|View printer-friendly version|
|Crown Castle Reports Third Quarter 2016 Results, Provides Outlook for Full Year 2017 and Announces Increase to Common Stock Dividend|
"Our business continues to grow at a healthy pace as U.S. wireless carriers further invest to enhance the consumer mobile experience," stated Jay Brown, Crown Castle’s Chief Executive Officer. "Driven by the continued adoption and introduction of data-intensive applications and consistent with many industry forecasts, we believe over the next decade there will be tremendous growth in wireless data traffic that will necessitate further investment in wireless networks, which we expect will result in revenue and cash flow growth for Crown Castle. Today, as a result of our investments over the last several years to acquire towers and deploy small cells, we have the leading portfolio of U.S. wireless infrastructure, which we expect will continue to generate significant incremental returns. Consistent with the growth we are seeing in our business, we are increasing our quarterly stock dividend by 7% to
HIGHLIGHTS FROM THE QUARTER
"Our excellent third quarter results allowed us to increase our full year 2016 Outlook, setting the stage for expected continued growth in 2017," stated Dan Schlanger, Crown Castle's Chief Financial Officer. "We expect the healthy leasing environment from 2016 to continue into 2017 as the wireless carriers continue to upgrade and enhance their networks to meet increasing demand for wireless connectivity. This leasing backdrop combined with the strength of our business model, the quality of our assets and the strength of our balance sheet give us the confidence to increase our dividend and provide us with opportunities to continue to invest in our business to drive long-term growth in AFFO and dividends."
DIVIDEND INCREASE ANNOUNCEMENT
Full Year 2016 Outlook
Full Year 2017 Outlook
An infographic accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/34f28cca-3c9c-49b9-bfec-567ddf46f869
An infographic accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/9c5c9a31-2760-496d-bfe0-f624bad7f7ac
CONFERENCE CALL DETAILS
ABOUT CROWN CASTLE
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. Our definition of FFO is consistent with guidelines from the
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:
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:
Reconciliation of Current Outlook for Adjusted EBITDA:
Reconciliation of Historical FFO and AFFO:
Reconciliation of Current Outlook for FFO and AFFO:
For Comparative Purposes - Reconciliation of Previous Outlook for FFO and AFFO:
The components of changes in site rental revenues for the quarters ended September 30, 2016 and 2015 are as follows:
The components of the changes in site rental revenues for the years ending December 31, 2016 and 2017 are forecasted as follows:
Components of Historical Interest Expense and Amortization of Deferred Financing Costs:
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, 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 and the amount and growth of our dividends, (6) leasing activity, (7) our investments, including in towers and 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) expenses, (14) site rental revenues, (15) site rental cost of operations, (16) site rental gross margin and network services gross margin, (17) net income (loss), (18) Adjusted EBITDA, (19) interest expense and amortization of deferred financing costs, (20) FFO, (21) AFFO, (22) Organic Contribution to Site Rental Revenues and Organic Contribution to Site Rental Revenue growth, (23) our common shares outstanding, including on a diluted basis, and the conversion of our Preferred Stock, 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:
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."