Crown Castle Reports Full Year 2019 Results, Updates Outlook for Full Year 2020, and Announces Restatement of Financial Results

February 26, 2020 at 4:15 PM EST

HOUSTON, Feb. 26, 2020 (GLOBE NEWSWIRE) -- Crown Castle International Corp. (NYSE: CCI) ("Crown Castle") today reported results for the fourth quarter and full year ended December 31, 2019, updated its full year 2020 Outlook, and announced the restatement of previously-issued financial statements.

Chart 1
  Crown Castle International Corp.
 
Chart 2
  Crown Castle International Corp.

 
(in millions, except per share amounts) Midpoint of
Current Full
Year
2020
Outlook(c)
Full Year 2019
Actual(d)
Full Year 2018
Actual,
as restated(d)
Full Year 2019
to Full Year
2020 Outlook
% Change
Full Year 2018
to Full Year
2019 %
Change(d)
Site rental revenues $5,360 $5,098 $4,800 +5% +6%
Net income (loss) $1,038 $863 $625 +20% +38%
Net income (loss) per share—diluted(a) $2.32 $1.80 $1.23 +29% +46%
Adjusted EBITDA(b) $3,502 $3,304 $3,095 +6% +7%
AFFO(a)(b) $2,595 $2,376 $2,228 +9% +7%
AFFO per share(a)(b) $6.12 $5.69 $5.37 +8% +6%

(a) Attributable to CCIC common stockholders.
(b) See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" included herein for further information and reconciliation of this non-GAAP financial measure to net income (loss).
(c) Represents no change from the midpoint of full year 2020 Outlook issued on October 16, 2019 ("Previous 2020 Outlook") other than the impact of the restatement described in  "Expected Impact of the Restatement of Previously-Issued Financial Statements."
(d) Results are preliminary and unaudited.  See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.

"In 2019, we experienced our highest level of tower leasing activity in more than a decade as the continued growth in mobile data demand is driving our customers to make significant investments in their existing 4G networks, while they are also positioning their businesses for 5G," stated Jay Brown, Crown Castle’s Chief Executive Officer.  "We believe our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks and are shared among multiple tenants, provides us the best opportunity to generate significant growth while delivering high returns for our shareholders.  We believe that the U.S. represents the best market in the world for communications infrastructure ownership, and we are pursuing that compelling opportunity with our comprehensive offering.

"Further, we delivered another strong year of results for full year 2019 despite a noticeable slowdown in activity in the fourth quarter of 2019.  We anticipate that this slowdown is temporary in nature and see a return to significant activity in the second half of this year.  We believe the industry fundamentals are improving further with the competitive landscape for our existing customers coming into focus, the prospect of new customers looking for access to our tower and fiber infrastructure at scale, and additional wireless spectrum auctions on the horizon.  As we look forward to what will likely be another decade-long investment cycle for our customers with the deployment of 5G, I am excited about the opportunity we see for Crown Castle to deliver long-term value to our shareholders while delivering dividend per share growth of 7% to 8% per year."

DISCUSSION OF TOWER INSTALLATION SERVICES REVENUES
In connection with our year-end procedures and after receiving the previously disclosed subpoena from the U.S. Securities and Exchange Commission ("SEC"), we engaged in a review internally, and in consultation with our independent auditors, PricewaterhouseCoopers LLP ("PwC"), of our accounting policies for our tower installation services.  Following that review, we decided with PwC to seek input from the SEC'sOffice of the Chief Accountant ("OCA") regarding whether a portion of our services revenues should be recognized over the term of the associated lease.  The OCA is an office of the SEC that provides guidance to registrants and auditors regarding the application of accounting standards and financial disclosure requirements.  The OCA provided advice on the specific revenue recognition question we submitted to them for their review and did not review or address any other aspect of our accounting policies.  Our consultation with the OCA was not part of the previously disclosed SEC investigation, which is still ongoing, or the related subpoena, which primarily related to certain of our long-standing capitalization and expense policies for tenant upgrades and installations in our services business.

Our long-standing historical practice with respect to services revenues had been to recognize the entirety of the transaction price from our tower installation services as services revenues upon the completion of the installation services.  After consultation with the OCA, we concluded that our historical practice was not acceptable under GAAP.  Instead, a portion of the transaction price for our installation services, specifically the amounts associated with permanent improvements recorded as fixed assets, represents a modification to the leases to which the services work is related and, therefore, should be recognized on a ratable basis as site rental revenues over the associated estimated remaining lease term.  Cumulatively, over the term of customer lease contracts, we will recognize the same amount of total revenue and total gross margin as our historical practice.

The result of recognizing a portion of the transaction price on a ratable basis will be an increase to site rental revenues and site rental gross margins that offsets, over time, the decreases to services revenues and services gross margins, in both historical and future periods.  As a result, the preliminary impact to each of Net Income, Adjusted EBITDA and AFFO is a decrease of approximately $100 million for full year 2019 actuals and a decrease of approximately $90 million to our Previous 2020 Outlook.  We have provided tables in this release to reconcile the changes.  Recognizing a portion of the transaction price on a ratable basis for tower installation services will have no impact on our net cash flows, business operations or expected dividend per share growth.

Due to the identified errors described above, we will restate our financial statements for the years ended December 31, 2018 and 2017, and unaudited financial information for the quarterly and year-to-date periods in the year ended December 31, 2018 and for the first three quarters in the year ended December 31, 2019.   Restated financial statements and financial information for the periods in question will be reflected in Crown Castle's Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 10-K"), which Crown Castle expects to file within the prescribed timeline for such report, including any available extension if needed to finalize the consolidated financial statements and disclosures and complete the associated audit work.

Additional information relating to the restatement is provided in the section of this release titled, "Expected Impact of the Restatement of Previously-Issued Financial Statements."

RESULTS FOR THE YEAR
The table below sets forth select preliminary unaudited financial results for the year ended December 31, 2019 that reflect the restatement described above.

(in millions, except per share amounts) Full Year
2019
Actual(c)(d)
Midpoint of
Previous
2019 Outlook(e)
Actual
Compared to
Previous
Outlook
Effect of
Restatement(c)
Site rental revenues $5,098 $4,965 +$133 +$110
Net income (loss) $863 $926 -$63 -$100
Net income (loss) per share—diluted(a) $1.80 $1.95 -$0.15 -$0.24
Adjusted EBITDA(b) $3,304 $3,408 -$104 -$100
AFFO(a)(b) $2,376 $2,479 -$103 -$100
AFFO per share(a)(b) $5.69 $5.94 -$0.25 -$0.24

(a) Attributable to CCIC common stockholders.
(b) See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" included herein for further information and reconciliation of this non-GAAP financial measure to net income (loss).

(c) Results are preliminary and unaudited.  See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.
(d) Includes restatement of nine months ended September 30, 2019.
(e) As issued on October 16, 2019.

HIGHLIGHTS FROM THE YEAR

  • Site rental revenues.  Site rental revenues grew approximately 6.2%, or $298 million, from full year 2018 to full year 2019, inclusive of approximately $290 million in Organic Contribution to Site Rental Revenues and a $9 million increase in straight-lined revenues.  The $290 million in Organic Contribution to Site Rental Revenues represents approximately 6.1% growth, comprised of approximately 9.9% growth from new leasing activity and contracted tenant escalations, net of approximately 3.8% from tenant non-renewals.
  • Capital Expenditures.  Capital expenditures during the year were $2.1 billion, comprised of $53 million of land purchases, $117 million of sustaining capital expenditures, $1.9 billion of discretionary capital expenditures and $9 million of integration capital expenditures.  The discretionary capital expenditures included approximately $1.4 billion attributable to Fiber and approximately $454 million attributable to Towers.
  • Common stock dividend.  During 2019, Crown Castle paid common stock dividends of approximately $1.9 billion in the aggregate, or $4.575 per common share, an increase of approximately 7% on a per share basis compared to the same period a year ago.

"Our solid 2019 results and 2020 Outlook, which remains unchanged with the exception of the impact of the restatement we disclosed today, reflect the strong underlying demand for our communications infrastructure assets and our ability to translate growth in data demand into growth in dividends per share," stated Dan Schlanger, Crown Castle's Chief Financial Officer.  "Uncertainty around the outcome of the pending merger between T-Mobile and Sprint led to lower activity levels in the fourth quarter of 2019 that we believe will continue through the first quarter of 2020.   However, we expect activity levels across the industry to increase throughout the year and potentially beyond as we believe our customers will accelerate their investments in 5G.  As a result, we expect our financial performance in 2020 will be more back-end loaded than we previously expected, particularly for services contribution.  Against that backdrop, we are excited about the growth trends across our business and the long-term opportunity in front of Crown Castle as we continue to target 7% to 8% 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.  As indicated in the footnotes to the table below, the only changes to our Previous 2020 Outlook are a result of the impact of the restatement as described in "Expected Impact of the Restatement of Previously-Issued Financial Statements."
The following table sets forth Crown Castle's current Outlook for full year 2020:

(in millions) Full Year 2020
Site rental revenues $5,337 to $5,382
Site rental cost of operations(a) $1,482 to $1,527
Net income (loss) $998 to $1,078
Adjusted EBITDA(b) $3,479 to $3,524
Interest expense and amortization of deferred financing costs(c) $691 to $736
FFO(b)(d) $2,449 to $2,494
AFFO(b)(d) $2,572 to $2,617
Weighted-average common shares outstanding - diluted 424

(a) Exclusive of depreciation, amortization and accretion.
(b) See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein.
(c)See reconciliation of "components of current outlook for interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
(d) Attributable to CCIC common stockholders.

Full Year 2020 Outlook
The table below compares midpoint of the current full year 2020 Outlook and the midpoint of our Previous 2020 Outlook for select metrics.

(in millions, except per share amounts) Midpoint of
Current Full
Year
2020 Outlook
Midpoint of
Previous
Full Year
2020 Outlook
Current
Compared to
Previous
Outlook
Effect of
Restatement(c)
Site rental revenues $5,360 $5,219 +$141 +$141
Net income (loss) $1,038 $1,128 -$90 -$90
Net income (loss) per share—diluted(a) $2.32 $2.53 -$0.21 -$0.21
Adjusted EBITDA(b) $3,502 $3,592 -$90 -$90
AFFO(a)(b) $2,595 $2,685 -$90 -$90
AFFO per share(a)(b) $6.12 $6.33 -$0.21 -$0.21

(a) Attributable to CCIC common stockholders.
(b) See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein.
(c) See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.

  • The full year 2020 Outlook assumes the proposed merger between T-Mobile and Sprint closes at the end of the first quarter 2020.
  • The 2020 Outlook also reflects the impact of the assumed conversion of preferred stock in August 2020.  This conversion is expected to increase the diluted weighted average common shares outstanding for 2020 by approximately 6 million and reduce the annual preferred stock dividends paid by approximately $28 million when compared to 2019.
  • The chart below reconciles the components of expected growth in site rental revenues from 2019 to 2020 of $250 million to $295 million, inclusive of expected Organic Contribution to Site Rental Revenues during 2020 of $295 million to $335 million.
    Chart 1: https://www.globenewswire.com/NewsRoom/AttachmentNg/41d94009-0f48-47d0-9fcf-ad26bbdb2697 
  • New leasing activity is expected to contribute $395 million to $425 million to 2020 Organic Contribution to Site Rental Revenues, consisting of new leasing activity from towers of $170 million to $180 million, small cells of $65 million to $75 million, and fiber solutions of $160 million to $170 million.
  • The chart below reconciles the components of expected growth in AFFO from 2019 to 2020 of $195 million to $240 million.
    Chart 2: https://www.globenewswire.com/NewsRoom/AttachmentNg/3cd193da-e22b-40b6-b1f1-929b7b54aa2a 
  • Additional information is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of our website.

EXPECTED IMPACT OF THE RESTATEMENT OF PREVIOUSLY-ISSUED FINANCIAL STATEMENTS
As indicated above, we will restate our financial statements for the years ended December 31, 2018 and 2017, and unaudited financial information for the quarterly and year-to-date periods in the year ended December 31, 2018 and for the first three quarters in the year ended December 31, 2019. The expected impact of the restatement described above and in the tables in this release is preliminary and unaudited and is subject to change before we file the 2019 10-K.  We believe the restatement will not have an impact on our business operations or our net cash flows.

The tables set forth below summarize (1) the estimated effects of the restatement on historical periods and (2) the estimated effects of other adjustments to previously-issued financial statements for years prior to 2019 to correct errors relating exclusively to our Towers segment that were not material, either individually or in the aggregate, on certain of the Company's select financial results for the quarters and years ending December 31, 2019 and 2018, and the years ended December 31, 2017, 2016, and 2015.

(in millions, except per share amounts) Q1 2019(c) Q2 2019(c) Q3 2019(c) Q4 2019(c) Full Year
2019(c)
Site rental revenues $24 $26 $29 $31 $110
Services and other revenues $(41) $(55) $(57) $(57) $(210)
Net income (loss) $(17) $(29) $(28) $(26) $(100)
Net income (loss) per share—diluted(a) $(0.04) $(0.07) $(0.07) $(0.06) $(0.24)
Adjusted EBITDA(b) $(17) $(29) $(28) $(26) $(100)
AFFO(a)(b) $(17) $(29) $(28) $(26) $(100)
AFFO per share(a)(b) $(0.04) $(0.07) $(0.07) $(0.06) $(0.24)

 

(in millions, except per share amounts) Q1 2018(c) Q2 2018(c) Q3 2018(c) Q4 2018(c) Full Year
2018(c)
Site rental revenues $19 $20 $22 $23 $84
Services and other revenues $(33) $(30) $(34) $(36) $(133)
Net income (loss) $(13) $(9) $(11) $(13) $(46)
Net income (loss) per share—diluted(a) $(0.03) $(0.02) $(0.03) $(0.03) $(0.11)
Adjusted EBITDA(b) $(13) $(9) $(11) $(13) $(46)
AFFO(a)(b) $(13) $(9) $(11) $(13) $(46)
AFFO per share(a)(b) $(0.03) $(0.02) $(0.03) $(0.03) $(0.11)

 

(in millions, except per share amounts) Full Year
2017(c)
Full Year
2016(c)
Full Year
2015(c)
Site rental revenues $68 $53 $40
Services and other revenues $(166) $(122) $(111)
Net income (loss) $(77) $(49) $(68)
Net income (loss) per share—diluted(a) $(0.20) $(0.14) $(0.20)
Adjusted EBITDA(b) $(77) $(49) $(68)
AFFO(a)(b) $(77) $(49) $(68)
AFFO per share(a)(b) $(0.20) $(0.14) $(0.20)

(a) Attributable to CCIC common stockholders.
(b) See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" included herein for further information and reconciliation of this non-GAAP financial measure to net income (loss).
(c) Results are preliminary and unaudited.  See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.

Crown Castle has determined that the restatement of its previously issued financial statements as described above indicates the existence of one or more material weaknesses in its internal control over financial reporting and that its internal control over financial reporting and disclosure controls and procedures were ineffective as of December 31, 2019Crown Castle will report the material weakness(es) in its 2019 10-K and intends to create a plan of remediation to address the material weakness(es).

CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, February 27, 2020, at 10:30 a.m. Eastern time to discuss its fourth quarter 2019 results.  The conference call may be accessed by dialing 800-367-2403 and asking for the Crown Castle call (access code 8599522) at least 30 minutes prior to the start time.  The conference call may also be accessed live over the Internet at investor.crowncastle.com. Supplemental materials for the call have been posted on the Crown Castle website at investor.crowncastle.com.

A telephonic replay of the conference call will be available from 1:30 p.m. Eastern time on Thursday, February 27, 2020, through 1:30 p.m. Eastern time on Wednesday, May 27, 2020, and may be accessed by dialing 888-203-1112 and using access code 8599522.  An audio archive will also be available on Crown Castle's website at investor.crowncastle.com shortly after the call and will be accessible for approximately 90 days.

ABOUT CROWN CASTLE
Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 80,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market.  This nationwide portfolio of communications infrastructure connects cities and communities to essential data, technology and wireless service - bringing information, ideas and innovations to the people and businesses that need them.  For more information on Crown Castle, please visit www.crowncastle.com

Non-GAAP Financial Measures, Segment Measures and Other Calculations

This press release includes presentations of Adjusted EBITDA, Adjusted Funds from Operations ("AFFO"), including per share amounts, Funds from Operations ("FFO"), including per share amounts, 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 non-GAAP financial measures may not be comparable to similarly titled measures of other companies, including other companies in the communications infrastructure sector or other real estate investment trusts ("REITs").  Our definition of FFO is consistent with guidelines from the National Association of Real Estate Investment Trusts with the exception of the impact of income taxes in periods prior to our REIT conversion in 2014.

In addition to the non-GAAP financial measures used herein, we also provide Segment Site Rental Gross Margin, Segment Services and Other Gross Margin and Segment Operating Profit, which are key measures used by management to evaluate our operating segments.  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.

Our non-GAAP financial measures are presented as additional information because management believes these measures are useful indicators of the financial performance of our business.  Among other things, management believes that:

  • Adjusted EBITDA is useful to investors or other interested parties in evaluating our financial performance.  Adjusted EBITDA is the primary measure used by management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of, our operations.  Management believes that Adjusted EBITDA helps investors or other interested parties meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors, by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results.  Management also believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of the communications infrastructure sector and other REITs to measure financial performance without regard to items such as depreciation, amortization and accretion which can vary depending upon accounting methods and the book value of assets.  In addition, Adjusted EBITDA is similar to the measure of current financial performance generally used in our debt covenant calculations.  Adjusted EBITDA should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.
     
  • AFFO, including per share amounts, is useful to investors or other interested parties in evaluating our financial performance.  Management believes that AFFO helps investors or other interested parties meaningfully evaluate our financial performance as it includes (1) the impact of our capital structure (primarily interest expense on our outstanding debt and dividends on our preferred stock) and (2) sustaining capital expenditures, and excludes the impact of our (a) asset base (primarily depreciation, amortization and accretion) and (b) certain non-cash items, including straight-lined revenues and expenses related to fixed escalations and rent free periods.  GAAP requires rental revenues and expenses related to leases that contain specified rental increases over the life of the lease to be recognized evenly over the life of the lease.  In accordance with GAAP, if payment terms call for fixed escalations, or rent free periods, the revenue or expense is recognized on a straight-lined basis over the fixed, non-cancelable term of the contract.  Management notes that Crown Castle uses AFFO only as a performance measure.  AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flows from operations or as residual cash flow available for discretionary investment.
     
  • FFO, including per share amounts, is useful to investors or other interested parties in evaluating our financial performance.  Management believes that FFO may be used by investors or other interested parties as a basis to compare our financial performance with that of other REITs.  FFO helps investors or other interested parties meaningfully evaluate financial performance by excluding the impact of our asset base (primarily depreciation, amortization and accretion). FFO is not a key performance indicator used by Crown Castle.  FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flow from operations.
     
  • Organic Contribution to Site Rental Revenues is useful to investors or other interested parties in understanding the components of the year-over-year changes in our site rental revenues computed in accordance with GAAP.  Management uses the Organic Contribution to Site Rental Revenues to assess year-over-year growth rates for our rental activities, to evaluate current performance, to capture trends in rental rates, new leasing activities and tenant non-renewals in our core business, as well to forecast future results. Organic Contribution to Site Rental Revenues is not meant as an alternative measure of revenue and should be considered only as a supplement in understanding and assessing the performance of our site rental revenues computed in accordance with GAAP.

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

Non-GAAP Financial Measures

Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, cumulative effect of a change in accounting principle, (income) loss from discontinued operations and stock-based compensation expense.

Adjusted Funds from Operations.  We define Adjusted Funds from Operations as FFO before straight-lined revenue, straight-lined expense, stock-based compensation expense, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, acquisition and integration costs, and adjustments for noncontrolling interests, and less sustaining capital expenditures.

AFFO per share. We define AFFO per share as AFFO divided by diluted weighted-average common shares outstanding.

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.

FFO per share. We define FFO per share as FFO divided by the diluted weighted-average common shares outstanding.

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 tenant contracts.

Segment Measures

Segment Site Rental Gross Margin.  We define Segment Site Rental Gross Margin as segment site rental revenues less segment site rental cost of operations, excluding stock-based compensation expense and prepaid lease purchase price adjustments recorded in consolidated site rental cost of operations.

Segment Services and Other Gross Margin.  We define Segment Services and Other Gross Margin as segment services and other revenues less segment services and other cost of operations, excluding stock-based compensation expense recorded in consolidated services and other cost of operations.

Segment Operating Profit.  We define Segment Operating Profit as segment site rental gross margin plus segment services and other gross margin, less selling, general and administrative expenses attributable to the respective segment.

All of these measurements of profit or loss are exclusive of depreciation, amortization and accretion, which are shown separately.  Additionally, certain costs are shared across segments and are reflected in our segment measures through allocations that management believes to be reasonable.

Other Calculations

Discretionary capital expenditures. We define discretionary capital expenditures as those capital expenditures made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They primarily consist of expansion or development of communications infrastructure (including capital expenditures related to (1) enhancing communications infrastructure in order to add new tenants for the first time or support subsequent tenant equipment augmentations: or (2) modifying the structure of a communications infrastructure asset to accommodate additional tenants). and construction of new communications infrastructure. Discretionary capital expenditures also include purchases of land interests (which primarily relates to land assets under towers as we seek to manage our interests in the land beneath our towers). certain technology-related investments necessary to support and scale future customer demand for our communications infrastructure. and other capital projects.

Integration capital expenditures.  We define integration capital expenditures as those capital expenditures made as a result of integrating acquired companies into our business.

Sustaining capital expenditures.  We define sustaining capital expenditures as those capital expenditures not otherwise categorized as either discretionary or integration capital expenditures, such as (1) maintenance capital expenditures on our communications infrastructure assets that enable our tenants' ongoing quiet enjoyment of the communications infrastructure and (2) ordinary corporate capital expenditures.

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

The expected impacts of the restatement described above and in the tables below are preliminary and unaudited and are subject to change before we file the 2019 10-K.  The tables set forth below reflect (1) the estimated effects of the restatement and (2) the estimated effects of other adjustments to previously-issued financial statements for years prior to 2019 to correct errors related exclusively to our Towers segment that were not material, individually or in the aggregate, on certain of the Company's select financial results for the quarters and years ending December 31, 2019 and 2018, and the years ended December 31, 2017, 2016, and 2015.

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

Reconciliation of Historical Adjusted EBITDA:

  For the Three Months Ended   For the Twelve Months Ended
  December 31, 2019   December 31, 2018   December 31, 2019   December 31, 2018
(in millions)     (As Restated)       (As Restated)
Net income (loss) $ 208     $ 200     $ 863     $ 625  
Adjustments to increase (decrease) net income (loss):              
Asset write-down charges 6     8     19     26  
Acquisition and integration costs 3     9     13     27  
Depreciation, amortization and accretion 398     390     1,574     1,528  
Amortization of prepaid lease purchase price adjustments 5     5     20     20  
Interest expense and amortization of deferred financing costs(a) 173     164     683     642  
(Gains) losses on retirement of long-term obligations         2     106  
Interest income (1 )   (2 )   (6 )   (5 )
Other (income) expense (7 )   (1 )   (1 )   (1 )
(Benefit) provision for income taxes 6     5     21     19  
Stock-based compensation expense 27     25     116     108  
Adjusted EBITDA(b)(c) $ 818     $ 803     $ 3,304     $ 3,095  

 

  For the Twelve Months Ended
  December 31, 2017   December 31, 2016   December 31, 2015
(in millions) (As Restated)   (As Restated)   (As Restated)
Net income (loss) $ 368     $ 308     $ 1,456  
Adjustments to increase (decrease) net income (loss):          
Income (loss) from discontinued operations         (999 )
Asset write-down charges 17     34     33  
Acquisition and integration costs 61     17     16  
Depreciation, amortization and accretion 1,242     1,109     1,036  
Amortization of prepaid lease purchase price adjustments 20     21     21  
Interest expense and amortization of deferred financing costs(a) 591     515     527  
(Gains) losses on retirement of long-term obligations 4     52     4  
Interest income (19 )   (1 )   (2 )
Other (income) expense (1 )   9     (57 )
(Benefit) provision for income taxes 26     17     (51 )
Stock-based compensation expense 96     97     67  
Adjusted EBITDA(b)(c) $ 2,405     $ 2,179     $ 2,051  
  1. See the reconciliation of "components of historical interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
  2. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA.
  3. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.

Reconciliation of Current Outlook for Adjusted EBITDA:

  Full Year 2020
(in millions) Outlook
Net income (loss) $ 998   to $ 1,078  
Adjustments to increase (decrease) net income (loss):      
Asset write-down charges $ 20   to $ 30  
Acquisition and integration costs $ 7   to $ 17  
Depreciation, amortization and accretion $ 1,503   to $ 1,598  
Amortization of prepaid lease purchase price adjustments $ 18   to $ 20  
Interest expense and amortization of deferred financing costs(a) $ 691   to $ 736  
(Gains) losses on retirement of long-term obligations $ 0   to $ 0  
Interest income $ (7 ) to $ (3 )
Other (income) expense $ (1 ) to $ 1  
(Benefit) provision for income taxes $ 16   to $ 24  
Stock-based compensation expense $ 126   to $ 130  
Adjusted EBITDA(b)(c) $ 3,479   to $ 3,524  
  1. See the reconciliation of "components of historical interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
  2. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA.
  3. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.

Reconciliation of Historical FFO and AFFO:

  For the Three Months Ended   For the Twelve Months Ended
(in millions) December 31, 2019   December 31, 2018   December 31, 2019   December 31, 2018
    (As Restated)       (As Restated)
Net income (loss) $ 208     $ 200     $ 863     $ 625  
Real estate related depreciation, amortization and accretion 384     375     1,519     1,472  
Asset write-down charges 6     8     19     26  
Dividends/distributions on preferred stock (28 )   (28 )   (113 )   (113 )
FFO(a)(b)(c)(d) $ 570     $ 555     $ 2,288     $ 2,009  
Weighted-average common shares outstanding—diluted(e) 418     417     418     415  
FFO per share(a)(b)(c)(d)(e) $ 1.36     $ 1.33     $ 5.47     $ 4.84  
               
FFO (from above) $ 570     $ 555     $ 2,288     $ 2,009  
Adjustments to increase (decrease) FFO:              
Straight-lined revenue (18 )   (20 )   (80 )   (72 )
Straight-lined expense 23     21     93     90  
Stock-based compensation expense 27     25     116     108  
Non-cash portion of tax provision 3     3     5     2  
Non-real estate related depreciation, amortization and accretion 14     15     55     56  
Amortization of non-cash interest expense     2     1     7  
Other (income) expense (7 )   (1 )   (1 )   (1 )
(Gains) losses on retirement of long-term obligations         2     106  
Acquisition and integration costs 3     9     13     27  
Sustaining capital expenditures (36 )   (30 )   (117 )   (105 )
AFFO(a)(b)(c)(d) $ 578     $ 578     $ 2,376     $ 2,228  
Weighted-average common shares outstanding—diluted(e) 418     417     418     415  
AFFO per share(a)(b)(c)(d)(e) $ 1.38     $ 1.39     $ 5.69     $ 5.37  
  1. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO, including per share amounts, and AFFO, including per share amounts.
  2. FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid. 
  3. Attributable to CCIC common stockholders. 
  4. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
  5. For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of preferred stock in the share count.

Reconciliation of Historical FFO and AFFO:

  For the Twelve Months Ended
(in millions) December 31, 2017   December 31, 2016   December 31, 2015
(As Restated)
Net income (loss)(a) $ 368     $ 308     $ 457  
Real estate related depreciation, amortization and accretion 1,211     1,082     1,018  
Asset write-down charges 17     34     33  
Dividends/distributions on preferred stock (30 )   (44 )   (44 )
FFO(b)(c)(d)(e) $ 1,566     $ 1,381     $ 1,465  
Weighted-average common shares outstanding—diluted(f) 383     341     334  
FFO per share(b)(c)(d)(e)(f) $ 4.09     $ 4.05     $ 4.39  
           
FFO (from above) $ 1,566     $ 1,381     $ 1,465  
Adjustments to increase (decrease) FFO:          
Straight-lined revenue     (47 )   (111 )
Straight-lined expense 93     94     99  
Stock-based compensation expense 96     97     67  
Non-cash portion of tax provision 9     7     (64 )
Non-real estate related depreciation, amortization and accretion 31     26     18  
Amortization of non-cash interest expense 9     14     37  
Other (income) expense (1 )   9     (57 )
(Gains) losses on retirement of long-term obligations 4     52     4  
Acquisition and integration costs 61     17     16  
Sustaining capital expenditures (85 )   (90 )   (105 )
AFFO(b)(c)(d)(e) $ 1,783     $ 1,561     $ 1,369  
Weighted-average common shares outstanding—diluted(f) 383     341     334  
AFFO per share(b)(c)(d)(e)(f) $ 4.65     $ 4.58     $ 4.10  
  1. Exclusive of income (loss) from discontinued operations and related noncontrolling interest of $1.0 billion for the twelve months ended December 31, 2015.
  2. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO, including per share amounts, and AFFO, including per share amounts.
  3. FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid. 
  4. Attributable to CCIC common stockholders. 
  5. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
  6. For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of preferred stock in the share count.

Reconciliation of Current Outlook for FFO and AFFO:

  Full Year 2020
(in millions) Outlook
Net income (loss) $ 998   to $ 1,078  
Real estate related depreciation, amortization and accretion $ 1,454   to $ 1,534  
Asset write-down charges $ 20   to $ 30  
Dividends/distributions on preferred stock $ (85 ) to $ (85 )
FFO(a)(b)(c)(d) $ 2,449   to $ 2,494  
Weighted-average common shares outstanding—diluted(e)   424  
FFO per share(a)(b)(c)(d)(e) $ 5.77   to $ 5.88  
       
FFO (from above) $ 2,449   to $ 2,494  
Adjustments to increase (decrease) FFO:      
Straight-lined revenue $ (53 ) to $ (33 )
Straight-lined expense $ 70   to $ 90  
Stock-based compensation expense $ 126   to $ 130  
Non-cash portion of tax provision $ (6 ) to $ 9  
Non-real estate related depreciation, amortization and accretion $ 49   to $ 64  
Amortization of non-cash interest expense $ (4 ) to $ 6  
Other (income) expense $ (1 ) to $ 1  
(Gains) losses on retirement of long-term obligations $ 0   to $ 0  
Acquisition and integration costs $ 7   to $ 17  
Sustaining capital expenditures $ (123 ) to $ (103 )
AFFO(a)(b)(c)(d) $ 2,572   to $ 2,617  
Weighted-average common shares outstanding—diluted(e)   424  
AFFO per share(a)(b)(c)(d)(e) $ 6.06   to $ 6.17  
  1. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO, including per share amounts, and AFFO, including per share amounts.
  2. FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid. 
  3. Attributable to CCIC common stockholders. 
  4. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
  5. The assumption for diluted weighted-average common shares outstanding for full year 2020 Outlook is based on the diluted common shares outstanding as of December 31, 2019 and is inclusive of the assumed conversion of preferred stock in August 2020, which we expect to result in (1) an increase in the diluted weighted-average common shares outstanding by approximately 6 million shares and (2) a reduction in the amount of annual preferred stock dividends paid by approximately $28 million when compared to full year 2019.

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

  Previously Issued   Previously Issued
  Full Year 2019   Full Year 2020
(in millions) Outlook   Outlook
Net income (loss) $ 896   to $ 956     $ 1,088   to $ 1,168  
Adjustments to increase (decrease) net income (loss):              
Asset write-down charges $ 23   to $ 33     $ 20   to $ 30  
Acquisition and integration costs $ 11   to $ 21     $ 7   to $ 17  
Depreciation, amortization and accretion $ 1,576   to $ 1,611     $ 1,503   to $ 1,598  
Amortization of prepaid lease purchase price adjustments $ 19   to $ 21     $ 18   to $ 20  
Interest expense and amortization of deferred financing costs $ 674   to $ 704     $ 691   to $ 736  
(Gains) losses on retirement of long-term obligations $ 2   to $ 2     $ 0   to $ 0  
Interest income $ (8 ) to $ (4 )   $ (7 ) to $ (3 )
Other (income) expense $ 2   to $ 4     $ (1 ) to $ 1  
(Benefit) provision for income taxes $ 16   to $ 24     $ 16   to $ 24  
Stock-based compensation expense $ 112   to $ 120     $ 126   to $ 130  
Adjusted EBITDA(a)(b) $ 3,393   to $ 3,423     $ 3,569   to $ 3,614  
  1. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA.
  2. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
     

For Comparative Purposes - Reconciliation of Previous Outlook for FFO and AFFO:

  Previously Issued   Previously Issued
  Full Year 2019   Full Year 2020
(in millions) Outlook   Outlook
Net income (loss) $ 896   to $ 956     $ 1,088   to $ 1,168  
Real estate related depreciation, amortization and accretion $ 1,528   to $ 1,548     $ 1,454   to $ 1,534  
Asset write-down charges $ 23   to $ 33     $ 20   to $ 30  
Dividends/distributions on preferred stock $ (113 ) to $ (113 )   $ (85 ) to $ (85 )
FFO(a)(b)(c)(d) $ 2,363   to $ 2,393     $ 2,539   to $ 2,584  
Weighted-average common shares outstanding—diluted(e)   418       424  
FFO per share(a)(b)(c)(d)(e) $ 5.66   to $ 5.73     $ 5.99   to $ 6.09  
               
FFO (from above) $ 2,363   to $ 2,393     $ 2,539   to $ 2,584  
Adjustments to increase (decrease) FFO:              
Straight-lined revenue $ (74 ) to $ (54 )   $ (53 ) to $ (33 )
Straight-lined expense $ 81   to $ 101     $ 70   to $ 90  
Stock-based compensation expense $ 112   to $ 120     $ 126   to $ 130  
Non-cash portion of tax provision $ (6 ) to $ 9     $ (6 ) to $ 9  
Non-real estate related depreciation, amortization and accretion $ 48   to $ 63     $ 49   to $ 64  
Amortization of non-cash interest expense $ (5 ) to $ 5     $ (4 ) to $ 6  
Other (income) expense $ 2   to $ 4     $ (1 ) to $ 1  
(Gains) losses on retirement of long-term obligations $ 2   to $ 2     $ 0   to $ 0  
Acquisition and integration costs $ 11   to $ 21     $ 7   to $ 17  
Sustaining capital expenditures $ (136 ) to $ (106 )   $ (123 ) to $ (103 )
AFFO(a)(b)(c)(d) $ 2,464   to $ 2,494     $ 2,662   to $ 2,707  
Weighted-average common shares outstanding—diluted(e)   418       424  
AFFO per share(a)(b)(c)(d)(e) $ 5.90   to $ 5.97     $ 6.28   to $ 6.38  
  1. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO, including per share amounts, and AFFO, including per share amounts.
  2. FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid.
  3. Attributable to CCIC common stockholders.
  4. The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
  5. The assumption for diluted weighted-average common shares outstanding for full year 2020 Outlook is based on the diluted common shares outstanding as of December 31, 2019 and is inclusive of the assumed conversion of preferred stock in August 2020, which we expect to result in (1) an increase in the diluted weighted-average common shares outstanding by approximately 6 million shares and (2) a reduction in the amount of annual preferred stock dividends paid by approximately $28 million when compared to full year 2019.

The components of changes in site rental revenues for the quarters ended December 31, 2019 and 2018 are as follows:

  Three Months Ended December 31,
(dollars in millions) 2019   2018
    (As Restated)
Components of changes in site rental revenues(a):      
Prior year site rental revenues exclusive of straight-lined revenues associated with fixed escalators(b)(c) $1,212    $1,067 
       
New leasing activity(b)(c) 100    64 
Escalators 22    21 
Non-renewals (51)   (22)
Organic Contribution to Site Rental Revenues(d) 71    63 
Straight-lined revenues associated with fixed escalators 18    20 
Acquisitions(e) —    82 
Other —    — 
Total GAAP site rental revenues $1,301    $1,232 
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues 5.6%    
Organic Contribution to Site Rental Revenues(d)(f) 5.9%    
  1. Additional information regarding Crown Castle's site rental revenues, including projected revenue from tenant licenses, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website.
  2. Includes revenues from amortization of prepaid rent in accordance with GAAP. 
  3. Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. 
  4. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein.
  5. Represents the contribution from recent acquisitions.  The financial impact of recent acquisitions is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition.
  6. Calculated as the percentage change from prior year site rental revenues, exclusive of straight-lined revenues associated with fixed escalations, compared to Organic Contribution to Site Rental Revenues for the current period.

The components of the changes in site rental revenues for the years ending December 31, 2019 and December 31, 2020 are forecasted as follows:

(dollars in millions) Full Year 2019   Full Year 2020 Outlook
Components of changes in site rental revenues(a):      
Prior year site rental revenues exclusive of straight-lined revenues associated with fixed escalators(b)(c) $4,727    $5,017 
       
New leasing activity(b)(c)  385    395-425
Escalators  86    90-100
Non-renewals  (181)   (195)-(175)
Organic Contribution to Site Rental Revenues(d)  290    295-335
Straight-lined revenues associated with fixed escalators  81    33-53
Acquisitions(e)  —     — 
Other  —     — 
Total GAAP site rental revenues $5,098    $5,337-$5,382
       
Year-over-year changes in revenue:      
Reported GAAP site rental revenues(f)  6.2%    5.1%
Organic Contribution to Site Rental Revenues(d)(f)(g)  6.1%    6.3%
  1. Additional information regarding Crown Castle's site rental revenues, including projected revenue from tenant licenses, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website.
  2. Includes revenues from amortization of prepaid rent in accordance with GAAP. 
  3. Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. 
  4. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein.
  5. Represents the contribution from recent acquisitions.  The financial impact of recent acquisitions is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition.
  6. Calculated based on midpoint of full year 2020 Outlook.
  7. Calculated as the percentage change from prior year site rental revenues, exclusive of straight-lined revenues associated with fixed escalations, compared to Organic Contribution to Site Rental Revenues for the current period.

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

  For the Three Months Ended
(in millions) December 31, 2019   December 31, 2018
Interest expense on debt obligations $ 173     $ 162  
Amortization of deferred financing costs and adjustments on long-term debt, net 5     5  
Other, net (5 )   (3 )
Interest expense and amortization of deferred financing costs $ 173     $ 164  

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

  Full Year 2020
(in millions) Outlook
Interest expense on debt obligations $ 703   to $ 723  
Amortization of deferred financing costs and adjustments on long-term debt, net $ 20   to $ 25  
Other, net $ (24 ) to $ (19 )
Interest expense and amortization of deferred financing costs $ 691   to $ 736  

Debt balances and maturity dates as of December 31, 2019 are as follows:

(in millions) Face Value   Final Maturity
Cash, cash equivalents and restricted cash $ 338    
       
3.849% Secured Notes 1,000   Apr. 2023
Secured Notes, Series 2009-1, Class A-2(a) 68   Aug. 2029
Tower Revenue Notes, Series 2015-1(b) 300   May 2042
Tower Revenue Notes, Series 2018-1(b) 250   July 2043
Tower Revenue Notes, Series 2015-2(b) 700   May 2045
Tower Revenue Notes, Series 2018-2(b) 750   July 2048
Finance leases and other obligations 226   Various
Total secured debt $ 3,294    
2016 Revolver 525   June 2024
2016 Term Loan A 2,312   June 2024
Commercial Paper Notes(c) 155   Various
3.400% Senior Notes 850   Feb. 2021
2.250% Senior Notes 700   Sept. 2021
4.875% Senior Notes 850   Apr. 2022
5.250% Senior Notes 1,650   Jan. 2023
3.150% Senior Notes 750   July 2023
3.200% Senior Notes 750   Sept. 2024
4.450% Senior Notes 900   Feb. 2026
3.700% Senior Notes 750   June 2026
4.000% Senior Notes 500   Mar. 2027
3.650% Senior Notes 1,000   Sept. 2027
3.800% Senior Notes 1,000   Feb. 2028
4.300% Senior Notes 600   Feb. 2029
3.100% Senior Notes 550   Nov. 2029
4.750% Senior Notes 350   May 2047
5.200% Senior Notes 400   Feb. 2049
4.000% Senior Notes 350   Nov. 2049
Total unsecured debt $ 14,942    
Total net debt $ 17,898    
  1. The Senior Secured Notes, 2009-1, Class A-2 principal amortizes during the period beginning in September 2019 and ending in August 2029.
  2. The Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 have anticipated repayment dates in 2022 and 2025, respectively.  The Senior Secured Tower Revenue Notes, Series 2018-1 and 2018-2 have anticipated repayment dates in 2023 and 2028, respectively.
  3. The maturities of the Commercial Paper Notes, when outstanding, may vary but may not exceed 397 days from the date of issue.

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

(dollars in millions) For the Three Months Ended December 31, 2019
Total face value of debt $ 18,236  
Ending cash, cash equivalents and restricted cash 338  
Total Net Debt $ 17,898  
   
Adjusted EBITDA for the three months ended December 31, 2019 $ 818  
Last quarter annualized Adjusted EBITDA 3,272  
Net Debt to Last Quarter Annualized Adjusted EBITDA 5.5 x

Components of Capital Expenditures:

  For the Three Months Ended
(in millions) December 31, 2019   December 31, 2018
  Towers Fiber Other Total   Towers Fiber Other Total
Discretionary:                  
Purchases of land interests $ 11   $   $   $ 11     $ 18   $   $   $ 18  
Communications infrastructure construction and improvements 119   353     472     98   349     447  
Sustaining 12   12   12   36     8   15   7   30  
Integration     2   2         5   5  
Total $ 142   $ 365   $ 14   $ 521     $ 124   $ 364   $ 11   $ 500  

Note:  See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for further discussion of our components of capital expenditures.

Cautionary Language Regarding Forward-Looking Statements

This press release contains forward-looking statements and information that are based on our management's current expectations.  Such statements include our Outlook and plans, projections, and estimates regarding (1) potential benefits, growth, returns, opportunities and tenant and shareholder value which may be derived from our business, assets, investments, acquisitions and dividends, (2) our strategy, business model and capabilities and the strength of our business, (3) industry fundamentals and driving factors for improvements in such fundamentals, (4) our customers' investment, including investment cycles, in network improvements and the trends driving such improvements, (5) our long-term prospects and the trends impacting our business (including growth in mobile data demand), (6) preliminary restatement of financial results, our restatement plans and the expected impact of such restatement, (7) management's intent to report in the 2019 10-K and create a remediation plan to address the material weakness(es) in Crown Castle's internal controls over financial reporting and its ineffective disclosure controls and procedures, (8) leasing environment and activity, including (a) timing and temporary nature of the leasing activity slowdown and our expectation for rebound in leasing activity and (b) growth in leasing activity and the contribution to our financial or operating results therefrom, (9) opportunities we see to deliver long-term value and dividend per share growth, (10) the status of the SEC investigation, (11) our dividends and our dividend (including on a per share basis) growth rate, including its driving factors, and targets, (12) our portfolio of assets, including demand therefor, strategic position thereof and opportunities created thereby, (13) assumed conversion of preferred stock and the impact therefrom, (14) expected timing for the closing of the proposed merger between T-Mobile and Sprint, (15) amount of total revenue and total gross margin we expect to recognize cumulatively over the associated estimated remaining lease term, (16) timing of filing of the 2019 10-K, (17) cash flows, including growth thereof, (18) tenant non-renewals, including the impact and timing thereof, (19) capital expenditures, including sustaining and discretionary capital expenditures, and the timing thereof, (20) straight-line adjustments, (21) site rental revenues and estimated growth thereof, (22) site rental cost of operations, (23) net income (loss) (including on a per share basis) and estimated growth thereof, (24) Adjusted EBITDA, including the impact of the timing of certain components thereof and estimated growth thereof, (25) expenses, including interest expense and amortization of deferred financing costs, (26) FFO (including on a per share basis) and estimated growth thereof, (27) AFFO (including on a per share basis) and estimated growth thereof and corresponding driving factors, (28) Organic Contribution to Site Rental Revenues and its components, including contributions therefrom, (29) our weighted-average common shares outstanding (including on a diluted basis) and estimated growth thereof, (30) services contribution, including the timing thereof, (31) Segment Site Rental Gross Margin, (32) Segment Services and Other Gross Margin, (33) Segment Operating Profit and (34) the utility of certain financial measures, including non-GAAP financial measures.  Such forward-looking statements are subject to certain risks, uncertainties and assumptions prevailing market conditions and the following:

  • Our business depends on the demand for our communications infrastructure, driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand.  Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services).
  • A substantial portion of our revenues is derived from a small number of tenants, and the loss, consolidation or financial instability of any of such tenants may materially decrease revenues or reduce demand for our communications infrastructure and services.
  • The expansion or development of our business, including through acquisitions, increased product offerings or other strategic growth opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations or financial results.
  • Our Fiber segment has expanded rapidly, and the Fiber business model contains certain differences from our Towers business model, resulting in different operational risks.  If we do not successfully operate our Fiber business model or identify or manage the related operational risks, such operations may produce results that are lower than anticipated.
  • Failure to timely and efficiently execute on our construction projects could adversely affect our business.
  • Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments and our 6.875% Mandatory Convertible Preferred Stock limit our ability to take a number of actions that our management might otherwise believe to be in our best interests.  In addition, if we fail to comply with our covenants, our debt could be accelerated.
  • We have a substantial amount of indebtedness.  In the event we do not repay or refinance such indebtedness, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets to meet our debt payment obligations.
  • Sales or issuances of a substantial number of shares of our common stock or securities convertible into shares of our common stock may adversely affect the market price of our common stock.
  • As a result of competition in our industry, we may find it more difficult to negotiate favorable rates on our new or renewing tenant contracts.
  • New technologies may reduce demand for our communications infrastructure or negatively impact our revenues.
  • If we fail to retain rights to our communications infrastructure, including the land interests under our towers and the right-of-way and other agreements related to our small cells and fiber, our business may be adversely affected.
  • Our 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 tenants as rapidly or in the manner projected.
  • If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.
  • If radio frequency emissions from wireless handsets or equipment on our communications infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues.
  • Certain provisions of our restated certificate of incorporation, amended and restated by-laws and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders.
  • We may be vulnerable to security breaches or other unforeseen events that could adversely affect our operations, business, and reputation.
  • We have concluded that certain of our previously-issued consolidated financial statements should not be relied upon and we have restated such previously-issued consolidated financial statements, which may result in loss of investor confidence, negative impact on our stock price, shareholder litigation, and certain other risks.
  • We identified one or more material weaknesses in our internal control over financial reporting. If we are unable to remediate such material weakness(es), or if we experience additional material weaknesses or other deficiencies in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately and timely report our financial results, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports, and the stock price may decline.
  • Future dividend payments to our stockholders will reduce the availability of our cash on hand available to fund future discretionary investments, and may result in a need to incur indebtedness or issue equity securities to fund growth opportunities.  In such event, the then current economic, credit market or equity market conditions will impact the availability or cost of such financing, which may hinder our ability to grow our per share results of operations.
  • Remaining qualified to be taxed as a REIT involves highly technical and complex provisions of the U.S. Internal Revenue Code.  Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, which would reduce our available cash.
  • If we fail to pay scheduled dividends on our 6.875% Mandatory Convertible Preferred Stock (prior to the automatic conversion in August 2020), in cash, common stock, or any combination of cash and common stock, we will be prohibited from paying dividends on our common stock, which may jeopardize our status as a REIT.
  • Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives.
  • REIT related ownership limitations and transfer restrictions may prevent or restrict certain transfers of our capital stock.

Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors which could affect our results is included in our filings with the SEC.  Our filings with the SEC are available through the SEC website at www.sec.gov or through our investor relations website at investor.crowncastle.com. We use our investor relations website to disclose information about us that may be deemed to be material. We encourage investors, the media and others interested in us to visit our investor relations website from time to time to review up-to-date information or to sign up for e-mail alerts to be notified when new or updated information is posted on the site.

As used in this release, the term "including," and any variation thereof, means "including without limitation."

CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Amounts in millions, except par values)

 

  December 31,
2019
  December 31,
 2018
      (As Restated)
       
ASSETS      
Current assets:      
Cash and cash equivalents $ 196     $ 277  
Restricted cash 137     131  
Receivables, net 596     501  
Prepaid expenses(a) 107     172  
Other current assets 168     148  
Total current assets 1,204     1,229  
Deferred site rental receivables 1,424     1,366  
Property and equipment, net 14,689     13,676  
Operating lease right-of-use assets(a) 6,133      
Goodwill 10,078     10,078  
Other intangible assets, net(a) 4,836     5,516  
Long-term prepaid rent and other assets, net(a) 116     920  
Total assets $ 38,480     $ 32,785  
       
LIABILITIES AND EQUITY      
Current liabilities:      
Accounts payable $ 334     $ 313  
Accrued interest 169     148  
Deferred revenues 661     591  
Other accrued liabilities(a) 361     351  
Current maturities of debt and other obligations 100     107  
Current portion of operating lease liabilities(a) 299      
Total current liabilities 1,924     1,510  
Debt and other long-term obligations 18,021     16,575  
Operating lease liabilities(a) 5,511      
Other long-term liabilities(a) 2,526     3,123  
Total liabilities 27,982     21,208  
Commitments and contingencies      
CCIC stockholders' equity:      
Common stock, $0.01 par value; 600 shares authorized; shares issued and outstanding: December 31, 2019—416 and December 31, 2018—415 4     4  
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value; 20 shares authorized; shares issued and outstanding: December 31, 2019—2 and December 31, 2018—2; aggregate liquidation value: December 31, 2019—$1,650 and December 31, 2018—$1,650      
Additional paid-in capital 17,855     17,767  
Accumulated other comprehensive income (loss) (5 )   (5 )
Dividends/distributions in excess of earnings (7,356 )   (6,189 )
Total equity 10,498     11,577  
Total liabilities and equity $ 38,480     $ 32,785  
  1. Effective January 1, 2019, we adopted new guidance on the recognition, measurement, presentation and disclosure of leases.  The new guidance requires lessees to recognize a lease liability, initially measured at the present value of the lease payments for all leases, and a corresponding right-of-use asset. The accounting for lessors remained largely unchanged from previous guidance.  As a result of the new guidance for leases, on the effective date, certain amounts related to our lessee arrangements that were previously reported separately have been de-recognized and reclassified into "Operating lease right-of-use assets" on the condensed consolidated balance sheet as of December 31, 2019.
CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Amounts in millions, except per share amounts)

 

  Three Months Ended December 31,   Twelve Months Ended December 31,
  2019   2018   2019   2018
      (As Restated)       (As Restated)
Net revenues:              
Site rental $ 1,301     $ 1,232     $ 5,098     $ 4,800  
Services and other 128     174     675     574  
Net revenues 1,429     1,406     5,773     5,374  
Operating expenses:              
Costs of operations (exclusive of depreciation, amortization and accretion):              
Site rental 367     353     1,462     1,410  
Services and other 119     135     529     434  
Selling, general and administrative 157     145     614     563  
Asset write-down charges 6     8     19     26  
Acquisition and integration costs 3     9     13     27  
Depreciation, amortization and accretion 398     390     1,574     1,528  
Total operating expenses 1,050     1,040     4,211     3,988  
Operating income (loss) 379     366     1,562     1,386  
Interest expense and amortization of deferred financing costs (173 )   (164 )   (683 )   (642 )
Gains (losses) on retirement of long-term obligations         (2 )   (106 )
Interest income 1     2     6     5  
Other income (expense) 7     1     1     1  
Income (loss) before income taxes 214     205     884     644  
Benefit (provision) for income taxes (6 )   (5 )   (21 )   (19 )
Net income (loss) 208     200     863     625  
Dividends/distributions on preferred stock (28 )   (28 )   (113 )   (113 )
Net income (loss) attributable to CCIC common stockholders $ 180     $ 172     $ 750     $ 512  
               
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders, basic $ 0.43     $ 0.41     $ 1.80     $ 1.24  
Net income (loss) attributable to CCIC common stockholders, diluted $ 0.43     $ 0.41     $ 1.80     $ 1.23  
               
Weighted-average common shares outstanding:              
Basic 416     415     416     413  
Diluted 418     417     418     415  

 

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

 

  Twelve Months Ended December 31,
  2019   2018
      (As Restated)
Cash flows from operating activities:      
Net income (loss) $ 863     $ 625  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:      
Depreciation, amortization and accretion 1,574     1,528  
(Gains) losses on retirement of long-term obligations 2     106  
Amortization of deferred financing costs and other non-cash interest 1     7  
Stock-based compensation expense 117     103  
Asset write-down charges 19     26  
Deferred income tax (benefit) provision 2     2  
Other non-cash adjustments, net (2 )   2  
Changes in assets and liabilities, excluding the effects of acquisitions:      
Increase (decrease) in liabilities 291     322  
Decrease (increase) in assets (167 )   (219 )
Net cash provided by (used for) operating activities 2,700     2,502  
Cash flows from investing activities:      
Capital expenditures (2,059 )   (1,741 )
Payments for acquisitions, net of cash acquired (17 )   (42 )
Other investing activities, net (7 )   (12 )
Net cash provided by (used for) investing activities (2,083 )   (1,795 )
Cash flows from financing activities:      
Proceeds from issuance of long-term debt 1,894     2,742  
Principal payments on debt and other long-term obligations (86 )   (105 )
Purchases and redemptions of long-term debt (12 )   (2,346 )
Borrowings under revolving credit facility 2,110     1,820  
Payments under revolving credit facility (2,660 )   (1,725 )
Net borrowings (repayments) under commercial paper program 155      
Payments for financing costs (24 )   (31 )
Net proceeds from issuance of common stock     841  
Purchases of common stock (44 )   (34 )
Dividends/distributions paid on common stock (1,912 )   (1,782 )
Dividends/distributions paid on preferred stock (113 )   (113 )
Net cash provided by (used for) financing activities (692 )   (733 )
Net increase (decrease) in cash, cash equivalents, and restricted cash (75 )   (26 )
Effect of exchange rate changes on cash     (1 )
Cash, cash equivalents, and restricted cash at beginning of period 413     440  
Cash, cash equivalents, and restricted cash at end of period $ 338     $ 413  
Supplemental disclosure of cash flow information:      
Interest paid 661     619  
Income taxes paid 16     17  

 

CROWN CASTLE INTERNATIONAL CORP.
SEGMENT OPERATING RESULTS (UNAUDITED)
(In millions of dollars)

 

SEGMENT OPERATING RESULTS
  Three Months Ended December 31, 2019   Three Months Ended December 31, 2018
                  (As Restated)
  Towers   Fiber   Other   Consolidated Total   Towers   Fiber   Other   Consolidated Total
Segment site rental revenues $ 864     $ 437         $ 1,301     $ 821     $ 411         $ 1,232  
Segment services and other revenues 122     6         128     166     8         174  
Segment revenues 986     443         1,429     987     419         1,406  
Segment site rental cost of operations 217     141         358     207     138         345  
Segment services and other cost of operations 114     3         117     127     5         132  
Segment cost of operations(a)(b) 331     144         475     334     143         477  
Segment site rental gross margin(c) 647     296         943     614     273         887  
Segment services and other gross margin(c) 8     3         11     39     3         42  
Segment selling, general and administrative expenses(b) 23     48         71     29     47         76  
Segment operating profit(c) 632     251         883     624     229         853  
Other selling, general and administrative expenses(b)         $ 65     65             $ 50     50  
Stock-based compensation expense         27     27             25     25  
Depreciation, amortization and accretion         398     398             390     390  
Interest expense and amortization of deferred financing costs         173     173             164     164  
Other (income) expenses to reconcile to income (loss) before income taxes(d)         6     6             19     19  
Income (loss) before income taxes             $ 214                 $ 205  
  1. Exclusive of depreciation, amortization and accretion shown separately.
  2. Segment cost of operations excludes (1) stock-based compensation expense of $6 million for both of the three months ended December 31, 2019 and 2018, and (2) prepaid lease purchase price adjustments of $5 million for both of the three months ended December 31, 2019 and 2018. Selling, general and administrative expenses exclude stock-based compensation expense of $21 million and $19 million for the three months ended December 31, 2019 and 2018, respectively.
  3. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of segment site rental gross margin, segment services and other gross margin and segment operating profit.
  4. See condensed consolidated statement of operations for further information.
SEGMENT OPERATING RESULTS
  Twelve Months Ended December 31, 2019   Twelve Months Ended December 31, 2018
                  (As Restated)
  Towers   Fiber   Other   Consolidated Total   Towers   Fiber   Other   Consolidated Total
Segment site rental revenues $ 3,394     $ 1,704         $ 5,098     $ 3,200     $ 1,600         $ 4,800  
Segment services and other revenues 658     17         675     558     16         574  
Segment revenues 4,052     1,721         5,773     3,758     1,616         5,374  
Segment site rental cost of operations 864     559         1,423     848     525         1,373  
Segment services and other cost of operations 511     11         522     415     11         426  
Segment cost of operations(a)(b) 1,375     570         1,945     1,263     536         1,799  
Segment site rental gross margin(c) 2,530     1,145         3,675     2,352     1,075         3,427  
Segment services and other gross margin(c) 147     6         153     143     5         148  
Segment selling, general and administrative expenses(b) 96     195         291     110     179         289  
Segment operating profit(c) 2,581     956         3,537     2,385     901         3,286  
Other selling, general and administrative expenses(b)         $ 233     233             $ 191     191  
Stock-based compensation expense         116     116             108     108  
Depreciation, amortization and accretion         1,574     1,574             1,528     1,528  
Interest expense and amortization of deferred financing costs         683     683             642     642  
Other (income) expenses to reconcile to income (loss) before income taxes(d)         47     47             173     173  
Income (loss) before income taxes             $ 884                 $ 644  
  1. Exclusive of depreciation, amortization and accretion shown separately.
  2. Segment cost of operations excludes (1) stock-based compensation expense of $26 million and $25 million for the twelve months ended December 31, 2019 and 2018, respectively, and (2) prepaid lease purchase price adjustments of $20 million for both of the twelve months ended December 31, 2019 and 2018.  Selling, general and administrative expenses exclude stock-based compensation expense of $90 million and $83 million for the twelve months ended December 31, 2019 and 2018, respectively.
  3. See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of segment site rental gross margin, segment services and other gross margin and segment operating profit.
  4. See condensed consolidated statement of operations for further information.

Expected Impact of Restatement on Previously-Issued Financial Statements

As a result of the identified errors described above, we will restate our financial statements for the years ended December 31, 2018 and 2017, and unaudited financial information for the quarterly and year-to-date periods in the year ended December 31, 2018 and for the first three quarters in the year ended December 31, 2019. We refer to the adjustments to correct the historical errors as "Restatement Adjustments."

In addition to the Restatement Adjustments, we have also made other adjustments to the financial statements referenced above to correct errors which were not material, individually or in the aggregate, to our consolidated financial statements.  All such immaterial adjustments relate exclusively to our Towers segment. Collectively, we refer to the Restatement Adjustments and  immaterial adjustments as "Historical Adjustments."

We will also restate selected historical consolidated financial and other data for the years ended December 31, 2016 and 2015 to reflect the impact of the Historical Adjustments.  Restated financial statements and selected historical consolidated financial and other data for such periods will be reflected in our Annual Report on Form 10-K for the year ended December 31, 2019, which we expect to file within the prescribed timeline for such report, including any available extension if needed to finalize the consolidated financial statements and disclosures and complete the associated audit work.

Preliminary Restatement of Previously-Issued Annual Financial Statements

This section summarizes the expected unaudited effects of the Company's restatement to certain of its previously-issued annual financial statements for the years ended December 31, 2017 and 2018.  "As Reported" amounts represent amounts as previously reported on the Company’s respective Annual Reports on Form 10-K.  The following tables also reflect the expected unaudited impact of the Historical Adjustments, where applicable, on each annual period below.

Condensed Consolidated Balance Sheet

  December 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
LIABILITIES AND EQUITY              
Current liabilities:              
Deferred revenues $ 498     $ 93     $     $ 591  
     Total current liabilities 1,417     93         1,510  
Other long-term liabilities 2,759     364         3,123  
Total liabilities 20,751     457         21,208  
Dividends/distributions in excess of earnings (5,732 )   (457 )       (6,189 )
     Total equity 12,034     (457 )       11,577  
     Total liabilities and equity $ 32,785     $     $     $ 32,785  

Condensed Consolidated Statement of Operations

  Year Ended December 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 4,716     $ 84     $     $ 4,800  
Services and other 707     (130 )   (3 )   574  
Net revenues 5,423     (46 )   (3 )   5,374  
Operating expenses:              
Costs of operations(a):              
Services and other 437         (3 )   434  
Total operating expenses 3,991         (3 )   3,988  
Operating income (loss) 1,432     (46 )       1,386  
Income (loss) before income taxes 690     (46 )       644  
Net income (loss) 671     (46 )       625  
Net income (loss) attributable to CCIC common stockholders $ 558     $ (46 )   $     $ 512  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 1.35     $ (0.11 )   $     $ 1.24  
Net income (loss) attributable to CCIC common stockholders - diluted $ 1.34     $ (0.11 )   $     $ 1.23  

 

  Year Ended December 31, 2017
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 3,669     $ 68     $     $ 3,737  
Services and other 687     (135 )   (31 )   521  
Net revenues 4,356     (67 )   (31 )   4,258  
Operating expenses:              
Costs of operations(a):              
Services and other 420         (21 )   399  
Total operating expenses 3,310         (21 )   3,289  
Operating income (loss) 1,046     (67 )   (10 )   969  
Income (loss) before income taxes 471     (67 )   (10 )   394  
Net income (loss) 445     (67 )   (10 )   368  
Net income (loss) attributable to CCIC common stockholders $ 387     $ (67 )   $ (10 )   $ 310  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 1.01     $ (0.17 )   $ (0.03 )   $ 0.81  
Net income (loss) attributable to CCIC common stockholders - diluted $ 1.01     $ (0.17 )   $ (0.03 )   $ 0.81  

(a)      Exclusive of depreciation, amortization and accretion shown separately.

Condensed Consolidated Statement of Cash Flows

  Year Ended December 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 671     $ (46 )   $     $ 625  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities 276       46           322  
  Net cash provided by (used for) operating activities   2,502                   2,502  
Net increase (decrease) in cash, cash equivalents, and restricted cash (26 )           (26 )
Cash, cash equivalents, and restricted cash at beginning of period 440             440  
Cash, cash equivalents, and restricted cash at end of period $ 413     $     $     $ 413  

 

  Year Ended December 31, 2017
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 445     $ (67 )   $ (10 )   $ 368  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities   176       67             243  
Decrease (increase) in assets   45             10       55  
Net cash provided by (used for) operating activities   2,043                   2,043  
Net increase (decrease) in cash, cash equivalents, and restricted cash (258 )           (258 )
Cash, cash equivalents, and restricted cash at beginning of period 697             697  
Cash, cash equivalents, and restricted cash at end of period $ 440     $     $     $ 440  

Condensed Consolidated Statement of Equity

  December 31, 2016
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Dividends/distributions in excess of earnings $ (3,379 )   $ (344 )   $ 10     $ (3,713 )
Total stockholders' equity $ 7,557     $ (344 )   $ 10     $ 7,223  
               
  December 31, 2017
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Dividends/distributions in excess of earnings $ (4,505 )   $ (411 )   $     $ (4,916 )
Total stockholders' equity $ 12,339     $ (411 )   $     $ 11,928  
               
  December 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Dividends/distributions in excess of earnings $ (5,732 )   $ (457 )   $     $ (6,189 )
Total stockholders' equity $ 12,034     $ (457 )   $     $ 11,577  

Preliminary Restatement of Previously-Issued Interim Unaudited Quarterly Financial Information

The following tables represent the Company’s expected impact to previously issued unaudited quarterly financial information for each of the applicable interim periods during the nine months ended September 30, 2019 and twelve months ended December 31, 2018.  The amounts previously issued were derived from the Company’s respective Quarterly Reports on Form 10-Q, and, for the fourth quarter of 2018, from its 2018 Annual Report on Form 10-K.  The following tables also reflect the expected unaudited impact of the Historical Adjustments, where applicable, on each interim period below.

Condensed Consolidated Balance Sheet

  September 30, 2019   June 30, 2019   March 31, 2019
  (As Restated)
ASSETS          
Current assets:          
Cash and cash equivalents $ 182     $ 288     $ 245  
Restricted cash 138     136     158  
Receivables, net 667     591     545  
Prepaid expenses 99     111     85  
Other current assets 167     168     160  
Total current assets 1,253     1,294     1,193  
Deferred site rental receivables 1,413     1,391     1,373  
Property and equipment, net 14,416     14,151     13,883  
Operating lease right-of-use assets 6,112     6,053     5,969  
Goodwill 10,078     10,078     10,078  
Other intangible assets, net 4,968     5,074     5,178  
Long-term prepaid rent and other assets, net 104     106     104  
Total assets $ 38,344     $ 38,147     $ 37,778  
LIABILITIES AND EQUITY          
Current liabilities:          
Accounts payable $ 368     $ 337     $ 311  
Accrued interest 110     166     107  
Deferred revenues 642     611     602  
Other accrued liabilities 335     305     262  
Current maturities of debt and other obligations 100     98     96  
Current portion of operating lease liabilities 296     289     287  
Total current liabilities 1,851     1,806     1,665  
Debt and other long-term obligations 17,750     17,471     17,120  
Operating lease liabilities 5,480     5,427     5,338  
Other long-term liabilities 2,469     2,423     2,383  
Total liabilities 27,550     27,127     26,506  
Commitments and contingencies          
CCIC stockholders' equity:          
Common stock, $0.01 par value 4     4     4  
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value          
Additional paid-in capital 17,829     17,801     17,769  
Accumulated other comprehensive income (loss) (5 )   (5 )   (5 )
Dividends/distributions in excess of earnings (7,034 )   (6,780 )   (6,496 )
Total equity 10,794     11,020     11,272  
Total liabilities and equity $ 38,344     $ 38,147     $ 37,778  

 

  September 30, 2018   June 30, 2018   March 31, 2018
  (As Restated)
ASSETS          
Current assets:          
Cash and cash equivalents $ 323     $ 206     $ 220  
Restricted cash 125     125     120  
Receivables, net 471     455     402  
Prepaid expenses 182     197     175  
Other current assets 148     181     157  
Total current assets 1,249     1,164     1,074  
Deferred site rental receivables 1,357     1,303     1,304  
Property and equipment, net 13,433     13,218     13,051  
Goodwill 10,074     10,075     10,075  
Other intangible assets, net 5,620     5,729     5,854  
Long-term prepaid rent and other assets, net 911     885     892  
Total assets $ 32,644     $ 32,374     $ 32,250  
LIABILITIES AND EQUITY          
Current liabilities:          
Accounts payable $ 302     $ 272     $ 248  
Accrued interest 101     154     104  
Deferred revenues 572     558     543  
Other accrued liabilities 306     272     240  
Current maturities of debt and other obligations 111     112     130  
Total current liabilities 1,392     1,368     1,265  
Debt and other long-term obligations 16,313     15,844     15,616  
Other long-term liabilities 3,088     3,029     2,961  
Total liabilities 20,793     20,241     19,842  
Commitments and contingencies          
CCIC stockholders' equity:          
Common stock, $0.01 par value 4     4     4  
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value          
Additional paid-in capital 17,743     17,711     17,690  
Accumulated other comprehensive income (loss) (5 )   (5 )   (4 )
Dividends/distributions in excess of earnings (5,891 )   (5,577 )   (5,282 )
Total equity 11,851     12,133     12,408  
Total liabilities and equity $ 32,644     $ 32,374     $ 32,250  

The following tables illustrate the estimated Historical Adjustments, where applicable, on the Company’s condensed consolidated balance sheet for each period presented.  Only line items impacted by the Historical Adjustments are presented, and as such, components will not sum to totals.

  September 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
LIABILITIES AND EQUITY              
Current liabilities:              
Deferred revenues $ 525     $ 117     $     $ 642  
Total current liabilities 1,734     117         1,851  
Other long-term liabilities 2,055     414         2,469  
Total liabilities 27,019     531         27,550  
CCIC stockholders' equity:              
Dividends/distributions in excess of earnings (6,503 )   (531 )       (7,034 )
Total equity 11,325     (531 )       10,794  
Total liabilities and equity $ 38,344     $     $     $ 38,344  

 

  June 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
LIABILITIES AND EQUITY              
Current liabilities:              
Deferred revenues $ 503     $ 108     $     $ 611  
Total current liabilities 1,698     108         1,806  
Other long-term liabilities 2,028     395         2,423  
Total liabilities 26,624     503         27,127  
CCIC stockholders' equity:              
Dividends/distributions in excess of earnings (6,277 )   (503 )       (6,780 )
Total equity 11,523     (503 )       11,020  
Total liabilities and equity $ 38,147     $     $     $ 38,147  

 

  March 31, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
LIABILITIES AND EQUITY              
Current liabilities:              
Deferred revenues $ 502     $ 100     $     $ 602  
Total current liabilities 1,565     100         1,665  
Other long-term liabilities 2,009     374         2,383  
Total liabilities 26,032     474         26,506  
CCIC stockholders' equity:              
Dividends/distributions in excess of earnings (6,022 )   (474 )       (6,496 )
Total equity 11,746     (474 )       11,272  
Total liabilities and equity $ 37,778     $     $     $ 37,778  

 

  September 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
LIABILITIES AND EQUITY              
Current liabilities:              
Deferred revenues $ 484     $ 88     $     $ 572  
Total current liabilities 1,304     88         1,392  
Other long-term liabilities 2,732     356         3,088  
Total liabilities 20,349     444         20,793  
CCIC stockholders' equity:              
Dividends/distributions in excess of earnings (5,447 )   (444 )       (5,891 )
Total equity 12,295     (444 )       11,851  
Total liabilities and equity $ 32,644     $     $     $ 32,644  

 

  June 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
LIABILITIES AND EQUITY              
Current liabilities:              
Deferred revenues $ 476     $ 82     $     $ 558  
Total current liabilities 1,286     82         1,368  
Other long-term liabilities 2,678     351         3,029  
Total liabilities 19,808     433         20,241  
CCIC stockholders' equity:              
Dividends/distributions in excess of earnings (5,144 )   (433 )       (5,577 )
Total equity 12,566     (433 )       12,133  
Total liabilities and equity $ 32,374     $     $     $ 32,374  

 

  March 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
LIABILITIES AND EQUITY              
Current liabilities:              
Deferred revenues $ 465     $ 78     $     $ 543  
Total current liabilities 1,187     78         1,265  
Other long-term liabilities 2,615     346         2,961  
Total liabilities 19,418     424         19,842  
CCIC stockholders' equity:              
Dividends/distributions in excess of earnings (4,858 )   (424 )       (5,282 )
Total equity 12,832     (424 )       12,408  
Total liabilities and equity $ 32,250     $     $     $ 32,250  

Condensed Consolidated Statement of Operations

  September 30, 2019   June 30, 2019   March 31, 2019
  Three Months Ended   Nine Months Ended   Three Months Ended   Six Months Ended   Three Months Ended
  (As Restated)
Net revenues:                  
Site rental $ 1,289     $ 3,797     $ 1,264     $ 2,507     $ 1,243  
Services and other 197     547     185     351     166  
Net revenues 1,486     4,344     1,449     2,858     1,409  
Operating expenses:                  
Costs of operations(a):                  
Site rental 369     1,095     365     726     361  
Services and other 147     410     138     263     125  
Selling, general and administrative 150     457     155     307     152  
Asset write-down charges 2     13     6     12     6  
Acquisition and integration costs 4     10     2     6     4  
Depreciation, amortization and accretion 389     1,176     393     787     394  
Total operating expenses 1,061     3,161     1,059     2,101     1,042  
Operating income (loss) 425     1,183     390     757     367  
Interest expense and amortization of deferred financing costs (173 )   (510 )   (169 )   (337 )   (168 )
Gains (losses) on retirement of long-term obligations     (2 )   (1 )   (2 )   (1 )
Interest income 2     5     1     3     2  
Other income (expense) (5 )   (6 )       (1 )   (1 )
Income (loss) before income taxes 249     670     221     420     199  
Benefit (provision) for income taxes (5 )   (15 )   (4 )   (10 )   (6 )
Net income (loss) 244     655     217     410     193  
Dividends/distributions on preferred stock (28 )   (85 )   (28 )   (57 )   (28 )
Net income (loss) attributable to CCIC common stockholders $ 216     $ 570     $ 189     $ 353     $ 165  
Net income (loss) attributable to CCIC common stockholders, per common share:                  
Net income (loss) attributable to CCIC common stockholders - basic $ 0.52     $ 1.37     $ 0.45     $ 0.85     $ 0.40  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.52     $ 1.36     $ 0.45     $ 0.85     $ 0.40  
Weighted-average common shares outstanding:                  
Basic 416     416     416     415     415  
Diluted 418     418     418     417     417  
  1. Exclusive of depreciation, amortization and accretion shown separately.
  December 31, 2018   September 30, 2018   June 30, 2018   March 31, 2018
  Three Months Ended   Three Months Ended   Nine Months Ended   Three Months Ended   Six Months Ended   Three Months Ended
  (As Restated)
Net revenues:                      
Site rental $ 1,232     $ 1,206     $ 3,568     $ 1,189     $ 2,362     $ 1,172  
Services and other 174     157     400     131     244     113  
Net revenues 1,406     1,363     3,968     1,320     2,606     1,285  
Operating expenses:                      
Costs of operations(a):                      
Site rental 353     355     1,057     355     702     347  
Services and other 135     118     301     98     183     85  
Selling, general and administrative 145     145     418     138     273     134  
Asset write-down charges 8     8     18     6     9     3  
Acquisition and integration costs 9     4     18     8     14     6  
Depreciation, amortization and accretion 390     385     1,138     379     753     374  
Total operating expenses 1,040     1,015     2,950     984     1,934     949  
Operating income (loss) 366     348     1,018     336     672     336  
Interest expense and amortization of deferred financing costs (164 )   (160 )   (478 )   (158 )   (318 )   (160 )
Gains (losses) on retirement of long-term obligations     (32 )   (106 )   (3 )   (74 )   (71 )
Interest income 2     1     4     1     2     1  
Other income (expense) 1     1             (1 )   (1 )
Income (loss) before income taxes 205     158     438     176     281     105  
Benefit (provision) for income taxes (5 )   (5 )   (13 )   (5 )   (9 )   (4 )
Net income (loss) 200     153     425     171     272     101  
Dividends/distributions on preferred stock (28 )   (28 )   (85 )   (28 )   (57 )   (28 )
Net income (loss) attributable to CCIC common stockholders $ 172     $ 125     $ 340     $ 143     $ 215     $ 73  
Net income (loss) attributable to CCIC common stockholders, per common share:                      
Net income (loss) attributable to CCIC common stockholders -  basic $ 0.41     $ 0.30     $ 0.82     $ 0.34     $ 0.52     $ 0.18  
Net income (loss) attributable to CCIC common stockholders -  diluted $ 0.41     $ 0.30     $ 0.82     $ 0.34     $ 0.52     $ 0.18  
Weighted-average common shares outstanding:                      
Basic 415     415     413     415     412     409  
Diluted 417     416     414     416     413     410  
  1. Exclusive of depreciation, amortization and accretion shown separately.

The following tables illustrate the estimated Historical Adjustments, where applicable, on the Company’s condensed consolidated statement of operations and comprehensive income (loss) for each period presented.  Only line items impacted by the Historical Adjustments are presented, and as such, components will not sum to totals.

  Nine Months Ended September 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 3,718     $ 79     $     $ 3,797  
Services and other 700     (153 )       547  
Net revenues 4,418     (74 )       4,344  
Operating income (loss) 1,257     (74 )       1,183  
Income (loss) before income taxes 744     (74 )       670  
Net income (loss) 729     (74 )       655  
Net income (loss) attributable to CCIC common stockholders $ 644     $ (74 )   $     $ 570  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 1.55     $ (0.18 )   $     $ 1.37  
Net income (loss) attributable to CCIC common stockholders - diluted $ 1.54     $ (0.18 )   $     $ 1.36  

 

  Three Months Ended September 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 1,260     $ 29     $     $ 1,289  
Services and other 254     (57 )       197  
Net revenues 1,514     (28 )       1,486  
Operating income (loss) 453     (28 )       425  
Income (loss) before income taxes 277     (28 )       249  
Net income (loss) 272     (28 )       244  
Net income (loss) attributable to CCIC common stockholders $ 244     $ (28 )   $     $ 216  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.59     $ (0.07 )   $     $ 0.52  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.58     $ (0.06 )   $     $ 0.52  

(a)      Exclusive of depreciation, amortization and accretion shown separately.

  Six Months Ended June 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 2,457     $ 50     $     $ 2,507  
Services and other 447     (96 )       351  
Net revenues 2,904     (46 )       2,858  
Operating income (loss) 803     (46 )       757  
Income (loss) before income taxes 466     (46 )       420  
Net income (loss) 456     (46 )       410  
Net income (loss) attributable to CCIC common stockholders $ 399     $ (46 )   $     $ 353  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.96     $ (0.11 )   $     $ 0.85  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.95     $ (0.10 )   $     $ 0.85  

 

  Three Months Ended June 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 1,238     $ 26     $     $ 1,264  
Services and other 240     (55 )       185  
Net revenues 1,478     (29 )       1,449  
Operating income (loss) 419     (29 )       390  
Income (loss) before income taxes 250     (29 )       221  
Net income (loss) 246     (29 )       217  
Net income (loss) attributable to CCIC common stockholders $ 218     $ (29 )   $     $ 189  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.52     $ (0.07 )   $     $ 0.45  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.52     $ (0.07 )   $     $ 0.45  

 

  Three Months Ended March 31, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 1,219     $ 24     $     $ 1,243  
Services and other 207     (41 )       166  
Net revenues 1,426     (17 )       1,409  
Operating income (loss) 384     (17 )       367  
Income (loss) before income taxes 216     (17 )       199  
Net income (loss) 210     (17 )       193  
Net income (loss) attributable to CCIC common stockholders $ 182     $ (17 )   $     $ 165  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.44     $ (0.04 )   $     $ 0.40  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.44     $ (0.04 )   $     $ 0.40  

(a)      Exclusive of depreciation, amortization and accretion shown separately.

  Three Months Ended December 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 1,209     $ 23     $     $ 1,232  
Services and other 210     (36 )       174  
Net revenues 1,419     (13 )       1,406  
Operating income (loss) 379     (13 )       366  
Income (loss) before income taxes 218     (13 )       205  
Net income (loss) 213     (13 )       200  
Net income (loss) attributable to CCIC common stockholders $ 185     $ (13 )   $     $ 172  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.45     $ (0.04 )   $     $ 0.41  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.44     $ (0.03 )   $     $ 0.41  

 

  Nine Months Ended September 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 3,507     $ 61     $     $ 3,568  
Services and other 497     (94 )   (3 )   400  
Net revenues 4,004     (33 )   (3 )   3,968  
Operating expenses:              
Costs of operations(a):              
Services and other 304         (3 )   301  
Total operating expenses 2,953         (3 )   2,950  
Operating income (loss) 1,051     (33 )       1,018  
Income (loss) before income taxes 471     (33 )       438  
Net income (loss) 458     (33 )       425  
Net income (loss) attributable to CCIC common stockholders $ 373     $ (33 )   $     $ 340  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.90     $ (0.08 )   $     $ 0.82  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.90     $ (0.08 )   $     $ 0.82  

(a)      Exclusive of depreciation, amortization and accretion shown separately.

  Three Months Ended September 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 1,184     $ 22     $     $ 1,206  
Services and other 191     (33 )   (1 )   157  
Net revenues 1,375     (11 )   (1 )   1,363  
Operating expenses:              
Costs of operations(a):              
Services and other 119         (1 )   118  
Total operating expenses 1,016         (1 )   1,015  
Operating income (loss) 359     (11 )       348  
Income (loss) before income taxes 169     (11 )       158  
Net income (loss) 164     (11 )       153  
Net income (loss) attributable to CCIC common stockholders $ 136     $ (11 )   $     $ 125  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.33     $ (0.03 )   $     $ 0.30  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.33     $ (0.03 )   $     $ 0.30  

 

  Six Months Ended June 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 2,323     $ 39     $     $ 2,362  
Services and other 307     (61 )   (2 )   244  
Net revenues 2,630     (22 )   (2 )   2,606  
Operating expenses:              
Costs of operations(a):              
Services and other 185         (2 )   183  
Total operating expenses 1,936         (2 )   1,934  
Operating income (loss) 694     (22 )       672  
Income (loss) before income taxes 303     (22 )       281  
Net income (loss) 294     (22 )       272  
Net income (loss) attributable to CCIC common stockholders $ 237     $ (22 )   $     $ 215  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.58     $ (0.06 )   $     $ 0.52  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.57     $ (0.05 )   $     $ 0.52  

(a)      Exclusive of depreciation, amortization and accretion shown separately.

  Three Months Ended June 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 1,169     $ 20     $     $ 1,189  
Services and other 161     (29 )   (1 )   131  
Net revenues 1,330     (9 )   (1 )   1,320  
Operating expenses:              
Costs of operations(a):              
Services and other 99         (1 )   98  
Total operating expenses 985         (1 )   984  
Operating income (loss) 345     (9 )       336  
Income (loss) before income taxes 185     (9 )       176  
Net income (loss) 180     (9 )       171  
Net income (loss) attributable to CCIC common stockholders $ 152     $ (9 )   $     $ 143  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.37     $ (0.03 )   $     $ 0.34  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.36     $ (0.02 )   $     $ 0.34  

 

  Three Months Ended March 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Net revenues:              
Site rental $ 1,153     $ 19     $     $ 1,172  
Services and other 146     (32 )   (1 )   113  
Net revenues 1,299     (13 )   (1 )   1,285  
Operating expenses:              
Costs of operations(a):              
Services and other 86         (1 )   85  
Total operating expenses 950         (1 )   949  
Operating income (loss) 349     (13 )       336  
Income (loss) before income taxes 118     (13 )       105  
Net income (loss) 114     (13 )       101  
Net income (loss) attributable to CCIC common stockholders $ 86     $ (13 )   $     $ 73  
Net income (loss) attributable to CCIC common stockholders, per common share:              
Net income (loss) attributable to CCIC common stockholders - basic $ 0.21     $ (0.03 )   $     $ 0.18  
Net income (loss) attributable to CCIC common stockholders - diluted $ 0.21     $ (0.03 )   $     $ 0.18  
  1. Exclusive of depreciation, amortization and accretion shown separately.

Condensed Consolidated Statement of Cash Flows

  September 30, 2019   June 30, 2019   March 31, 2019
  Nine Months Ended   Six Months Ended   Three Months Ended
  (As Restated)
Cash flows from operating activities:          
Net income (loss) $ 655     $ 410     $ 193  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:          
Depreciation, amortization and accretion 1,176     787     394  
(Gains) losses on retirement of long-term obligations 2     2     1  
Amortization of deferred financing costs and other non-cash interest 1     1     1  
Stock-based compensation expense 91     62     29  
Asset write-down charges 13     12     6  
Deferred income tax (benefit) provision 2     1     1  
Other non-cash adjustments, net 4     3     2  
Changes in assets and liabilities, excluding the effects of acquisitions:          
Increase (decrease) in liabilities 175     100     (53 )
Decrease (increase) in assets (228 )   (151 )   (62 )
Net cash provided by (used for) operating activities 1,891     1,227     512  
Cash flows from investing activities:          
Capital expenditures (1,538 )   (998 )   (480 )
Payments for acquisitions, net of cash acquired (15 )   (13 )   (10 )
Other investing activities, net 3     1     1  
Net cash provided by (used for) investing activities (1,550 )   (1,010 )   (489 )
Cash flows from financing activities:          
Proceeds from issuance of long-term debt 1,895     995     996  
Principal payments on debt and other long-term obligations (59 )   (36 )   (25 )
Purchases and redemptions of long-term debt (12 )   (12 )   (12 )
Borrowings under revolving credit facility 1,585     1,195     710  
Payments under revolving credit facility (2,270 )   (1,785 )   (1,140 )
Net issuances (repayments) under commercial paper program     500      
Payments for financing costs (24 )   (14 )   (10 )
Purchases of common stock (44 )   (43 )   (42 )
Dividends/distributions paid on common stock (1,415 )   (944 )   (477 )
Dividends/distributions paid on preferred stock (85 )   (57 )   (28 )
Net cash provided by (used for) financing activities (429 )   (201 )   (28 )
Net increase (decrease) in cash, cash equivalents, and restricted cash (88 )   16     (5 )
Effect of exchange rate changes on cash          
Cash, cash equivalents, and restricted cash at beginning of period 413     413     413  
Cash, cash equivalents, and restricted cash at end of period $ 325     $ 429     $ 408  

 

  September 30, 2018   June 30, 2018   March 31, 2018
  Nine Months Ended   Six Months Ended   Three Months Ended
  (As Restated)
Cash flows from operating activities:          
Net income (loss) $ 425     $ 272     $ 101  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:          
Depreciation, amortization and accretion 1,138     753     374  
(Gains) losses on retirement of long-term obligations 106     74     71  
Amortization of deferred financing costs and other non-cash interest 5     4     2  
Stock-based compensation expense 79     47     23  
Asset write-down charges 18     9     3  
Deferred income tax (benefit) provision 2     1     1  
Other non-cash adjustments, net 2     1     2  
Changes in assets and liabilities, excluding the effects of acquisitions:          
Increase (decrease) in liabilities 177     100     (77 )
Decrease (increase) in assets (177 )   (150 )   (48 )
Net cash provided by (used for) operating activities 1,775     1,111     452  
Cash flows from investing activities:          
Capital expenditures (1,241 )   (763 )   (370 )
Payments for acquisitions, net of cash acquired (26 )   (18 )   (14 )
Other investing activities, net (14 )   3      
Net cash provided by (used for) investing activities (1,281 )   (778 )   (384 )
Cash flows from financing activities:          
Proceeds from issuance of long-term debt 2,743     1,743     1,743  
Principal payments on debt and other long-term obligations (76 )   (47 )   (32 )
Purchases and redemptions of long-term debt (2,346 )   (1,318 )   (1,318 )
Borrowings under revolving credit facility 1,290     485     170  
Payments under revolving credit facility (1,465 )   (1,150 )   (1,050 )
Payments for financing costs (33 )   (20 )   (15 )
Net proceeds from issuance of common stock 841     841     843  
Purchases of common stock (34 )   (34 )   (33 )
Dividends/distributions paid on common stock (1,315 )   (879 )   (443 )
Dividends/distributions paid on preferred stock (85 )   (57 )   (28 )
Net cash provided by (used for) financing activities (480 )   (436 )   (163 )
Net increase (decrease) in cash, cash equivalents, and restricted cash 14     (103 )   (95 )
Effect of exchange rate changes on cash (1 )   (1 )    
Cash, cash equivalents, and restricted cash at beginning of period 440     440     440  
Cash, cash equivalents, and restricted cash at end of period $ 453     $ 336     $ 345  

The following tables illustrate the estimated Historical Adjustments, where applicable, on the Company’s condensed consolidated statement of cash flows for each period.  Only line items impacted by the Historical Adjustments are presented, and as such, components will not sum to totals.

  Nine Months Ended September 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 729     $ (74 )   $     $ 655  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities 101     74         175  
Net cash provided by (used for) operating activities 1,891             1,891  
Net increase (decrease) in cash, cash equivalents, and restricted cash (88 )           (88 )
Cash, cash equivalents, and restricted cash at beginning of period 413             413  
Cash, cash equivalents, and restricted cash at end of period $ 325     $     $     $ 325  

 

  Six Months Ended June 30, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 456     $ (46 )   $     $ 410  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities 54     46         100  
Net cash provided by (used for) operating activities 1,227             1,227  
Net increase (decrease) in cash, cash equivalents, and restricted cash 16             16  
Cash, cash equivalents, and restricted cash at beginning of period 413             413  
Cash, cash equivalents, and restricted cash at end of period $ 429     $     $     $ 429  

 

  Three Months Ended March 31, 2019
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 210     $ (17 )   $     $ 193  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities (70 )   17         (53 )
Net cash provided by (used for) operating activities 512             512  
Net increase (decrease) in cash, cash equivalents, and restricted cash (5 )           (5 )
Cash, cash equivalents, and restricted cash at beginning of period 413             413  
Cash, cash equivalents, and restricted cash at end of period $ 408     $     $     $ 408  

 

  Nine Months Ended September 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 458     $ (33 )   $     $ 425  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities 144     33         177  
Net cash provided by (used for) operating activities 1,775             1,775  
Net increase (decrease) in cash, cash equivalents, and restricted cash 14             14  
Cash, cash equivalents, and restricted cash at beginning of period 440             440  
Cash, cash equivalents, and restricted cash at end of period $ 453     $     $     $ 453  

 

  Six Months Ended June 30, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 294     $ (22 )   $     $ 272  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities 78     22         100  
Net cash provided by (used for) operating activities 1,111             1,111  
Net increase (decrease) in cash, cash equivalents, and restricted cash (103 )           (103 )
Cash, cash equivalents, and restricted cash at beginning of period 440             440  
Cash, cash equivalents, and restricted cash at end of period $ 336     $     $     $ 336  

 

  Three Months Ended March 31, 2018
  As Reported   Restatement Adjustments   Other Adjustments   As Restated
Cash flows from operating activities:              
Net income (loss) $ 114     $ (13 )   $     $ 101  
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:              
Increase (decrease) in liabilities (90 )   13         (77 )
Net cash provided by (used for) operating activities 452             452  
Net increase (decrease) in cash, cash equivalents, and restricted cash (95 )           (95 )
Cash, cash equivalents, and restricted cash at beginning of period 440             440  
Cash, cash equivalents, and restricted cash at end of period $ 345     $     $     $ 345  

Impact of Restatement on Selected Financial Data

  Years Ended December 31,
(In millions of dollars, except per share amounts) 2019   2018   2017   2016   2015
      As Restated
Statement of Operations Data(a)(c):                  
Net revenues:                  
Site rental $ 5,098     $ 4,800     $ 3,737     $ 3,286     $ 3,058  
Services and other 675     574     521     566     534  
Net revenues 5,773     5,374     4,258     3,852     3,592  
Operating expenses:                  
Costs of operations(b):                  
Site rental 1,462     1,410     1,144     1,024     964  
Services and other 529     434     399     397     355  
Total costs of operations 1,991     1,844     1,543     1,421     1,319  
Selling, general and administrative 614     563     426     371     310  
Asset write-down charges 19     26     17     34     33  
Acquisition and integration costs 13     27     61     17     16  
Depreciation, amortization and accretion 1,574     1,528     1,242     1,109     1,036  
Operating income (loss) 1,562     1,386     969     900     878  
Interest expense and amortization of deferred financing costs (683 )   (642 )   (591 )   (515 )   (527 )
Gains (losses) on retirement of long-term obligations (2 )   (106 )   (4 )   (52 )   (4 )
Interest income 6     5     19     1     2  
Other income (expense) 1     1     1     (9 )   57  
Income (loss) from continuing operations before income taxes 884     644     394     325     406  
Benefit (provision) for income taxes (21 )   (19 )   (26 )   (17 )   51  
Income (loss) from continuing operations 863     625     368     308     457  
Discontinued operations:                  
Income (loss) from discontinued operations, net of tax                 20  
Net gain (loss) from disposal of discontinued operations, net of tax                 979  
Income (loss) from discontinued operations, net of tax                 999  
Net income (loss) 863     625     368     308     1,456  
Less: Net income (loss) attributable to the noncontrolling interest                 3  
Net income (loss) attributable to CCIC stockholders 863     625     368     308     1,453  
Dividends/distributions on preferred stock (113 )   (113 )   (58 )   (33 )   (44 )
Net income (loss) attributable to CCIC common stockholders $ 750     $ 512     $ 310     $ 275     $ 1,409  
Income (loss) from continuing operations attributable to CCIC common stockholders, per common share - basic $ 1.80     $ 1.24     $ 0.81     $ 0.81     $ 1.24  
Income (loss) from continuing operations attributable to CCIC common stockholders, per common share - diluted $ 1.80     $ 1.23     $ 0.81     $ 0.81     $ 1.24  
Weighted-average common shares outstanding (in millions):                  
Basic 416     413     382     340     333  
Diluted 418     415     383     341     334  

 

Other Data(a)(c):                  
Summary cash flow information:                  
Net cash provided by (used for) operating activities $ 2,700     $ 2,502     $ 2,043     $ 1,787     $ 1,790  
Net cash provided by (used for) investing activities (2,083 )   (1,795 )   (10,493 )   (1,429 )   (1,956 )
Net cash provided by (used for) financing activities (692 )   (733 )   8,192     (89 )   (952 )
Balance Sheet Data (at period end)(a)(c):                  
Cash and cash equivalents $ 196     $ 277     $ 314     $ 568     $ 179  
Property and equipment, net 14,689     13,676     12,933     9,805     9,580  
Total assets 38,480     32,785     32,229     22,685     21,937  
Total debt and other long-term obligations 18,121     16,682     16,159     12,171     12,150  
Total CCIC stockholders' equity 10,498     11,577     11,928     7,223     6,805  
  1. Inclusive of the impact of acquisitions.
  2. Exclusive of depreciation, amortization and accretion, which are shown separately.
  3. Amounts reflect the impact of all applicable adopted accounting pronouncements during the periods presented.  

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

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Crown Castle International Corporation