Crown Castle Reports First Quarter 2015 Results and Raises Outlook for 2015
"Our excellent first quarter results reflect the continued demand for our wireless infrastructure as US wireless carriers continue to make network investments to meet wireless consumer demand," stated
CONSOLIDATED FINANCIAL RESULTS
Adjusted Funds from Operations ("AFFO") increased 10% to
Total revenues for the first quarter of 2015 increased 7% to
Net income attributable to CCIC common stockholders for the first quarter of 2015 was
Adjusted EBITDA and AFFO for the first quarter of 2015 benefited from approximately
FINANCING AND INVESTING ACTIVITIES
During the first quarter of 2015,
On March 31, 2015,
As of March 31, 2015,
As of March 31, 2015,
"We had a terrific first quarter, allowing us to raise the midpoint of our full year 2015 Outlook for site rental revenues, site rental gross margin, Adjusted EBITDA and AFFO," stated
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
As reflected in the table below,
On a sequential basis, the second quarter 2015 Outlook for site rental gross margin, Adjusted EBITDA and AFFO are expected to be impacted by certain seasonal or timing items. Repair and maintenance during the second quarter of 2015 is expected to be higher by approximately
The following table sets forth
(in millions, except per share amounts) | Second Quarter 2015 | Full Year 2015 |
Site rental revenues | $767 to $772 | $3,067 to $3,082 |
Site rental cost of operations | $242 to $247 | $967 to $982 |
Site rental gross margin | $523 to $528 | $2,091 to $2,106 |
Adjusted EBITDA | $531 to $536 | $2,145 to $2,160 |
Interest expense and amortization of deferred financing costs(a) | $133 to $138 | $531 to $546 |
FFO | $352 to $357 | $1,439 to $1,454 |
AFFO | $348 to $353 | $1,450 to $1,465 |
AFFO per share(b) | $1.04 to $1.06 | $4.34 to $4.39 |
Net income (loss) | $92 to $125 | $419 to $498 |
Net income (loss) per share - diluted(b) | $0.28 to $0.37 | $1.26 to $1.49 |
Net income (loss) attributable to CCIC common stockholders | $80 to $117 | $381 to $467 |
Net income (loss) attributable to CCIC common stockholders per share - diluted(b) | $0.24 to $0.35 | $1.14 to $1.40 |
(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) Based on 333.9 million diluted shares outstanding as of March 31, 2015. |
As previously disclosed, based on
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ABOUT
Non-GAAP Financial Measures and Other Calculations
This press release includes presentations of Adjusted EBITDA, Funds from Operations, Adjusted Funds from Operations, Organic Site Rental Revenues, and Site Rental Revenues, as Adjusted, 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")). Each of the amounts included in the calculation of Adjusted EBITDA, FFO, AFFO, Organic Site Rental Revenues, and Site Rental Revenues, as Adjusted, are computed in accordance with GAAP, with the exception of: (1) sustaining capital expenditures, which is not defined under GAAP and (2) our adjustment to the income tax provision in calculations of AFFO for periods prior to our REIT conversion.
Our measures of Adjusted EBITDA, FFO, AFFO, Organic Site Rental Revenues and Site Rental Revenues, as Adjusted, may not be comparable to similarly titled measures of other companies, including other companies in the tower sector or those reported by other REITs. Our FFO and AFFO may not be comparable to those reported in accordance with
Adjusted EBITDA, FFO, AFFO, Organic Site Rental Revenues and Site Rental Revenues, as Adjusted, are presented as additional information because management believes these measures are useful indicators of the financial performance of our core businesses. In addition, Adjusted EBITDA is a measure of current financial performance used in our debt covenant calculations.
Adjusted EBITDA.
Funds from Operations ("FFO").
FFO per share.
Adjusted Funds from Operations ("AFFO").
AFFO per share.
Site Rental Revenues, as Adjusted.
Organic Site Rental Revenues.
Sustaining capital expenditures.
The tables set forth below reconcile these non-GAAP financial measures 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:
Adjusted EBITDA for the three months ended March 31, 2015 and 2014 is computed as follows: |
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For the Three Months Ended | ||
March 31, 2015 | March 31, 2014 | |
(in millions) | ||
Net income (loss) | $ 125.1 | $ 102.8 |
Adjustments to increase (decrease) net income (loss): | ||
Asset write-down charges | 8.6 | 2.7 |
Acquisition and integration costs | 2.0 | 5.7 |
Depreciation, amortization and accretion | 258.1 | 250.2 |
Amortization of prepaid lease purchase price adjustments | 5.2 | 3.9 |
Interest expense and amortization of deferred financing costs(a) | 134.4 | 146.4 |
Interest income | (0.1) | (0.2) |
Other income (expense) | 0.2 | 2.7 |
Benefit (provision) for income taxes | 3.3 | (0.2) |
Stock-based compensation expense | 17.4 | 12.9 |
Adjusted EBITDA(b) | $ 554.3 | $ 527.0 |
(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 Adjusted EBITDA definition which are not applicable for the periods shown. |
Adjusted EBITDA for the quarter ending June 30, 2015 and the year ending December 31, 2015 are forecasted as follows: | ||
Q2 2015 | Full Year 2015 | |
(in millions) | Outlook | Outlook |
Net income (loss) | $92 to $125 | $419 to $498 |
Adjustments to increase (decrease) net income (loss): | ||
Asset write-down charges | $4 to $6 | $19 to $29 |
Acquisition and integration costs | $0 to $3 | $4 to $4 |
Depreciation, amortization and accretion | $256 to $261 | $1,021 to $1,041 |
Amortization of prepaid lease purchase price adjustments | $4 to $6 | $19 to $21 |
Interest expense and amortization of deferred financing costs(a) | $133 to $138 | $531 to $546 |
Interest income | $(2) to $0 | $(3) to $(1) |
Other income (expense) | $(1) to $2 | $1 to $3 |
Benefit (provision) for income taxes | $1 to $5 | $4 to $12 |
Stock-based compensation expense | $16 to $18 | $66 to $71 |
Adjusted EBITDA(b) | $531 to $536 | $2,145 to $2,160 |
(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 Adjusted EBITDA definition which are not applicable for the periods shown. |
FFO and AFFO for the quarter ending June 30, 2015 and the year ending December 31, 2015 are forecasted as follows: | ||
Q2 2015 | Full Year 2015 | |
(in millions, except share and per share amounts) | Outlook | Outlook |
Net income | $92 to $125 | $419 to $498 |
Real estate related depreciation, amortization and accretion | $252 to $255 | $1,003 to $1,018 |
Asset write-down charges | $4 to $6 | $19 to $29 |
Adjustment for noncontrolling interest(a) | $(3) to $1 | $(13) to $(6) |
Dividends on preferred stock | $(11) to $(11) | $(44) to $(44) |
FFO(c)(d) | $352 to $357 | $1,439 to $1,454 |
FFO (from above) | $352 to $357 | $1,439 to $1,454 |
Adjustments to increase (decrease) FFO: | ||
Straight-line revenue | $(40) to $(35) | $(142) to $(127) |
Straight-line expense | $23 to $28 | $88 to $103 |
Stock-based compensation expense | $16 to $18 | $66 to $71 |
Non-cash portion of tax provision | $(9) to $(4) | $(21) to $(6) |
Non-real estate related depreciation, amortization and accretion | $4 to $6 | $18 to $23 |
Amortization of non-cash interest expense | $10 to $15 | $30 to $41 |
Other (income) expense | $(1) to $2 | $1 to $3 |
Acquisition and integration costs | $0 to $3 | $4 to $4 |
Adjustment for noncontrolling interest(a) | $3 to $(1) | $13 to $6 |
Capital improvement capital expenditures | $(12) to $(10) | $(41) to $(36) |
Corporate capital expenditures | $(12) to $(10) | $(40) to $(35) |
AFFO(c)(d) | $348 to $353 | $1,450 to $1,465 |
Weighted average common shares outstanding — diluted(b)(e) | 333.9 | 333.9 |
AFFO per share(c) | $1.04 to $1.06 | $4.34 to $4.39 |
(a) Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs. | ||
(b) Based on diluted shares outstanding as of March 31, 2015. | ||
(c) See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO. | ||
(d) FFO and AFFO are reduced by cash paid for preferred stock dividends. | ||
(e) The diluted weighted average common shares outstanding assumes no conversion of preferred stock in the share count. |
Organic Site Rental Revenue growth for the year ending December 31, 2015 is forecasted as follows: | ||||
Midpoint of Full Year | ||||
(in millions of dollars) | 2015 Outlook | Full Year 2014 | ||
GAAP site rental revenues | $ 3,075 | $ 3,007 | ||
Site rental straight-line revenues | (135) | (197) | ||
Other - Non-recurring | — | (5) | ||
Site Rental Revenues, as Adjusted(a)(c) | $ 2,940 | $ 2,805 | ||
Cash adjustments: | ||||
FX and other | 25 | |||
New tower acquisitions and builds(b) | (19) | |||
Organic Site Rental Revenues(a)(c)(d) | $ 2,946 | |||
Year-Over-Year Revenue Growth | ||||
GAAP site rental revenues | 2.3% | |||
Site Rental Revenues, as Adjusted | 4.8% | |||
Organic Site Rental Revenues(e)(f) | 5.0% | |||
(a) Includes amortization of prepaid rent. | ||||
(b) The financial impact of new tower acquisitions and builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build. | ||||
(c) Includes Site Rental Revenues, as Adjusted, from the construction of new small cell nodes. | ||||
(d) See "Non-GAAP Financial Measures and Other Calculations" herein. | ||||
(e) Year-over-year Organic Site Rental Revenue growth for the year ending December 31, 2015: |
Midpoint of Full Year 2015 Outlook | |
New leasing activity | 5.6% |
Escalators | 3.4% |
Organic Site Rental Revenue growth, before non-renewals | 9.0% |
Non-renewals | (4.0)% |
Organic Site Rental Revenue growth | 5.0% |
(f) Calculated as the percentage change from Site Rental Revenues, as Adjusted, for the prior period when compared to Organic Site Rental Revenue for the current period. |
Organic Site Rental Revenue growth for the quarter ended March 31, 2015 is as follows: |
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Three Months Ended March 31, | ||
(in millions of dollars) | 2015 | 2014 |
Reported GAAP site rental revenues | $ 768 | $ 747 |
Site rental straight-line revenues | (38) | (51) |
Other - Non-recurring | — | $ (5) |
Site Rental Revenues, as Adjusted(a)(c) | $ 730 | $ 691 |
Cash adjustments: | ||
FX and other | 5 | |
New tower acquisitions and builds(b) | (6) | |
Organic Site Rental Revenues(a)(c)(d) | 729 | |
Year-Over-Year Revenue Growth | ||
Reported GAAP site rental revenues | 2.7% | |
Site Rental Revenues, as Adjusted | 5.5% | |
Organic Site Rental Revenues(e)(f) | 5.4% | |
(a) Includes amortization of prepaid rent. (b) The financial impact of new tower acquisitions and builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build. (c) Includes Site Rental Revenues, as Adjusted from the construction of new small cell nodes. (d) See "Non-GAAP Financial Measures and Other Calculations" herein. (e) Quarter-over-quarter Organic Site Rental Revenue growth for the quarter ending March 31, 2015: |
Three Months Ended March 31, 2015 | |
New leasing activity | 6.2% |
Escalators | 3.4% |
Organic Site Rental Revenue growth, before non-renewals | 9.6% |
Non-renewals | (4.2)% |
Organic Site Rental Revenue Growth | 5.4% |
(f) Calculated as the percentage change from Site Rental Revenues, as Adjusted, for the prior period when compared to Organic Site Rental Revenues for the current period. |
FFO and AFFO for the three months ended March 31, 2015 and 2014 are computed as follows: | ||
For the Three Months Ended | ||
(in millions, except share and per share amounts) |
March 31, 2015 |
March 31, 2014 |
Net income | $ 125.1 | $ 102.8 |
Real estate related depreciation, amortization and accretion | 252.7 | 244.4 |
Asset write-down charges | 8.6 | 2.7 |
Adjustment for noncontrolling interest(a) | (2.3) | (1.3) |
Dividends on preferred stock | (11.0) | (11.0) |
FFO(b)(c) | $ 373.1 | $ 337.7 |
Weighted average common shares outstanding — diluted(d) | 333.5 | 333.0 |
FFO per share(b) | $ 1.12 | $ 1.01 |
FFO (from above) | $ 373.1 | $ 337.7 |
Adjustments to increase (decrease) FFO: | ||
Straight-line revenue | (38.0) | (50.8) |
Straight-line expense | 25.3 | 26.4 |
Stock-based compensation expense | 17.4 | 12.9 |
Non-cash portion of tax provision | 0.8 | (2.3) |
Non-real estate related depreciation, amortization and accretion | 5.3 | 5.8 |
Amortization of non-cash interest expense | 11.7 | 20.9 |
Other (income) expense | 0.2 | 2.7 |
Acquisition and integration costs | 2.0 | 5.7 |
Adjustment for noncontrolling interest(a) | 2.3 | 1.3 |
Capital improvement capital expenditures | (7.6) | (3.9) |
Corporate capital expenditures | (9.4) | (7.6) |
AFFO(b)(c) | $ 383.3 | $ 348.7 |
Weighted average common shares outstanding — diluted(d) | 333.5 | 333.0 |
AFFO per share(b) | $ 1.15 | $ 1.05 |
(a) Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs. | ||
(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) The diluted weighted average common shares outstanding assumes no conversion of preferred stock in the share count. |
Other Calculations: |
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The components of interest expense and amortization of deferred financing costs for the three months ended March 31, 2015 and 2014 are as follows: | ||
For the Three Months Ended | ||
(in millions) |
March 31, 2015 |
March 31, 2014 |
Interest expense on debt obligations | $ 122.7 | $ 125.5 |
Amortization of deferred financing costs | 5.6 | 5.6 |
Amortization of adjustments on long-term debt | (0.9) | (1.0) |
Amortization of interest rate swaps(a) | 7.5 | 16.2 |
Other, net | (0.5) | — |
Interest expense and amortization of deferred financing costs | $ 134.4 | $ 146.4 |
(a) Relates to the amortization of interest rate swaps; the swaps were cash settled in prior periods. |
The components of interest expense and amortization of deferred financing costs for the quarter ending June 30, 2015 and the year ending December 31, 2015 are forecasted as follows: | ||
Q2 2015 | Full Year 2015 | |
(in millions) | Outlook | Outlook |
Interest expense on debt obligations | $123 to $125 | $498 to $508 |
Amortization of deferred financing costs | $5 to $7 | $21 to $23 |
Amortization of adjustments on long-term debt | $(1) to $0 | $(4) to $(2) |
Amortization of interest rate swaps(a) | $6 to $8 | $16 to $21 |
Other, net | $0 to $0 | $(3) to $(1) |
Interest expense and amortization of deferred financing costs | $133 to $138 | $531 to $546 |
(a) Relates to the amortization of interest rate swaps, all of which has been cash settled in prior periods. |
Debt balances and maturity dates as of March 31, 2015 are as follows: | ||
(in millions) | ||
Face Value | Final Maturity | |
Revolver | $ 860.0 | Nov. 2018/Jan 2019 |
Term Loan A | 641.8 | Nov. 2018/Jan 2019 |
Term Loan B | 2,828.3 | Jan. 2019/Jan. 2021 |
4.875% Senior Notes | 850.0 | Apr. 2022 |
5.25% Senior Notes | 1,650.0 | Jan. 2023 |
2012 Secured Notes(a) | 1,500.0 | Dec. 2017/Apr. 2023 |
Senior Secured Notes, Series 2009-1(b) | 156.0 | Various |
Senior Secured Tower Revenue Notes, Series 2010-2-2010-3(c) | 1,600.0 | Various |
Senior Secured Tower Revenue Notes, Series 2010-4-2010-6(d) | 1,550.0 | Various |
WCP Secured Wireless Site Contracts Revenue Notes, Series 2010-1(e) | 254.3 | Nov. 2040 |
Capital Leases and Other Obligations | 180.9 | Various |
Total Debt | $ 12,071.3 | |
Less: Cash and Cash Equivalents(f) | $ 240.2 | |
Net Debt | $ 11,831.1 | |
(a) The 2012 Secured Notes consist of $500 million aggregate principal amount of 2.381% secured notes due 2017 and $1.0 billion aggregate principal amount of 3.849% secured notes due 2023. | ||
(b) The Senior Secured Notes, Series 2009-1 consist of $86.0 million of principal as of March 31, 2015 that amortizes during the period beginning January 2010 and ending in 2019, and $70.0 million of principal that amortizes during the period beginning in 2019 and ending in 2029. | ||
(c) The Senior Secured Tower Revenue Notes Series 2010-2 and 2010-3 have principal amounts of $350.0 million and $1.25 billion with anticipated repayment dates of 2017 and 2020, respectively. | ||
(d) The Senior Secured Tower Revenue Notes Series 2010-4, 2010-5 and 2010-6 have principal amounts of $250.0 million, $300.0 million and $1.0 billion with anticipated repayment dates of 2015, 2017 and 2020, respectively. | ||
(e) The WCP Secured Wireless Site Contracts Revenue Notes, Series 2010-1 ("WCP Securitized Notes") were assumed in connection with the WCP acquisition. If the WCP Securitized Notes are not repaid in full by their anticipated repayment dates in 2015, the applicable interest rate increases by an additional approximately 5% per annum. If the WCP Securitized Notes are not repaid in full by their rapid amortization date of 2017, monthly principal payments commence. | ||
(f) Excludes restricted cash. |
Net Debt to Last Quarter Annualized Adjusted EBITDA is computed as follows: | |
(in millions) |
For the Three Months Ended March 31, 2015 |
Total face value of debt | $ 12,071.3 |
Ending cash and cash equivalents | 240.2 |
Total Net Debt | $ 11,831.1 |
Adjusted EBITDA for the three months ended March 31, 2015 | $ 554.3 |
Last quarter annualized adjusted EBITDA | 2,217.0 |
Net Debt to Last Quarter Annualized Adjusted EBITDA | 5.3x |
Sustaining capital expenditures for the three months ended March 31, 2015 and 2014 is computed as follows: | ||
For the Three Months Ended | ||
(in millions) |
March 31, 2015 |
March 31, 2014 |
Capital Expenditures | $ 204.8 | $ 142.9 |
Less: Land purchases | 23.8 | 20.4 |
Less: Wireless infrastructure construction and improvements | 164.0 | 111.1 |
Sustaining capital expenditures | $ 16.9 | $ 11.4 |
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, but are not limited to, plans, projections, Outlook and estimates regarding (1) demand for our wireless infrastructure and services, (2) carrier network investments and upgrades, and the benefits which may be derived therefrom, (3) our dividends, including our dividend plans, the amount and growth of our dividends, and the potential benefits therefrom, (4)wireless consumer demand, (5) our growth, (6) potential benefits, returns and shareholder value which may be derived from our business and assets, our investments, dividends and acquisitions, (7) leasing activity, including the impact of such leasing activity on our results and Outlook, (8) the US wireless market, (9) investments in small cells, including the potential benefits therefrom, (10) our strategy, (11) currency exchange rates, (12) non-renewal of leases and the timing and impact thereof, including with respect to the Acquired Networks, (13) the decommissioning of the iDEN network and the Acquired Networks, including the impact and timing thereof, (14) capital expenditures, including sustaining capital expenditures, (15) timing items, (16) repair and maintenance expense, (17) site rental revenues and Site Rental Revenues, as Adjusted, (18) site rental cost of operations, (19) site rental gross margin and network services gross margin, (20) Adjusted EBITDA, (21) interest expense and amortization of deferred financing costs, (22) FFO, including on a per share basis, (23) AFFO, including on a per share basis, (24) Organic Site Rental Revenues and Organic Site Rental Revenue growth, (25) net income (loss), including on a per share basis, (26) our common shares outstanding, including on a diluted basis, and (27) the utility of certain financial measures, including non-GAAP financial measures. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including but not limited to prevailing market conditions and the following:
- Our business depends on the demand for wireless communications and wireless infrastructure, 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.
- 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, including from some competitors with significantly more resources or less debt than we have, we may find it more difficult to achieve favorable rental rates on our new or renewing customer contracts.
- 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.
- New technologies may significantly reduce demand for our wireless infrastructure and negatively impact our revenues.
- New wireless technologies may not deploy or be adopted by customers as rapidly or in the manner projected.
- If we fail to retain rights to our wireless infrastructure, including the land under our sites, our business may be adversely affected.
- Our network services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
- 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 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 certificate of incorporation, bylaws 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 adversely affected by our exposure to changes in foreign currency exchange rates relating to our operations in
Australia . - Future dividend payments to our common 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 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
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (in thousands, except share amounts) |
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March 31, 2015 |
December 31, 2014 |
|
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 240,153 | $ 175,620 |
Restricted cash | 136,964 | 147,411 |
Receivables, net | 292,565 | 329,229 |
Prepaid expenses | 144,334 | 155,070 |
Deferred income tax assets | 30,105 | 29,961 |
Other current assets | 83,393 | 94,211 |
Total current assets | 927,514 | 931,502 |
Deferred site rental receivables | 1,292,630 | 1,260,614 |
Property and equipment, net | 9,139,703 | 9,148,311 |
Goodwill | 5,215,348 | 5,210,091 |
Other intangible assets, net | 3,650,945 | 3,715,700 |
Deferred income tax assets | 18,620 | 20,914 |
Long-term prepaid rent, deferred financing costs and other assets, net | 860,717 | 856,144 |
Total assets | $ 21,105,477 | $ 21,143,276 |
LIABILITIES AND EQUITY | ||
Current liabilities: | ||
Accounts payable | $ 146,894 | $ 167,662 |
Accrued interest | 68,697 | 66,943 |
Deferred revenues | 327,270 | 348,338 |
Other accrued liabilities | 163,096 | 202,657 |
Current maturities of debt and other obligations | 115,998 | 113,335 |
Total current liabilities | 821,955 | 898,935 |
Debt and other long-term obligations | 11,954,093 | 11,807,526 |
Deferred income tax liabilities | 38,152 | 39,889 |
Other long-term liabilities | 1,732,484 | 1,659,698 |
Total liabilities | 14,546,684 | 14,406,048 |
Commitments and contingencies | ||
CCIC stockholders' equity: | ||
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: March 31, 2015—333,761,959 and December 31, 2014—333,856,632 | 3,339 | 3,339 |
4.50% Mandatory Convertible Preferred Stock, Series A, $.01 par value; 20,000,000 shares authorized; shares issued and outstanding: March 31, 2015 and December 31, 2014—9,775,000; aggregate liquidation value: March 31, 2015 and December 31, 2014—$977,500 | 98 | 98 |
Additional paid-in capital | 9,503,335 | 9,512,396 |
Accumulated other comprehensive income (loss) | 8,304 | 15,820 |
Dividends/distributions in excess of earnings | (2,978,356) | (2,815,428) |
Total CCIC stockholders' equity | 6,536,720 | 6,716,225 |
Noncontrolling interest | 22,073 | 21,003 |
Total equity | 6,558,793 | 6,737,228 |
Total liabilities and equity | $ 21,105,477 | $ 21,143,276 |
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (in thousands, except share and per share amounts) |
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Three Months Ended March 31, | ||
2015 | 2014 | |
Net revenues: | ||
Site rental | $ 767,606 | $ 747,162 |
Network services and other | 173,395 | 128,788 |
Net revenues | 941,001 | 875,950 |
Operating expenses: | ||
Costs of operations (exclusive of depreciation, amortization and accretion): | ||
Site rental | 240,980 | 228,076 |
Network services and other | 88,878 | 72,874 |
General and administrative | 79,487 | 64,849 |
Asset write-down charges | 8,623 | 2,733 |
Acquisition and integration costs | 2,019 | 5,659 |
Depreciation, amortization and accretion | 258,060 | 250,191 |
Total operating expenses | 678,047 | 624,382 |
Operating income (loss) | 262,954 | 251,568 |
Interest expense and amortization of deferred financing costs | (134,439) | (146,400) |
Interest income | 109 | 173 |
Other income (expense) | (230) | (2,736) |
Income (loss) before income taxes | 128,394 | 102,605 |
Benefit (provision) for income taxes | (3,282) | 188 |
Net income (loss) | 125,112 | 102,793 |
Less: Net income (loss) attributable to the noncontrolling interest | 2,325 | 1,296 |
Net income (loss) attributable to CCIC stockholders | 122,787 | 101,497 |
Dividends on preferred stock | (10,997) | (10,997) |
Net income (loss) attributable to CCIC common stockholders | $ 111,790 | $ 90,500 |
Net income (loss) attributable to CCIC common stockholders, per common share: | ||
Basic | $ 0.34 | $ 0.27 |
Diluted | $ 0.34 | $ 0.27 |
Weighted-average common shares outstanding (in thousands): | ||
Basic | 332,712 | 332,034 |
Diluted | 333,485 | 333,045 |
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (in thousands) |
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Three Months Ended March 31, | ||
2015 | 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 125,112 | $ 102,793 |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
Depreciation, amortization and accretion | 258,060 | 250,191 |
Amortization of deferred financing costs and other non-cash interest | 11,736 | 20,881 |
Stock-based compensation expense | 15,244 | 11,956 |
Asset write-down charges | 8,623 | 2,733 |
Deferred income tax benefit (provision) | (800) | (2,332) |
Other non-cash adjustments, net | (557) | (774) |
Changes in assets and liabilities, excluding the effects of acquisitions: | ||
Increase (decrease) in liabilities | 16,969 | 23,278 |
Decrease (increase) in assets | 26,407 | (46,443) |
Net cash provided by (used for) operating activities | 460,794 | 362,283 |
Cash flows from investing activities: | ||
Payments for acquisition of businesses, net of cash acquired | (17,493) | (62,228) |
Capital expenditures | (204,753) | (142,943) |
Other investing activities, net | (514) | 952 |
Net cash provided by (used for) investing activities | (222,760) | (204,219) |
Cash flows from financing activities: | ||
Principal payments on debt and other long-term obligations | (31,497) | (27,739) |
Purchases of capital stock | (29,372) | (21,417) |
Borrowings under revolving credit facility | 230,000 | 83,000 |
Payments under revolving credit facility | (65,000) | (89,000) |
Payments for financing costs | (1,904) | (5,854) |
Net decrease (increase) in restricted cash | 10,214 | 14,743 |
Dividends/distributions paid on common stock | (273,685) | (116,829) |
Dividends paid on preferred stock | (10,997) | (11,363) |
Net cash provided by (used for) financing activities | (172,241) | (174,459) |
Effect of exchange rate changes on cash | (1,260) | (6,462) |
Net increase (decrease) in cash and cash equivalents | 64,533 | (22,857) |
Cash and cash equivalents at beginning of period | 175,620 | 223,394 |
Cash and cash equivalents at end of period | $ 240,153 | $ 200,537 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 120,949 | 126,540 |
Income taxes paid | 2,498 | 7,400 |
Contacts: | Jay Brown, CFO |
Son Nguyen, VP - Corporate Finance | |
Crown Castle International Corp. | |
713-570-3050 |