Delaware | 001-16441 | 76-0470458 | |||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||
1220 Augusta Drive, Suite 600 Houston, TX | 77057 | ||||||
(Address of principal executive offices) | (Zip Code) |
(Former name or former address, if changed since last report.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Press Release dated July 19, 2017 | |
99.2 | Supplemental Information Package for period ended June 30, 2017 |
CROWN CASTLE INTERNATIONAL CORP. | ||||
By: | /s/ Kenneth J. Simon | |||
Name: | Kenneth J. Simon | |||
Title: | Senior Vice President and General Counsel |
Exhibit No. | Description | |
99.1 | Press Release dated July 19, 2017 | |
99.2 | Supplemental Information Package for the period ended June 30, 2017 |
NEWS RELEASE July 19, 2017 |
Contacts: Dan Schlanger, CFO | |
Son Nguyen, VP & Treasurer | |
FOR IMMEDIATE RELEASE | Crown Castle International Corp. |
713-570-3050 |
(in millions) | Actual | Midpoint Q2 2017 Outlook(b) | Actual Compared to Outlook | |||
Q2 2017 | Q2 2016 | Change | % Change | |||
Site rental revenues | $869 | $805 | +$64 | 8% | $869 | — |
Net income (loss) | $112 | $86 | +$26 | 30% | $100 | +$12 |
Adjusted EBITDA(a) | $589 | $550 | +$39 | 7% | $587 | +$2 |
AFFO(a) | $440 | $392 | +$48 | 12% | $436 | +$4 |
Weighted-average common shares outstanding - diluted | 366 | 339 | +27 | 8% | 362 | +4 |
(a) | See reconciliation of this non-GAAP financial measure to net income (loss) included herein. |
(b) | As issued on April 24, 2017. |
News Release continued: | Page 2 |
• | Site rental revenues. Site rental revenues grew approximately 8%, or $64 million, from second quarter 2016 to second quarter 2017, inclusive of approximately $42 million in Organic Contribution to Site Rental Revenues plus $40 million in contributions from acquisitions and other items, less a $17 million reduction in straight-lined revenues. The $42 million in Organic Contribution to Site Rental Revenues represents approximately 5% growth, comprised of approximately 8% growth from new leasing activity and contracted tenant escalations, net of approximately 3% from tenant non-renewals. |
• | Capital expenditures and acquisitions. Capital expenditures during the quarter were approximately $301 million, comprised of approximately $21 million of land purchases, approximately $19 million of sustaining capital expenditures and approximately $261 million of revenue generating capital expenditures. On June 26, 2017, Crown Castle also closed on its previously announced acquisition of Wilcon Holdings LLC ("Wilcon") for approximately $600 million. |
• | Common stock dividend. During the quarter, Crown Castle paid common stock dividends of approximately $348 million in the aggregate, or $0.95 per common share, an increase of approximately 7% on a per share basis compared to the same period a year ago. Consistent with past practice, in its third quarter 2017 earnings release, Crown Castle expects to provide its Outlook for 2018 and make a related annual common stock dividend announcement, which will be in addition to the dividend increase announcement that Crown Castle expects to make following the closing of the Lightower acquisition. |
• | Financing activities. In May, Crown Castle issued 4.75 million shares of common stock, raising net proceeds of $442 million, and $350 million in aggregate principal amount of inaugural 30-year senior unsecured notes (“May Financing Transactions”). Proceeds from the May Financing Transactions were used to fund the Wilcon acquisition and refinance existing debt. |
News Release continued: | Page 3 |
(in millions) | Third Quarter 2017 | Full Year 2017 | ||||
Site rental revenues | $888 | to | $893 | $3,504 | to | $3,529 |
Site rental cost of operations(a) | $275 | to | $280 | $1,071 | to | $1,096 |
Net income (loss) | $90 | to | $110 | $426 | to | $476 |
Adjusted EBITDA(b) | $600 | to | $605 | $2,389 | to | $2,414 |
Interest expense and amortization of deferred financing costs(c) | $142 | to | $147 | $552 | to | $582 |
FFO(b) | $404 | to | $409 | $1,623 | to | $1,653 |
AFFO(b) | $447 | to | $452 | $1,813 | to | $1,838 |
Weighted-average common shares outstanding - diluted(d) | 368 | 366 |
(a) | Exclusive of depreciation, amortization and accretion. |
(b) | See reconciliation of this non-GAAP financial measure to net income (loss) included herein. |
(c) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense. |
(d) | The assumption for third quarter 2017 and full year 2017 diluted weighted-average common shares outstanding is based on diluted common shares outstanding as of June 30, 2017. |
Midpoint of FY 2017 Outlook to FY 2016 Actual Comparison | Previous Full Year 2017 Outlook(b) | Current Compared to Previous Outlook | ||||
($ in millions) | Current Full Year 2017 Outlook | Full Year 2016 Actual | Change | % Change | ||
Site rental revenues | $3,517 | $3,233 | +$284 | +9% | $3,488 | +$29 |
Net income (loss) | $451 | $357 | +$94 | +26% | $452 | -$1 |
Adjusted EBITDA(a) | $2,402 | $2,228 | +$174 | +8% | $2,387 | +$15 |
AFFO(a) | $1,826 | $1,610 | +$216 | +13% | $1,820 | +$6 |
Weighted-average common shares outstanding - diluted(c) | 366 | 341 | +25 | +7% | 362 | +4 |
(a) | See reconciliation of this non-GAAP financial measure to net income (loss) included herein. |
(b) | As issued on April 24, 2017. Represents midpoint of Outlook. |
(c) | The assumption for full year 2017 diluted weighted-average common shares outstanding is based on diluted common shares outstanding as of June 30, 2017. |
News Release continued: | Page 4 |
• | The update to full year 2017 Outlook primarily reflects the contribution from the Wilcon acquisition, partially offset by higher interest expense. The current full year 2017 Outlook does not include the expected contribution from the acquisition of Lightower, which is expected to close by the end of 2017, and the associated impact from financing the acquisition. |
• | The chart below reconciles the components of expected growth from 2016 to 2017 in site rental revenues of $271 million to $296 million, including expected Organic Contribution to Site Rental Revenues of approximately $140 million to $170 million. |
• | The chart below reconciles the components of expected growth in AFFO from 2016 to 2017 of approximately $216 million at the midpoint. |
• | The current midpoint of full year 2017 Outlook includes contribution from Wilcon to site rental revenues of approximately $26 million, site rental cost of operations of approximately $7 million and general and administrative expenses of $5 million. The financing of the Wilcon acquisition from the proceeds raised in the May Financing |
News Release continued: | Page 5 |
• | Additional information is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website. |
News Release continued: | Page 6 |
• | 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 wireless 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 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 exclude 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 the Company uses AFFO only as a performance measure. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flows from operations or as residual cash flow available for discretionary investment. |
• | FFO is useful to investors or other interested parties in evaluating our financial performance. Management believes that FFO may be used by investors or other interested parties as a basis to compare our financial performance with that of other REITs. FFO helps investors or other interested parties meaningfully evaluate financial performance by excluding the impact of our asset base (primarily depreciation, amortization and accretion). FFO is not a key performance indicator used by the Company. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flow from operations. |
• | Organic Contribution to Site Rental Revenues is useful to investors or other interested parties in understanding the components of the year-over-year changes in our site rental revenues computed in accordance with GAAP. Management uses the Organic Contribution to Site Rental Revenues to assess year-over-year growth rates for our rental activities, to evaluate current performance, to capture trends in rental rates, new leasing activities and customer non-renewals in our core business, as well to forecast future results. Organic Contribution to Site Rental Revenues is not meant as an |
News Release continued: | Page 7 |
News Release continued: | Page 8 |
For the Three Months Ended | For the Twelve Months Ended | ||||||||||
June 30, 2017 | June 30, 2016 | December 31, 2016 | |||||||||
(in millions) | |||||||||||
Net income (loss) | $ | 112.1 | $ | 86.1 | $ | 357.0 | |||||
Adjustments to increase (decrease) net income (loss): | |||||||||||
Asset write-down charges | 4.3 | 12.0 | 34.5 | ||||||||
Acquisition and integration costs | 8.3 | 3.1 | 17.5 | ||||||||
Depreciation, amortization and accretion | 295.6 | 276.0 | 1,108.6 | ||||||||
Amortization of prepaid lease purchase price adjustments | 5.0 | 5.4 | 21.3 | ||||||||
Interest expense and amortization of deferred financing costs(a) | 141.8 | 129.4 | 515.0 | ||||||||
Gains (losses) on retirement of long-term obligations | — | 11.5 | 52.3 | ||||||||
Interest income | (1.0 | ) | (0.1 | ) | (0.8 | ) | |||||
Other income (expense) | 1.1 | 0.5 | 8.8 | ||||||||
Benefit (provision) for income taxes | 4.5 | 3.9 | 16.9 | ||||||||
Stock-based compensation expense | 16.8 | 22.0 | 96.5 | ||||||||
Adjusted EBITDA(b)(c) | $ | 588.5 | $ | 549.7 | $ | 2,227.5 |
(a) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense. |
(b) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA. |
(c) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
Q3 2017 | Full Year 2017 | ||||||
(in millions) | Outlook | Outlook | |||||
Net income (loss) | $90 | to | $110 | $426 | to | $476 | |
Adjustments to increase (decrease) net income (loss): | |||||||
Asset write-down charges | $9 | to | $11 | $20 | to | $30 | |
Acquisition and integration costs | $8 | to | $12 | $28 | to | $38 | |
Depreciation, amortization and accretion | $296 | to | $310 | $1,178 | to | $1,208 | |
Amortization of prepaid lease purchase price adjustments | $4 | to | $6 | $19 | to | $21 | |
Interest expense and amortization of deferred financing costs(a) | $142 | to | $147 | $552 | to | $582 | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $4 | to | $4 | |
Interest income | $(1) | to | $1 | $(3) | to | $1 | |
Other income (expense) | $(1) | to | $3 | $(2) | to | $0 | |
Benefit (provision) for income taxes | $3 | to | $7 | $14 | to | $22 | |
Stock-based compensation expense | $24 | to | $26 | $89 | to | $94 | |
Adjusted EBITDA(b)(c) | $600 | to | $605 | $2,389 | to | $2,414 |
(a) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense. |
(b) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA. |
(c) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
News Release continued: | Page 9 |
For the Three Months Ended | For the Six Months Ended | For the Twelve Months Ended | |||||||||||||||||
(in millions) | June 30, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | December 31, 2016 | ||||||||||||||
Net income (loss) | $ | 112.1 | $ | 86.1 | $ | 231.3 | $ | 133.9 | $ | 357.0 | |||||||||
Real estate related depreciation, amortization and accretion | 288.2 | 269.4 | 569.3 | 540.9 | 1,082.1 | ||||||||||||||
Asset write-down charges | 4.3 | 12.0 | 5.0 | 19.9 | 34.5 | ||||||||||||||
Dividends on preferred stock | — | (11.0 | ) | — | (22.0 | ) | (44.0 | ) | |||||||||||
FFO(a)(b)(c)(d) | $ | 404.6 | $ | 356.4 | $ | 805.6 | $ | 672.7 | $ | 1,429.5 | |||||||||
FFO (from above) | $ | 404.6 | $ | 356.4 | $ | 805.6 | $ | 672.7 | $ | 1,429.5 | |||||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||||||
Straight-lined revenue | 0.8 | (16.2 | ) | (0.5 | ) | (33.5 | ) | (47.4 | ) | ||||||||||
Straight-lined expense | 22.7 | 23.9 | 45.9 | 47.6 | 94.2 | ||||||||||||||
Stock-based compensation expense | 16.8 | 22.0 | 41.8 | 52.7 | 96.5 | ||||||||||||||
Non-cash portion of tax provision | (4.8 | ) | — | (1.2 | ) | 1.7 | 7.3 | ||||||||||||
Non-real estate related depreciation, amortization and accretion | 7.4 | 6.6 | 14.8 | 13.0 | 26.5 | ||||||||||||||
Amortization of non-cash interest expense | 2.4 | 3.8 | 5.3 | 8.0 | 14.3 | ||||||||||||||
Other (income) expense | 1.1 | 0.5 | (3.5 | ) | 3.8 | 8.8 | |||||||||||||
Gains (losses) on retirement of long-term obligations | — | 11.5 | 3.5 | 42.0 | 52.3 | ||||||||||||||
Acquisition and integration costs | 8.3 | 3.1 | 13.9 | 8.8 | 17.5 | ||||||||||||||
Capital improvement capital expenditures | (9.6 | ) | (8.9 | ) | (16.5 | ) | (15.3 | ) | (42.8 | ) | |||||||||
Corporate capital expenditures | (9.9 | ) | (10.2 | ) | (19.0 | ) | (13.9 | ) | (46.9 | ) | |||||||||
AFFO(a)(b)(c)(d) | $ | 439.9 | $ | 392.5 | $ | 890.1 | $ | 787.6 | $ | 1,609.9 |
(a) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO. |
(b) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(c) | Diluted weighted-average common shares outstanding were 365.8 million, 338.6 million, 363.9 million, 336.7 million and 340.9 million for the three months ended June 30, 2017 and 2016, the six months ended June 30, 2017 and 2016 and the twelve months ended December 31, 2016, respectively. |
(d) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
News Release continued: | Page 10 |
Q3 2017 | Full Year 2017 | ||||||
(in millions) | Outlook | Outlook | |||||
Net income (loss) | $90 | to | $110 | $426 | to | $476 | |
Real estate related depreciation, amortization and accretion | $291 | to | $301 | $1,154 | to | $1,174 | |
Asset write-down charges | $9 | to | $11 | $20 | to | $30 | |
FFO(a)(b)(c) | $404 | to | $409 | $1,623 | to | $1,653 | |
FFO (from above) | $404 | to | $409 | $1,623 | to | $1,653 | |
Adjustments to increase (decrease) FFO: | |||||||
Straight-lined revenue | $0 | to | $5 | $4 | to | $19 | |
Straight-lined expense | $20 | to | $25 | $81 | to | $96 | |
Stock-based compensation expense | $24 | to | $26 | $89 | to | $94 | |
Non-cash portion of tax provision | $(2) | to | $3 | $(6) | to | $4 | |
Non-real estate related depreciation, amortization and accretion | $5 | to | $9 | $24 | to | $34 | |
Amortization of non-cash interest expense | $2 | to | $5 | $9 | to | $15 | |
Other (income) expense | $(1) | to | $3 | $(2) | to | $0 | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $4 | to | $4 | |
Acquisition and integration costs | $8 | to | $12 | $28 | to | $38 | |
Capital improvement capital expenditures | $(15) | to | $(10) | $(41) | to | $(31) | |
Corporate capital expenditures | $(19) | to | $(14) | $(53) | to | $(43) | |
AFFO(a)(b)(c) | $447 | to | $452 | $1,813 | to | $1,838 |
(a) | The assumption for third quarter 2017 and full year 2017 diluted weighted-average common shares outstanding is 367.5 million and 365.7 million, respectively, based on diluted common shares outstanding as of June 30, 2017. |
(b) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO. |
(c) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
News Release continued: | Page 11 |
Full Year 2018 | |||
(in millions) | Expected Contribution | ||
Net income (loss) | $163 | to | $213 |
Adjustments to increase (decrease) net income (loss): | |||
Asset write-down charges | $0 | to | $0 |
Acquisition and integration costs | $20 | to | $40 |
Depreciation, amortization and accretion | $250 | to | $300 |
Amortization of prepaid lease purchase price adjustments | $0 | to | $0 |
Interest expense and amortization of deferred financing costs(a)(b) | $0 | to | $0 |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 |
Interest income | $0 | to | $0 |
Other income (expense) | $0 | to | $0 |
Benefit (provision) for income taxes | $15 | to | $20 |
Stock-based compensation expense | $5 | to | $15 |
Adjusted EBITDA(c) | $510 | to | $530 |
(a) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense. |
(b) | Excludes the impact of expected financing relating to the Lightower acquisition. Assumes the Lightower acquisition closes on December 31, 2017. |
(c) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA. |
Full Year 2018 | |||
(in millions) | Expected Contribution | ||
Net income (loss) | $163 | to | $213 |
Real estate related depreciation, amortization and accretion | $209 | to | $259 |
Asset write-down charges | $0 | to | $0 |
FFO(a) | $396 | to | $446 |
FFO (from above) | $396 | to | $446 |
Adjustments to increase (decrease) FFO: | |||
Straight-lined revenue | $(2) | to | $0 |
Straight-lined expense | $0 | to | $0 |
Stock-based compensation expense | $5 | to | $15 |
Non-cash portion of tax provision | $0 | to | $0 |
Non-real estate related depreciation, amortization and accretion | $16 | to | $66 |
Amortization of non-cash interest expense(b) | $0 | to | $0 |
Other (income) expense | $0 | to | $0 |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 |
Acquisition and integration costs | $20 | to | $40 |
Capital improvement capital expenditures | $(29) | to | $(24) |
Corporate capital expenditures | $0 | to | $0 |
AFFO(a) | $465 | to | $485 |
(a) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO. |
(b) | Excludes the impact of expected financing relating to the Lightower acquisition. Assumes the Lightower acquisition closes on December 31, 2017. |
News Release continued: | Page 12 |
Previously Issued | Previously Issued | ||||||
Q2 2017 | Full Year 2017 | ||||||
(in millions) | Outlook | Outlook | |||||
Net income (loss) | $90 | to | $110 | $427 | to | $477 | |
Adjustments to increase (decrease) net income (loss): | |||||||
Asset write-down charges | $9 | to | $11 | $26 | to | $36 | |
Acquisition and integration costs | $4 | to | $8 | $15 | to | $25 | |
Depreciation, amortization and accretion | $288 | to | $302 | $1,170 | to | $1,200 | |
Amortization of prepaid lease purchase price adjustments | $4 | to | $6 | $19 | to | $21 | |
Interest expense and amortization of deferred financing costs | $137 | to | $142 | $542 | to | $572 | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $4 | to | $4 | |
Interest income | $(1) | to | $1 | $(2) | to | $2 | |
Other income (expense) | $(1) | to | $3 | $(3) | to | $(1) | |
Benefit (provision) for income taxes | $3 | to | $7 | $15 | to | $23 | |
Stock-based compensation expense | $25 | to | $27 | $97 | to | $102 | |
Adjusted EBITDA(a)(b) | $584 | to | $589 | $2,372 | to | $2,402 |
(a) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA. |
(b) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
Previously Issued | Previously Issued | ||||||
Q2 2017 | Full Year 2017 | ||||||
(in millions) | Outlook | Outlook | |||||
Net income (loss) | $90 | to | $110 | $427 | to | $477 | |
Real estate related depreciation, amortization and accretion | $283 | to | $293 | $1,146 | to | $1,166 | |
Asset write-down charges | $9 | to | $11 | $26 | to | $36 | |
FFO(a)(b)(c) | $394 | to | $399 | $1,623 | to | $1,653 | |
FFO (from above) | $394 | to | $399 | $1,623 | to | $1,653 | |
Adjustments to increase (decrease) FFO: | |||||||
Straight-lined revenue | $(2) | to | $3 | $6 | to | $21 | |
Straight-lined expense | $21 | to | $26 | $81 | to | $96 | |
Stock-based compensation expense | $25 | to | $27 | $97 | to | $102 | |
Non-cash portion of tax provision | $(7) | to | $(2) | $(4) | to | $6 | |
Non-real estate related depreciation, amortization and accretion | $5 | to | $9 | $24 | to | $34 | |
Amortization of non-cash interest expense | $2 | to | $5 | $8 | to | $14 | |
Other (income) expense | $(1) | to | $2 | $(3) | to | $(1) | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $4 | to | $4 | |
Acquisition and integration costs | $4 | to | $8 | $15 | to | $25 | |
Capital improvement capital expenditures | $(14) | to | $(9) | $(41) | to | $(31) | |
Corporate capital expenditures | $(15) | to | $(10) | $(54) | to | $(44) | |
AFFO(a)(b)(c) | $433 | to | $438 | $1,805 | to | $1,835 |
(a) | Previously issued second quarter 2017 and full year 2017 outlook assumes diluted common shares outstanding as of March 31, 2017 of approximately 362 million shares. |
(b) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO. |
(c) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
News Release continued: | Page 13 |
Three Months Ended June 30, | |||||||
(in millions) | 2017 | 2016 | |||||
Components of changes in site rental revenues(f): | |||||||
Prior year site rental revenues exclusive of straight-line associated with fixed escalators(a)(c) | $ | 788 | $ | 706 | |||
New leasing activity(a)(c) | 45 | 44 | |||||
Escalators | 21 | 23 | |||||
Non-renewals | (24 | ) | (18 | ) | |||
Organic Contribution to Site Rental Revenues(d) | 42 | 49 | |||||
Straight-lined revenues associated with fixed escalators | (1 | ) | 16 | ||||
Acquisitions and builds(b) | 40 | 34 | |||||
Other | — | — | |||||
Total GAAP site rental revenues | $ | 869 | $ | 805 | |||
Year-over-year changes in revenue: | |||||||
Reported GAAP site rental revenues | 8.0 | % | |||||
Organic Contribution to Site Rental Revenues(d)(e) | 5.3 | % |
(a) | Includes revenues from amortization of prepaid rent in accordance with GAAP. |
(b) | The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build. |
(c) | Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. |
(d) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein. |
(e) | 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. |
(f) | Additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website. |
News Release continued: | Page 14 |
(in millions) | Full Year 2017 Outlook | Full Year 2016 | |
Components of changes in site rental revenues(g): | |||
Prior year site rental revenues exclusive of straight-line associated with fixed escalators(a)(c) | $3,186 | $2,907 | |
New leasing activity(a)(c) | 155 - 175 | 174 | |
Escalators | 80 - 85 | 89 | |
Non-renewals | (95) - (90) | (74) | |
Organic Contribution to Site Rental Revenues(d) | 140 - 170 | 189 | |
Straight-lined revenues associated with fixed escalators | (20) - (10) | 47 | |
Acquisitions and builds(b) | 185 | 90 | |
Other | — | — | |
Total GAAP site rental revenues | $3,504 - $3,529 | $3,233 | |
Year-over-year changes in revenue:(f) | |||
Reported GAAP site rental revenues | 8.7% | ||
Organic Contribution to Site Rental Revenues(d)(e) | 4.9% |
(a) | Includes revenues from amortization of prepaid rent in accordance with GAAP. |
(b) | The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build. |
(c) | Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. |
(d) | See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein. |
(e) | 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. |
(f) | Calculated based on midpoint of Full Year 2017 Outlook. |
(g) | Additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website. |
News Release continued: | Page 15 |
For the Three Months Ended | |||||||
(in millions) | June 30, 2017 | June 30, 2016 | |||||
Interest expense on debt obligations | $ | 139.3 | $ | 125.6 | |||
Amortization of deferred financing costs and adjustments on long-term debt, net | 4.5 | 4.8 | |||||
Other, net | (2.1 | ) | (1.0 | ) | |||
Interest expense and amortization of deferred financing costs | $ | 141.8 | $ | 129.4 |
Q3 2017 | Full Year 2017 | ||||||
(in millions) | Outlook | Outlook | |||||
Interest expense on debt obligations | $140 | to | $142 | $546 | to | $561 | |
Amortization of deferred financing costs and adjustments on long-term debt, net | $4 | to | $7 | $17 | to | $21 | |
Other, net | $(2) | to | $(2) | $(8) | to | $(6) | |
Interest expense and amortization of deferred financing costs | $142 | to | $147 | $552 | to | $582 |
(in millions) | Face Value | Final Maturity | |||
Bank debt - variable rate: | |||||
2016 Revolver | $ | 350.0 | Jan. 2022 | ||
2016 Term Loan A | 2,431.7 | Jan. 2022 | |||
Total bank debt | 2,781.7 | ||||
Securitized debt - fixed rate: | |||||
Secured Notes, Series 2009-1, Class A-1(a) | 42.7 | Aug. 2019 | |||
Secured Notes, Series 2009-1, Class A-2(a) | 70.0 | Aug. 2029 | |||
Tower Revenue Notes, Series 2010-3(b) | 1,250.0 | Jan. 2040 | |||
Tower Revenue Notes, Series 2010-6(b) | 1,000.0 | Aug. 2040 | |||
Tower Revenue Notes, Series 2015-1(b) | 300.0 | May 2042 | |||
Tower Revenue Notes, Series 2015-2(b) | 700.0 | May 2045 | |||
Total securitized debt | 3,362.7 | ||||
Bonds - fixed rate: | |||||
5.250% Senior Notes | 1,650.0 | Jan. 2023 | |||
3.849% Secured Notes | 1,000.0 | Apr. 2023 | |||
4.875% Senior Notes | 850.0 | Apr. 2022 | |||
3.400% Senior Notes | 850.0 | Feb. 2021 | |||
4.450% Senior Notes | 900.0 | Feb. 2026 | |||
3.700% Senior Notes | 750.0 | June 2026 | |||
2.250% Senior Notes | 700.0 | Sept. 2021 | |||
4.000% Senior Notes | 500.0 | Mar. 2027 | |||
4.750% Senior Notes | 350.0 | May 2047 | |||
Total bonds | 7,550.0 | ||||
Capital leases and other obligations | 240.7 | Various | |||
Total Debt | $ | 13,935.1 | |||
Less: Cash and Cash Equivalents(c) | $ | 199.7 | |||
Net Debt | $ | 13,735.4 |
(a) | The Senior Secured Notes, Series 2009-1, Class A-1 principal amortizes during the period beginning January 2010 and ending in 2019 and the Senior Secured Notes, 2009-1, Class A-2 principal amortizes during the period beginning in 2019 and ending in 2029. |
(b) | The Senior Secured Tower Revenue Notes, Series 2010-3 and 2010-6 have anticipated repayment dates in 2020. The Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 have anticipated repayment dates in 2022 and 2025, respectively. |
(c) | Excludes restricted cash. |
News Release continued: | Page 16 |
(in millions) | For the Three Months Ended June 30, 2017 | |||
Total face value of debt | $ | 13,935.1 | ||
Ending cash and cash equivalents(a) | 199.7 | |||
Total Net Debt | $ | 13,735.5 | ||
Adjusted EBITDA for the three months ended June 30, 2017 | $ | 588.5 | ||
Last quarter annualized adjusted EBITDA | 2,354.1 | |||
Net Debt to Last Quarter Annualized Adjusted EBITDA | 5.8 | x | (b) |
(a) | Excludes restricted cash. |
(b) | The Net Debt to Last Quarter Annualized Adjusted EBITDA calculation does not give effect to a full quarter of ownership of Wilcon, as this acquisition closed on June 26, 2017. |
For the Three Months Ended | |||||||||||||||||||||||||
(in millions) | June 30, 2017 | June 30, 2016 | |||||||||||||||||||||||
Towers | Small Cells | Other | Total | Towers | Small Cells | Other | Total | ||||||||||||||||||
Discretionary: | |||||||||||||||||||||||||
Purchases of land interests | $ | 21.2 | $ | — | $ | — | $ | 21.2 | $ | 19.1 | $ | — | $ | — | $ | 19.1 | |||||||||
Wireless infrastructure construction and improvements | 76.3 | 184.0 | — | 260.3 | 75.9 | 85.4 | — | 161.3 | |||||||||||||||||
Sustaining: | |||||||||||||||||||||||||
Capital improvement and corporate | 9.5 | 4.1 | 5.9 | 19.4 | 9.1 | 2.1 | 7.9 | 19.1 | |||||||||||||||||
Total | $ | 107.0 | $ | 188.1 | $ | 5.9 | $ | 300.9 | $ | 104.2 | $ | 87.5 | $ | 7.9 | $ | 199.5 |
News Release continued: | Page 17 |
• | Our business depends on the demand for our wireless infrastructure, driven primarily by demand for wireless connectivity, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of carrier network investment may materially and adversely affect our business (including reducing demand for tenant additions and network services). |
• | A substantial portion of our revenues is derived from a small number of customers, and the loss, consolidation or financial instability of any of our limited number of customers may materially decrease revenues or reduce demand for our wireless infrastructure and network services. |
• | The business model for small cells contains certain differences from our traditional site rental business, resulting in different operational risks. If we do not successfully operate that business model or identify or manage those operational risks, such operations may produce results that are less than anticipated. |
• | Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments limit our ability to take a number of actions that our management might otherwise believe to be in our best interests. In addition, if we fail to comply with our covenants, our debt could be accelerated. |
• | We have a substantial amount of indebtedness. In the event we do not repay or refinance such indebtedness, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets to meet our debt payment obligations. |
• | Sales or issuances of a substantial number of shares of our common stock may adversely affect the market price of our common stock. |
• | As a result of competition in our industry, we may find it more difficult to achieve favorable rental rates on our new or renewing tenant leases. |
• | New technologies may reduce demand for our wireless infrastructure or negatively impact our revenues. |
• | The expansion 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. |
• | If we fail to retain rights to our wireless infrastructure, including the land interests under our towers, our business may be adversely affected. |
• | Our network services business has historically experienced significant volatility in demand, which reduces the predictability of our results. |
• | New wireless technologies may not deploy or be adopted by customers as rapidly or in the manner projected. |
• | If we fail to comply with laws 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 wireless infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues. |
News Release continued: | Page 18 |
• | Certain provisions of our restated certificate of incorporation, amended and restated by-laws and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders. |
• | We may be vulnerable to security breaches that could adversely affect our business, operations, and reputation. |
• | Future dividend payments to our stockholders will reduce the availability of our cash on hand available to fund future discretionary investments, and may result in a need to incur indebtedness or issue equity securities to fund growth opportunities. In such event, the then current economic, credit market or equity market conditions will impact the availability or cost of such financing, which may hinder our ability to grow our per share results of operations. |
• | Remaining qualified to be taxed as a REIT involves highly technical and complex provisions of the US Internal Revenue Code. Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, which would reduce our available cash. |
• | Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives. |
• | REIT related ownership limitations and transfer restrictions may prevent or restrict certain transfers of our capital stock. |
News Release continued: | Page 19 |
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (in thousands, except share amounts) |
June 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 199,663 | $ | 567,599 | |||
Restricted cash | 117,913 | 124,547 | |||||
Receivables, net | 305,982 | 373,532 | |||||
Prepaid expenses | 175,976 | 128,721 | |||||
Other current assets | 151,801 | 130,362 | |||||
Total current assets | 951,335 | 1,324,761 | |||||
Deferred site rental receivables | 1,299,440 | 1,317,658 | |||||
Property and equipment, net | 10,507,736 | 9,805,315 | |||||
Goodwill | 6,919,358 | 5,757,676 | |||||
Other intangible assets, net | 3,953,812 | 3,650,072 | |||||
Long-term prepaid rent and other assets, net | 851,943 | 819,610 | |||||
Total assets | $ | 24,483,624 | $ | 22,675,092 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 178,927 | $ | 188,516 | |||
Accrued interest | 107,764 | 97,019 | |||||
Deferred revenues | 387,065 | 353,005 | |||||
Other accrued liabilities | 209,224 | 221,066 | |||||
Current maturities of debt and other obligations | 114,932 | 101,749 | |||||
Total current liabilities | 997,912 | 961,355 | |||||
Debt and other long-term obligations | 13,726,333 | 12,069,393 | |||||
Other long-term liabilities | 2,169,070 | 2,087,229 | |||||
Total liabilities | 16,893,315 | 15,117,977 | |||||
Commitments and contingencies | |||||||
CCIC stockholders' equity: | |||||||
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: June 30, 2017—366,115,800 and December 31, 2016—360,536,659 | 3,661 | 3,605 | |||||
Additional paid-in capital | 11,433,018 | 10,938,236 | |||||
Accumulated other comprehensive income (loss) | (5,183 | ) | (5,888 | ) | |||
Dividends/distributions in excess of earnings | (3,841,187 | ) | (3,378,838 | ) | |||
Total equity | 7,590,309 | 7,557,115 | |||||
Total liabilities and equity | $ | 24,483,624 | $ | 22,675,092 |
News Release continued: | Page 20 |
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (in thousands, except share and per share amounts) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net revenues: | |||||||||||||||
Site rental | $ | 868,806 | $ | 804,600 | $ | 1,725,742 | $ | 1,603,893 | |||||||
Network services and other | 169,529 | 157,809 | 328,535 | 292,899 | |||||||||||
Net revenues | 1,038,335 | 962,409 | 2,054,277 | 1,896,792 | |||||||||||
Operating expenses: | |||||||||||||||
Costs of operations (exclusive of depreciation, amortization and accretion): | |||||||||||||||
Site rental | 269,285 | 252,852 | 534,302 | 505,472 | |||||||||||
Network services and other | 104,622 | 95,867 | 203,430 | 176,838 | |||||||||||
General and administrative | 97,736 | 91,386 | 198,460 | 188,967 | |||||||||||
Asset write-down charges | 4,327 | 11,952 | 4,972 | 19,912 | |||||||||||
Acquisition and integration costs | 8,250 | 3,141 | 13,900 | 8,779 | |||||||||||
Depreciation, amortization and accretion | 295,615 | 276,026 | 584,164 | 553,901 | |||||||||||
Total operating expenses | 779,835 | 731,224 | 1,539,228 | 1,453,869 | |||||||||||
Operating income (loss) | 258,500 | 231,185 | 515,049 | 442,923 | |||||||||||
Interest expense and amortization of deferred financing costs | (141,769 | ) | (129,362 | ) | (276,256 | ) | (255,740 | ) | |||||||
Gains (losses) on retirement of long-term obligations | — | (11,468 | ) | (3,525 | ) | (42,017 | ) | ||||||||
Interest income | 1,027 | 105 | 1,397 | 279 | |||||||||||
Other income (expense) | (1,106 | ) | (518 | ) | 3,494 | (3,791 | ) | ||||||||
Income (loss) before income taxes | 116,652 | 89,942 | 240,159 | 141,654 | |||||||||||
Benefit (provision) for income taxes | (4,538 | ) | (3,884 | ) | (8,907 | ) | (7,756 | ) | |||||||
Net income (loss) | 112,114 | 86,058 | 231,252 | 133,898 | |||||||||||
Dividends on preferred stock | — | (10,997 | ) | — | (21,994 | ) | |||||||||
Net income (loss) attributable to CCIC common stockholders | $ | 112,114 | $ | 75,061 | $ | 231,252 | $ | 111,904 | |||||||
Net income (loss) attributable to CCIC common stockholders, per common share: | |||||||||||||||
Net income (loss) attributable to CCIC common stockholders, basic | $ | 0.31 | $ | 0.22 | $ | 0.64 | $ | 0.33 | |||||||
Net income (loss) attributable to CCIC common stockholders, diluted | $ | 0.31 | $ | 0.22 | $ | 0.64 | $ | 0.33 | |||||||
Weighted-average common shares outstanding (in thousands): | |||||||||||||||
Basic | 364,493 | 337,560 | 362,662 | 335,857 | |||||||||||
Diluted | 365,832 | 338,609 | 363,892 | 336,658 |
News Release continued: | Page 21 |
CROWN CASTLE INTERNATIONAL CORP. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (in thousands) |
Six Months Ended June 30, | ||||||||||||
2017 | 2016 | |||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 231,252 | $ | 133,898 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||||||||||||
Depreciation, amortization and accretion | 584,164 | 553,901 | ||||||||||
Gains (losses) on retirement of long-term obligations | 3,525 | 42,017 | ||||||||||
Amortization of deferred financing costs and other non-cash interest | 5,256 | 7,993 | ||||||||||
Stock-based compensation expense | 45,232 | 40,135 | ||||||||||
Asset write-down charges | 4,972 | 19,912 | ||||||||||
Deferred income tax benefit (provision) | 261 | 3,947 | ||||||||||
Other non-cash adjustments, net | (3,486 | ) | 1,672 | |||||||||
Changes in assets and liabilities, excluding the effects of acquisitions: | ||||||||||||
Increase (decrease) in liabilities | 16,963 | 84,145 | ||||||||||
Decrease (increase) in assets | 45,970 | 30,561 | ||||||||||
Net cash provided by (used for) operating activities | 934,109 | 918,181 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Payments for acquisition of businesses, net of cash acquired | (2,103,503 | ) | (493,932 | ) | ||||||||
Capital expenditures | (563,361 | ) | (392,997 | ) | ||||||||
Net (payments) receipts from settled swaps | (328 | ) | 8,141 | |||||||||
Other investing activities, net | (7,032 | ) | 1,854 | |||||||||
Net cash provided by (used for) investing activities | (2,674,224 | ) | (876,934 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of long-term debt | 1,345,115 | 4,501,206 | ||||||||||
Principal payments on debt and other long-term obligations | (59,947 | ) | (43,838 | ) | ||||||||
Purchases and redemptions of long-term debt | — | (3,536,362 | ) | |||||||||
Borrowings under revolving credit facility | 1,755,000 | 3,030,000 | ||||||||||
Payments under revolving credit facility | (1,405,000 | ) | (3,720,000 | ) | ||||||||
Payments for financing costs | (11,446 | ) | (35,604 | ) | ||||||||
Net proceeds from issuance of capital stock | 464,023 | 323,798 | ||||||||||
Purchases of capital stock | (22,594 | ) | (24,460 | ) | ||||||||
Dividends/distributions paid on common stock | (696,025 | ) | (597,846 | ) | ||||||||
Dividends paid on preferred stock | — | (21,994 | ) | |||||||||
Net (increase) decrease in restricted cash | 2,351 | (6,089 | ) | |||||||||
Net cash provided by (used for) financing activities | 1,371,477 | (131,189 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents - continuing operations | (368,638 | ) | (89,942 | ) | ||||||||
Discontinued operations: | ||||||||||||
Net cash provided by (used for) investing activities | — | 113,150 | ||||||||||
Net increase (decrease) in cash and cash equivalents - discontinued operations | — | 113,150 | ||||||||||
Effect of exchange rate changes | 702 | 320 | ||||||||||
Cash and cash equivalents at beginning of period | 567,599 | 178,810 | ||||||||||
Cash and cash equivalents at end of period | $ | 199,663 | $ | 202,338 | ||||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Interest paid | 260,255 | 217,783 | ||||||||||
Income taxes paid | 10,372 | 10,186 |
News Release continued: | Page 22 |
CROWN CASTLE INTERNATIONAL CORP. SEGMENT OPERATING RESULTS (UNAUDITED) (in thousands) |
SEGMENT OPERATING RESULTS | |||||||||||||||||||||||||||||
Three Months Ended June 30, 2017 | Three Months Ended June 30, 2016 | ||||||||||||||||||||||||||||
Towers | Small Cells | Other | Consolidated Total | Towers | Small Cells | Other | Consolidated Total | ||||||||||||||||||||||
Segment site rental revenues | $ | 717,645 | $ | 151,161 | $ | 868,806 | $ | 705,716 | $ | 98,884 | $ | 804,600 | |||||||||||||||||
Segment network services and other revenue | 157,977 | 11,552 | 169,529 | 142,053 | 15,756 | 157,809 | |||||||||||||||||||||||
Segment revenues | 875,622 | 162,713 | 1,038,335 | 847,769 | 114,640 | 962,409 | |||||||||||||||||||||||
Segment site rental cost of operations | 211,204 | 51,861 | 263,065 | 210,444 | 34,165 | 244,609 | |||||||||||||||||||||||
Segment network services and other cost of operations | 95,837 | 8,604 | 104,441 | 81,922 | 12,423 | 94,345 | |||||||||||||||||||||||
Segment cost of operations(a) | 307,041 | 60,465 | 367,506 | 292,366 | 46,588 | 338,954 | |||||||||||||||||||||||
Segment site rental gross margin(b) | 506,441 | 99,300 | 605,741 | 495,272 | 64,719 | 559,991 | |||||||||||||||||||||||
Segment network services and other gross margin(b) | 62,140 | 2,948 | 65,088 | 60,131 | 3,333 | 63,464 | |||||||||||||||||||||||
Segment general and administrative expenses(a) | 22,875 | 18,666 | 40,754 | 82,295 | 22,505 | 15,718 | 35,563 | 73,786 | |||||||||||||||||||||
Segment operating profit(b) | 545,706 | 83,582 | (40,754 | ) | 588,534 | 532,898 | 52,334 | (35,563 | ) | 549,669 | |||||||||||||||||||
Stock-based compensation expense | 16,835 | 16,835 | 21,998 | 21,998 | |||||||||||||||||||||||||
Depreciation, amortization and accretion | 295,615 | 295,615 | 276,026 | 276,026 | |||||||||||||||||||||||||
Interest expense and amortization of deferred financing costs | 141,769 | 141,769 | 129,362 | 129,362 | |||||||||||||||||||||||||
Other (income) expenses to reconcile to income (loss) before income taxes(c) | 17,663 | 17,663 | 32,341 | 32,341 | |||||||||||||||||||||||||
Income (loss) before income taxes | $ | 116,652 | $ | 89,942 |
(a) | Segment cost of operations exclude (1) stock-based compensation expense of $1.4 million and $4.4 million for the three months ended June 30, 2017 and 2016, respectively and (2) prepaid lease purchase price adjustments of $5.0 million and $5.4 million for the three months ended June 30, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $15.4 million and $17.6 million for the three months ended June 30, 2017 and 2016, respectively. |
(c) | See condensed consolidated statement of operations for further information. |
News Release continued: | Page 23 |
SEGMENT OPERATING RESULTS | |||||||||||||||||||||||||||||
Six Months Ended June 30, 2017 | Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||
Towers | Small Cells | Other | Consolidated Total | Towers | Small Cells | Other | Consolidated Total | ||||||||||||||||||||||
Segment site rental revenues | $ | 1,434,181 | $ | 291,561 | $ | 1,725,742 | $ | 1,408,555 | $ | 195,338 | $ | 1,603,893 | |||||||||||||||||
Segment network services and other revenue | 307,592 | 20,943 | 328,535 | 267,063 | 25,836 | 292,899 | |||||||||||||||||||||||
Segment revenues | 1,741,773 | 312,504 | 2,054,277 | 1,675,618 | 221,174 | 1,896,792 | |||||||||||||||||||||||
Segment site rental cost of operations | 420,668 | 99,107 | 519,775 | 415,009 | 71,648 | 486,657 | |||||||||||||||||||||||
Segment network services and other cost of operations | 184,773 | 16,833 | 201,606 | 151,911 | 20,458 | 172,369 | |||||||||||||||||||||||
Segment cost of operations(a) | 605,441 | 115,940 | 721,381 | 566,920 | 92,106 | 659,026 | |||||||||||||||||||||||
Segment site rental gross margin(b) | 1,013,513 | 192,454 | 1,205,967 | 993,546 | 123,690 | 1,117,236 | |||||||||||||||||||||||
Segment network services and other gross margin(b) | 122,819 | 4,110 | 126,929 | 115,152 | 5,378 | 120,530 | |||||||||||||||||||||||
Segment general and administrative expenses(a) | 46,635 | 36,355 | 79,960 | 162,950 | 46,104 | 31,240 | 71,635 | 148,979 | |||||||||||||||||||||
Segment operating profit(b) | 1,089,697 | 160,209 | (79,960 | ) | 1,169,946 | 1,062,594 | 97,828 | (71,635 | ) | 1,088,787 | |||||||||||||||||||
Stock-based compensation expense | 41,777 | 41,777 | 52,703 | 52,703 | |||||||||||||||||||||||||
Depreciation, amortization and accretion | 584,164 | 584,164 | 553,901 | 553,901 | |||||||||||||||||||||||||
Interest expense and amortization of deferred financing costs | 276,256 | 276,256 | 255,740 | 255,740 | |||||||||||||||||||||||||
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(c) | 27,590 | 27,590 | 84,789 | 84,789 | |||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 240,159 | $ | 141,654 |
(a) | Segment cost of operations exclude (1) stock-based compensation expense of $6.3 million and $12.7 million for the six months ended June 30, 2017 and 2016, respectively and (2) prepaid lease purchase price adjustments of $10.1 million and $10.6 million for the six months ended June 30, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $35.5 million and $40.0 million for the six months ended June 30, 2017 and 2016, respectively. |
(c) | See condensed consolidated statement of operations for further information. |
TABLE OF CONTENTS | |
Page | |
Company Overview | |
Company Profile | |
Strategy | |
Historical AFFO per Share | |
Tower Portfolio Footprint | |
Corporate Information | |
Research Coverage | |
Historical Common Stock Data | |
Portfolio and Financial Highlights | |
Outlook | |
Financials & Metrics | |
Condensed Consolidated Balance Sheet | |
Condensed Consolidated Statement of Operations | |
Segment Operating Results | |
FFO and AFFO Reconciliations | |
Condensed Consolidated Statement of Cash Flows | |
Components of Changes in Site Rental Revenues | |
Summary of Straight-Lined and Prepaid Rent Activity | |
Summary of Capital Expenditures | |
Lease Renewal and Lease Distribution | |
Customer Overview | |
Asset Portfolio Overview | |
Summary of Tower Portfolio by Vintage | |
Portfolio Overview | |
Ground Interest Overview | |
Ground Interest Activity | |
Capitalization Overview | |
Capitalization Overview | |
Debt Maturity Overview | |
Liquidity Overview | |
Maintenance and Financial Covenants | |
Interest Rate Sensitivity | |
Appendix |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
COMPANY PROFILE |
STRATEGY |
• | Grow cash flows from our wireless infrastructure. We seek to maximize our site rental cash flows by working with our customers to provide them quick access to our wireless infrastructure and entering into associated long-term leases. Tenant additions or modifications of existing tenant equipment (collectively, "tenant additions") enable our customers to expand coverage and capacity in order to meet increasing demand for wireless connectivity, while generating high incremental returns for our business. We believe our product offerings of towers and small cells provide a comprehensive solution to our customers' growing connectivity needs through our shared wireless infrastructure model, which is an efficient and cost effective way to serve our customers. We also believe that there will be considerable future demand for our wireless infrastructure based on the location of our wireless infrastructure and the rapid growth in wireless connectivity, which will lead to future growth in the wireless industry. |
• | Return cash provided by operating activities to stockholders in the form of dividends. We believe that distributing a meaningful portion of our cash provided by operating activities appropriately provides stockholders with increased certainty for a portion of expected long-term stockholder value while still retaining sufficient flexibility to invest in our business and deliver growth. We believe this decision reflects the translation of the high-quality, long-term contractual cash flows of our business into stable capital returns to stockholders. |
• | Invest capital efficiently to grow cash flows and long-term dividends per share. We seek to invest our available capital, including the net cash provided by our operating activities and external financing sources, in a manner that will increase long-term stockholder value on a risk-adjusted basis. Our historical investments have included the following (in no particular order): |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
◦ | purchases of shares of our common stock from time to time; |
◦ | acquisitions or construction of towers, fiber and small cells; |
◦ | acquisitions of land interests under towers; |
◦ | improvements and structural enhancements to our existing wireless infrastructure; or |
◦ | purchases, repayment or redemption of our debt. |
HISTORICAL AFFO PER SHARE (1) |
(1) | See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of FFO and AFFO. |
(2) | AFFO per share represents the midpoint of the full year 2017 outlook as issued on July 19, 2017. |
TOWER PORTFOLIO FOOTPRINT | ||
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
GENERAL COMPANY INFORMATION | |
Principal executive offices | 1220 Augusta Drive, Suite 600, Houston, TX 77057 |
Common shares trading symbol | CCI |
Stock exchange listing | New York Stock Exchange |
Fiscal year ending date | December 31 |
Fitch - Long Term Issuer Default Rating | BBB- |
Moody’s - Long Term Corporate Family Rating | Baa3 |
Standard & Poor’s - Long Term Local Issuer Credit Rating | BBB- |
EXECUTIVE MANAGEMENT TEAM | |||
Name | Age | Years with Company | Position |
Jay A. Brown | 44 | 17 | President and Chief Executive Officer |
Daniel K. Schlanger | 43 | 1 | Senior Vice President and Chief Financial Officer |
James D. Young | 56 | 11 | Senior Vice President and Chief Operating Officer |
Kenneth J. Simon | 56 | 1 | Senior Vice President and General Counsel |
Michael J. Kavanagh | 49 | 6 | Senior Vice President and Chief Commercial Officer |
Philip M. Kelley | 44 | 20 | Senior Vice President-Corporate Development and Strategy |
BOARD OF DIRECTORS | ||||
Name | Position | Committees | Age | Years as Director |
J. Landis Martin | Chairman | NCG(1) | 71 | 21 |
P. Robert Bartolo | Director | Audit, Compensation | 45 | 3 |
Cindy Christy | Director | Compensation, NCG(1), Strategy | 51 | 9 |
Ari Q. Fitzgerald | Director | Compensation, NCG(1), Strategy | 54 | 14 |
Robert E. Garrison II | Director | Audit, Compensation | 75 | 12 |
Lee W. Hogan | Director | Audit, Compensation, Strategy | 72 | 16 |
Edward C. Hutcheson | Director | Strategy | 71 | 22 |
Robert F. McKenzie | Director | Audit, Strategy | 73 | 22 |
Anthony J. Melone | Director | NCG(1), Strategy | 57 | 2 |
W. Benjamin Moreland | Director | 53 | 10 | |
Jay A. Brown | Director | 44 | 1 |
(1) | Nominating & Corporate Governance Committee |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
RESEARCH COVERAGE | ||
Equity Research | ||
Bank of America David Barden (646) 855-1320 | Barclays Amir Rozwadowski (212) 526-4043 | BTIG Walter Piecyk (646) 450-9258 |
Citigroup Michael Rollins (212) 816-1116 | Cowen and Company Colby Synesael (646) 562-1355 | Deutsche Bank Matthew Niknam (212) 250-4711 |
Goldman Sachs Brett Feldman (212) 902-8156 | Guggenheim Robert Gutman (212) 518-9148 | Jefferies Mike McCormack (212) 284-2516 |
JPMorgan Philip Cusick (212) 622-1444 | Macquarie Amy Yong (212) 231-2624 | MoffettNathanson Nick Del Deo (212) 519-0025 |
Morgan Stanley Simon Flannery (212) 761-6432 | New Street Research Spencer Kurn (212) 921-2067 | Oppenheimer & Co. Timothy Horan (212) 667-8137 |
Pacific Crest Securities Brandon Nispel (503) 821-3871 | Raymond James Ric Prentiss (727) 567-2567 | RBC Capital Markets Jonathan Atkin (415) 633-8589 |
Stifel Matthew Heinz (443) 224-1382 | SunTrust Robinson Humphrey Greg Miller (212) 303-4169 | UBS Batya Levi (212) 713-8824 |
Wells Fargo Securities, LLC Jennifer Fritzsche (312) 920-3548 | ||
Rating Agency | ||
Fitch John Culver (312) 368-3216 | Moody’s Phil Kibel (212) 553-1653 | Standard & Poor’s Ryan Gilmore (212) 438-0602 |
HISTORICAL COMMON STOCK DATA | |||||||||||||||
Three Months Ended | |||||||||||||||
(in millions, except per share data) | 6/30/17 | 3/31/17 | 12/31/16 | 9/30/16 | 6/30/16 | ||||||||||
High price(1) | $ | 103.98 | $ | 94.57 | $ | 92.95 | $ | 98.77 | $ | 97.41 | |||||
Low price(1) | $ | 92.34 | $ | 82.29 | $ | 76.89 | $ | 87.07 | $ | 81.38 | |||||
Period end closing price(2) | $ | 100.18 | $ | 93.57 | $ | 85.05 | $ | 91.35 | $ | 97.40 | |||||
Dividends paid per common share | $ | 0.95 | $ | 0.95 | $ | 0.95 | $ | 0.885 | $ | 0.885 | |||||
Volume weighted average price for the period(1) | $ | 97.68 | $ | 88.19 | $ | 84.55 | $ | 92.52 | $ | 87.25 | |||||
Common shares outstanding, at period end | 366 | 361 | 361 | 338 | 338 | ||||||||||
Market value of outstanding common shares, at period end(3) | $ | 36,677 | $ | 33,813 | $ | 30,664 | $ | 30,836 | $ | 32,879 |
(1) | Based on the sales price, adjusted for common stock dividends, as reported by Bloomberg. |
(2) | Based on the period end closing price, adjusted for common stock dividends, as reported by Bloomberg. |
(3) | Period end market value of outstanding common shares is calculated as the product of (a) shares of common stock outstanding at period end and (b) closing share price at period end, adjusted for common stock dividends, as reported by Bloomberg. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY PORTFOLIO HIGHLIGHTS | |||
(as of June 30, 2017) | |||
Towers | |||
Number of towers(1) | 40,127 | ||
Average number of tenants per tower | 2.2 | ||
Remaining contracted customer receivables ($ in billions)(2) | $ | 16 | |
Weighted average remaining customer contract term (years)(3) | 6 | ||
Percent of towers in the Top 50 / 100 Basic Trading Areas | 56% / 71% | ||
Percent of ground leased / owned (by Towers segment site rental gross margin) | 62% / 38% | ||
Weighted average maturity of ground leases (years)(4) | 34 | ||
Small Cells | |||
Number of route miles of fiber (in thousands) | 29 | ||
Remaining contracted customer receivables ($ in billions)(2) | $ | 2 | |
Weighted average remaining customer contract term (years)(3) | 6 |
SUMMARY FINANCIAL HIGHLIGHTS | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(dollars in thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating Data: | ||||||||||||||||
Net revenues | ||||||||||||||||
Site rental | $ | 868,806 | $ | 804,600 | $ | 1,725,742 | $ | 1,603,893 | ||||||||
Network services and other | 169,529 | 157,809 | 328,535 | 292,899 | ||||||||||||
Net revenues | $ | 1,038,335 | $ | 962,409 | $ | 2,054,277 | $ | 1,896,792 | ||||||||
Costs of operations (exclusive of depreciation, amortization and accretion) | ||||||||||||||||
Site rental | $ | 269,285 | $ | 252,852 | $ | 534,302 | $ | 505,472 | ||||||||
Network services and other | 104,622 | 95,867 | 203,430 | 176,838 | ||||||||||||
Total cost of operations | $ | 373,907 | $ | 348,719 | $ | 737,732 | $ | 682,310 | ||||||||
Net income (loss) attributable to CCIC common stockholders | $ | 112,114 | $ | 75,061 | $ | 231,252 | $ | 111,904 | ||||||||
Net income (loss) attributable to CCIC common stockholders per share - diluted(6) | $ | 0.31 | $ | 0.22 | $ | 0.64 | $ | 0.33 | ||||||||
Non-GAAP Data(5): | ||||||||||||||||
Adjusted EBITDA | $ | 588,534 | $ | 549,669 | $ | 1,169,946 | $ | 1,088,787 | ||||||||
FFO | 404,626 | 356,429 | 805,573 | 672,725 | ||||||||||||
AFFO | 439,907 | 392,478 | 890,071 | 787,632 | ||||||||||||
AFFO per share(6) | $ | 1.20 | $ | 1.16 | $ | 2.45 | $ | 2.34 |
(1) | Excludes small cells and third-party land interests. |
(2) | Excludes renewal terms at customers' option. |
(3) | Excludes renewal terms at customers' option, weighted by site rental revenues. |
(4) | Includes renewal terms at the Company's option, weighted by Towers segment site rental gross margin. |
(5) | See reconciliations of Non-GAAP financial measures provided herein. See also "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of Adjusted EBITDA, FFO and AFFO. |
(6) | Based on diluted weighted-average common shares outstanding of 365.8 million, 338.6 million, 363.9 and 336.7 million for the three months ended June 30, 2017 and 2016, and the six months ended June 30, 2017 and 2016, respectively. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY FINANCIAL HIGHLIGHTS (CONTINUED) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(dollars in thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Summary Cash Flow Data: | ||||||||||||||||
Net cash provided by (used for) operating activities | $ | 488,017 | $ | 480,525 | $ | 934,109 | $ | 918,181 | ||||||||
Net cash provided by (used for) investing activities(1) | (911,083 | ) | (669,188 | ) | (2,674,224 | ) | (876,934 | ) | ||||||||
Net cash provided by (used for) financing activities | 417,261 | 214,403 | 1,371,477 | (131,189 | ) |
(dollars in thousands) | June 30, 2017 | December 31, 2016 | ||||||
Balance Sheet Data (at period end): | ||||||||
Cash and cash equivalents | $ | 199,663 | $ | 567,599 | ||||
Property and equipment, net | 10,507,736 | 9,805,315 | ||||||
Total assets | 24,483,624 | 22,675,092 | ||||||
Total debt and other long-term obligations(2) | 13,841,265 | 12,171,142 | ||||||
Total CCIC stockholders' equity | 7,590,309 | 7,557,115 |
(dollars in thousands, except per share amounts) | Three Months Ended June 30, 2017 | |||
Other Data: | ||||
Net debt to last quarter annualized Adjusted EBITDA(3) | 5.8 | x | ||
Dividend per common share | $ | 0.95 |
OUTLOOK FOR THIRD QUARTER 2017 AND FULL YEAR 2017 | ||||||
(dollars in millions, except per share amounts) | Third Quarter 2017 | Full Year 2017 | ||||
Site rental revenues | $888 | to | $893 | $3,504 | to | $3,529 |
Site rental cost of operations(4) | $275 | to | $280 | $1,071 | to | $1,096 |
Net income (loss) | $90 | to | $110 | $426 | to | $476 |
Net income (loss) per share - diluted(5)(8) | $0.24 | to | $0.30 | $1.16 | to | $1.30 |
Adjusted EBITDA(6) | $600 | to | $605 | $2,389 | to | $2,414 |
Interest expense and amortization of deferred financing costs(7) | $142 | to | $147 | $552 | to | $582 |
FFO(6) | $404 | to | $409 | $1,623 | to | $1,653 |
AFFO(6) | $447 | to | $452 | $1,813 | to | $1,838 |
AFFO per share(5)(6) | $1.22 | to | $1.23 | $4.96 | to | $5.03 |
(1) | Includes net cash used for acquisitions of approximately $606 million and $472 million for the three months ended June 30, 2017 and 2016, respectively and $2.1 billion and $494 million for the six months ended June 30, 2017 and 2016, respectively. |
(2) | Balances reflect debt issuance costs as a direct reduction from the respective carrying amounts of debt, with the exception of debt issuance costs associated with the Company's revolving credit facilities. |
(3) | The Net Debt to Last Quarter Annualized Adjusted EBITDA calculation does not give effect to a full quarter of ownership of Wilcon, as this acquisition closed on June 26, 2017. |
(4) | Exclusive of depreciation, amortization and accretion. |
(5) | The assumption for third quarter 2017 and full year 2017 diluted weighted-average common shares outstanding is 367.5 million and 365.7 million, respectively, based on diluted common shares outstanding as of June 30, 2017. |
(6) | See reconciliation of this non-GAAP financial measure to net income (loss) included herein. |
(7) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" in the Appendix. |
(8) | Calculated using net income (loss) attributable to CCIC common stockholders. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
OUTLOOK FOR FULL YEAR 2017 COMPONENTS OF CHANGES IN SITE RENTAL REVENUES | |||
(dollars in millions) | Full Year 2017 Outlook | Full Year 2016 | |
Components of changes in site rental revenues(7): | |||
Prior year site rental revenues exclusive of straight-line associated with fixed escalators(1)(3) | $3,186 | $2,907 | |
New leasing activity(1)(3) | 155 - 175 | 174 | |
Escalators | 80 - 85 | 89 | |
Non-renewals | (95) - (90) | (74) | |
Organic Contribution to Site Rental Revenues(4) | 140 - 170 | 189 | |
Straight-lined revenues associated with fixed escalators | (20) - (10) | 47 | |
Acquisitions and builds(2) | 185 | 90 | |
Other | — | — | |
Total GAAP site rental revenues | $3,504 - $3,529 | $3,233 | |
Year-over-year changes in revenue:(6) | |||
Reported GAAP site rental revenues | 8.7% | ||
Organic Contribution to Site Rental Revenues(4)(5) | 4.9% |
(1) | Includes revenues from amortization of prepaid rent in accordance with GAAP. |
(2) | The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build. |
(3) | Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. |
(4) | See definitions provided herein. |
(5) | 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. |
(6) | Calculated based on midpoint of Full Year 2017 Outlook. |
(7) | See additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent herein. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) | |||||||
(dollars in thousands, except share amounts) | June 30, 2017 | December 31, 2016 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 199,663 | $ | 567,599 | |||
Restricted cash | 117,913 | 124,547 | |||||
Receivables, net | 305,982 | 373,532 | |||||
Prepaid expenses | 175,976 | 128,721 | |||||
Other current assets | 151,801 | 130,362 | |||||
Total current assets | 951,335 | 1,324,761 | |||||
Deferred site rental receivables | 1,299,440 | 1,317,658 | |||||
Property and equipment, net | 10,507,736 | 9,805,315 | |||||
Goodwill | 6,919,358 | 5,757,676 | |||||
Other intangible assets, net | 3,953,812 | 3,650,072 | |||||
Long-term prepaid rent and other assets, net | 851,943 | 819,610 | |||||
Total assets | $ | 24,483,624 | $ | 22,675,092 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 178,927 | $ | 188,516 | |||
Accrued interest | 107,764 | 97,019 | |||||
Deferred revenues | 387,065 | 353,005 | |||||
Other accrued liabilities | 209,224 | 221,066 | |||||
Current maturities of debt and other obligations | 114,932 | 101,749 | |||||
Total current liabilities | 997,912 | 961,355 | |||||
Debt and other long-term obligations | 13,726,333 | 12,069,393 | |||||
Other long-term liabilities | 2,169,070 | 2,087,229 | |||||
Total liabilities | 16,893,315 | 15,117,977 | |||||
Commitments and contingencies | |||||||
CCIC stockholders' equity: | |||||||
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: June 30, 2017—366,115,800 and December 31, 2016—360,536,659 | 3,661 | 3,605 | |||||
Additional paid-in capital | 11,433,018 | 10,938,236 | |||||
Accumulated other comprehensive income (loss) | (5,183 | ) | (5,888 | ) | |||
Dividends/distributions in excess of earnings | (3,841,187 | ) | (3,378,838 | ) | |||
Total equity | 7,590,309 | 7,557,115 | |||||
Total liabilities and equity | $ | 24,483,624 | $ | 22,675,092 |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(dollars in thousands, except share and per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net revenues: | |||||||||||||||
Site rental | $ | 868,806 | $ | 804,600 | $ | 1,725,742 | $ | 1,603,893 | |||||||
Network services and other | 169,529 | 157,809 | 328,535 | 292,899 | |||||||||||
Net revenues | 1,038,335 | 962,409 | 2,054,277 | 1,896,792 | |||||||||||
Operating expenses: | |||||||||||||||
Costs of operations (exclusive of depreciation, amortization and accretion): | |||||||||||||||
Site rental | 269,285 | 252,852 | 534,302 | 505,472 | |||||||||||
Network services and other | 104,622 | 95,867 | 203,430 | 176,838 | |||||||||||
General and administrative | 97,736 | 91,386 | 198,460 | 188,967 | |||||||||||
Asset write-down charges | 4,327 | 11,952 | 4,972 | 19,912 | |||||||||||
Acquisition and integration costs | 8,250 | 3,141 | 13,900 | 8,779 | |||||||||||
Depreciation, amortization and accretion | 295,615 | 276,026 | 584,164 | 553,901 | |||||||||||
Total operating expenses | 779,835 | 731,224 | 1,539,228 | 1,453,869 | |||||||||||
Operating income (loss) | 258,500 | 231,185 | 515,049 | 442,923 | |||||||||||
Interest expense and amortization of deferred financing costs | (141,769 | ) | (129,362 | ) | (276,256 | ) | (255,740 | ) | |||||||
Gains (losses) on retirement of long-term obligations | — | (11,468 | ) | (3,525 | ) | (42,017 | ) | ||||||||
Interest income | 1,027 | 105 | 1,397 | 279 | |||||||||||
Other income (expense) | (1,106 | ) | (518 | ) | 3,494 | (3,791 | ) | ||||||||
Income (loss) before income taxes | 116,652 | 89,942 | 240,159 | 141,654 | |||||||||||
Benefit (provision) for income taxes | (4,538 | ) | (3,884 | ) | (8,907 | ) | (7,756 | ) | |||||||
Net income (loss) | 112,114 | 86,058 | 231,252 | 133,898 | |||||||||||
Dividends on preferred stock | — | (10,997 | ) | — | (21,994 | ) | |||||||||
Net income (loss) attributable to CCIC common stockholders | $ | 112,114 | $ | 75,061 | $ | 231,252 | $ | 111,904 | |||||||
Net income (loss) attributable to CCIC common stockholders, per common share: | |||||||||||||||
Net income (loss) attributable to CCIC common stockholders, basic | $ | 0.31 | $ | 0.22 | $ | 0.64 | $ | 0.33 | |||||||
Net income (loss) attributable to CCIC common stockholders, diluted | $ | 0.31 | $ | 0.22 | $ | 0.64 | $ | 0.33 | |||||||
Weighted-average common shares outstanding (in thousands): | |||||||||||||||
Basic | 364,493 | 337,560 | 362,662 | 335,857 | |||||||||||
Diluted | 365,832 | 338,609 | 363,892 | 336,658 |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SEGMENT OPERATING RESULTS | |||||||||||||||||||||||||||||
Three Months Ended June 30, 2017 | Three Months Ended June 30, 2016 | ||||||||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Other | Consolidated Total | Towers | Small Cells | Other | Consolidated Total | |||||||||||||||||||||
Segment site rental revenues | $ | 717,645 | $ | 151,161 | $ | 868,806 | $ | 705,716 | $ | 98,884 | $ | 804,600 | |||||||||||||||||
Segment network service and other revenue | 157,977 | 11,552 | 169,529 | 142,053 | 15,756 | 157,809 | |||||||||||||||||||||||
Segment revenues | 875,622 | 162,713 | 1,038,335 | 847,769 | 114,640 | 962,409 | |||||||||||||||||||||||
Segment site rental cost of operations | 211,204 | 51,861 | 263,065 | 210,444 | 34,165 | 244,609 | |||||||||||||||||||||||
Segment network service and other cost of operations | 95,837 | 8,604 | 104,441 | 81,922 | 12,423 | 94,345 | |||||||||||||||||||||||
Segment cost of operations(1) | 307,041 | 60,465 | 367,506 | 292,366 | 46,588 | 338,954 | |||||||||||||||||||||||
Segment site rental gross margin(2) | 506,441 | 99,300 | 605,741 | 495,272 | 64,719 | 559,991 | |||||||||||||||||||||||
Segment network services and other gross margin(2) | 62,140 | 2,948 | 65,088 | 60,131 | 3,333 | 63,464 | |||||||||||||||||||||||
Segment general and administrative expenses(1) | 22,875 | 18,666 | 40,754 | 82,295 | 22,505 | 15,718 | 35,563 | 73,786 | |||||||||||||||||||||
Segment operating profit(2) | 545,706 | 83,582 | (40,754 | ) | 588,534 | 532,898 | 52,334 | (35,563 | ) | 549,669 | |||||||||||||||||||
Stock-based compensation expense | 16,835 | 16,835 | 21,998 | 21,998 | |||||||||||||||||||||||||
Depreciation, amortization and accretion | 295,615 | 295,615 | 276,026 | 276,026 | |||||||||||||||||||||||||
Interest expense and amortization of deferred financing costs | 141,769 | 141,769 | 129,362 | 129,362 | |||||||||||||||||||||||||
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(3) | 17,663 | 17,663 | 32,341 | 32,341 | |||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 116,652 | $ | 89,942 |
(1) | Segment cost of operations exclude (1) stock-based compensation expense of $1.4 million and $4.4 million for the three months ended June 30, 2017 and 2016, respectively and (2) prepaid lease purchase price adjustments of $5.0 million and $5.4 million for the three months ended June 30, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $15.4 million and $17.6 million for the three months ended June 30, 2017 and 2016, respectively. |
(2) | See "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of segment site rental gross margin, segment network service and other gross margin and segment operating profit. |
(3) | See condensed consolidated statement of operations for further information. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SEGMENT OPERATING RESULTS | |||||||||||||||||||||||||||||
Six Months Ended June 30, 2017 | Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Other | Consolidated Total | Towers | Small Cells | Other | Consolidated Total | |||||||||||||||||||||
Segment site rental revenues | $ | 1,434,181 | $ | 291,561 | $ | 1,725,742 | $ | 1,408,555 | $ | 195,338 | $ | 1,603,893 | |||||||||||||||||
Segment network service and other revenue | 307,592 | 20,943 | 328,535 | 267,063 | 25,836 | 292,899 | |||||||||||||||||||||||
Segment revenues | 1,741,773 | 312,504 | 2,054,277 | 1,675,618 | 221,174 | 1,896,792 | |||||||||||||||||||||||
Segment site rental cost of operations | 420,668 | 99,107 | 519,775 | 415,009 | 71,648 | 486,657 | |||||||||||||||||||||||
Segment network service and other cost of operations | 184,773 | 16,833 | 201,606 | 151,911 | 20,458 | 172,369 | |||||||||||||||||||||||
Segment cost of operations(1) | 605,441 | 115,940 | 721,381 | 566,920 | 92,106 | 659,026 | |||||||||||||||||||||||
Segment site rental gross margin(2) | 1,013,513 | 192,454 | 1,205,967 | 993,546 | 123,690 | 1,117,236 | |||||||||||||||||||||||
Segment network services and other gross margin(2) | 122,819 | 4,110 | 126,929 | 115,152 | 5,378 | 120,530 | |||||||||||||||||||||||
Segment general and administrative expenses(1) | 46,635 | 36,355 | 79,960 | 162,950 | 46,104 | 31,240 | 71,635 | 148,979 | |||||||||||||||||||||
Segment operating profit(2) | 1,089,697 | 160,209 | (79,960 | ) | 1,169,946 | 1,062,594 | 97,828 | (71,635 | ) | 1,088,787 | |||||||||||||||||||
Stock-based compensation expense | 41,777 | 41,777 | 52,703 | 52,703 | |||||||||||||||||||||||||
Depreciation, amortization and accretion | 584,164 | 584,164 | 553,901 | 553,901 | |||||||||||||||||||||||||
Interest expense and amortization of deferred financing costs | 276,256 | 276,256 | 255,740 | 255,740 | |||||||||||||||||||||||||
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(2) | 27,590 | 27,590 | 84,789 | 84,789 | |||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 240,159 | $ | 141,654 |
(1) | Segment cost of operations exclude (1) stock-based compensation expense of $6.3 million and $12.7 million for the six months ended June 30, 2017 and 2016, respectively and (2) prepaid lease purchase price adjustments of $10.1 million and $10.6 million for the six months ended June 30, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $35.5 million and $40.0 million for the six months ended June 30, 2017 and 2016, respectively. |
(2) | See "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of segment site rental gross margin, segment network service and other gross margin and segment operating profit. |
(3) | See condensed consolidated statement of operations for further information. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
FFO AND AFFO RECONCILIATIONS | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(dollars in thousands, except share and per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net income (loss) | $ | 112,114 | $ | 86,058 | $ | 231,252 | $ | 133,898 | |||||||
Real estate related depreciation, amortization and accretion | 288,185 | 269,416 | 569,348 | 540,909 | |||||||||||
Asset write-down charges | 4,327 | 11,952 | 4,972 | 19,912 | |||||||||||
Dividends on preferred stock | — | (10,997 | ) | — | (21,994 | ) | |||||||||
FFO(1)(2)(4) | $ | 404,626 | $ | 356,429 | $ | 805,573 | $ | 672,725 | |||||||
Weighted average common shares outstanding — diluted(3) | 365,832 | 338,609 | 363,892 | 336,658 | |||||||||||
FFO per share(1)(4) | $ | 1.11 | $ | 1.05 | $ | 2.21 | $ | 2.00 | |||||||
FFO (from above) | $ | 404,626 | $ | 356,429 | $ | 805,573 | $ | 672,725 | |||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||
Straight-lined revenue | 807 | (16,204 | ) | (455 | ) | (33,539 | ) | ||||||||
Straight-lined expense | 22,655 | 23,881 | 45,871 | 47,646 | |||||||||||
Stock-based compensation expense | 16,835 | 21,998 | 41,777 | 52,703 | |||||||||||
Non-cash portion of tax provision | (4,791 | ) | (35 | ) | (1,213 | ) | 1,747 | ||||||||
Non-real estate related depreciation, amortization and accretion | 7,430 | 6,611 | 14,816 | 12,993 | |||||||||||
Amortization of non-cash interest expense | 2,420 | 3,782 | 5,256 | 7,993 | |||||||||||
Other (income) expense | 1,106 | 518 | (3,494 | ) | 3,791 | ||||||||||
Gains (losses) on retirement of long-term obligations | — | 11,468 | 3,525 | 42,017 | |||||||||||
Acquisition and integration costs | 8,250 | 3,141 | 13,900 | 8,779 | |||||||||||
Capital improvement capital expenditures | (9,570 | ) | (8,910 | ) | (16,465 | ) | (15,311 | ) | |||||||
Corporate capital expenditures | (9,861 | ) | (10,200 | ) | (19,019 | ) | (13,911 | ) | |||||||
AFFO(1)(2)(4) | $ | 439,907 | $ | 392,478 | $ | 890,071 | $ | 787,632 | |||||||
Weighted average common shares outstanding — diluted(3) | 365,832 | 338,609 | 363,892 | 336,658 | |||||||||||
AFFO per share(1)(4) | $ | 1.20 | $ | 1.16 | $ | 2.45 | $ | 2.34 |
(1) | See "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of FFO and AFFO. |
(2) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(3) | Based on the diluted weighted-average common shares outstanding for the three and six months ended June 30, 2017 and 2016. |
(4) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) | ||||||||||||
Six Months Ended June 30, | ||||||||||||
(dollars in thousands) | 2017 | 2016 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 231,252 | $ | 133,898 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||||||||||||
Depreciation, amortization and accretion | 584,164 | 553,901 | ||||||||||
Gains (losses) on retirement of long-term obligations | 3,525 | 42,017 | ||||||||||
Amortization of deferred financing costs and other non-cash interest | 5,256 | 7,993 | ||||||||||
Stock-based compensation expense | 45,232 | 40,135 | ||||||||||
Asset write-down charges | 4,972 | 19,912 | ||||||||||
Deferred income tax benefit (provision) | 261 | 3,947 | ||||||||||
Other non-cash adjustments, net | (3,486 | ) | 1,672 | |||||||||
Changes in assets and liabilities, excluding the effects of acquisitions: | ||||||||||||
Increase (decrease) in liabilities | 16,963 | 84,145 | ||||||||||
Decrease (increase) in assets | 45,970 | 30,561 | ||||||||||
Net cash provided by (used for) operating activities | 934,109 | 918,181 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Payments for acquisition of businesses, net of cash acquired | (2,103,503 | ) | (493,932 | ) | ||||||||
Capital expenditures | (563,361 | ) | (392,997 | ) | ||||||||
Net (payments) receipts from settled swaps | (328 | ) | 8,141 | |||||||||
Other investing activities, net | (7,032 | ) | 1,854 | |||||||||
Net cash provided by (used for) investing activities | (2,674,224 | ) | (876,934 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of long-term debt | 1,345,115 | 4,501,206 | ||||||||||
Principal payments on debt and other long-term obligations | (59,947 | ) | (43,838 | ) | ||||||||
Purchases and redemptions of long-term debt | — | (3,536,362 | ) | |||||||||
Borrowings under revolving credit facility | 1,755,000 | 3,030,000 | ||||||||||
Payments under revolving credit facility | (1,405,000 | ) | (3,720,000 | ) | ||||||||
Payments for financing costs | (11,446 | ) | (35,604 | ) | ||||||||
Net proceeds from issuance of capital stock | 464,023 | 323,798 | ||||||||||
Purchases of capital stock | (22,594 | ) | (24,460 | ) | ||||||||
Dividends/distributions paid on common stock | (696,025 | ) | (597,846 | ) | ||||||||
Dividends paid on preferred stock | — | (21,994 | ) | |||||||||
Net (increase) decrease in restricted cash | 2,351 | (6,089 | ) | |||||||||
Net cash provided by (used for) financing activities | 1,371,477 | (131,189 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents - continuing operations | (368,638 | ) | (89,942 | ) | ||||||||
Discontinued operations: | ||||||||||||
Net cash provided by (used for) investing activities | — | 113,150 | ||||||||||
Net increase (decrease) in cash and cash equivalents - discontinued operations | — | 113,150 | ||||||||||
Effect of exchange rate changes | 702 | 320 | ||||||||||
Cash and cash equivalents at beginning of period | 567,599 | 178,810 | ||||||||||
Cash and cash equivalents at end of period | $ | 199,663 | $ | 202,338 | ||||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Interest paid | 260,255 | 217,783 | ||||||||||
Income taxes paid | 10,372 | 10,186 |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
COMPONENTS OF CHANGES IN SITE RENTAL REVENUES | |||||||
Three Months Ended June 30, | |||||||
(dollars in millions) | 2017 | 2016 | |||||
Components of changes in site rental revenues(6): | |||||||
Prior year site rental revenues exclusive of straight-line associated with fixed escalators(1)(3) | $ | 788 | $ | 706 | |||
New leasing activity(1)(3) | 45 | 44 | |||||
Escalators | 21 | 23 | |||||
Non-renewals | (24 | ) | (18 | ) | |||
Organic Contribution to Site Rental Revenues(4) | 42 | 49 | |||||
Straight-lined revenues associated with fixed escalators | (1 | ) | 16 | ||||
Acquisitions and builds(2) | 40 | 34 | |||||
Other | — | — | |||||
Total GAAP site rental revenues | $ | 869 | $ | 805 | |||
Year-over-year changes in revenue: | |||||||
Reported GAAP site rental revenues | 8.0 | % | |||||
Organic Contribution to Site Rental Revenues(4)(5) | 5.3 | % |
(1) | Includes revenues from amortization of prepaid rent in accordance with GAAP. |
(2) | The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build. |
(3) | Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. |
(4) | See definitions provided herein. |
(5) | 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. |
(6) | See additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent herein. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF SITE RENTAL STRAIGHT-LINED REVENUES AND EXPENSES ASSOCIATED WITH FIXED ESCALATORS(1) | |||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Total | Towers | Small Cells | Total | |||||||||||||||||
Site rental straight-lined revenue | $ | (3,359 | ) | $ | 2,552 | $ | (807 | ) | $ | 13,862 | $ | 2,342 | $ | 16,204 | |||||||||
Site rental straight-lined expenses | 22,527 | 128 | 22,655 | 23,820 | 61 | 23,881 |
Six Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Total | Towers | Small Cells | Total | |||||||||||||||||
Site rental straight-lined revenue | $ | (4,381 | ) | $ | 4,836 | $ | 455 | $ | 28,758 | $ | 4,781 | $ | 33,539 | ||||||||||
Site rental straight-lined expenses | 45,411 | 460 | 45,871 | 47,570 | 76 | 47,646 |
SUMMARY OF PREPAID RENT ACTIVITY(2) | |||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Total | Towers | Small Cells | Total | |||||||||||||||||
Prepaid rent received | $ | 32,755 | $ | 37,507 | $ | 70,262 | $ | 45,717 | $ | 25,713 | $ | 71,430 | |||||||||||
Amortization of prepaid rent | 29,325 | 28,278 | 57,603 | 25,361 | 27,014 | 52,375 |
Six Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Total | Towers | Small Cells | Total | |||||||||||||||||
Prepaid rent received | $ | 63,351 | $ | 74,255 | $ | 137,606 | $ | 88,062 | $ | 58,100 | $ | 146,162 | |||||||||||
Amortization of prepaid rent | 57,087 | 54,010 | 111,097 | 50,627 | 49,460 | 100,087 |
(1) | In accordance with GAAP accounting, if payment terms call for fixed escalations, or rent free periods, the revenue is recognized on a straight-line basis over the fixed, non-cancelable term of the contract. Since the Company recognizes revenue on a straight-line basis, a portion of the site rental revenue in a given period represents cash collected or contractually collectible in other periods. |
(2) | Reflects up front payments received from long-term tenant contracts and other deferred credits (commonly referred to as prepaid rent), and the amortization thereof for GAAP revenue recognition purposes. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF CAPITAL EXPENDITURES | |||||||||||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Other | Total | Towers | Small Cells | Other | Total | |||||||||||||||||||||||
Discretionary: | |||||||||||||||||||||||||||||||
Purchases of land interests | $ | 21,207 | $ | — | $ | — | $ | 21,207 | $ | 19,119 | $ | 5 | $ | — | $ | 19,124 | |||||||||||||||
Wireless infrastructure construction and improvements | 76,270 | 184,038 | — | 260,308 | 75,921 | 85,354 | — | 161,275 | |||||||||||||||||||||||
Sustaining: | |||||||||||||||||||||||||||||||
Capital improvement and corporate | 9,473 | 4,052 | 5,906 | 19,431 | 9,140 | 2,091 | 7,878 | 19,109 | |||||||||||||||||||||||
Total | $ | 106,950 | $ | 188,090 | $ | 5,906 | $ | 300,946 | $ | 104,180 | $ | 87,450 | $ | 7,878 | $ | 199,508 |
PROJECTED REVENUE FROM CUSTOMER LICENSES(1) | |||||||||||||||
Remaining six months | Years Ended December 31, | ||||||||||||||
(as of June 30, 2017; dollars in millions) | 2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||
Components of site rental revenue: | |||||||||||||||
Site rental revenues exclusive of straight-line associated with fixed escalators | 1,772 | $ | 3,605 | $ | 3,676 | $ | 3,754 | $ | 3,831 | ||||||
Straight-lined site rental revenues associated with fixed escalators | (13 | ) | (73 | ) | (132 | ) | (192 | ) | (240 | ) | |||||
GAAP site rental revenue | $ | 1,759 | $ | 3,532 | $ | 3,544 | $ | 3,562 | $ | 3,591 |
PROJECTED GROUND LEASE EXPENSE FROM EXISTING GROUND LEASES(2) | |||||||||||||||
Remaining six months | Years Ended December 31, | ||||||||||||||
(as of June 30, 2017; dollars in millions) | 2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||
Components of ground lease expense: | |||||||||||||||
Ground lease expense exclusive of straight-line associated with fixed escalators | $ | 305 | $ | 622 | $ | 637 | $ | 653 | $ | 673 | |||||
Straight-lined site rental ground lease expense associated with fixed escalators | 43 | 79 | 68 | 57 | 45 | ||||||||||
GAAP ground lease expense | $ | 407 | $ | 701 | $ | 705 | $ | 711 | $ | 718 |
(1) | Based on customer licenses as of June 30, 2017. All customer licenses are assumed to renew for a new term at current term end date. CPI-linked customer contracts are assumed to escalate at 3% per annum. |
(2) | Based on existing ground leases as of June 30, 2017. CPI-linked leases are assumed to escalate at 3% per annum. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
ANNUALIZED RENTAL CASH PAYMENTS AT TIME OF RENEWAL(1) | |||||||||||||||
Remaining six months | Years Ended December 31, | ||||||||||||||
(as of June 30, 2017; dollars in millions) | 2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||
AT&T | $ | 9 | $ | 39 | $ | 35 | $ | 44 | $ | 74 | |||||
Sprint | 22 | 36 | 39 | 22 | 39 | ||||||||||
T-Mobile | 13 | 25 | 59 | 21 | 31 | ||||||||||
Verizon | 11 | 21 | 20 | 28 | 26 | ||||||||||
All Others Combined | 26 | 44 | 37 | 36 | 33 | ||||||||||
Total | $ | 81 | $ | 165 | $ | 191 | $ | 151 | $ | 203 |
ESTIMATED REDUCTION TO SITE RENTAL REVENUES FROM NON-RENEWALS FROM LEAP, METROPCS AND CLEARWIRE NETWORK DECOMMISSIONING(2)(3) (dollars in millions) | |||
2017 | 2018 | Thereafter | Total |
$50-$55 | $30-$40 | $35-$60 | $115-$155 |
CUSTOMER OVERVIEW | |||
(as of June 30, 2017) | Percentage of Q2 2017 LQA Site Rental Revenues | Weighted Average Current Term Remaining(4) | Long-Term Credit Rating (S&P / Moody’s) |
AT&T | 26% | 6 | BBB+ / Baa1 |
T-Mobile | 23% | 5 | BB |
Verizon | 19% | 7 | BBB+ / Baa1 |
Sprint | 17% | 5 | B / B3 |
All Others Combined | 15% | 4 | N/A |
Total / Weighted Average | 100% | 6 |
(1) | Reflects lease renewals by year by customer; dollar amounts represent annualized cash site rental revenues from assumed renewals or extension as reflected in the table "Projected Revenue from Customer Contracts." |
(2) | Estimated impact to site rental revenues in the applicable period based on the anticipated timing and amount of decommissioning activity, as of June 30, 2017. |
(3) | Depending on the eventual network deployment and decommissioning plans of AT&T, T-Mobile and Sprint, the impact and timing of such renewals may vary from Crown Castle's expectations. |
(4) | Weighted by site rental revenue contributions; excludes renewals at the customers' option. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF TOWER PORTFOLIO BY VINTAGE | |
(as of June 30, 2017; dollars in thousands) | |
YIELD(1) | NUMBER OF TENANTS PER TOWER |
LQA SITE RENTAL REVENUE PER TOWER | LQA TOWERS SEGMENT SITE RENTAL GROSS MARGIN PER TOWER |
INVESTED CAPITAL PER TOWER(2) | NUMBER OF TOWERS |
(1) | Yield is calculated as LQA Towers segment site rental gross margin divided by invested capital. |
(2) | Reflects gross total assets, including incremental capital invested by the Company since time of acquisition or construction completion. Inclusive of invested capital related to land at the tower site. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
PORTFOLIO OVERVIEW(1) | ||
(as of June 30, 2017; dollars in thousands) | ||
NUMBER OF TOWERS | TENANTS PER TOWER | LQA SITE RENTAL REVENUE PER TOWER |
(1) | Includes towers and rooftops, excludes small cells and third-party land interests. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
DISTRIBUTION OF TOWER TENANCY (as of June 30, 2017) | |||||
PERCENTAGE OF TOWERS BY TENANTS PER TOWER(1) | |||||
SITES ACQUIRED AND BUILT 2006 AND PRIOR | SITES ACQUIRED AND BUILT 2007 TO PRESENT |
Average: 2.6 | Average: 2.0 |
GEOGRAPHIC TOWER DISTRIBUTION (as of June 30, 2017)(1) | |
PERCENTAGE OF TOWERS BY GEOGRAPHIC LOCATION | PERCENTAGE OF LQA SITE RENTAL REVENUE BY GEOGRAPHIC LOCATION |
(1) | Includes towers and rooftops, excludes small cells and third-party land interests. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
GROUND INTEREST OVERVIEW | ||||||||||||||||
(as of June 30, 2017; dollars in millions) | LQA Site Rental Revenue | Percentage of LQA Site Rental Revenue | LQA Towers Segment Site Rental Gross Margin | Percentage of LQA Towers Segment Site Rental Gross Margin | Number of Towers(1) | Percentage of Towers | Weighted Average Term Remaining (by years)(2) | |||||||||
Less than 10 years | $ | 357 | 13 | % | $ | 197 | 10 | % | 5,842 | 15 | % | |||||
10 to 20 years | 449 | 16 | % | 237 | 12 | % | 7,835 | 20 | % | |||||||
Greater 20 years | 1,198 | 42 | % | 795 | 40 | % | 16,950 | 42 | % | |||||||
Total leased | $ | 2,003 | 71 | % | $ | 1,229 | 62 | % | 30,627 | 76 | % | 34 | ||||
Owned | 818 | 29 | % | 752 | 38 | % | 9,500 | 24 | % | |||||||
Total / Average | $ | 2,821 | 100 | % | $ | 1,982 | 100 | % | 40,127 | 100 | % |
(1) | Includes towers and rooftops, excludes small cells and third-party land interests. |
(2) | Includes renewal terms at the Company’s option; weighted by Towers segment site rental gross margin. |
GROUND INTEREST ACTIVITY | ||||||
(dollars in millions) | Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | ||||
Ground Extensions Under Crown Castle Towers: | ||||||
Number of ground leases extended | 392 | 819 | ||||
Average number of years extended | 35 | 31 | ||||
Percentage increase in consolidated cash ground lease expense due to extension activities(1) | 0.1 | % | 0.1 | % | ||
Ground Purchases Under Crown Castle Towers: | ||||||
Number of ground leases purchased | 97 | 198 | ||||
Land lease purchases (including capital expenditures, acquisitions and capital leases) | $ | 22 | $ | 44 | ||
Percentage of Towers segment site rental gross margin from towers residing on land purchased | <1% | <1% |
(1) | Includes the impact from the amortization of lump sum payments. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CAPITALIZATION OVERVIEW | ||||||||
(dollars in millions) | Face Value as of 6/30/2017 | Fixed vs. Variable | Secured vs. Unsecured | Interest Rate(1) | Net Debt to LQA EBITDA(2) | Maturity | ||
Cash | $ | 200 | ||||||
Senior Secured Tower Revenue Notes, Series 2010-3(3) | 1,250 | Fixed | Secured | 6.1% | 2040(3) | |||
Senior Secured Tower Revenue Notes, Series 2010-6(3) | 1,000 | Fixed | Secured | 4.9% | 2040(3) | |||
Senior Secured Tower Revenue Notes, Series 2015-1(3) | 300 | Fixed | Secured | 3.2% | 2042(3) | |||
Senior Secured Tower Revenue Notes, Series 2015-2(3) | 700 | Fixed | Secured | 3.7% | 2045(3) | |||
3.849% Secured Notes | 1,000 | Fixed | Secured | 3.8% | 2023 | |||
Senior Secured Notes, Series 2009-1, Class A-1 | 43 | Fixed | Secured | 6.3% | 2019 | |||
Senior Secured Notes, Series 2009-1, Class A-2 | 70 | Fixed | Secured | 9.0% | 2029 | |||
Capital Leases & other obligations | 241 | Various | Secured | Various | Various | |||
Total secured debt | $ | 4,603 | 4.8% | 2.0x | ||||
Senior Unsecured Revolving Credit Facility(4) | 350 | Variable | Unsecured | 2.6% | 2022 | |||
Senior Unsecured Term Loan A | 2,432 | Variable | Unsecured | 2.6% | 2022 | |||
5.250% Senior Notes | 1,650 | Fixed | Unsecured | 5.3% | 2023 | |||
3.400% Senior Notes | 850 | Fixed | Unsecured | 3.4% | 2021 | |||
4.450% Senior Notes | 900 | Fixed | Unsecured | 4.5% | 2026 | |||
4.875% Senior Notes | 850 | Fixed | Unsecured | 4.9% | 2022 | |||
3.700% Senior Notes | 750 | Fixed | Unsecured | 3.7% | 2026 | |||
2.250% Senior Notes | 700 | Fixed | Unsecured | 2.3% | 2021 | |||
4.000% Senior Notes | 500 | Fixed | Unsecured | 4.0% | 2027 | |||
4.750% Senior Notes | 350 | Fixed | Unsecured | 4.8% | 2047 | |||
Total unsecured debt | $ | 9,332 | 3.7% | 4.0x | ||||
Total net debt | $ | 13,735 | 4.1% | 5.8x | ||||
Market Capitalization(5) | 36,677 | |||||||
Firm Value(6) | $ | 50,412 |
(1) | Represents the weighted-average stated interest rate. |
(2) | Represents the applicable amount of debt divided by LQA consolidated Adjusted EBITDA. The Net Debt to Last Quarter Annualized Adjusted EBITDA calculation does not give effect to a full quarter of ownership of Wilcon, as this acquisition closed on June 26, 2017. |
(3) | If the respective series of such debt is not paid in full on or prior to an applicable date then the Excess Cash Flow (as defined in the indenture) of the issuers of such notes will be used to repay principal of the applicable series, and additional interest (of an additional approximately 5% per annum) will accrue on the respective series. The Senior Secured Tower Revenue Notes, Series 2010-3 and 2010-6 have anticipated repayment dates in 2020. The Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 have anticipated repayment dates of 2022 and 2025, respectively. Notes are prepayable at par if voluntarily repaid six months or less prior to maturity; earlier prepayment may require additional consideration. |
(4) | As of June 30, 2017, the undrawn availability under the $2.5 billion Revolving Credit Facility is $2.1 billion. |
(5) | Market capitalization calculated based on $100.18 closing price and 366.1 million shares outstanding as of June 30, 2017. |
(6) | Represents the sum of net debt and market capitalization. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
DEBT MATURITY OVERVIEW(1) |
(1) | Where applicable, maturities reflect the Anticipated Repayment Date as defined in the respective debt agreement; excludes capital leases and other obligations; amounts presented at face value net of repurchases held at CCIC. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
LIQUIDITY OVERVIEW(1) | |||
(dollars in thousands) | June 30, 2017 | ||
Cash and cash equivalents(2) | $ | 199,663 | |
Undrawn revolving credit facility availability(3) | 2,140,426 | ||
Restricted cash | 122,913 | ||
Debt and other long-term obligations(4) | 13,841,265 | ||
Total equity | 7,590,309 |
(1) | We have an At-The-Market stock offering program ("ATM Program") through which we may, from time to time, issue and sell shares of our common stock having an aggregate cumulative gross sales price of up to $500.0 million to or through sales agents. As of June 30, 2017, 4.1 million shares of common stock had been sold under the ATM Program generating net proceeds of $346.3 million. |
(2) | Exclusive of restricted cash. |
(3) | Availability at any point in time is subject to reaffirmation of the representations and warranties in, and there being no default under, our credit agreement governing our Senior Unsecured Credit Facility. |
(4) | Balances reflect debt issuance costs as a direct reduction from the respective carrying amounts of debt, with the exception of debt issuance costs associated with the Company's revolving credit facilities. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF MAINTENANCE AND FINANCIAL COVENANTS | |||||
Debt | Borrower / Issuer | Covenant(1) | Covenant Level Requirement | As of June 30, 2017 | |
Maintenance Financial Covenants(2) | |||||
2016 Credit Facility | CCIC | Total Net Leverage Ratio | ≤ 6.50x | 5.7x | |
2016 Credit Facility | CCIC | Total Senior Secured Leverage Ratio | ≤ 3.50x | 1.8x | |
2016 Credit Facility | CCIC | Consolidated Interest Coverage Ratio(3) | N/A | N/A | |
Restrictive Negative Financial Covenants | |||||
Financial covenants restricting ability to incur additional debt | |||||
2012 Secured Notes | CC Holdings GS V LLC and Crown Castle GS III Corp. | Debt to Adjusted Consolidated Cash Flow Ratio | ≤ 3.50x | 2.6x | |
Financial covenants requiring excess cash flows to be deposited in a cash trap reserve account and not released | |||||
2010 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.75x | (4) | 4.6x |
2015 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.75x | (4) | 4.6x |
2009 Securitized Notes | Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.30x | (4) | 7.0x |
Financial covenants restricting ability of relevant issuer to issue additional notes under the applicable indenture | |||||
2010 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.00x | (5) | 4.6x |
2015 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.00x | (5) | 4.6x |
2009 Securitized Notes | Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.34x | (5) | 7.0x |
(1) | As defined in the respective debt agreement. In the indentures for the 2010 Tower Revenue Notes, 2015 Tower Revenue Notes and the 2009 Securitized Notes, the defined term for Debt Service Coverage Ratio is "DSCR". |
(2) | Failure to comply with the financial maintenance covenants would, absent a waiver, result in an event of default under the credit agreement governing our 2016 Credit Facility. |
(3) | Applicable solely to the extent that the senior unsecured debt rating by any two of S&P, Moody's and Fitch is lower than BBB-, Baa3 or BBB-, respectively. If applicable, the consolidated interest coverage ratio must be greater than or equal to 2.50. |
(4) | The 2010 Tower Revenue Notes, 2015 Tower Revenue Notes, and 2009 Securitized Notes also include the potential for amortization events, which could result in applying current and future cash flow to the prepayment of debt with applicable prepayment consideration. An amortization event occurs when the Debt Service Coverage Ratio falls below 1.45x, 1.45x or 1.15x, in each case as described under the indentures for the 2010 Tower Revenue Notes, 2015 Tower Revenue Notes, or 2009 Securitized Notes, respectively. |
(5) | Rating Agency Confirmation (as defined in the respective debt agreement) is also required. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
INTEREST RATE SENSITIVITY(1) | |||||||||
Remaining six months | Years Ended December 31, | ||||||||
(as of June 30, 2017; dollars in millions) | 2017 | 2018 | 2019 | ||||||
Fixed Rate Debt: | |||||||||
Face Value of Principal Outstanding(2) | $ | 10,903 | $ | 10,883 | $ | 10,867 | |||
Current Interest Payment Obligations(3) | 242 | 484 | 483 | ||||||
Effect of 0.125% Change in Interest Rates(4) | — | — | — | ||||||
Floating Rate Debt: | |||||||||
Face Value of Principal Outstanding(2) | $ | 2,751 | $ | 2,689 | $ | 2,566 | |||
Current Interest Payment Obligations(5) | 37 | 80 | 85 | ||||||
Effect of 0.125% Change in Interest Rates(6) | 2 | 3 | 3 |
(1) | Excludes capital lease and other obligations. |
(2) | Face value net of required amortizations; assumes no maturity or balloon principal payments; excludes capital leases. |
(3) | Interest expense calculated based on current interest rates. |
(4) | Interest expense calculated based on current interest rates until the sooner of the (1) stated maturity date or (2) the Anticipated Repayment Date, at which time the face value amount outstanding of such indebtedness is refinanced at current rates plus 12.5 bps. |
(5) | Interest expense calculated based on current interest rates. Forward LIBOR assumptions are derived from the 1-month LIBOR forward curve as of June 30, 2017. Calculation assumes no changes to future interest rate margin spread over LIBOR due to changes in the Borrower’s senior unsecured credit rating. |
(6) | Interest expense calculated based on current interest rates using the 1-month LIBOR forward curve as of June 30, 2017 plus 12.5 bps. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
DEFINITIONS |
• | 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 wireless 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 and AFFO per share are useful to investors or other interested parties in evaluating our financial performance. Management believes that AFFO and AFFO per share help investors or other interested parties meaningfully evaluate our financial performance as they include (1) the impact of our capital structure (primarily interest expense on our outstanding debt and dividends on our preferred stock) and (2) sustaining capital expenditures and exclude the impact of our (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 the Company uses AFFO and AFFO per share only as a performance measure. AFFO and AFFO per share 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 and FFO per share are 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 and FFO per share help investors or other interested parties meaningfully evaluate financial performance by excluding the impact of our asset base (primarily depreciation, amortization and accretion). FFO and FFO per share are not key performance indicators used by the Company. FFO and FFO per share 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. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
• | Organic Contribution to Site Rental Revenues is useful to investors or other interested parties in understanding the components of the year-over-year changes in our site rental revenues computed in accordance with GAAP. Management uses the Organic Contribution to Site Rental Revenues to assess year-over-year growth rates for our rental activities, to evaluate current performance, to capture trends in rental rates, new leasing activities and customer non-renewals in our core business, as well to forecast future results. Organic Contribution to Site Rental Revenues is not meant as an alternative measure of revenue and should be considered only as a supplement in understanding and assessing the performance of our site rental revenues computed in accordance with GAAP. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Three Months Ended June 30, | Six Months Ended June 30, | Twelve Months Ended December 31, | |||||||||||||||||
(dollars in thousands) | 2017 | 2016 | 2017 | 2016 | 2016 | ||||||||||||||
Net income (loss) | $ | 112,114 | $ | 86,058 | $ | 231,252 | $ | 133,898 | $ | 356,973 | |||||||||
Adjustments to increase (decrease) net income (loss): | |||||||||||||||||||
Asset write-down charges | 4,327 | 11,952 | 4,972 | 19,912 | 34,453 | ||||||||||||||
Acquisition and integration costs | 8,250 | 3,141 | 13,900 | 8,779 | 17,453 | ||||||||||||||
Depreciation, amortization and accretion | 295,615 | 276,026 | 584,164 | 553,901 | 1,108,551 | ||||||||||||||
Amortization of prepaid lease purchase price adjustments | 5,007 | 5,367 | 10,084 | 10,569 | 21,312 | ||||||||||||||
Interest expense and amortization of deferred financing costs(1) | 141,769 | 129,362 | 276,256 | 255,740 | 515,032 | ||||||||||||||
Gains (losses) on retirement of long-term obligations | — | 11,468 | 3,525 | 42,017 | 52,291 | ||||||||||||||
Interest income | (1,027 | ) | (105 | ) | (1,397 | ) | (279 | ) | (796 | ) | |||||||||
Other income (expense) | 1,106 | 518 | (3,494 | ) | 3,791 | 8,835 | |||||||||||||
Benefit (provision) for income taxes | 4,538 | 3,884 | 8,907 | 7,756 | 16,881 | ||||||||||||||
Stock-based compensation expense | 16,835 | 21,998 | 41,777 | 52,703 | 96,538 | ||||||||||||||
Adjusted EBITDA(2)(3) | $ | 588,534 | $ | 549,669 | $ | 1,169,946 | $ | 1,088,787 | $ | 2,227,523 |
(1) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein. |
(2) | See "Definitions of Non-GAAP 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. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Q3 2017 | Full Year 2017 | ||||||
(dollars in millions) | Outlook | Outlook | |||||
Net income (loss) | $90 | to | $110 | $426 | to | $476 | |
Adjustments to increase (decrease) net income (loss): | |||||||
Asset write-down charges | $9 | to | $11 | $20 | to | $30 | |
Acquisition and integration costs | $8 | to | $12 | $28 | to | $38 | |
Depreciation, amortization and accretion | $296 | to | $310 | $1,178 | to | $1,208 | |
Amortization of prepaid lease purchase price adjustments | $4 | to | $6 | $19 | to | $21 | |
Interest expense and amortization of deferred financing costs(1) | $142 | to | $147 | $552 | to | $582 | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $4 | to | $4 | |
Interest income | $(1) | to | $1 | $(3) | to | $1 | |
Other income (expense) | $(1) | to | $3 | $(2) | to | $0 | |
Benefit (provision) for income taxes | $3 | to | $7 | $14 | to | $22 | |
Stock-based compensation expense | $24 | to | $26 | $89 | to | $94 | |
Adjusted EBITDA(2)(3) | $600 | to | $605 | $2,389 | to | $2,414 |
Three Months Ended June 30, | |||||||
(dollars in thousands) | 2017 | 2016 | |||||
Interest expense on debt obligations | $ | 139,349 | $ | 125,580 | |||
Amortization of deferred financing costs and adjustments on long-term debt, net | 4,540 | 4,815 | |||||
Other, net | (2,120 | ) | (1,033 | ) | |||
Interest expense and amortization of deferred financing costs | $ | 141,769 | $ | 129,362 |
Q3 2017 | Full Year 2017 | ||||||
(dollars in millions) | Outlook | Outlook | |||||
Interest expense on debt obligations | $140 | to | $142 | $546 | to | $561 | |
Amortization of deferred financing costs and adjustments on long-term debt, net | $4 | to | $7 | $17 | to | $21 | |
Other, net | $(2) | to | $(2) | $(8) | to | $(6) | |
Interest expense and amortization of deferred financing costs | $142 | to | $147 | $552 | to | $582 |
(1) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein. |
(2) | See "Definitions of Non-GAAP 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. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(dollars in thousands, except share and per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net income (loss) | $ | 112,114 | $ | 86,058 | $ | 231,252 | $ | 133,898 | |||||||
Real estate related depreciation, amortization and accretion | 288,185 | 269,416 | 569,348 | 540,909 | |||||||||||
Asset write-down charges | 4,327 | 11,952 | 4,972 | 19,912 | |||||||||||
Dividends on preferred stock | — | (10,997 | ) | — | (21,994 | ) | |||||||||
FFO(1)(2)(4) | $ | 404,626 | $ | 356,429 | $ | 805,573 | $ | 672,725 | |||||||
FFO (from above) | $ | 404,626 | $ | 356,429 | $ | 805,573 | $ | 672,725 | |||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||
Straight-lined revenue | 807 | (16,204 | ) | (455 | ) | (33,539 | ) | ||||||||
Straight-lined expense | 22,655 | 23,881 | 45,871 | 47,646 | |||||||||||
Stock-based compensation expense | 16,835 | 21,998 | 41,777 | 52,703 | |||||||||||
Non-cash portion of tax provision | (4,791 | ) | (35 | ) | (1,213 | ) | 1,747 | ||||||||
Non-real estate related depreciation, amortization and accretion | 7,430 | 6,611 | 14,816 | 12,993 | |||||||||||
Amortization of non-cash interest expense | 2,420 | 3,782 | 5,256 | 7,993 | |||||||||||
Other (income) expense | 1,106 | 518 | (3,494 | ) | 3,791 | ||||||||||
Gains (losses) on retirement of long-term obligations | — | 11,468 | 3,525 | 42,017 | |||||||||||
Acquisition and integration costs | 8,250 | 3,141 | 13,900 | 8,779 | |||||||||||
Capital improvement capital expenditures | (9,570 | ) | (8,910 | ) | (16,465 | ) | (15,311 | ) | |||||||
Corporate capital expenditures | (9,861 | ) | (10,200 | ) | (19,019 | ) | (13,911 | ) | |||||||
AFFO(1)(2)(4) | $ | 439,907 | $ | 392,478 | $ | 890,071 | $ | 787,632 | |||||||
Weighted average common shares outstanding — diluted(3) | 365,832 | 338,609 | 363,892 | 336,658 | |||||||||||
AFFO per share(1)(4) | $ | 1.20 | $ | 1.16 | $ | 2.45 | $ | 2.34 |
(1) | See “Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO. |
(2) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(3) | Based on the diluted weighted-average common shares outstanding for the three and six months ended June 30, 2017 and 2016. |
(4) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Years Ended December 31, | |||||||||||||||
(in thousands of dollars, except share and per share amounts) | 2016 | 2015 | 2014 | 2013 | |||||||||||
Net income (loss) | $ | 356,973 | $ | 525,286 | $ | 346,314 | $ | 60,001 | |||||||
Real estate related depreciation, amortization and accretion | 1,082,083 | 1,018,303 | 971,562 | 730,076 | |||||||||||
Asset write-down charges | 34,453 | 33,468 | 14,246 | 13,595 | |||||||||||
Adjustment for noncontrolling interest(1) | — | — | — | — | |||||||||||
Dividends on preferred stock | (43,988 | ) | (43,988 | ) | (43,988 | ) | — | ||||||||
FFO(3)(4)(6) | $ | 1,429,521 | $ | 1,533,069 | $ | 1,288,133 | $ | 803,672 | |||||||
FFO (from above) | $ | 1,429,521 | $ | 1,533,069 | $ | 1,288,133 | $ | 803,672 | |||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||
Straight-lined revenue | (47,377 | ) | (111,263 | ) | (183,393 | ) | (212,856 | ) | |||||||
Straight-lined expense | 94,246 | 98,738 | 101,890 | 78,619 | |||||||||||
Stock-based compensation expense | 96,538 | 67,148 | 56,431 | 39,031 | |||||||||||
Non-cash portion of tax provision(2) | 7,322 | (63,935 | ) | (19,490 | ) | 185,723 | |||||||||
Non-real estate related depreciation, amortization and accretion | 26,468 | 17,875 | 14,219 | 11,266 | |||||||||||
Amortization of non-cash interest expense | 14,333 | 37,126 | 80,854 | 99,244 | |||||||||||
Other (income) expense | 8,835 | (57,028 | ) | (11,992 | ) | 3,902 | |||||||||
Gains (losses) on retirement of long-term obligations | 52,291 | 4,157 | 44,629 | 37,127 | |||||||||||
Net gain (loss) on interest rate swaps | — | — | — | — | |||||||||||
Acquisition and integration costs | 17,453 | 15,678 | 34,145 | 25,574 | |||||||||||
Adjustment for noncontrolling interest(1) | — | — | — | — | |||||||||||
Capital improvement capital expenditures | (42,818 | ) | (46,789 | ) | (31,056 | ) | (17,520 | ) | |||||||
Corporate capital expenditures | (46,948 | ) | (58,142 | ) | (50,317 | ) | (27,099 | ) | |||||||
AFFO(3)(4)(6) | $ | 1,609,864 | $ | 1,436,635 | $ | 1,324,054 | $ | 1,026,684 | |||||||
Weighted average common shares outstanding — diluted(5) | 340,879 | 334,062 | 333,265 | 299,293 | |||||||||||
AFFO per share(3)(6) | $ | 4.72 | $ | 4.30 | $ | 3.97 | $ | 3.43 |
(2) | Adjusts the income tax provision to reflect our estimate of the cash taxes paid had we been a REIT for all periods presented, and is primarily comprised of foreign taxes. As a result income tax expense (benefit) is lower by the amount of the adjustment. |
(3) | See "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO. |
(4) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(5) | Based on the diluted weighted-average common shares outstanding for the twelve months ended December 31, 2016, 2015, 2014 and 2013. |
(6) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Q3 2017 | Full Year 2017 | ||||||
(in millions of dollars, except share and per share amounts) | Outlook | Outlook | |||||
Net income (loss) | $90 | to | $110 | $426 | to | $476 | |
Real estate related depreciation, amortization and accretion | $291 | to | $301 | $1,154 | to | $1,174 | |
Asset write-down charges | $9 | to | $11 | $20 | to | $30 | |
FFO(2)(3) | $404 | to | $409 | $1,623 | to | $1,653 | |
Weighted-average common shares outstanding—diluted(1) | 367.5 | 365.7 | |||||
FFO per share(2)(3) | $1.10 | to | $1.11 | $4.45 | to | $4.52 | |
FFO (from above) | $404 | to | $409 | $1,623 | to | $1,653 | |
Adjustments to increase (decrease) FFO: | |||||||
Straight-lined revenue | $0 | to | $5 | $4 | to | $19 | |
Straight-lined expense | $20 | to | $25 | $81 | to | $96 | |
Stock-based compensation expense | $24 | to | $26 | $89 | to | $94 | |
Non-cash portion of tax provision | $(2) | to | $3 | $(6) | to | $4 | |
Non-real estate related depreciation, amortization and accretion | $5 | to | $9 | $24 | to | $34 | |
Amortization of non-cash interest expense | $2 | to | $5 | $9 | to | $15 | |
Other (income) expense | $(1) | to | $3 | $(2) | to | $0 | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $4 | to | $4 | |
Acquisition and integration costs | $8 | to | $12 | $28 | to | $38 | |
Capital improvement capital expenditures | $(15) | to | $(10) | $(41) | to | $(31) | |
Corporate capital expenditures | $(19) | to | $(14) | $(53) | to | $(43) | |
AFFO(2)(3) | $447 | to | $452 | $1,813 | to | $1,838 | |
Weighted-average common shares outstanding—diluted(1) | 367.5 | 365.7 | |||||
AFFO per share(2)(3) | $1.22 | to | $1.23 | $4.96 | to | $5.03 |
(1) | The assumption for third quarter 2017 and full year 2017 diluted weighted-average common shares outstanding is based on diluted common shares outstanding as of June 30, 2017. |
(2) | See “Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO. |
(3) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Three Months Ended June 30, | |||||||
(dollars in millions) | 2017 | 2016 | |||||
Total face value of debt | $ | 13,935.1 | $ | 12,520.6 | |||
Ending cash and cash equivalents(1) | 199.7 | 202.3 | |||||
Total net debt | $ | 13,735.4 | $ | 12,318.3 | |||
Adjusted EBITDA for the three months ended June 30, | $ | 588.5 | $ | 549.7 | |||
Last quarter annualized Adjusted EBITDA | 2,354.1 | 2,198.7 | |||||
Net debt to Last Quarter Annualized Adjusted EBITDA | 5.8 | x | (2) | 5.6 | x |
Three Months Ended June 30, | |||||||
(dollars in thousands) | 2017 | 2016 | |||||
Adjusted EBITDA | $ | 588,534 | $ | 549,669 | |||
Interest expense on debt obligations | 139,349 | 125,580 | |||||
Interest Coverage Ratio | 4.2 | x | 4.4 | x |
(2) | The Net Debt to Last Quarter Annualized Adjusted EBITDA calculation does not give effect to a full quarter of ownership of Wilcon, as this acquisition closed on June 26, 2017. |