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Crown Castle Reports Fourth Quarter and Full Year 2016 Results, Raises Outlook for Full Year 2017

HOUSTON, Jan. 25, 2017 (GLOBE NEWSWIRE) -- Crown Castle International Corp. (NYSE:CCI) ("Crown Castle") today reported results for the quarter and year ended December 31, 2016.   

2017 Outlook for Organic Contribution to Site Rental Revenues and Growth in Site Rental Revenues
2017 Outlook for Organic Contribution to Site Rental Revenues and Growth in Site Rental Revenues


2017 Outlook for AFFO Growth
2017 Outlook for AFFO Growth


"Our strong fourth quarter and full year 2016 results and increased Outlook for 2017 demonstrates our continued focus on executing for our customers," stated Jay Brown, Crown Castle’s Chief Executive Officer. "During 2016, we increased our dividends per share by 8%, exceeding our long-term goal of 6% to 7% annual growth. With our recent acquisition of FiberNet, which closed in January, we now own approximately 40,000 towers and over 26,500 route miles of fiber in key metro markets throughout the US. We believe our extensive portfolio of shared wireless infrastructure positions us well to continue to serve our customers’ needs as they seek to upgrade and enhance network quality and capacity to meet increasing demand for wireless connectivity. We believe the expected substantial growth in demand for mobile data over the next several years provides us the opportunity to drive organic growth through higher utilization of our existing assets, while allowing us to deploy capital towards new assets that we expect will enhance long-term growth in our dividends per share."

RESULTS FOR THE QUARTER
The table below sets forth select financial results for the three month period ended December 31, 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 
Q4 2016
Outlook(b)
Actual
Compared to
Outlook
Q4 2016   Q4 2015   $ Change   % Change  
Site rental revenues $ 817   $ 785   +$ 32   4 %   $ 814 +$ 3
Site rental gross margin $ 556   $ 538   +$ 18   3 %   $ 559 -$ 3
Net income (loss) $ 125   $ 141   -$ 16   -11 %   $ 100 +$ 25
Adjusted EBITDA(a) $ 575   $ 540   +$ 35   6 %   $ 569 +$ 6
AFFO(a) $ 406   $ 372   +$ 34   9 %   $ 406 +$ 1
Weighted-average common shares outstanding - diluted 353   334   +19 6 %   346 +7
 
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 October 20, 2016.

HIGHLIGHTS FROM THE QUARTER

  • Site rental revenues. Site rental revenues grew approximately 4%, or $32 million, from fourth quarter 2015 to fourth quarter 2016, inclusive of approximately $39 million in Organic Contribution to Site Rental Revenues plus $10 million in contributions from acquisitions and other items, less a $17 million reduction in straight-line revenues. The $39 million in Organic Contribution to Site Rental Revenues represents approximately 5% growth, comprised of approximately 8% growth from new leasing activity and contracted tenant escalations, net of approximately 3% from tenant non-renewals.
  • Capital expenditures. Capital expenditures during the quarter were approximately $260 million, comprised of approximately $17 million of land purchases, approximately $42 million of sustaining capital expenditures and approximately $201 million of revenue generating capital expenditures.
  • Common stock dividend. During the quarter, Crown Castle paid common stock dividends of approximately $343 million in the aggregate, or $0.95 per common share.
  • Share count. Per share results during fourth quarter and full year 2016 were impacted by 11.4 million shares of common stock issued in November 2016 in contemplation of funding the previously announced acquisition of FPL FiberNet Holdings, LLC and certain other subsidiaries of NextEra Energy, Inc. (collectively, “FiberNet”). The acquisition of FiberNet was completed on January 17, 2017 and did not contribute to results during 2016. The share issuance in November 2016 increased the weighted-average common share outstanding on a diluted basis for fourth quarter and full year 2016 by approximately 7 million shares and 2 million shares, respectively.

RESULTS FOR THE YEAR
The table below sets forth select financial results for the year ended December 31, 2016. For further information, refer to the financial statements and non-GAAP and other calculation reconciliations included in this press release. 

(in millions) Actual
2016   2015   $ Change   % Change
Site rental revenues $ 3,233   $ 3,018   +$ 215   7 %
Site rental gross margin $ 2,210   $ 2,055   +$ 155   8 %
Net income (loss) $ 357   $ 1,524   - $ 1,167   -77 %
Adjusted EBITDA(a) $ 2,228   $ 2,119   +$ 109   5 %
AFFO(a) $ 1,610   $ 1,437   +$ 173   12 %
Weighted-average common shares outstanding - diluted 341   334   +7   2 %
 
Note: Figures may not tie due to rounding
(a) See reconciliation of this non-GAAP financial measure to net income (loss) included herein.

HIGHLIGHTS FROM THE YEAR

  • Site rental revenues. Site rental revenues grew approximately 7%, or $215 million, from full year 2015 to full year 2016, inclusive of approximately $189 million in Organic Contribution to Site Rental Revenues plus $90 million in contributions from acquisitions and other items, less a $64 million reduction in straight-line revenues. The $189 million in Organic Contribution to Site Rental Revenues represents approximately 6% growth, comprised of approximately 9% growth from new leasing activity and contracted tenant escalations, net of approximately 3% from tenant non-renewals.
  • Capital expenditures. Capital expenditures during the year were approximately $874 million, comprised of approximately $75 million of land purchases, approximately $90 million of sustaining capital expenditures and approximately $709 million of revenue generating capital expenditures.
  • Common stock dividend. During the year, Crown Castle paid common stock dividends of approximately $1.2 billion in the aggregate, or $3.605 per common share.

"In addition to generating strong results during 2016, we also enhanced our leading portfolio of wireless infrastructure with the acquisition of Tower Development Corporation and continued expansion of our small cell footprint, including announcing the acquisition of FiberNet and completing the integration of Sunesys," stated Dan Schlanger, Crown Castle's Chief Financial Officer. "During the year, we also made significant progress in increasing our financial flexibility by increasing the average maturity of our debt, lowering our average interest rate and achieving investment grade credit ratings, which reflect the quality and stability of our business and cash flows.  With these accomplishments, together with our position as the leading wireless infrastructure provider in the US, we believe we are well-positioned to continue our track record of delivering on our goal of generating 6% to 7% long-term annual growth in dividends per share."

OUTLOOK
This Outlook section contains forward-looking statements, and actual results may differ materially. Information regarding potential risks which could cause actual results to differ from the forward-looking statements herein is set forth below and in Crown Castle's filings with the SEC.

The following table sets forth Crown Castle's current Outlook for first quarter 2017 and full year 2017:

(in millions) First Quarter 2017    Full Year 2017 
Site rental revenues $ 851   to   $ 856   $ 3,468   to   $ 3,498
Site rental cost of operations $ 263   to   $ 268   $ 1,063   to   $ 1,093
Site rental gross margin $ 586   to   $ 591   $ 2,391   to   $ 2,421
Net income (loss) $ 88   to   $ 108   $ 360   to   $ 410
Adjusted EBITDA(a) $ 575   to   $ 580   $ 2,358   to   $ 2,388
Interest expense and amortization of deferred financing costs(b) $ 132   to   $ 137   $ 540   to   $ 570
FFO(a) $ 395   to   $ 400   $ 1,616   to   $ 1,646
AFFO(a) $ 440   to   $ 445   $ 1,801   to   $ 1,831
Weighted-average common shares outstanding - diluted(c)      361             361     
 
(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 first quarter 2017 and full year 2017 diluted weighted-average common shares outstanding is based on diluted common shares outstanding as of December 31, 2016.

Full Year 2017 Outlook 

The table below compares the results for full year 2016, the midpoint of the current full year 2017 Outlook and the midpoint of the previously provided full year 2017 Outlook for select metrics. 

  Midpoint of FY 2017 Outlook to  FY 2016 Actual Comparison Previous
Full Year
2017
Outlook(b)
Current
Compared
to Previous
Outlook
($ in millions) Current
Full Year
2017
Outlook
Full Year
2016
Actual
$ Change % Change
Site rental revenues $ 3,483   $ 3,233   +$ 250   +8 %   $ 3,329   +$ 154
Site rental gross margin $ 2,406   $ 2,210   +$ 196   +9 %   $ 2,291   +$ 115
Net income (loss) $ 385   $ 357   +$ 28   +8 %   $ 400   -$ 15
Adjusted EBITDA(a) $ 2,373   $ 2,228   +$ 145   +7 %   $ 2,278   +$ 95
AFFO(a) $ 1,816   $ 1,610   +$ 206   +13 %   $ 1,754   +$ 62
Weighted-average common shares outstanding - diluted(c) 361   341    +20   +6 %   350   +11
 
(a) See reconciliation of this non-GAAP financial measure to net income (loss) included herein.
(b) As issued on October 20, 2016.  Represents midpoint of Outlook.
(c) The assumption for full year 2017 diluted weighted-average common shares outstanding is based on diluted common shares outstanding as of December 31, 2016.


  • The increase in full year 2017 Outlook primarily reflects an expected increase in operating results before the acquisition of FiberNet and, separately, the expected contribution from FiberNet, which closed on January 17, 2017, partially offset by expected higher interest expense.
  • The chart below reconciles the components of expected growth from 2016 to 2017 in site rental revenues of $235 million to $265 million, including expected Organic Contribution to Site Rental Revenues of approximately $140 million to $170 million.

An infographic accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/95e717e0-a516-4b73-9fc3-af69561cef71           

  • At the midpoint and compared to the previously provided full year 2017 Outlook, the increases to full year 2017 Outlook for site rental revenues and site rental gross margin of $154 million and $115 million, respectively, include expected contribution to site rental revenues and site rental gross margin of approximately $150 million and approximately $105 million, respectively, from FiberNet.  General and administrative expenses related to FiberNet are expected to be approximately $20 million at the midpoint of full year 2017 Outlook.
  • The chart below reconciles the components of expected growth in AFFO from 2016 to 2017 of approximately $206 million at the midpoint.

An infographic accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/68e476f9-a7d7-4c7d-9350-e4b5906e1571       

  • Network services gross margin contribution for first quarter and full year 2017 is expected to be approximately $57 million to $62 million and $235 million to $255 million, respectively.
  • 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, January 26, 2017, at 10:30 a.m. Eastern time. The conference call may be accessed by dialing 800-475-6881 and asking for the Crown Castle call (access code 3091537) 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, January 26, 2017, through 1:30 p.m. Eastern time on Wednesday, April 26, 2017 and may be accessed by dialing 888-203-1112 and using access code 3091537. 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 26,500 route 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.  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.

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
  December 31,
2016
  December 31,
2015
  December 31,
2016
  December 31,
2015
(in millions)              
Net income (loss) $ 124.7     $ 141.1     $ 357.0     $ 1,524.3  
Adjustments to increase (decrease) net income (loss):              
Income (loss) from discontinued operations     1.7         (999.0 )
Asset write-down charges 6.2     13.8     34.5     33.5  
Acquisition and integration costs 6.0     3.7     17.5     15.7  
Depreciation, amortization and accretion 273.8     269.6     1,108.6     1,036.2  
Amortization of prepaid lease purchase price adjustments 5.3     5.1     21.3     20.5  
Interest expense and amortization of deferred financing costs(a) 129.4     128.3     515.0     527.1  
Gains (losses) on retirement of long-term obligations         52.3     4.2  
Interest income (0.3 )   (0.7 )   (0.8 )   (1.9 )
Other income (expense) 4.2     1.5     8.8     (57.0 )
Benefit (provision) for income taxes 4.1     (42.1 )   16.9     (51.5 )
Stock-based compensation expense 21.2     17.9     96.5     67.1  
Adjusted EBITDA(b) $ 574.6     $ 539.8     $ 2,227.5     $ 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:

  Q1 2017   Full Year 2017
(in millions) Outlook   Outlook
Net income (loss) $ 88
    to   $ 108
  $ 360     to   $ 410
Adjustments to increase (decrease) net income (loss):                              
Asset write-down charges $ 9     to   $ 11   $ 35     to   $ 45
Acquisition and integration costs $ 5     to   $ 8   $ 19     to   $ 24
Depreciation, amortization and accretion $ 288     to   $ 303   $ 1,217     to   $ 1,243
Amortization of prepaid lease purchase price adjustments $ 4     to   $ 6   $ 20     to   $ 22
Interest expense and amortization of deferred financing costs(a) $ 132     to   $ 137   $ 540     to   $ 570
Interest income $ (1 )   to   $ 0   $ (1 )   to   $ 1
Other income (expense) $ (1 )   to   $ 2   $ 2     to   $ 4
Benefit (provision) for income taxes $ 2     to   $ 6   $ 14     to   $ 22
Stock-based compensation expense $ 23     to   $ 25   $ 96     to   $ 101
Adjusted EBITDA(b) $ 575     to   $ 580   $ 2,358     to   $ 2,388
 
(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 Twelve Months Ended
(in millions) December 31,
2016
  December 31,
2015
  December 31,
2016
  December 31,
2015
Net income (loss)(a) $ 124.7     $ 142.7     $ 357.0     $ 525.3  
Real estate related depreciation, amortization and accretion 267.0     264.7     1,082.1     1,018.3  
Asset write-down charges 6.2     13.8     34.5     33.5  
Dividends on preferred stock (11.0 )   (11.0 )   (44.0 )   (44.0 )
FFO(b)(c)(d)(e) $ 386.9     $ 410.3     $ 1,429.5     $ 1,533.1  
               
FFO (from above) $ 386.9     $ 410.3     $ 1,429.5     $ 1,533.1  
Adjustments to increase (decrease) FFO:              
Straight-lined revenue (5.0 )   (22.3 )   (47.4 )   (111.3 )
Straight-lined expense 23.1     24.8     94.2     98.7  
Stock-based compensation expense 21.2     17.9     96.5     67.1  
Non-cash portion of tax provision 2.1     (43.7 )   7.3     (63.9 )
Non-real estate related depreciation, amortization and accretion 6.9     4.8     26.5     17.9  
Amortization of non-cash interest expense 3.0     4.7     14.3     37.1  
Other (income) expense 4.2     1.5     8.8     (57.0 )
Gains (losses) on retirement of long-term obligations         52.3     4.2  
Acquisition and integration costs 6.0     3.7     17.5     15.7  
Capital improvement capital expenditures (17.5 )   (14.3 )   (42.8 )   (46.8 )
Corporate capital expenditures (24.6 )   (15.2 )   (46.9 )   (58.1 )
AFFO(b)(c)(d)(e) $ 406.4     $ 372.2     $ 1,609.9     $ 1,436.6  
 
(a) Exclusive of income (loss) from discontinued operations and related noncontrolling interest of $(1.7) million and $1.0 billion for the three months ended December 31, 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 352.9 million, 334.3 million, 340.9 million and 334.1 million for the three months ended December 31, 2016 and 2015, and the twelve months ended December 31, 2016 and 2015, respectively.  The diluted weighted-average common shares outstanding for the three months ended December 31, 2015 and twelve months ended December 31, 2015 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.


Reconciliation of Current Outlook for FFO and AFFO:

  Q1 2017   Full Year 2017
(in millions) Outlook   Outlook
Net income (loss) $ 88
    to   $ 108     $ 360     to   $ 410  
Real estate related depreciation, amortization and accretion $ 282     to   $ 295     $ 1,193     to   $ 1,214  
Asset write-down charges $ 9     to   $ 11     $ 35     to   $ 45  
FFO(a)(b)(c) $ 395     to   $ 400     $ 1,616     to   $ 1,646  
                                   
FFO (from above) $ 395     to   $ 400     $ 1,616     to   $ 1,646  
Adjustments to increase (decrease) FFO:                                      
Straight-lined revenue $ (4 )   to   $ 1     $ 8     to   $ 23  
Straight-lined expense $ 21     to   $ 26     $ 80     to   $ 95  
Stock-based compensation expense $ 23     to   $ 25     $ 96     to   $ 101  
Non-cash portion of tax provision $ 0     to   $ 5     $ (3 )   to   $ 12  
Non-real estate related depreciation, amortization and accretion $ 6     to   $ 8     $ 24     to   $ 29  
Amortization of non-cash interest expense $ 3     to   $ 6     $ 11     to   $ 17  
Other (income) expense $ (1 )   to   $ 2     $ 2     to   $ 4  
Acquisition and integration costs $ 5     to   $ 8     $ 19     to   $ 24  
Capital improvement capital expenditures $ (16 )   to   $ (11 )   $ (50 )   to   $ (45 )
Corporate capital expenditures $ (7 )   to   $ (2 )   $ (36 )   to   $ (31 )
AFFO(a)(b)(c) $ 440     to   $ 445     $ 1,801     to   $ 1,831  
 
(a) The assumption for first quarter 2017 and full year 2017 diluted weighted-average common shares outstanding is 361 million based on diluted common shares outstanding as of December 31, 2016.
(b) See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO.
(c) 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 Adjusted EBITDA:

  Previously Issued   Previously Issued
  Q4 2016   Full Year 2016
(in millions) Outlook   Outlook
Net income (loss) $ 90   to   $ 110   $ 318   to   $ 338  
Adjustments to increase (decrease) net income (loss):                                
Asset write-down charges $ 9   to   $ 11   $ 37   to   $ 39  
Acquisition and integration costs $ 3   to   $ 6   $ 14   to   $ 17  
Depreciation, amortization and accretion $ 283   to   $ 298   $ 1,123   to   $ 1,138  
Amortization of prepaid lease purchase price adjustments $ 4   to   $ 6   $ 20   to   $ 22  
Interest expense and amortization of deferred financing costs $ 128   to   $ 133   $ 514   to   $ 519  
Gains (losses) on retirement of long-term obligations $ 0   to   $ 0   $ 52   to   $ 52  
Interest income $ (1 ) to   $ 0   $ (2 ) to   $ (1 )
Other income (expense) $ (1 ) to   $ 2   $ 3   to   $ 6  
Benefit (provision) for income taxes $ 4   to   $ 8   $ 18   to   $ 22  
Stock-based compensation expense $ 21   to   $ 23   $ 97   to   $ 99  
Adjusted EBITDA(a) $ 566   to   $ 571   $ 2,219   to   $ 2,224  
 
(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
  Q4 2016   Full Year 2016
(in millions) Outlook   Outlook
Net income (loss) $ 90   to   $ 110     $ 318   to   $ 338  
Real estate related depreciation, amortization and accretion $ 277   to   $ 290     $ 1,097   to   $ 1,110  
Asset write-down charges $ 9   to   $ 11     $ 37   to   $ 39  
Dividends on preferred stock $ (11 ) to   $ (11 )   $ (44 ) to   $ (44 )
FFO(a)(b)(c) $ 383   to   $ 388     $ 1,426   to   $ 1,431  
                   
FFO (from above) $ 383   to   $ 388     $ 1,426   to   $ 1,431  
Adjustments to increase (decrease) FFO:                  
Straight-line revenue $ (8 ) to   $ (3 )   $ (50 ) to   $ (45 )
Straight-line expense $ 20   to   $ 25     $ 90   to   $ 95  
Stock-based compensation expense $ 21   to   $ 23     $ 97   to   $ 99  
Non-cash portion of tax provision $ 2   to   $ 7     $ 9   to   $ 14  
Non-real estate related depreciation, amortization and accretion $ 6   to   $ 8     $ 26   to   $ 28  
Amortization of non-cash interest expense $ 3   to   $ 6     $ 12   to   $ 15  
Other (income) expense $ (1 ) to   $ 2     $ 3   to   $ 6  
Gains (losses) on retirement of long-term obligations $ 0   to   $ 0     $ 52   to   $ 52  
Acquisition and integration costs $ 3   to   $ 6     $ 14   to   $ 17  
Capital improvement capital expenditures $ (20 ) to   $ (15 )   $ (46 ) to   $ (41 )
Corporate capital expenditures $ (20 ) to   $ (15 )   $ (43 ) to   $ (38 )
AFFO(a)(b)(c) $ 403   to   $ 408     $ 1,606   to   $ 1,611  
 
(a) Previously issued fourth quarter 2016 and full year 2016 outlook assumes diluted weighted average common shares outstanding of approximately 346 million shares and 340 million shares, respectively, based on (1) diluted common shares outstanding as of September 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.


The components of changes in site rental revenues for the quarters ended December 31, 2016 and 2015 are as follows:

  Three Months Ended December 31,
(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) $ 763     $ 685  
       
New leasing activity(a)(c) 38     47  
Escalators 22     23  
Non-renewals (21 )   (22 )
Organic Contribution to Site Rental Revenues(d) 39     48  
Straight-lined revenues associated with fixed escalators 5     22  
Acquisitions and builds(b) 10     30  
Other      
Total GAAP site rental revenues $ 817     $ 785  
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues 4.1 %    
Organic Contribution to Site Rental Revenues(d)(e) 5.1 %    
 
(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, 2017 is forecasted as follows:

(in millions) Full Year
2017 Outlook
  Full Year 2016
Components of changes in site rental revenues(g):      
Prior year site rental revenues exclusive of straight-line associated with fixed escalators(a)(c) $ 3,186     $ 2,907  
               
New leasing activity(a)(c) 150 - 170     174  
Escalators 80 - 85     89  
Non-renewals (95) - (85)     (74 )
Organic Contribution to Site Rental Revenues(d) 140 - 170     189  
Straight-lined revenues associated with fixed escalators (20) - (10)     47  
Acquisitions and builds(b)   160       90  
Other          
Total GAAP site rental revenues $3,468 - $3,498   $ 3,233  
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues   7.7
%     7.1 %
Organic Contribution to Site Rental Revenues(d)(e)   4.8 % (f)     6.5 %
 
(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) Calculated based on midpoint of Full Year 2017 Outlook.
(g) 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) December 31,
2016
  December 31,
2015
Interest expense on debt obligations $ 126.3     $ 123.6  
Amortization of deferred financing costs and adjustments on long-term debt, net 4.6     5.6  
Other, net (1.5 )   (0.8 )
Interest expense and amortization of deferred financing costs $ 129.4     $ 128.3  

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

  Q1 2017   Full Year 2017
(in millions) Outlook   Outlook
Interest expense on debt obligations $ 131
    to   $ 133     $ 534     to   $ 549  
Amortization of deferred financing costs and adjustments on long-term debt, net $ 4     to   $ 7     $ 17     to   $ 21  
Other, net $ (1 )   to   $ (1 )   $ (6 )   to   $ (4 )
Interest expense and amortization of deferred financing costs $ 132     to   $ 137     $ 540     to   $ 570  

Debt balances and maturity dates as of December 31, 2016 are as follows:

(in millions) Face Value   Final Maturity
Bank debt - variable rate:      
2016 Revolver $     Jan. 2021
2016 Term Loan A 1,962.5   Jan. 2021
Total bank debt 1,962.5    
Securitized debt - fixed rate:      
Secured Notes, Series 2009-1, Class A-1(a) 52.4   Aug. 2019
Secured Notes, Series 2009-1, Class A-2(a) 70.0   Aug. 2029
Tower Revenue Notes, Series 2010-3(b) 1,250.0   Jan. 2040
Tower Revenue Notes, Series 2010-6(b) 1,000.0   Aug. 2040
Tower Revenue Notes, Series 2015-1(b) 300.0   May 2042
Tower Revenue Notes, Series 2015-2(b) 700.0   May 2045
Total securitized debt 3,372.4    
Bonds - fixed rate:      
5.250% Senior Notes 1,650.0   Jan. 2023
3.849% Secured Notes 1,000.0   Apr. 2023
4.875% Senior Notes 850.0   Apr. 2022
3.400% Senior Notes 850.0   Feb. 2021
4.450% Senior Notes 900.0   Feb. 2026
3.700% Senior Notes 750.0   June 2026
2.250% Senior Notes 700.0   Sept. 2021
Total bonds 6,700.0    
Capital leases and other obligations 226.8     Various
Total Debt(c) $ 12,261.7      
Less: Cash and Cash Equivalents(d) $ 567.6      
Net Debt $ 11,694.1      
 
(a) The Senior Secured Notes, Series 2009-1, Class A-1 principal amortizes during the period beginning 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.
(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) After giving effect to the closing of the FiberNet acquisition, the outstanding borrowings under the 2016 Revolver total approximately $1.1 billion.
(d) Excludes restricted cash.


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

(in millions) For the Three Months Ended
December 31, 2016
Total face value of debt(a) $ 12,261.7  
Ending cash and cash equivalents(a)(b) 567.6  
Total Net Debt $ 11,694.1  
   
Adjusted EBITDA for the three months ended December 31, 2016 $ 574.6  
Last quarter annualized adjusted EBITDA 2,298.5  
Net Debt to Last Quarter Annualized Adjusted EBITDA 5.1 x
 
(a) After giving effect to the closing of the FiberNet acquisition, the total face value of debt and ending cash and cash equivalents for the three months ended December 31, 2016 was $13.3 billion and $116 million, respectively. See full year 2017 outlook for further discussion of the impact of the FiberNet acquisition.
(b) Excludes restricted cash.


Components of Capital Expenditures:

  For the Three Months Ended
(in millions) December 31, 2016   December 31, 2015
  Towers Small Cells Other Total   Towers Small Cells Other Total
Discretionary:                  
Purchases of land interests $ 16.7   $   $   $ 16.7     $ 22.7   $   $   $ 22.7  
Wireless infrastructure construction and improvements 77.0   123.9     200.9     100.3   98.2     198.5  
Sustaining:                  
Capital improvement and corporate 16.9   6.3   18.9   42.1     14.3   3.5   11.7   29.5  
Total $ 110.6   $ 130.2   $ 18.9   $ 259.7     $ 137.3   $ 101.7   $ 11.7   $ 250.7  


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 the FiberNet acquisition), 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 mobile data and 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, small cells and other assets, and the potential growth, returns and benefits therefrom, (8) the contribution of FiberNet to our results, (9) demand for our wireless infrastructure and services, (10) our growth and long-term prospects, (11) tenant non-renewals, including the impact and timing thereof, (12) capital expenditures, including sustaining capital expenditures, (13) straight-line adjustments, (14) expenses, (15) site rental revenues, (16) site rental cost of operations, (17) site rental gross margin and network services gross margin, (18) net income (loss), (19) Adjusted EBITDA, (20) interest expense and amortization of deferred financing costs, (21) FFO, (22) AFFO, (23) Organic Contribution to Site Rental Revenues and Organic Contribution to Site Rental Revenue growth, (24) our common shares outstanding and (25) 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 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.
  • 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)


  December 31,
 2016
  December 31,
 2015
       
ASSETS      
Current assets:      
Cash and cash equivalents $ 567,599     $ 178,810  
Restricted cash 124,547     130,731  
Receivables, net 373,532     313,296  
Prepaid expenses 128,721     133,194  
Other current assets 130,362     225,214  
Total current assets 1,324,761     981,245  
Deferred site rental receivables 1,317,658     1,306,408  
Property and equipment, net 9,805,315     9,580,057  
Goodwill 5,757,676     5,513,551  
Other intangible assets, net 3,650,072     3,779,915  
Long-term prepaid rent and other assets, net 819,610     775,790  
Total assets $ 22,675,092     $ 21,936,966  
       
LIABILITIES AND EQUITY      
Current liabilities:      
Accounts payable $ 188,516     $ 159,629  
Accrued interest 97,019     66,975  
Deferred revenues 353,005     322,623  
Other accrued liabilities 221,066     199,923  
Current maturities of debt and other obligations 101,749     106,219  
Total current liabilities 961,355     855,369  
Debt and other long-term obligations 12,069,393     12,043,740  
Other long-term liabilities 2,087,229     1,948,636  
Total liabilities 15,117,977     14,847,745  
Commitments and contingencies      
CCIC stockholders' equity:      
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: December 31, 2016—360,536,659 and December 31, 2015—333,771,660 3,605     3,338  
4.50% Mandatory Convertible Preferred Stock, Series A, $.01 par value; 20,000,000 shares authorized; shares issued and outstanding: December 31, 2016—0 and December 31, 2015—9,775,000; aggregate liquidation value: December 31, 2016—0 and December 31, 2015—$977,500     98  
Additional paid-in capital 10,938,236     9,548,580  
Accumulated other comprehensive income (loss) (5,888 )   (4,398 )
Dividends/distributions in excess of earnings
(3,378,838 )   (2,458,397 )
Total equity 7,557,115     7,089,221  
Total liabilities and equity $ 22,675,092     $ 21,936,966  


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


  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2016   2015   2016   2015
Net revenues:              
Site rental $ 817,381     $ 785,336     $ 3,233,307     $ 3,018,413  
Network services and other 215,035     160,500     687,918     645,438  
Net revenues 1,032,416     945,836     3,921,225     3,663,851  
Operating expenses:              
Costs of operations (exclusive of depreciation, amortization and accretion):              
Site rental 261,127     247,625     1,023,350     963,869  
Network services and other 131,105     94,381     417,171     357,557  
General and administrative 92,122     87,042     371,031     310,921  
Asset write-down charges 6,202     13,817     34,453     33,468  
Acquisition and integration costs 5,994     3,677     17,453     15,678  
Depreciation, amortization and accretion 273,826     269,558     1,108,551     1,036,178  
Total operating expenses 770,376     716,100     2,972,009     2,717,671  
Operating income (loss) 262,040     229,736     949,216     946,180  
Interest expense and amortization of deferred financing costs (129,376 )   (128,346 )   (515,032 )   (527,128 )
Gains (losses) on retirement of long-term obligations         (52,291 )   (4,157 )
Interest income 342     736     796     1,906  
Other income (expense) (4,212 )   (1,482 )   (8,835 )   57,028  
Income (loss) from continuing operations before income taxes 128,794     100,644     373,854     473,829  
Benefit (provision) for income taxes (4,084 )   42,077     (16,881 )   51,457  
Income (loss) from continuing operations 124,710     142,721     356,973     525,286  
Discontinued operations:              
Income (loss) from discontinued operations, net of tax     (1,659 )       999,049  
Net income (loss) 124,710     141,062     356,973     1,524,335  
Less: Net income (loss) attributable to the noncontrolling interest             3,343  
Net income (loss) attributable to CCIC stockholders 124,710     141,062     356,973     1,520,992  
Dividends on preferred stock     (10,997 )   (32,991 )   (43,988 )
Net income (loss) attributable to CCIC common stockholders $ 124,710     $ 130,065     $ 323,982     $ 1,477,004  
               
Net income (loss) attributable to CCIC common stockholders, per common share:              
Income (loss) from continuing operations, basic $ 0.35     $ 0.39     $ 0.95     $ 1.45  
Income (loss) from discontinued operations, basic $     $     $     $ 2.99  
Net income (loss) attributable to CCIC common stockholders, basic $ 0.35     $ 0.39     $ 0.95     $ 4.44  
Income (loss) from continuing operations, diluted $ 0.35     $ 0.39     $ 0.95     $ 1.44  
Income (loss) from discontinued operations, diluted $     $     $     $ 2.98  
Net income (loss) attributable to CCIC common stockholders, diluted $ 0.35     $ 0.39     $ 0.95     $ 4.42  
               
Weighted-average common shares outstanding (in thousands):              
Basic 352,116     333,107     340,349     333,002  
Diluted 352,878     334,320     340,879     334,062  


CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)

  Twelve Months Ended December 31,  
  2016   2015  
Cash flows from operating activities:        
Net income (loss) from continuing operations $ 356,973     $ 525,286    
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities:        
Depreciation, amortization and accretion 1,108,551     1,036,178    
Gains (losses) on retirement of long-term obligations 52,291     4,157    
Gains (losses) on settled swaps 2,608     (54,475 )  
Amortization of deferred financing costs and other non-cash interest 14,333     37,126    
Stock-based compensation expense 79,338     60,773    
Asset write-down charges 34,453     33,468    
Deferred income tax benefit (provision) 8,603     (60,618 )  
Other adjustments, net 2,451     (8,915 )  
Changes in assets and liabilities, excluding the effects of acquisitions:        
Increase (decrease) in liabilities 236,642     320,625    
Decrease (increase) in assets (113,979 )   (99,580 )  
Net cash provided by (used for) operating activities 1,782,264     1,794,025    
Cash flows from investing activities:        
Payments for acquisition of businesses, net of cash acquired (556,854 )   (1,102,179 )  
Capital expenditures (873,883 )   (908,892 )  
Net receipts from settled swaps 8,141     54,475    
Other investing activities, net 12,364     (3,138 )  
Net cash provided by (used for) investing activities (1,410,232 )   (1,959,734 )  
Cash flows from financing activities:        
Proceeds from issuance of long-term debt 5,201,010     1,000,000    
Principal payments on debt and other long-term obligations (95,787 )   (102,866 )  
Purchases and redemptions of long-term debt (4,044,834 )   (1,069,337 )  
Borrowings under revolving credit facility 3,440,000     1,790,000    
Payments under revolving credit facility (4,565,000 )   (1,360,000 )  
Payments for financing costs (41,533 )   (19,642 )  
Net proceeds from issuance of capital stock 1,325,865        
Purchases of capital stock (24,936 )   (29,657 )  
Dividends/distributions paid on common stock (1,239,158 )   (1,116,444 )  
Dividends paid on preferred stock (43,988 )   (43,988 )  
Net (increase) decrease in restricted cash (7,931 )   16,458    
Net cash provided by (used for) financing activities (96,292 )   (935,476 )  
Net increase (decrease) in cash and cash equivalents - continuing operations 275,740     (1,101,185 )  
Discontinued operations:        
Net cash provided by (used for) operating activities     2,700    
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     1,106,277    
Effect of exchange rate changes (101 )   (1,902 )  
Cash and cash equivalents at beginning of period 178,810     175,620   (a)
Cash and cash equivalents at end of period $ 567,599     $ 178,810    
Supplemental disclosure of cash flow information:        
Interest paid 470,655     489,970    
Income taxes paid 13,821     28,771    
_______________
(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 December 31, 2016   Three Months Ended December 31, 2015
  Towers   Small Cells   Other   Consolidated
Total
  Towers   Small Cells   Other   Consolidated
Total
Segment site rental revenues $ 712,549     $ 104,832         $ 817,381     $ 693,898     $ 91,438         $ 785,336  
Segment network services and other revenue 169,647     45,388         215,035     145,972     14,528         160,500  
Segment revenues 882,196     150,220         1,032,416     839,870     105,966         945,836  
Segment site rental cost of operations 214,878     38,057         252,935     206,449     33,377         239,826  
Segment network services and other cost of operations 95,289     34,207         129,496     79,861     13,128         92,989  
Segment cost of operations(a) 310,167     72,264         382,431     286,310     46,505         332,815  
Segment site rental gross margin(b) 497,671     66,775         564,446     487,449     58,061         545,510  
Segment network services and other gross margin(b) 74,358     11,181         85,539     66,111     1,400         67,511  
Segment general and administrative expenses(a) 24,574     14,956     35,838     75,368     23,654     12,715     36,855     73,224  
Segment operating profit(b) 547,455     63,000     (35,838 )   574,617     529,906     46,746     (36,855 )   539,797  
Stock-based compensation expense         21,241     21,241             17,866     17,866  
Depreciation, amortization and accretion         273,826     273,826             269,558     269,558  
Interest expense and amortization of deferred financing costs         129,376     129,376             128,346     128,346  
Other (income) expenses to reconcile to income (loss) from continuing operations before income taxes(c)         21,380     21,380             23,383     23,383  
Income (loss) from continuing operations before income taxes             $ 128,794                 $ 100,644  
 
(a) Segment cost of operations exclude (1) stock-based compensation expense of $4.5 million and $4.0 million for the three months ended December 31, 2016 and 2015, respectively and (2) prepaid lease purchase price adjustments of $5.3 million and $5.1 million for the three months ended December 31, 2016 and 2015, respectively.  Segment general and administrative expenses exclude stock-based compensation expense of $16.8 million and $13.8 million for the three months ended December 31, 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) See condensed consolidated statement of operations for further information.


SEGMENT OPERATING RESULTS
  Twelve Months Ended December 31, 2016   Twelve Months Ended December 31, 2015
  Towers   Small Cells   Other   Consolidated
Total
  Towers   Small Cells   Other   Consolidated
Total
Segment site rental revenues $ 2,830,708     $ 402,599         $ 3,233,307     $ 2,734,045     $ 284,368         $ 3,018,413  
Segment network services and other revenue 603,689     84,229         687,918     591,655     53,783         645,438  
Segment revenues 3,434,397     486,828         3,921,225     3,325,700     338,151         3,663,851  
Segment site rental cost of operations 840,209     147,459         987,668     827,175     107,195         934,370  
Segment network services and other cost of operations 344,595     64,859         409,454     309,025     43,162         352,187  
Segment cost of operations(a) 1,184,804     212,318         1,397,122     1,136,200     150,357         1,286,557  
Segment site rental gross margin(b) 1,990,499     255,140         2,245,639     1,906,870     177,173         2,084,043  
Segment network services and other gross margin(b) 259,094     19,370         278,464     282,630     10,621         293,251  
Segment general and administrative expenses(a) 92,903     60,676     143,001     296,580     91,899     38,379     127,833     258,111  
Segment operating profit(b) 2,156,690     213,834     (143,001 )   2,227,523     2,097,601     149,415     (127,833 )   2,119,183  
Stock-based compensation expense         96,538     96,538             67,148     67,148  
Depreciation, amortization and accretion         1,108,551     1,108,551             1,036,178     1,036,178  
Interest expense and amortization of deferred financing costs         515,032     515,032             527,128     527,128  
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(c)         133,548     133,548             14,900     14,900  
Income (loss) from continuing operations before income taxes             $ 373,854                 $ 473,829  
 
(a)  Segment cost of operations exclude (1) stock-based compensation expense of $22.1 million and $14.3 million for the twelve months ended December 31, 2016 and 2015, respectively and (2) prepaid lease purchase price adjustments of $21.3 million and $20.5 million for the twelve months ended December 31, 2016 and 2015, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $74.5 million and $52.8 million for the twelve months ended December 31, 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)  See condensed consolidated statement of operations for further information.


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

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