Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2020
Crown Castle International Corp.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
001-16441
 
76-0470458
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

1220 Augusta Drive, Suite 600, Houston, Texas 77057-2261
(Address of principal executives office) (Zip Code)
Registrant's telephone number, including area code: (713) 570-3000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
CCI
New York Stock Exchange
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value
CCI.PRA
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 





ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On February 26, 2020, Crown Castle International Corp. ("Company") issued a press release disclosing its financial results for fourth quarter and full year ended December 31, 2019. The February 26, 2020 press release is furnished herewith as Exhibit 99.1.
ITEM 4.02 — NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW
(a)
Correction of Errors in Previously Issued Financial Statements
Following review of the Company's accounting policies for tower installation services, we identified historical errors related to the timing of revenue recognition for such services. Due to these errors, on February 25, 2020, the Audit Committee of the Company’s Board of Directors, after considering the recommendation of management and after discussion with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, concluded that the following financial statements previously issued by the Company should no longer be relied upon: (1) audited consolidated financial statements and related disclosures for years ended December 31, 2016 through and including 2018 and (2) unaudited financial statements and related disclosures for the quarterly and year-to-date periods during 2018 and for the first three quarters of fiscal year 2019. As a result, the Company is restating its financial statements for the years ended December 31, 2018 and 2017 and unaudited financial information for the quarterly and year-to-date periods in the year ended December 31, 2018 and for the first three quarters in the year ended December 31, 2019. The restatement also affects periods prior to 2017, and the cumulative effect of the errors is expected to be reflected in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 10-K") as an adjustment to opening “Dividends/distributions in excess of earnings” as of January 1, 2017.
The restated financial statements and financial information will be included in the 2019 10-K, which the Company expects to file by the time period prescribed for such filing, including any available extension if needed to finalize the consolidated financial statements and disclosures and complete the associated audit work. Specifically, the Company intends to include in its 2019 10‑K, the restated 2018 and 2017 year-end financial statements in its consolidated financial statements and include the restated quarterly financial information in the unaudited quarterly financial information note to the consolidated financial statements. The Company does not intend to file amended Quarterly Reports on Form 10-Q to reflect the restatement.
Identification of Material Weakness
The Company has determined that the restatement of the Company's previously issued financial statements as described above indicates the existence of one or more material weaknesses in its internal control over financial reporting and that the Company's internal control over financial reporting and disclosure controls and procedures were ineffective as of December 31, 2019. The Company will report the material weakness(es) in its 2019 10-K and intends to create a plan of remediation to address the material weakness(es).
ITEM 7.01 — REGULATION FD DISCLOSURE
The press release referenced in Item 2.02 above refers to certain supplemental information that was posted as a supplemental information package on the Company's website on February 26, 2020. The supplemental information package is furnished herewith as Exhibit 99.2.
ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits

Exhibit Index
As described in Item 2.02 and 7.01 of this Current Report on Form 8-K ("Form 8-K"), the following exhibits are furnished as part of this Form 8-K:





Exhibit No.
 
Description
99.1
 
99.2
 
104
 
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
The information in Items 2.02 and 7.01 of this Form 8-K and Exhibits 99.1 and 99.2 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Language Regarding Forward Looking Statements
This Current Report on Form 8-K contains forward-looking statements and information that are based on the current expectations of the management of the Company. Statements that are not historical facts are hereby identified as forward-looking statements. Words such as “may,” “should,” “could,” “estimate,” “anticipate,” “project,” “plan,” “intend,” “believe,” “expect,” “likely,” “predicted,” “positioned,” and any variations of these words and similar expressions are intended to identify such forward looking statements.
The forward-looking statements included in this report are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is indicated in such forward-looking statements, and include, without limitation, the following: the timing of the filing of the 2019 10-K; the financial statements to be restated and the filing in which such restated financial statements will appear; additional restatement-related information that will be reflected in the 2019 10-K; the Company's intent to report one or more material weaknesses in its internal control over financial reporting; the Company's intent to create a remediation plan; and other factors described from time to time in our filings with the Securities and Exchange Commission.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
CROWN CASTLE INTERNATIONAL CORP. 
 
 
By:  
/s/ Kenneth J. Simon
 
 
 
Name:  
Kenneth J. Simon 
 
 
 
Title:
Senior Vice President
and General Counsel 
 
Date: February 26, 2020



Exhibit
Exhibit 99.1

https://cdn.kscope.io/b572e6d88c4c170a702900f69eec9cea-logoa47.jpg
 
NEWS RELEASE
February 26, 2020

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

CROWN CASTLE REPORTS FULL YEAR 2019 RESULTS,
UPDATES OUTLOOK FOR FULL YEAR 2020, AND ANNOUNCES RESTATEMENT OF FINANCIAL RESULTS

February 26, 2020 - HOUSTON, TEXAS - Crown Castle International Corp. (NYSE: CCI) ("Crown Castle") today reported results for the fourth quarter and full year ended December 31, 2019, updated its full year 2020 Outlook, and announced the restatement of previously-issued financial statements.
(in millions, except per share amounts)
Midpoint of Current Full Year
2020 Outlook(c)
Full Year 2019 Actual(d)
Full Year 2018 Actual,
as restated(d)
Full Year 2019 to Full Year 2020 Outlook % Change
Full Year 2018 to Full Year 2019 % Change(d)
Site rental revenues
$5,360
$5,098
$4,800
+5%
+6%
Net income (loss)
$1,038
$863
$625
+20%
+38%
Net income (loss) per share—diluted(a)
$2.32
$1.80
$1.23
+29%
+46%
Adjusted EBITDA(b)
$3,502
$3,304
$3,095
+6%
+7%
AFFO(a)(b)
$2,595
$2,376
$2,228
+9%
+7%
AFFO per share(a)(b)
$6.12
$5.69
$5.37
+8%
+6%
(a)
Attributable to CCIC common stockholders.
(b)
See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" included herein for further information and reconciliation of this non-GAAP financial measure to net income (loss).
(c)
Represents no change from the midpoint of full year 2020 Outlook issued on October 16, 2019 ("Previous 2020 Outlook") other than the impact of the restatement described in "Expected Impact of the Restatement of Previously-Issued Financial Statements."
(d)
Results are preliminary and unaudited. See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.
"In 2019, we experienced our highest level of tower leasing activity in more than a decade as the continued growth in mobile data demand is driving our customers to make significant investments in their existing 4G networks, while they are also positioning their businesses for 5G," stated Jay Brown, Crown Castle’s Chief Executive Officer. "We believe our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks and are shared among multiple tenants, provides us the best opportunity to generate significant growth while delivering high returns for our shareholders. We believe that the U.S. represents the best market in the world for communications infrastructure ownership, and we are pursuing that compelling opportunity with our comprehensive offering.
"Further, we delivered another strong year of results for full year 2019 despite a noticeable slowdown in activity in the fourth quarter of 2019. We anticipate that this slowdown is temporary in nature and see a return to significant activity in the second half of this year. We believe the industry fundamentals are improving further with the competitive landscape for our existing customers coming into focus, the prospect of new customers looking for access to our tower

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and fiber infrastructure at scale, and additional wireless spectrum auctions on the horizon. As we look forward to what will likely be another decade-long investment cycle for our customers with the deployment of 5G, I am excited about the opportunity we see for Crown Castle to deliver long-term value to our shareholders while delivering dividend per share growth of 7% to 8% per year."
DISCUSSION OF TOWER INSTALLATION SERVICES REVENUES
In connection with our year-end procedures and after receiving the previously disclosed subpoena from the U.S. Securities and Exchange Commission ("SEC"), we engaged in a review internally, and in consultation with our independent auditors, PricewaterhouseCoopers LLP ("PwC"), of our accounting policies for our tower installation services. Following that review, we decided with PwC to seek input from the SEC's Office of the Chief Accountant ("OCA") regarding whether a portion of our services revenues should be recognized over the term of the associated lease. The OCA is an office of the SEC that provides guidance to registrants and auditors regarding the application of accounting standards and financial disclosure requirements. The OCA provided advice on the specific revenue recognition question we submitted to them for their review and did not review or address any other aspect of our accounting policies. Our consultation with the OCA was not part of the previously disclosed SEC investigation, which is still ongoing, or the related subpoena, which primarily related to certain of our long-standing capitalization and expense policies for tenant upgrades and installations in our services business.
Our long-standing historical practice with respect to services revenues had been to recognize the entirety of the transaction price from our tower installation services as services revenues upon the completion of the installation services. After consultation with the OCA, we concluded that our historical practice was not acceptable under GAAP. Instead, a portion of the transaction price for our installation services, specifically the amounts associated with permanent improvements recorded as fixed assets, represents a modification to the leases to which the services work is related and, therefore, should be recognized on a ratable basis as site rental revenues over the associated estimated remaining lease term. Cumulatively, over the term of customer lease contracts, we will recognize the same amount of total revenue and total gross margin as our historical practice.
The result of recognizing a portion of the transaction price on a ratable basis will be an increase to site rental revenues and site rental gross margins that offsets, over time, the decreases to services revenues and services gross margins, in both historical and future periods. As a result, the preliminary impact to each of Net Income, Adjusted EBITDA and AFFO is a decrease of approximately $100 million for full year 2019 actuals and a decrease of approximately $90 million to our Previous 2020 Outlook. We have provided tables in this release to reconcile the changes. Recognizing a portion of the transaction price on a ratable basis for tower installation services will have no impact on our net cash flows, business operations or expected dividend per share growth.
Due to the identified errors described above, we will restate our financial statements for the years ended December 31, 2018 and 2017, and unaudited financial information for the quarterly and year-to-date periods in the year ended December 31, 2018 and for the first three quarters in the year ended December 31, 2019. Restated financial statements and financial information for the periods in question will be reflected in Crown Castle's Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 10-K"), which Crown Castle expects to file within the prescribed timeline for such report, including any available extension if needed to finalize the consolidated financial statements and disclosures and complete the associated audit work.
Additional information relating to the restatement is provided in the section of this release titled, "Expected
Impact of the Restatement of Previously-Issued Financial Statements."


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RESULTS FOR THE YEAR
The table below sets forth select preliminary unaudited financial results for the year ended December 31, 2019 that reflect the restatement described above.
(in millions, except per share amounts)
Full Year
2019
Actual(c)(d)
Midpoint of
Previous
2019 Outlook(e)
Actual Compared to Previous Outlook
Effect of Restatement(c)
Site rental revenues
$5,098
$4,965
+$133
+$110
Net income (loss)
$863
$926
-$63
-$100
Net income (loss) per share—diluted(a)
$1.80
$1.95
-$0.15
-$0.24
Adjusted EBITDA(b)
$3,304
$3,408
-$104
-$100
AFFO(a)(b)
$2,376
$2,479
-$103
-$100
AFFO per share(a)(b)
$5.69
$5.94
-$0.25
-$0.24
(a)
Attributable to CCIC common stockholders.
(b)
See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" included herein for further information and reconciliation of this non-
GAAP financial measure to net income (loss).
(c)
Results are preliminary and unaudited. See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.
(d)
Includes restatement of nine months ended September 30, 2019.
(e)
As issued on October 16, 2019.
HIGHLIGHTS FROM THE YEAR
Site rental revenues. Site rental revenues grew approximately 6.2%, or $298 million, from full year 2018 to full year 2019, inclusive of approximately $290 million in Organic Contribution to Site Rental Revenues and a $9 million increase in straight-lined revenues. The $290 million in Organic Contribution to Site Rental Revenues represents approximately 6.1% growth, comprised of approximately 9.9% growth from new leasing activity and contracted tenant escalations, net of approximately 3.8% from tenant non-renewals.
Capital Expenditures. Capital expenditures during the year were $2.1 billion, comprised of $53 million of land purchases, $117 million of sustaining capital expenditures, $1.9 billion of discretionary capital expenditures and $9 million of integration capital expenditures. The discretionary capital expenditures included approximately $1.4 billion attributable to Fiber and approximately $454 million attributable to Towers.
Common stock dividend. During 2019, Crown Castle paid common stock dividends of approximately $1.9 billion in the aggregate, or $4.575 per common share, an increase of approximately 7% on a per share basis compared to the same period a year ago.
"Our solid 2019 results and 2020 Outlook, which remains unchanged with the exception of the impact of the restatement we disclosed today, reflect the strong underlying demand for our communications infrastructure assets and our ability to translate growth in data demand into growth in dividends per share," stated Dan Schlanger, Crown Castle's Chief Financial Officer. "Uncertainty around the outcome of the pending merger between T-Mobile and Sprint led to lower activity levels in the fourth quarter of 2019 that we believe will continue through the first quarter of 2020. However, we expect activity levels across the industry to increase throughout the year and potentially beyond as we believe our customers will accelerate their investments in 5G. As a result, we expect our financial performance in 2020 will be more back-end loaded than we previously expected, particularly for services contribution. Against that backdrop, we are excited about the growth trends across our business and the long-term opportunity in front of Crown Castle as we continue to target 7% to 8% annual growth in dividends per share."


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OUTLOOK
This Outlook section contains forward-looking statements, and actual results may differ materially. Information regarding potential risks which could cause actual results to differ from the forward-looking statements herein is set forth below and in Crown Castle's filings with the SEC. As indicated in the footnotes to the table below, the only changes to our Previous 2020 Outlook are a result of the impact of the restatement as described in "Expected Impact of the Restatement of Previously-Issued Financial Statements."
The following table sets forth Crown Castle's current Outlook for full year 2020:
(in millions)
Full Year 2020
Site rental revenues
$5,337
to
$5,382
Site rental cost of operations(a)
$1,482
to
$1,527
Net income (loss)
$998
to
$1,078
Adjusted EBITDA(b)
$3,479
to
$3,524
Interest expense and amortization of deferred financing costs(c)
$691
to
$736
FFO(b)(d)
$2,449
to
$2,494
AFFO(b)(d)
$2,572
to
$2,617
Weighted-average common shares outstanding - diluted
424
(a)
Exclusive of depreciation, amortization and accretion.
(b)
See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein.
(c)
See reconciliation of "components of current outlook for interest expense and amortization of deferred financing costs" herein for a discussion of non-cash interest expense.
(d)
Attributable to CCIC common stockholders.
Full Year 2020 Outlook
The table below compares midpoint of the current full year 2020 Outlook and the midpoint of our Previous 2020 Outlook for select metrics.
(in millions, except per share amounts)
Midpoint of Current Full Year
2020 Outlook
Midpoint of Previous
Full Year
2020 Outlook
Current Compared to Previous Outlook
Effect of Restatement(c)
Site rental revenues
$5,360
$5,219
+$141
+$141
Net income (loss)
$1,038
$1,128
-$90
-$90
Net income (loss) per share—diluted(a)
$2.32
$2.53
-$0.21
-$0.21
Adjusted EBITDA(b)
$3,502
$3,592
-$90
-$90
AFFO(a)(b)
$2,595
$2,685
-$90
-$90
AFFO per share(a)(b)
$6.12
$6.33
-$0.21
-$0.21
(a)
Attributable to CCIC common stockholders.
(b)
See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein.
(c)
See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.
The full year 2020 Outlook assumes the proposed merger between T-Mobile and Sprint closes at the end of the first quarter 2020.
The 2020 Outlook also reflects the impact of the assumed conversion of preferred stock in August 2020. This conversion is expected to increase the diluted weighted average common shares outstanding for 2020 by approximately 6 million and reduce the annual preferred stock dividends paid by approximately $28 million when compared to 2019.

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The chart below reconciles the components of expected growth in site rental revenues from 2019 to 2020 of $250 million to $295 million, inclusive of expected Organic Contribution to Site Rental Revenues during 2020 of $295 million to $335 million.
https://cdn.kscope.io/b572e6d88c4c170a702900f69eec9cea-revenueq42019a04.jpg
New leasing activity is expected to contribute $395 million to $425 million to 2020 Organic Contribution to Site Rental Revenues, consisting of new leasing activity from towers of $170 million to $180 million, small cells of $65 million to $75 million, and fiber solutions of $160 million to $170 million.
The chart below reconciles the components of expected growth in AFFO from 2019 to 2020 of $195 million to $240 million.
https://cdn.kscope.io/b572e6d88c4c170a702900f69eec9cea-affoq42019a04.jpg
Additional information is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of our website.

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EXPECTED IMPACT OF THE RESTATEMENT OF PREVIOUSLY-ISSUED FINANCIAL STATEMENTS
As indicated above, we will restate our financial statements for the years ended December 31, 2018 and 2017, and unaudited financial information for the quarterly and year-to-date periods in the year ended December 31, 2018 and for the first three quarters in the year ended December 31, 2019. The expected impact of the restatement described above and in the tables in this release is preliminary and unaudited and is subject to change before we file the 2019 10-K. We believe the restatement will not have an impact on our business operations or our net cash flows.
The tables set forth below summarize (1) the estimated effects of the restatement on historical periods and (2) the estimated effects of other adjustments to previously-issued financial statements for years prior to 2019 to correct errors relating exclusively to our Towers segment that were not material, either individually or in the aggregate, on certain of the Company's select financial results for the quarters and years ending December 31, 2019 and 2018, and the years ended December 31, 2017, 2016, and 2015.
(in millions, except per share amounts)
Q1 2019(c)
Q2 2019(c)
Q3 2019(c)
Q4 2019(c)
Full Year 2019(c)
Site rental revenues
$24
$26
$29
$31
$110
Services and other revenues
$(41)
$(55)
$(57)
$(57)
$(210)
Net income (loss)
$(17)
$(29)
$(28)
$(26)
$(100)
Net income (loss) per share—diluted(a)
$(0.04)
$(0.07)
$(0.07)
$(0.06)
$(0.24)
Adjusted EBITDA(b)
$(17)
$(29)
$(28)
$(26)
$(100)
AFFO(a)(b)
$(17)
$(29)
$(28)
$(26)
$(100)
AFFO per share(a)(b)
$(0.04)
$(0.07)
$(0.07)
$(0.06)
$(0.24)
(in millions, except per share amounts)
Q1 2018(c)
Q2 2018(c)
Q3 2018(c)
Q4 2018(c)
Full Year 2018(c)
Site rental revenues
$19
$20
$22
$23
$84
Services and other revenues
$(33)
$(30)
$(34)
$(36)
$(133)
Net income (loss)
$(13)
$(9)
$(11)
$(13)
$(46)
Net income (loss) per share—diluted(a)
$(0.03)
$(0.02)
$(0.03)
$(0.03)
$(0.11)
Adjusted EBITDA(b)
$(13)
$(9)
$(11)
$(13)
$(46)
AFFO(a)(b)
$(13)
$(9)
$(11)
$(13)
$(46)
AFFO per share(a)(b)
$(0.03)
$(0.02)
$(0.03)
$(0.03)
$(0.11)
(in millions, except per share amounts)
Full Year 2017(c)
Full Year 2016(c)
Full Year 2015(c)
Site rental revenues
$68
$53
$40
Services and other revenues
$(166)
$(122)
$(111)
Net income (loss)
$(77)
$(49)
$(68)
Net income (loss) per share—diluted(a)
$(0.20)
$(0.14)
$(0.20)
Adjusted EBITDA(b)
$(77)
$(49)
$(68)
AFFO(a)(b)
$(77)
$(49)
$(68)
AFFO per share(a)(b)
$(0.20)
$(0.14)
$(0.20)
(a)
Attributable to CCIC common stockholders.
(b)
See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" included herein for further information and reconciliation of this non-GAAP financial measure to net income (loss).
(c)
Results are preliminary and unaudited. See "Expected Impact of the Restatement of Previously-Issued Financial Statements" included herein for more information regarding the Company's restatement.
    

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Crown Castle has determined that the restatement of its previously issued financial statements as described above indicates the existence of one or more material weaknesses in its internal control over financial reporting and that its internal control over financial reporting and disclosure controls and procedures were ineffective as of December 31, 2019. Crown Castle will report the material weakness(es) in its 2019 10-K and intends to create a plan of remediation to address the material weakness(es).
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, February 27, 2020, at 10:30 a.m. Eastern time to discuss its fourth quarter 2019 results. The conference call may be accessed by dialing 800-367-2403 and asking for the Crown Castle call (access code 8599522) at least 30 minutes prior to the start time. The conference call may also be accessed live over the Internet at investor.crowncastle.com. Supplemental materials for the call have been posted on the Crown Castle website at investor.crowncastle.com.
A telephonic replay of the conference call will be available from 1:30 p.m. Eastern time on Thursday, February 27, 2020, through 1:30 p.m. Eastern time on Wednesday, May 27, 2020, and may be accessed by dialing 888-203-1112 and using access code 8599522. An audio archive will also be available on Crown Castle's website at investor.crowncastle.com shortly after the call and will be accessible for approximately 90 days.
ABOUT CROWN CASTLE
Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 80,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. This nationwide portfolio of communications infrastructure connects cities and communities to essential data, technology and wireless service - bringing information, ideas and innovations to the people and businesses that need them. For more information on Crown Castle, please visit www.crowncastle.com.

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Non-GAAP Financial Measures, Segment Measures and Other Calculations
This press release includes presentations of Adjusted EBITDA, Adjusted Funds from Operations ("AFFO"), including per share amounts, Funds from Operations ("FFO"), including per share amounts, and Organic Contribution to Site Rental Revenues, which are non-GAAP financial measures. These non-GAAP financial measures are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")).
Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies, including other companies in the communications infrastructure sector or other real estate investment trusts ("REITs"). Our definition of FFO is consistent with guidelines from the National Association of Real Estate Investment Trusts with the exception of the impact of income taxes in periods prior to our REIT conversion in 2014.
In addition to the non-GAAP financial measures used herein, we also provide Segment Site Rental Gross Margin, Segment Services and Other Gross Margin and Segment Operating Profit, which are key measures used by management to evaluate our operating segments. These segment measures are provided pursuant to GAAP requirements related to segment reporting. In addition, we provide the components of certain GAAP measures, such as capital expenditures.
Our non-GAAP financial measures are presented as additional information because management believes these measures are useful indicators of the financial performance of our business. Among other things, management believes that:
Adjusted EBITDA is useful to investors or other interested parties in evaluating our financial performance. Adjusted EBITDA is the primary measure used by management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of, our operations. Management believes that Adjusted EBITDA helps investors or other interested parties meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors, by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results. Management also believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of the communications infrastructure sector and other REITs to measure financial performance without regard to items such as depreciation, amortization and accretion which can vary depending upon accounting methods and the book value of assets. In addition, Adjusted EBITDA is similar to the measure of current financial performance generally used in our debt covenant calculations. Adjusted EBITDA should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.
AFFO, including per share amounts, is useful to investors or other interested parties in evaluating our financial performance. Management believes that AFFO helps investors or other interested parties meaningfully evaluate our financial performance as it includes (1) the impact of our capital structure (primarily interest expense on our outstanding debt and dividends on our preferred stock) and (2) sustaining capital expenditures, and excludes the impact of our (a) asset base (primarily depreciation, amortization and accretion) and (b) certain non-cash items, including straight-lined revenues and expenses related to fixed escalations and rent free periods. GAAP requires rental revenues and expenses related to leases that contain specified rental increases over the life of the lease to be recognized evenly over the life of the lease. In accordance with GAAP, if payment terms call for fixed escalations, or rent free periods, the revenue or expense is recognized on a straight-lined basis over the fixed, non-cancelable term of the contract. Management notes that Crown Castle uses AFFO only as a performance measure. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flows from operations or as residual cash flow available for discretionary investment.
FFO, including per share amounts, is useful to investors or other interested parties in evaluating our financial performance. Management believes that FFO may be used by investors or other interested parties as a basis to compare our financial performance with that of other REITs. FFO helps investors or other interested parties meaningfully evaluate financial performance by excluding the impact of our asset base (primarily depreciation, amortization and accretion). FFO is not a key performance indicator used by Crown Castle. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flow from operations.

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News Release continued:
 
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Organic Contribution to Site Rental Revenues is useful to investors or other interested parties in understanding the components of the year-over-year changes in our site rental revenues computed in accordance with GAAP. Management uses the Organic Contribution to Site Rental Revenues to assess year-over-year growth rates for our rental activities, to evaluate current performance, to capture trends in rental rates, new leasing activities and tenant non-renewals in our core business, as well to forecast future results. Organic Contribution to Site Rental Revenues is not meant as an alternative measure of revenue and should be considered only as a supplement in understanding and assessing the performance of our site rental revenues computed in accordance with GAAP.
We define our non-GAAP financial measures, segment measures and other calculations as follows:
Non-GAAP Financial Measures
Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, cumulative effect of a change in accounting principle, (income) loss from discontinued operations and stock-based compensation expense.
Adjusted Funds from Operations. We define Adjusted Funds from Operations as FFO before straight-lined revenue, straight-lined expense, stock-based compensation expense, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, acquisition and integration costs, and adjustments for noncontrolling interests, and less sustaining capital expenditures.
AFFO per share. We define AFFO per share as AFFO divided by diluted weighted-average common shares outstanding.
Funds from Operations. We define Funds from Operations as net income plus real estate related depreciation, amortization and accretion and asset write-down charges, less noncontrolling interest and cash paid for preferred stock dividends, and is a measure of funds from operations attributable to CCIC common stockholders.
FFO per share. We define FFO per share as FFO divided by the diluted weighted-average common shares outstanding.
Organic Contribution to Site Rental Revenues. We define the Organic Contribution to Site Rental Revenues as the sum of the change in GAAP site rental revenues related to (1) new leasing activity, including revenues from the construction of small cells and the impact of prepaid rent, (2) escalators and less (3) non-renewals of tenant contracts.
Segment Measures
Segment Site Rental Gross Margin. We define Segment Site Rental Gross Margin as segment site rental revenues less segment site rental cost of operations, excluding stock-based compensation expense and prepaid lease purchase price adjustments recorded in consolidated site rental cost of operations.
Segment Services and Other Gross Margin. We define Segment Services and Other Gross Margin as segment services and other revenues less segment services and other cost of operations, excluding stock-based compensation expense recorded in consolidated services and other cost of operations.
Segment Operating Profit. We define Segment Operating Profit as segment site rental gross margin plus segment services and other gross margin, less selling, general and administrative expenses attributable to the respective segment.
All of these measurements of profit or loss are exclusive of depreciation, amortization and accretion, which are shown separately. Additionally, certain costs are shared across segments and are reflected in our segment measures through allocations that management believes to be reasonable.
Other Calculations
Discretionary capital expenditures. We define discretionary capital expenditures as those capital expenditures made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They primarily consist of expansion or development of communications infrastructure (including capital expenditures related to (1) enhancing communications infrastructure in order to add new tenants for the first time or support subsequent tenant equipment augmentations, or (2) modifying the structure of a communications infrastructure asset to accommodate additional tenants), and construction of new communications infrastructure. Discretionary capital expenditures also include purchases of land interests (which primarily relates to land assets under towers as we seek to manage our interests in the land beneath our towers), certain

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News Release continued:
 
Page 10

technology-related investments necessary to support and scale future customer demand for our communications infrastructure, and other capital projects.
Integration capital expenditures. We define integration capital expenditures as those capital expenditures made as a result of integrating acquired companies into our business.
Sustaining capital expenditures. We define sustaining capital expenditures as those capital expenditures not otherwise categorized as either discretionary or integration capital expenditures, such as (1) maintenance capital expenditures on our communications infrastructure assets that enable our tenants' ongoing quiet enjoyment of the communications infrastructure and (2) ordinary corporate capital expenditures.
The tables set forth on the following pages reconcile the non-GAAP financial measures used herein to comparable GAAP financial measures. The components in these tables may not sum to the total due to rounding.


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News Release continued:
 
Page 11

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

Reconciliation of Historical Adjusted EBITDA:
 
For the Three Months Ended
 
For the Twelve Months Ended
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
(in millions)
 
 
(As Restated)
 
 
 
(As Restated)
Net income (loss)
$
208

 
$
200

 
$
863

 
$
625

Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
 
 
Asset write-down charges
6

 
8

 
19

 
26

Acquisition and integration costs
3

 
9

 
13

 
27

Depreciation, amortization and accretion
398

 
390

 
1,574

 
1,528

Amortization of prepaid lease purchase price adjustments
5

 
5

 
20

 
20

Interest expense and amortization of deferred financing costs(a)
173

 
164

 
683

 
642

(Gains) losses on retirement of long-term obligations

 

 
2

 
106

Interest income
(1
)
 
(2
)
 
(6
)
 
(5
)
Other (income) expense
(7
)
 
(1
)
 
(1
)
 
(1
)
(Benefit) provision for income taxes
6

 
5

 
21

 
19

Stock-based compensation expense
27

 
25

 
116

 
108

Adjusted EBITDA(b)(c)
$
818

 
$
803

 
$
3,304

 
$
3,095

 
For the Twelve Months Ended
 
December 31, 2017
 
December 31, 2016
 
December 31, 2015
(in millions)
(As Restated)
Net income (loss)
$
368

 
$
308

 
$
1,456

Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
Income (loss) from discontinued operations

 

 
(999
)
Asset write-down charges
17

 
34

 
33

Acquisition and integration costs
61

 
17

 
16

Depreciation, amortization and accretion
1,242

 
1,109

 
1,036

Amortization of prepaid lease purchase price adjustments
20

 
21

 
21

Interest expense and amortization of deferred financing costs(a)
591

 
515

 
527

(Gains) losses on retirement of long-term obligations
4

 
52

 
4

Interest income
(19
)
 
(1
)
 
(2
)
Other (income) expense
(1
)
 
9

 
(57
)
(Benefit) provision for income taxes
26

 
17

 
(51
)
Stock-based compensation expense
96

 
97

 
67

Adjusted EBITDA(b)(c)
$
2,405

 
$
2,179

 
$
2,051

(a)
See the reconciliation of "components of historical 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.

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Reconciliation of Current Outlook for Adjusted EBITDA:
 
Full Year 2020
(in millions)
Outlook
Net income (loss)
$998
to
$1,078
Adjustments to increase (decrease) net income (loss):
 
 
 
Asset write-down charges
$20
to
$30
Acquisition and integration costs
$7
to
$17
Depreciation, amortization and accretion
$1,503
to
$1,598
Amortization of prepaid lease purchase price adjustments
$18
to
$20
Interest expense and amortization of deferred financing costs(a)
$691
to
$736
(Gains) losses on retirement of long-term obligations
$0
to
$0
Interest income
$(7)
to
$(3)
Other (income) expense
$(1)
to
$1
(Benefit) provision for income taxes
$16
to
$24
Stock-based compensation expense
$126
to
$130
Adjusted EBITDA(b)(c)
$3,479
to
$3,524
(a)
See the reconciliation of "components of historical 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.

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Reconciliation of Historical FFO and AFFO:
 
For the Three Months Ended
 
For the Twelve Months Ended
(in millions)
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
 
(As Restated)
 
 
 
(As Restated)
Net income (loss)
$
208

 
$
200

 
$
863

 
$
625

Real estate related depreciation, amortization and accretion
384

 
375

 
1,519

 
1,472

Asset write-down charges
6

 
8

 
19

 
26

Dividends/distributions on preferred stock
(28
)
 
(28
)
 
(113
)
 
(113
)
FFO(a)(b)(c)(d)
$
570

 
$
555

 
$
2,288

 
$
2,009

Weighted-average common shares outstanding—diluted(e)
418

 
417

 
418

 
415

FFO per share(a)(b)(c)(d)(e)
$
1.36

 
$
1.33

 
$
5.47

 
$
4.84

 
 
 
 
 
 
 
 
FFO (from above)
$
570

 
$
555

 
$
2,288

 
$
2,009

Adjustments to increase (decrease) FFO:
 
 
 
 
 
 
 
Straight-lined revenue
(18
)
 
(20
)
 
(80
)
 
(72
)
Straight-lined expense
23

 
21

 
93

 
90

Stock-based compensation expense
27

 
25

 
116

 
108

Non-cash portion of tax provision
3

 
3

 
5

 
2

Non-real estate related depreciation, amortization and accretion
14

 
15

 
55

 
56

Amortization of non-cash interest expense

 
2

 
1

 
7

Other (income) expense
(7
)
 
(1
)
 
(1
)
 
(1
)
(Gains) losses on retirement of long-term obligations

 

 
2

 
106

Acquisition and integration costs
3

 
9

 
13

 
27

Sustaining capital expenditures
(36
)
 
(30
)
 
(117
)
 
(105
)
AFFO(a)(b)(c)(d)
$
578

 
$
578

 
$
2,376

 
$
2,228

Weighted-average common shares outstanding—diluted(e)
418

 
417

 
418

 
415

AFFO per share(a)(b)(c)(d)(e)
$
1.38

 
$
1.39

 
$
5.69

 
$
5.37

(a)
See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO, including per share amounts, and AFFO, including per share amounts.
(b)
FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid.
(c)
Attributable to CCIC common stockholders.
(d)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
(e)
For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of preferred stock in the share count.



















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Reconciliation of Historical FFO and AFFO:
 
For the Twelve Months Ended
(in millions)
December 31, 2017
 
December 31, 2016
 
December 31, 2015
(As Restated)
Net income (loss)(a)
$
368

 
$
308

 
$
457

Real estate related depreciation, amortization and accretion
1,211

 
1,082

 
1,018

Asset write-down charges
17

 
34

 
33

Dividends/distributions on preferred stock
(30
)
 
(44
)
 
(44
)
FFO(b)(c)(d)(e)
$
1,566

 
$
1,381

 
$
1,465

Weighted-average common shares outstanding—diluted(f)
383

 
341

 
334

FFO per share(b)(c)(d)(e)(f)
$
4.09

 
$
4.05

 
$
4.39

 
 
 
 
 
 
FFO (from above)
$
1,566

 
$
1,381

 
$
1,465

Adjustments to increase (decrease) FFO:
 
 
 
 
 
Straight-lined revenue

 
(47
)
 
(111
)
Straight-lined expense
93

 
94

 
99

Stock-based compensation expense
96

 
97

 
67

Non-cash portion of tax provision
9

 
7

 
(64
)
Non-real estate related depreciation, amortization and accretion
31

 
26

 
18

Amortization of non-cash interest expense
9

 
14

 
37

Other (income) expense
(1
)
 
9

 
(57
)
(Gains) losses on retirement of long-term obligations
4

 
52

 
4

Acquisition and integration costs
61

 
17

 
16

Sustaining capital expenditures
(85
)
 
(90
)
 
(105
)
AFFO(b)(c)(d)(e)
$
1,783

 
$
1,561

 
$
1,369

Weighted-average common shares outstanding—diluted(f)
383

 
341

 
334

AFFO per share(b)(c)(d)(e)(f)
$
4.65

 
$
4.58

 
$
4.10

(a)
Exclusive of income (loss) from discontinued operations and related noncontrolling interest of $1.0 billion for the twelve months ended December 31, 2015.
(b)
See "Non-GAAP Financial Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO, including per share amounts, and AFFO, including per share amounts.
(c)
FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid.
(d)
Attributable to CCIC common stockholders.
(e)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
(f)
For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of preferred stock in the share count.



















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

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For Comparative Purposes - Reconciliation of Previous Outlook for Adjusted EBITDA:
 
Previously Issued
 
Previously Issued
 
Full Year 2019
 
Full Year 2020
(in millions)
Outlook
 
Outlook
Net income (loss)
$896
to
$956
 
$1,088
to
$1,168
Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
 
 
Asset write-down charges
$23
to
$33
 
$20
to
$30
Acquisition and integration costs
$11
to
$21
 
$7
to
$17
Depreciation, amortization and accretion
$1,576
to
$1,611
 
$1,503
to
$1,598
Amortization of prepaid lease purchase price adjustments
$19
to
$21
 
$18
to
$20
Interest expense and amortization of deferred financing costs
$674
to
$704
 
$691
to
$736
(Gains) losses on retirement of long-term obligations
$2
to
$2
 
$0
to
$0
Interest income
$(8)
to
$(4)
 
$(7)
to
$(3)
Other (income) expense
$2
to
$4
 
$(1)
to
$1
(Benefit) provision for income taxes
$16
to
$24
 
$16
to
$24
Stock-based compensation expense
$112
to
$120
 
$126
to
$130
Adjusted EBITDA(a)(b)
$3,393
to
$3,423
 
$3,569
to
$3,614
(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.

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

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The components of changes in site rental revenues for the quarters ended December 31, 2019 and 2018 are as follows:
 
Three Months Ended December 31,
(dollars in millions)
2019
 
2018
 
 
(As Restated)
Components of changes in site rental revenues(a):
 
 
 
Prior year site rental revenues exclusive of straight-lined revenues associated with fixed escalators(b)(c)
$
1,212

 
$
1,067

 
 
 
 
New leasing activity(b)(c)
100

 
64

Escalators
22

 
21

Non-renewals
(51
)
 
(22
)
Organic Contribution to Site Rental Revenues(d)
71

 
63

Straight-lined revenues associated with fixed escalators
18

 
20

Acquisitions(e)

 
82

Other

 

Total GAAP site rental revenues
$
1,301

 
$
1,232

 
 
 
 
Year-over-year changes in revenue:
 
 
 
Reported GAAP site rental revenues
5.6
%
 
 
Organic Contribution to Site Rental Revenues(d)(f)
5.9
%
 
 
(a)
Additional information regarding Crown Castle's site rental revenues, including projected revenue from tenant licenses, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website.
(b)
Includes revenues from amortization of prepaid rent in accordance with GAAP.
(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)
Represents the contribution from recent acquisitions. The financial impact of recent acquisitions is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition.
(f)
Calculated as the percentage change from prior year site rental revenues, exclusive of straight-lined revenues associated with fixed escalations, compared to Organic Contribution to Site Rental Revenues for the current period.

The components of the changes in site rental revenues for the years ending December 31, 2019 and December 31, 2020 are forecasted as follows:
(dollars in millions)
Full Year 2019
 
Full Year 2020 Outlook
Components of changes in site rental revenues(a):
 
 
 
Prior year site rental revenues exclusive of straight-lined revenues associated with fixed escalators(b)(c)
$4,727
 
$5,017
 
 
 
 
New leasing activity(b)(c)
385
 
395-425
Escalators
86
 
90-100
Non-renewals
(181)
 
(195)-(175)
Organic Contribution to Site Rental Revenues(d)
290
 
295-335
Straight-lined revenues associated with fixed escalators
81
 
33-53
Acquisitions(e)
 
Other
 
Total GAAP site rental revenues
$5,098
 
$5,337-$5,382
 
 
 
 
Year-over-year changes in revenue:
 
 
 
Reported GAAP site rental revenues(f)
6.2%
 
5.1%
Organic Contribution to Site Rental Revenues(d)(f)(g)
6.1%
 
6.3%
(a)
Additional information regarding Crown Castle's site rental revenues, including projected revenue from tenant licenses, straight-lined revenues and prepaid rent is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of its website.
(b)
Includes revenues from amortization of prepaid rent in accordance with GAAP.
(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)
Represents the contribution from recent acquisitions. The financial impact of recent acquisitions is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition.
(f)
Calculated based on midpoint of full year 2020 Outlook.
(g)
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.

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Page 18

Components of Historical Interest Expense and Amortization of Deferred Financing Costs:
 
For the Three Months Ended
(in millions)
December 31, 2019
 
December 31, 2018
Interest expense on debt obligations
$
173

 
$
162

Amortization of deferred financing costs and adjustments on long-term debt, net
5

 
5

Other, net
(5
)
 
(3
)
Interest expense and amortization of deferred financing costs
$
173

 
$
164

Components of Current Outlook for Interest Expense and Amortization of Deferred Financing Costs:
 
Full Year 2020
(in millions)
Outlook
Interest expense on debt obligations
$703
to
$723
Amortization of deferred financing costs and adjustments on long-term debt, net
$20
to
$25
Other, net
$(24)
to
$(19)
Interest expense and amortization of deferred financing costs
$691
to
$736
Debt balances and maturity dates as of December 31, 2019 are as follows:
(in millions)
Face Value
 
Final Maturity
Cash, cash equivalents and restricted cash
$
338

 
 
 
 
 
 
3.849% Secured Notes
1,000

 
Apr. 2023
Secured Notes, Series 2009-1, Class A-2(a)
68

 
Aug. 2029
Tower Revenue Notes, Series 2015-1(b)
300

 
May 2042
Tower Revenue Notes, Series 2018-1(b)
250

 
July 2043
Tower Revenue Notes, Series 2015-2(b)
700

 
May 2045
Tower Revenue Notes, Series 2018-2(b)
750

 
July 2048
Finance leases and other obligations
226

 
Various
Total secured debt
$
3,294

 
 
2016 Revolver
525

 
June 2024
2016 Term Loan A
2,312

 
June 2024
Commercial Paper Notes(c)
155

 
Various
3.400% Senior Notes
850

 
Feb. 2021
2.250% Senior Notes
700

 
Sept. 2021
4.875% Senior Notes
850

 
Apr. 2022
5.250% Senior Notes
1,650

 
Jan. 2023
3.150% Senior Notes
750

 
July 2023
3.200% Senior Notes
750

 
Sept. 2024
4.450% Senior Notes
900

 
Feb. 2026
3.700% Senior Notes
750

 
June 2026
4.000% Senior Notes
500

 
Mar. 2027
3.650% Senior Notes
1,000

 
Sept. 2027
3.800% Senior Notes
1,000

 
Feb. 2028
4.300% Senior Notes
600

 
Feb. 2029
3.100% Senior Notes
550

 
Nov. 2029
4.750% Senior Notes
350

 
May 2047
5.200% Senior Notes
400

 
Feb. 2049
4.000% Senior Notes
350

 
Nov. 2049
Total unsecured debt
$
14,942

 
 
Total net debt
$
17,898

 
 

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Page 19

(a)
The Senior Secured Notes, 2009-1, Class A-2 principal amortizes during the period beginning in September 2019 and ending in August 2029.
(b)
The Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 have anticipated repayment dates in 2022 and 2025, respectively. The Senior Secured Tower Revenue Notes, Series 2018-1 and 2018-2 have anticipated repayment dates in 2023 and 2028, respectively.
(c)
The maturities of the Commercial Paper Notes, when outstanding, may vary but may not exceed 397 days from the date of issue.

Net Debt to Last Quarter Annualized Adjusted EBITDA is computed as follows:
(dollars in millions)
For the Three Months Ended December 31, 2019
Total face value of debt
$
18,236

Ending cash, cash equivalents and restricted cash
338

Total Net Debt
$
17,898

 
 
Adjusted EBITDA for the three months ended December 31, 2019
$
818

Last quarter annualized Adjusted EBITDA
3,272

Net Debt to Last Quarter Annualized Adjusted EBITDA
5.5
x



Components of Capital Expenditures:
 
For the Three Months Ended
(in millions)
December 31, 2019
 
December 31, 2018
 
Towers
Fiber
Other
Total
 
Towers
Fiber
Other
Total
Discretionary:
 
 
 
 
 
 
 
 
 
Purchases of land interests
$
11

$

$

$
11

 
$
18

$

$

$
18

Communications infrastructure construction and improvements
119

353


472

 
98

349


447

Sustaining
12

12

12

36

 
8

15

7

30

Integration


2

2

 


5

5

Total
$
142

$
365

$
14

$
521

 
$
124

$
364

$
11

$
500

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


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Page 20

Cautionary Language Regarding Forward-Looking Statements

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

Our business depends on the demand for our communications infrastructure, driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services).
A substantial portion of our revenues is derived from a small number of tenants, and the loss, consolidation or financial instability of any of such tenants may materially decrease revenues or reduce demand for our communications infrastructure and services.
The expansion or development of our business, including through acquisitions, increased product offerings or other strategic growth opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations or financial results.
Our Fiber segment has expanded rapidly, and the Fiber business model contains certain differences from our Towers business model, resulting in different operational risks. If we do not successfully operate our Fiber business model or identify or manage the related operational risks, such operations may produce results that are lower than anticipated.
Failure to timely and efficiently execute on our construction projects could adversely affect our business.
Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments and our 6.875% Mandatory Convertible Preferred Stock limit our ability to take a number of actions that our management might otherwise believe to be in our best interests. In addition, if we fail to comply with our covenants, our debt could be accelerated.
We have a substantial amount of indebtedness. In the event we do not repay or refinance such indebtedness, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets to meet our debt payment obligations.
Sales or issuances of a substantial number of shares of our common stock or securities convertible into shares of our common stock may adversely affect the market price of our common stock.
As a result of competition in our industry, we may find it more difficult to negotiate favorable rates on our new or renewing tenant contracts.

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Page 21

New technologies may reduce demand for our communications infrastructure or negatively impact our revenues.
If we fail to retain rights to our communications infrastructure, including the land interests under our towers and the right-of-way and other agreements related to our small cells and fiber, our business may be adversely affected.
Our services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
New wireless technologies may not deploy or be adopted by tenants as rapidly or in the manner projected.
If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.
If radio frequency emissions from wireless handsets or equipment on our communications infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues.
Certain provisions of our restated certificate of incorporation, amended and restated by-laws and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders.
We may be vulnerable to security breaches or other unforeseen events that could adversely affect our operations, business, and reputation.
We have concluded that certain of our previously-issued consolidated financial statements should not be relied upon and we have restated such previously-issued consolidated financial statements, which may result in loss of investor confidence, negative impact on our stock price, shareholder litigation, and certain other risks.
We identified one or more material weaknesses in our internal control over financial reporting. If we are unable to remediate such material weakness(es), or if we experience additional material weaknesses or other deficiencies in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately and timely report our financial results, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports, and the stock price may decline.
Future dividend payments to our stockholders will reduce the availability of our cash on hand available to fund future discretionary investments, and may result in a need to incur indebtedness or issue equity securities to fund growth opportunities. In such event, the then current economic, credit market or equity market conditions will impact the availability or cost of such financing, which may hinder our ability to grow our per share results of operations.
Remaining qualified to be taxed as a REIT involves highly technical and complex provisions of the U.S. Internal Revenue Code. Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, which would reduce our available cash.
If we fail to pay scheduled dividends on our 6.875% Mandatory Convertible Preferred Stock (prior to the automatic conversion in August 2020), in cash, common stock, or any combination of cash and common stock, we will be prohibited from paying dividends on our common stock, which may jeopardize our status as a REIT.
Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives.
REIT related ownership limitations and transfer restrictions may prevent or restrict certain transfers of our capital stock.
Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors which could affect our results is included in our filings with the SEC. Our filings with the SEC are available through the SEC website at www.sec.gov or through our investor relations website at investor.crowncastle.com. We use our investor relations website to disclose information about us that may be deemed to be material. We encourage investors, the media and others interested in us to visit our investor relations website from time to time to review up-to-date information or to sign up for e-mail alerts to be notified when new or updated information is posted on the site.
As used in this release, the term "including," and any variation thereof, means "including without limitation."

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CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Amounts in millions, except par values)
 
December 31,
2019
 
December 31,
2018
 
 
 
(As Restated)
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
196

 
$
277

Restricted cash
137

 
131

Receivables, net
596

 
501

Prepaid expenses(a)
107

 
172

Other current assets
168

 
148

Total current assets
1,204

 
1,229

Deferred site rental receivables
1,424

 
1,366

Property and equipment, net
14,689

 
13,676

Operating lease right-of-use assets(a)
6,133

 

Goodwill
10,078

 
10,078

Other intangible assets, net(a)
4,836

 
5,516

Long-term prepaid rent and other assets, net(a)
116

 
920

Total assets
$
38,480

 
$
32,785

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
334

 
$
313

Accrued interest
169

 
148

Deferred revenues
661

 
591

Other accrued liabilities(a)
361

 
351

Current maturities of debt and other obligations
100

 
107

Current portion of operating lease liabilities(a)
299

 

Total current liabilities
1,924

 
1,510

Debt and other long-term obligations
18,021

 
16,575

Operating lease liabilities(a)
5,511

 

Other long-term liabilities(a)
2,526

 
3,123

Total liabilities
27,982

 
21,208

Commitments and contingencies
 
 
 
CCIC stockholders' equity:
 
 
 
Common stock, $0.01 par value; 600 shares authorized; shares issued and outstanding: December 31, 2019—416 and December 31, 2018—415
4

 
4

6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value; 20 shares authorized; shares issued and outstanding: December 31, 2019—2 and December 31, 2018—2; aggregate liquidation value: December 31, 2019—$1,650 and December 31, 2018—$1,650

 

Additional paid-in capital
17,855

 
17,767

Accumulated other comprehensive income (loss)
(5
)
 
(5
)
Dividends/distributions in excess of earnings
(7,356
)
 
(6,189
)
Total equity
10,498

 
11,577

Total liabilities and equity
$
38,480

 
$
32,785

(a)
Effective January 1, 2019, we adopted new guidance on the recognition, measurement, presentation and disclosure of leases. The new guidance requires lessees to recognize a lease liability, initially measured at the present value of the lease payments for all leases, and a corresponding right-of-use asset. The accounting for lessors remained largely unchanged from previous guidance. As a result of the new guidance for leases, on the effective date, certain amounts related to our lessee arrangements that were previously reported separately have been de-recognized and reclassified into "Operating lease right-of-use assets" on the condensed consolidated balance sheet as of December 31, 2019.


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CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Amounts in millions, except per share amounts)
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2019
 
2018
 
2019
 
2018
 
 
 
(As Restated)
 
 
 
(As Restated)
Net revenues:
 
 
 
 
 
 
 
Site rental
$
1,301

 
$
1,232

 
$
5,098

 
$
4,800

Services and other
128

 
174

 
675

 
574

Net revenues
1,429

 
1,406

 
5,773

 
5,374

Operating expenses:
 
 
 
 
 
 
 
Costs of operations (exclusive of depreciation, amortization and accretion):
 
 
 
 
 
 
 
Site rental
367

 
353

 
1,462

 
1,410

Services and other
119

 
135

 
529

 
434

Selling, general and administrative
157

 
145

 
614

 
563

Asset write-down charges
6

 
8

 
19

 
26

Acquisition and integration costs
3

 
9

 
13

 
27

Depreciation, amortization and accretion
398

 
390

 
1,574

 
1,528

Total operating expenses
1,050

 
1,040

 
4,211

 
3,988

Operating income (loss)
379

 
366

 
1,562

 
1,386

Interest expense and amortization of deferred financing costs
(173
)
 
(164
)
 
(683
)
 
(642
)
Gains (losses) on retirement of long-term obligations

 

 
(2
)
 
(106
)
Interest income
1

 
2

 
6

 
5

Other income (expense)
7

 
1

 
1

 
1

Income (loss) before income taxes
214

 
205

 
884

 
644

Benefit (provision) for income taxes
(6
)
 
(5
)
 
(21
)
 
(19
)
Net income (loss)
208

 
200

 
863

 
625

Dividends/distributions on preferred stock
(28
)
 
(28
)
 
(113
)
 
(113
)
Net income (loss) attributable to CCIC common stockholders
$
180

 
$
172

 
$
750

 
$
512

 
 
 
 
 
 
 
 
Net income (loss) attributable to CCIC common stockholders, per common share:
 
 
 
 
 
 
 
Net income (loss) attributable to CCIC common stockholders, basic
$
0.43

 
$
0.41

 
$
1.80

 
$
1.24

Net income (loss) attributable to CCIC common stockholders, diluted
$
0.43

 
$
0.41

 
$
1.80

 
$
1.23

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
Basic
416

 
415

 
416

 
413

Diluted
418

 
417

 
418

 
415



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CROWN CASTLE INTERNATIONAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In millions of dollars)
 
Twelve Months Ended December 31,
 
2019
 
2018
 
 
 
(As Restated)
Cash flows from operating activities:
 
 
 
Net income (loss)
$
863

 
$
625

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
 
 
 
Depreciation, amortization and accretion
1,574

 
1,528

(Gains) losses on retirement of long-term obligations
2

 
106

Amortization of deferred financing costs and other non-cash interest
1

 
7

Stock-based compensation expense
117

 
103

Asset write-down charges
19

 
26

Deferred income tax (benefit) provision
2

 
2

Other non-cash adjustments, net
(2
)
 
2

Changes in assets and liabilities, excluding the effects of acquisitions:
 
 
 
Increase (decrease) in liabilities
291

 
322

Decrease (increase) in assets
(167
)
 
(219
)
Net cash provided by (used for) operating activities
2,700

 
2,502

Cash flows from investing activities:
 
 
 
Capital expenditures
(2,059
)
 
(1,741
)
Payments for acquisitions, net of cash acquired
(17
)
 
(42
)
Other investing activities, net
(7
)
 
(12
)
Net cash provided by (used for) investing activities
(2,083
)
 
(1,795
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of long-term debt
1,894

 
2,742

Principal payments on debt and other long-term obligations
(86
)
 
(105
)
Purchases and redemptions of long-term debt
(12
)
 
(2,346
)
Borrowings under revolving credit facility
2,110

 
1,820

Payments under revolving credit facility
(2,660
)
 
(1,725
)
Net borrowings (repayments) under commercial paper program
155

 

Payments for financing costs
(24
)
 
(31
)
Net proceeds from issuance of common stock

 
841

Purchases of common stock
(44
)
 
(34
)
Dividends/distributions paid on common stock
(1,912
)
 
(1,782
)
Dividends/distributions paid on preferred stock
(113
)
 
(113
)
Net cash provided by (used for) financing activities
(692
)
 
(733
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
(75
)
 
(26
)
Effect of exchange rate changes on cash

 
(1
)
Cash, cash equivalents, and restricted cash at beginning of period
413

 
440

Cash, cash equivalents, and restricted cash at end of period
$
338

 
$
413

Supplemental disclosure of cash flow information:
 
 
 
Interest paid
661

 
619

Income taxes paid
16

 
17









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CROWN CASTLE INTERNATIONAL CORP.
SEGMENT OPERATING RESULTS (UNAUDITED)
(In millions of dollars)
SEGMENT OPERATING RESULTS
 
Three Months Ended December 31, 2019
 
Three Months Ended December 31, 2018
 
 
 
 
 
 
 
 
 
(As Restated)
 
Towers
 
Fiber
 
Other
 
Consolidated Total
 
Towers
 
Fiber
 
Other
 
Consolidated Total
Segment site rental revenues
$
864

 
$
437

 
 
 
$
1,301

 
$
821

 
$
411

 
 
 
$
1,232

Segment services and other revenues
122

 
6

 
 
 
128

 
166

 
8

 
 
 
174

Segment revenues
986

 
443

 
 
 
1,429

 
987

 
419

 
 
 
1,406

Segment site rental cost of operations
217

 
141

 
 
 
358

 
207

 
138

 
 
 
345

Segment services and other cost of operations
114

 
3

 
 
 
117

 
127

 
5

 
 
 
132

Segment cost of operations(a)(b)
331

 
144

 
 
 
475

 
334

 
143

 
 
 
477

Segment site rental gross margin(c)
647

 
296

 
 
 
943

 
614

 
273

 
 
 
887

Segment services and other gross margin(c)
8

 
3

 
 
 
11

 
39

 
3

 
 
 
42

Segment selling, general and administrative expenses(b)
23

 
48

 
 
 
71

 
29

 
47

 
 
 
76

Segment operating profit(c)
632

 
251

 
 
 
883

 
624

 
229

 
 
 
853

Other selling, general and administrative expenses(b)
 
 
 
 
$
65

 
65

 
 
 
 
 
$
50

 
50

Stock-based compensation expense
 
 
 
 
27

 
27

 
 
 
 
 
25

 
25

Depreciation, amortization and accretion
 
 
 
 
398

 
398

 
 
 
 
 
390

 
390

Interest expense and amortization of deferred financing costs
 
 
 
 
173

 
173

 
 
 
 
 
164

 
164

Other (income) expenses to reconcile to income (loss) before income taxes(d)
 
 
 
 
6

 
6

 
 
 
 
 
19

 
19

Income (loss) before income taxes
 
 
 
 
 
 
$
214

 
 
 
 
 
 
 
$
205

(a)
Exclusive of depreciation, amortization and accretion shown separately.
(b)
Segment cost of operations excludes (1) stock-based compensation expense of $6 million for both of the three months ended December 31, 2019 and 2018, and (2) prepaid lease purchase price adjustments of $5 million for both of the three months ended December 31, 2019 and 2018