital expenditures $ (14 ) to $ (12 )   $ (43 ) to $ (38 )
AFFO(a)(b)(c)(d)(e) $ 400   to $ 405     $ 1,595   to $ 1,615  
                               
(a) The assumption for third quarter 2016 diluted weighted-average shares outstanding is approximately 339 million shares, based on diluted shares outstanding as of June 30, 2016. The assumption for Full year 2016 diluted weighted-average shares outstanding is 341 million, based on (1) diluted shares outstanding as of June 30, 2016 and (2) the assumed conversion of the mandatory convertible preferred stock in November 2016. 
(b) See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO.
(c) FFO and AFFO are reduced by cash paid for preferred stock dividends.
(d) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
(e) Attributable to CCIC common stockholders.


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

  Previously Issued   Previously Issued
  Q2 2016   Full Year 2016
(in millions) Outlook   Outlook
Net income (loss) $ 82   to $ 115     $ 325   to $ 424  
Adjustments to increase (decrease) net income (loss):              
Asset write-down charges $ 9   to $ 11     $ 33   to $ 43  
Acquisition and integration costs $ 3   to $ 6     $ 15   to $ 20  
Depreciation, amortization and accretion $ 270   to $ 275     $ 1,084   to $ 1,104  
Amortization of prepaid lease purchase price adjustments $ 4   to $ 6     $ 20   to $ 22  
Interest expense and amortization of deferred financing costs $ 128   to $ 133     $ 513   to $ 533  
Gains (losses) on retirement of long-term obligations $ 0   to $ 0     $ 31   to $ 31  
Interest income $ (2 ) to $ 0     $ (3 ) to $ (1 )
Other income (expense) $ (5 ) to $ (2 )   $ (8 ) to $ (6 )
Benefit (provision) for income taxes $ 5   to $ 9     $ 16   to $ 24  
Stock-based compensation expense $ 21   to $ 23     $ 93   to $ 98  
Adjusted EBITDA(a) $ 543   to $ 548     $ 2,193   to $ 2,218  
                               
(a) 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 2016   Full Year 2016
(in millions) Outlook   Outlook
Net income $ 82   to $ 115     $ 325   to $ 424  
Real estate related depreciation, amortization and accretion $ 265   to $ 268     $ 1,060   to $ 1,075  
Asset write-down charges $ 9   to $ 11     $ 33   to $ 43  
Dividends on preferred stock $ (11 ) to $ (11 )   $ (44 ) to $ (44 )
FFO(a)(b)(c)(e) $ 363   to $ 368     $ 1,428   to $ 1,453  
               
FFO (from above) $ 363   to $ 368     $ 1,428   to $ 1,453  
Adjustments to increase (decrease) FFO:              
Straight-line revenue $ (20 ) to $ (15 )   $ (54 ) to $ (39 )
Straight-line expense $ 21   to $ 26     $ 84   to $ 99  
Stock-based compensation expense $ 21   to $ 23     $ 93   to $ 98  
Non-cash portion of tax provision $ 0   to $ 5     $ 4   to $ 19  
Non-real estate related depreciation, amortization and accretion $ 5   to $ 7     $ 24   to $ 29  
Amortization of non-cash interest expense $ 3   to $ 6     $ 14   to $ 20  
Other (income) expense $ (5 ) to $ (2 )   $ (8 ) to $ (6 )
Gains (losses) on retirement of long-term obligations $ 0   to $ 0     $ 31   to $ 31  
Acquisition and integration costs $ 3   to $ 6     $ 15   to $ 20  
Capital improvement capital expenditures $ (7 ) to $ (5 )   $ (46 ) to $ (41 )
Corporate capital expenditures $ (11 ) to $ (9 )   $ (34 ) to $ (29 )
AFFO(a)(b)(c)(e) $ 389   to $ 394     $ 1,585   to $ 1,610  
                               
(a) Previously issued second quarter 2016 outlook assumes diluted shares outstanding as of March 31, 2016 of approximately 338 million shares. Previously issued full year 2016 outlook assumes diluted shares outstanding of approximately 340 million shares, inclusive of the assumed conversion of the mandatory convertible preferred stock in November 2016.
(b) See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO.
(c) FFO and AFFO are reduced by cash paid for preferred stock dividends.
(d) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
(e) Attributable to CCIC common stockholders.


The components of changes in site rental revenues for the quarters ended June 30, 2016 and 2015 are as follows:

  Three Months Ended June 30,
(in millions) 2016   2015
Components of changes in site rental revenues(f):      
Prior year site rental revenues exclusive of straight-line associated with fixed escalators(a)(c) $ 706     $ 661  
       
New leasing activity(a)(c) 44     43  
Escalators 23     22  
Non-renewals (18 )   (26 )
Organic Contribution to Site Rental Revenues(d) 49     39  
Straight-lined revenues associated with fixed escalators 16     31  
Acquisitions and builds(b) 34     6  
Other      
Total GAAP site rental revenues $ 805     $ 737  
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues 9.2 %    
Organic Contribution to Site Rental Revenues(d)(e) 6.9 %    
         
(a) Includes revenues from amortization of prepaid rent in accordance with GAAP.
(b) The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build.
(c) Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators.
(d) See "Non-GAAP Financial Measures and Other Calculations" herein.
(e) Calculated as the percentage change from prior year site rental revenues exclusive of straight-line associated with fixed escalations compared to Organic Contribution to Site Rental Revenues for the current period.
(f) Additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website. 


The components of the changes in site rental revenues for the year ending December 31, 2016 is forecasted as follows:

  Midpoint of Full
Year
   
(in millions) 2016 Outlook   Full Year 2015
Components of changes in site rental revenues(f):      
Prior year site rental revenues exclusive of straight-line associated with fixed escalators(a)(c) $ 2,907     $ 2,678  
       
New leasing activity(a)(c) 170     171  
Escalators 89     91  
Non-renewals (77 )   (96 )
Organic Contribution to Site Rental Revenues(d) 182     166  
Straight-lined revenues associated with fixed escalators 48     111  
Acquisitions and builds(b) 86     63  
Other      
Total GAAP site rental revenues $ 3,223     $ 3,018  
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues 6.8 %    
Organic Contribution to Site Rental Revenues(d)(e) 6.3 %    
 
(a) Includes revenues from amortization of prepaid rent in accordance with GAAP.
(b) The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build.
(c) Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators.
(d) See "Non-GAAP Financial Measures and Other Calculations" herein.
(e) Calculated as the percentage change from prior year site rental revenues exclusive of straight-lined associated with fixed escalations compared to Organic Contribution to Site Rental Revenues for the current period.
(f) Additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website. 


Components of Historical Interest Expense and Amortization of Deferred Financing Costs:

  For the Three Months Ended
(in millions) June 30, 2016   June 30, 2015
Interest expense on debt obligations $ 125.6     $ 122.4  
Amortization of deferred financing costs and adjustments on long-term debt, net 4.8     5.2  
Amortization of interest rate swaps(a)     7.5  
Other, net (1.0 )   (0.6 )
Interest expense and amortization of deferred financing costs $ 129.4     $ 134.5  
 
(a) Relates to the amortization of interest rate swaps; the swaps were cash settled in prior periods.


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

  Q3 2016   Full Year 2016
(in millions) Outlook   Outlook
Interest expense on debt obligations $ 125   to $ 127     $ 496   to $ 506  
Amortization of deferred financing costs and adjustments on long-term debt, net $ 4   to $ 6     $ 18   to $ 20  
Other, net $ (1 ) to $ (1 )   $ (5 ) to $ (3 )
Interest expense and amortization of deferred financing costs $ 127   to $ 132     $ 508   to $ 528  



Debt balances and maturity dates as of June 30, 2016 are as follows:

(in millions) Face Value   Final Maturity
Revolver $ 435.0     Jan. 2021
Senior Unsecured Term Loan A 1,987.5     Jan. 2021
3.400% Senior Notes 850.0   Feb. 2021
4.450% Senior Notes 900.0   Feb. 2026
3.700% Senior Notes 750.0   June 2026
4.875% Senior Notes 850.0   Apr. 2022
5.25% Senior Notes 1,650.0   Jan. 2023
2.381% Secured Notes 500.0   Dec. 2017
3.849% Secured Notes 1,000.0   Apr.  2023
Senior Secured Notes, Series 2009-1(a) 62.0   Aug. 2019
Senior Secured Notes, Series 2009-2(a) 70.0   Aug. 2029
Senior Secured Tower Revenue Notes, Series 2010-3(b) 1,250.0   Jan. 2040
Senior Secured Tower Revenue Notes, Series 2010-6(b) 1,000.0   Aug. 2040
Senior Secured Tower Revenue Notes, Series 2015-1(b) 300.0   May 2042
Senior Secured Tower Revenue Notes, Series 2015-2(b) 700.0   May 2045
Capital Leases and Other Obligations 216.2   Various
Total Debt $ 12,520.6      
Less: Cash and Cash Equivalents(c) $ 202.3      
Net Debt $ 12,318.3      
           
(a) The Senior Secured Notes, Series 2009-1 principal amortizes during the period beginning January 2010 and ending in 2019 and the Senior Secured Notes, 2009-2 principal amortizes during the period beginning in 2019 and ending in 2029.
(b) The Senior Secured Tower Revenue Notes, Series 2010-3 and 2010-6 have anticipated repayment dates in 2020.  The Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 have anticipated repayment dates in 2022 and 2025, respectively.
(c) Excludes restricted cash.


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

(in millions) For the Three Months Ended
June 30, 2016
Total face value of debt $ 12,520.6  
Ending cash and cash equivalents(a) 202.3  
Total Net Debt $ 12,318.3  
   
Adjusted EBITDA for the three months ended June 30, 2016 $ 549.7  
Last quarter annualized adjusted EBITDA 2,198.7  
Net Debt to Last Quarter Annualized Adjusted EBITDA 5.6 x
(a) Excludes restricted cash.


Components of Capital Expenditures:

  For the Three Months Ended
(in millions) June 30, 2016   June 30, 2015
  Towers Small Cells Other Total   Towers Small Cells Other Total
Discretionary:                  
Purchases of land interests $ 19.1   $   $   $ 19.1     $ 28.3   $   $   $ 28.3  
Wireless infrastructure construction and improvements 75.9   85.4     161.3     110.5   53.0     163.5  
Sustaining:                  
Capital improvement and corporate 9.1   2.1   7.9   19.1     19.1   2.3   6.0   27.4  
Total $ 104.1   $ 87.5   $ 7.9   $ 199.5     $ 157.9   $ 55.3   $ 6.0   $ 219.2  


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 and shareholder value which may be derived from our business, assets, investments, dividends and acquisitions, including on a long-term basis, (2) our strategy and strategic position and strength of our business, (3) carrier network investments and upgrades, and the benefits which may be derived therefrom, (4) demand for wireless connectivity and the benefits which may be derived therefrom, (5) our dividends, including our dividend plans, the amount and growth of our dividends, (6) leasing activity,  (7) our investments, including in small cells, and the potential growth, returns and benefits therefrom, (8) demand for our wireless infrastructure and services, (9) our growth and long-term prospects, (10) tenant non-renewals, including the impact and timing thereof, (11) capital expenditures, including sustaining capital expenditures, (12) straight-line adjustments, (13) tower acquisitions and builds, (14) expenses, (15) site rental revenues, (16) site rental cost of operations, (17) site rental gross margin and network services gross margin, (18) cash flows, (19) net income (loss), (20) Adjusted EBITDA, (21) interest expense and amortization of deferred financing costs, (22) FFO, (23) AFFO, (24) Organic Contribution to Site Rental Revenues and Organic Contribution to Site Rental Revenue growth, (25) our common shares outstanding, including on a diluted basis, 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 wireless infrastructure, driven primarily by demand for wireless connectivity, and we may be adversely affected by any slowdown in such demand.  Additionally, a reduction in carrier network investment may materially and adversely affect our business (including reducing demand for new tenant additions and network services).
  • A substantial portion of our revenues is derived from a small number of customers, and the loss, consolidation or financial instability of any of our limited number of customers may materially decrease revenues or reduce demand for our wireless infrastructure and network services.
  • The business model for our small cell operations contains differences from our traditional site rental business, resulting in different operational risks.  If we do not successfully operate that business model or identify or manage those operational risks, such operations may produce results that are less than anticipated.
  • Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments and 4.50% 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 may adversely affect the market price of our common stock.
  • As a result of competition in our industry, we may find it more difficult to achieve favorable rental rates on our new or renewing tenant leases.
  • New technologies may reduce demand for our wireless infrastructure or negatively impact our revenues.
  • The expansion and development of our business, including through acquisitions, increased product offerings or other strategic growth opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations or financial results.
  • If we fail to retain rights to our wireless infrastructure, including the land interests under our towers, our business may be adversely affected.
  • Our network services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
  • New wireless technologies may not deploy or be adopted by customers as rapidly or in the manner projected.
  • If we fail to comply with laws and regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.
  • If radio frequency emissions from wireless handsets or equipment on our wireless infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues.
  • Certain provisions of our restated certificate of incorporation, amended and restated by-laws and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders.
  • We may be vulnerable to security breaches that could adversely affect our business, operations, and reputation.
  • 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 US Internal Revenue Code.  Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, which would reduce our available cash.
  • Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives.
  • If we fail to pay scheduled dividends on the 4.50% 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.
  • We have limited experience operating as a REIT. Our failure to successfully operate as a REIT may adversely affect our financial condition, cash flow, the per share trading price of our common stock, or our ability to satisfy debt service obligations.
  • 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)
(in thousands, except share amounts)

 
  June 30,
 2016
  December 31,
 2015
       
ASSETS      
Current assets:      
Cash and cash equivalents $ 202,338     $ 178,810  
Restricted cash 132,119     130,731  
Receivables, net 229,015     313,296  
Prepaid expenses 145,205     133,194  
Other current assets 116,114     225,214  
Total current assets 824,791     981,245  
Deferred site rental receivables 1,333,790     1,306,408  
Property and equipment, net 9,670,358     9,580,057  
Goodwill 5,744,681     5,513,551  
Other intangible assets, net 3,779,957     3,779,915  
Long-term prepaid rent and other assets, net 806,673     775,790  
Total assets $ 22,160,250     $ 21,936,966  
       
LIABILITIES AND EQUITY      
Current liabilities:      
Accounts payable $ 143,082     $ 159,629  
Accrued interest 96,939     66,975  
Deferred revenues 364,010     322,623  
Other accrued liabilities 178,764     199,923  
Current maturities of debt and other obligations 100,345     106,219  
Total current liabilities 883,140     855,369  
Debt and other long-term obligations 12,325,859     12,043,740  
Other long-term liabilities 2,002,944     1,948,636  
Total liabilities 15,211,943     14,847,745  
Commitments and contingencies      
CCIC stockholders' equity:      
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: June 30, 2016—337,562,378 and December 31, 2015—333,771,660 3,375     3,338  
4.50% Mandatory Convertible Preferred Stock, Series A, $.01 par value; 20,000,000 shares authorized; shares issued and outstanding: June 30, 2016 and December 31, 2015—9,775,000; aggregate liquidation value: June 30, 2016 and December 31, 2015—$977,500 98     98  
Additional paid-in capital 9,894,921     9,548,580  
Accumulated other comprehensive income (loss) (4,006 )   (4,398 )
Dividends/distributions in excess of earnings (2,946,081 )   (2,458,397 )
Total equity 6,948,307     7,089,221  
Total liabilities and equity $ 22,160,250     $ 21,936,966  



CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(in thousands, except share and per share amounts)
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2016   2015   2016   2015
Net revenues:              
Site rental $ 804,600     $ 737,091     $ 1,603,893     $ 1,468,471  
Network services and other 157,809     162,346     292,899     331,437  
Net revenues 962,409     899,437     1,896,792     1,799,908  
Operating expenses:              
Costs of operations (exclusive of depreciation, amortization and accretion):              
Site rental 252,852     237,031     505,472     469,244  
Network services and other 95,867     89,400     176,838     176,318  
General and administrative 91,386     73,125     188,967     147,181  
Asset write-down charges 11,952     3,620     19,912     12,175  
Acquisition and integration costs 3,141     2,377     8,779     4,393  
Depreciation, amortization and accretion 276,026     253,153     553,901     504,959  
Total operating expenses 731,224     658,706     1,453,869     1,314,270  
Operating income (loss) 231,185     240,731     442,923     485,638  
Interest expense and amortization of deferred financing costs (129,362 )   (134,466 )   (255,740 )   (268,905 )
Gains (losses) on retirement of long-term obligations (11,468 )   (4,181 )   (42,017 )   (4,157 )
Interest income 105     325     279     381  
Other income (expense) (518 )   59,973     (3,791 )   59,724  
Income (loss) from continuing operations before income taxes 89,942     162,382     141,654     272,681  
Benefit (provision) for income taxes (3,884 )   4,144     (7,756 )   5,579  
Income (loss) from continuing operations 86,058     166,526     133,898     278,260  
Discontinued operations:              
Income (loss) from discontinued operations, net of tax     987,852         1,001,230  
Net income (loss) 86,058     1,154,378     133,898     1,279,490  
Less: Net income (loss) attributable to the noncontrolling interest     1,018         3,343  
Net income (loss) attributable to CCIC stockholders 86,058     1,153,360     133,898     1,276,147  
Dividends on preferred stock (10,997 )   (10,997 )   (21,994 )   (21,994 )
Net income (loss) attributable to CCIC common stockholders $ 75,061     $ 1,142,363     $ 111,904     $ 1,254,153  
               
Net income (loss) attributable to CCIC common stockholders, per common share:              
Income (loss) from continuing operations, basic $ 0.22     $ 0.47     $ 0.33     $ 0.77  
Income (loss) from discontinued operations, basic $     $ 2.96     $     $ 3.00  
Net income (loss) attributable to CCIC common stockholders, basic $ 0.22     $ 3.43     $ 0.33     $ 3.77  
Income (loss) from continuing operations, diluted $ 0.22     $ 0.47     $ 0.33     $ 0.77  
Income (loss) from discontinued operations, diluted $     $ 2.95     $     $ 2.99  
Net income (loss) attributable to CCIC common stockholders, diluted $ 0.22     $ 3.42     $ 0.33     $ 3.76  
               
Weighted-average common shares outstanding (in thousands):              
Basic 337,560     333,091     335,857     332,902  
Diluted 338,609     333,773     336,658     333,665  



CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
  Six Months Ended June 30,  
  2016   2015  
Cash flows from operating activities:        
Net income (loss) from continuing operations $ 133,898     $ 278,260    
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities:        
Depreciation, amortization and accretion 553,901     504,959    
Gains (losses) on retirement of long-term obligations 42,017     4,157    
Gains (losses) on settled swaps 2,608     (54,475 )  
Amortization of deferred financing costs and other non-cash interest 7,993     23,804    
Stock-based compensation expense 40,135     30,131    
Asset write-down charges 19,912     12,175    
Deferred income tax benefit (provision) 3,947     (10,170 )  
Other adjustments, net (936 )   (6,328 )  
Changes in assets and liabilities, excluding the effects of acquisitions:        
Increase (decrease) in liabilities 91,321     131,661    
Decrease (increase) in assets 23,385     4,704    
Net cash provided by (used for) operating activities 918,181     918,878    
Cash flows from investing activities:        
Payments for acquisition of businesses, net of cash acquired (493,932 )   (64,725 )  
Capital expenditures (392,997 )   (420,883 )  
Net receipts from settled swaps 8,141     54,475    
Other investing activities, net 1,854     (8,080 )  
Net cash provided by (used for) investing activities (876,934 )   (439,213 )  
Cash flows from financing activities:        
Proceeds from issuance of long-term debt 4,501,206     1,000,000    
Principal payments on debt and other long-term obligations (43,838 )   (53,718 )  
Purchases and redemptions of long-term debt (3,536,362 )   (1,069,337 )  
Borrowings under revolving credit facility 3,030,000     450,000    
Payments under revolving credit facility (3,720,000 )   (1,145,000 )  
Payments for financing costs (35,604 )   (16,348 )  
Net proceeds from issuance of capital stock 323,798        
Purchases of capital stock (24,460 )   (29,490 )  
Dividends/distributions paid on common stock (597,846 )   (547,371 )  
Dividends paid on preferred stock (21,994 )   (21,994 )  
Net (increase) decrease in restricted cash (6,089 )   9,093    
Net cash provided by (used for) financing activities (131,189 )   (1,424,165 )  
Net increase (decrease) in cash and cash equivalents - continuing operations (89,942 )   (944,500 )  
Discontinued operations:        
Net cash provided by (used for) operating activities     4,881    
Net cash provided by (used for) investing activities 113,150     1,103,577    
Net increase (decrease) in cash and cash equivalents - discontinued operations 113,150     1,108,458    
Effect of exchange rate changes 320     (969 )  
Cash and cash equivalents at beginning of period 178,810     175,620   (a)
Cash and cash equivalents at end of period $ 202,338     $ 338,609    
Supplemental disclosure of cash flow information:        
Interest paid 217,783     244,977    
Income taxes paid 10,186     8,489    
             
______________________            
(a) Inclusive of cash and cash equivalents included in discontinued operations.            



CROWN CASTLE INTERNATIONAL CORP.
SEGMENT OPERATING RESULTS (UNAUDITED)
(in thousands)
 
SEGMENT OPERATING RESULTS
  Three Months Ended June 30, 2016   Three Months Ended June 30, 2015
  Towers   Small Cells   Other   Consolidated Total   Towers   Small Cells   Other   Consolidated Total
Segment site rental revenues $ 705,716     $ 98,884         $ 804,600     $ 678,306     $ 58,785         $ 737,091  
Segment network services and other revenue 142,053     15,756         157,809     150,732     11,614         162,346  
Segment revenues 847,769     114,640         962,409     829,038     70,399         899,437  
Segment site rental cost of operations 210,444     34,165         244,609     207,037     22,856         229,893  
Segment network services and other cost of operations 81,922     12,423         94,345     77,671     10,367         88,038  
Segment cost of operations(a) 292,366     46,588         338,954     284,708     33,223         317,931  
Segment site rental gross margin(b) 495,272     64,719         559,991     471,269     35,929         507,198  
Segment network services and other gross margin(b) 60,131     3,333         63,464     73,061     1,247         74,308  
Segment general and administrative expenses(a) 22,505     15,718     35,563     73,786     22,529     7,910     30,141     60,580  
Segment operating profit(b) 532,898     52,334     (35,563 )   549,669     521,801     29,266     (30,141 )   520,926  
Stock-based compensation expense         21,998     21,998             15,975     15,975  
Depreciation, amortization and accretion         276,026     276,026             253,153     253,153  
Interest expense and amortization of deferred financing costs         129,362     129,362             134,466     134,466  
Other (income) expenses to reconcile to income (loss) from continuing operations before income taxes(c)         32,341     32,341             (45,050 )   (45,050 )
Income (loss) from continuing operations before income taxes             $ 89,942                 $ 162,382  
                                       
(a)  Segment cost of operations exclude (1) stock-based compensation expense of $4.4 million and $3.4 million for the three months ended June 30, 2016 and 2015, respectively and (2) prepaid lease purchase price adjustments of $5.4 million and $5.1 million for the three months ended June 30, 2016 and 2015, respectively.  Segment general and administrative expenses exclude stock-based compensation expense of $17.6 million and $12.5 million for the three months ended June 30, 2016 and 2015, respectively. 
(b)  See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion of our definitions of segment site rental gross margin, segment network service and other gross margin and segment operating profit.
(c)  Other (income) expenses to reconcile to income (loss) from continuing operations before income taxes includes losses on retirement of long-term obligations of approximately $11.5 million and a gain on swaps of approximately $59.8 million for the three months ended June 30, 2016 and 2015, respectively.




SEGMENT OPERATING RESULTS
  Six Months Ended June 30, 2016   Six Months Ended June 30, 2015
  Towers   Small Cells   Other   Consolidated Total   Towers   Small Cells   Other   Consolidated Total
Segment site rental revenues $ 1,408,555     $ 195,338         $ 1,603,893     $ 1,353,213     $ 115,258         $ 1,468,471  
Segment network services and other revenue 267,063     25,836         292,899     307,117     24,320         331,437  
Segment revenues 1,675,618     221,174         1,896,792     1,660,330     139,578         1,799,908  
Segment site rental cost of operations 415,009     71,648         486,657     411,670     43,369         455,039  
Segment network services and other cost of operations 151,911     20,458         172,369     153,862     19,821         173,683  
Segment cost of operations(a) 566,920     92,106         659,026     565,532     63,190         628,722  
Segment site rental gross margin(b) 993,546     123,690         1,117,236     941,543     71,889         1,013,432  
Segment network services and other gross margin(b) 115,152     5,378         120,530     153,255     4,499         157,754  
Segment general and administrative expenses(a) 46,104     31,240     71,635     148,979     45,251     15,470     60,240     120,961  
Segment operating profit(b) 1,062,594     97,828     (71,635 )   1,088,787     1,049,547     60,918     (60,240 )   1,050,225  
Stock-based compensation expense         52,703     52,703             32,816     32,816  
Depreciation, amortization and accretion         553,901     553,901             504,959     504,959  
Interest expense and amortization of deferred financing costs         255,740     255,740             268,905     268,905  
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(c)         84,789     84,789             (29,136 )   (29,136 )
Income (loss) from continuing operations before income taxes             $ 141,654                 $ 272,681  
                                       
(a)  Segment cost of operations exclude (1) stock-based compensation expense of $12.7 million and $6.6 million for the six months ended June 30, 2016 and 2015, respectively and (2) prepaid lease purchase price adjustments of $10.6 million and $10.2 million for the six months ended June 30, 2016 and 2015, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $40.0 million and $26.2 million for the six months ended June 30, 2016 and 2015, respectively. 
(b)  See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion of our definitions of segment site rental gross margin, segment network service and other gross margin and segment operating profit.
(c)  Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes includes losses on retirement of long-term obligations of approximately $42.0 million and a gain on swaps of approximately $59.8 million for the six months ended June 30, 2016 and 2015, respectively.



Contacts:  Dan Schlanger, CFO
  Son Nguyen, VP - Corporate Finance
  Crown Castle International Corp.
  713-570-3050

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