Exhibit 99.2
Supplemental Information Package
and Non-GAAP Reconciliations
First Quarter • March 31, 2016
The Foundation for a Wireless World.
CrownCastle.com
Crown Castle International Corp
First Quarter 2016
TABLE OF CONTENTS | |
Page | |
Company Overview | |
Company Profile | |
Strategy | |
Historical Dividend and AFFO per Share | |
Portfolio Footprint | |
Corporate Information | |
Research Coverage | |
Historical Common Stock Data | |
Portfolio and Financial Highlights | 7 |
Outlook | |
Financials & Metrics | |
Consolidated Balance Sheet | |
Consolidated Statement of Operations | |
FFO and AFFO Reconciliations | |
Consolidated Statement of Cash Flows | |
Site Rental Revenue Growth | |
Site Rental Gross Margin Growth | |
Summary of Straight-Line, Prepaid Rent Activity, and 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 | |
Small Cell Network Overview | |
Capitalization Overview | |
Capitalization Overview | |
Debt Maturity Overview | |
Liquidity Overview | |
Maintenance and Financial Covenants | |
Interest Rate Sensitivity | |
Appendix |
Cautionary Language Regarding Forward-Looking Statements
This supplemental information package ("Supplement") contains forward-looking statements and information that are based on our management's current expectations as of the date of this Supplement. Statements that are not historical facts are hereby identified as forward-looking statements. Words such as "Outlook", "guide", "forecast", "estimate", "anticipate", "project", "plan", "intend", "believe", "expect", "likely", "predicted", and any variations of these words and similar expressions are intended to identify such forward looking statements. Such statements include, but are not limited to, our Outlook for the second quarter 2016 and full year 2016.
Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including, but not limited to, prevailing market conditions. 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 Securities and Exchange Commission. Crown Castle assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
The components of financial information presented herein, both historical and forward looking, may not sum due to rounding. Definitions and reconciliations of non-GAAP measures, including FFO and AFFO, are provided in the Appendix to this Supplement.
As used herein, the term "including" and any variation thereof, means "including without limitation." The use of the word "or" herein is not exclusive.
1
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
COMPANY PROFILE |
Crown Castle International Corp. (to which the terms "Crown Castle," "CCIC," "we," "our," "our Company," "the Company" or "us" as used herein refer) owns, operates and leases shared wireless infrastructure, including: (1) towers and other structures, such as rooftops (collectively, "towers"), and (2) small cell networks supported by fiber (collectively, "small cells," and together with towers, "wireless infrastructure"). Our towers have a significant presence in each of the top 100 US markets. Crown Castle owns, operates and manages approximately 40,000 towers in the US.
Our core business is providing access, including space or capacity, to our wireless infrastructure via long-term contracts in various forms, including license, sublease and lease agreements (collectively, "leases"). We seek to increase our site rental revenues by adding more tenants on our wireless infrastructure, which we expect to result in significant incremental cash flows due to our relatively fixed operating costs.
Effective January 1, 2014, Crown Castle commenced operating as a Real Estate Investment Trust ("REIT") for U.S. federal income tax purposes as it relates to our towers and third party land interests.
On May 28, 2015, Crown Castle completed the sale of CCAL for an aggregate purchase price of approximately $1.6 billion. At the time of the sale, CCAL was 77.6% owned by Crown Castle. We have classified the historical balances, results of operations, and cash flows of CCAL as amounts from discontinued operations.
During the first quarter of 2016, Crown Castle changed its operating segments to consist of (1) towers and (2) small cells. Crown Castle has recast its prior period presentation to conform to its current reporting presentation.
STRATEGY |
Our strategy is to create long-term stockholder value via a combination of (1) growing cash flows generated from our portfolio of wireless infrastructure, (2) returning a meaningful portion of our cash provided by operating activities to our stockholders in the form of dividends and (3) investing capital efficiently to grow cash flows and long-term dividends per share. We measure our efforts to create "long-term stockholder value" by the combined payment of dividends to stockholders and growth in our per share results. The key elements of our strategy are to:
• | Grow cash flows from our wireless infrastructure. We seek to maximize the site rental cash flows derived from our wireless infrastructure by adding tenants on our wireless infrastructure through long-term leases. We believe that the rapid growth in wireless connectivity will result in considerable future demand for our existing wireless infrastructure. We seek to maximize additional tenancy on our wireless infrastructure by working with wireless customers to quickly provide them access to our wireless infrastructure via new tenant additions or modifications of existing tenant equipment installations (collectively, "tenant additions") to enable them to expand coverage and capacity in order to meet increasing demand for wireless connectivity. We expect increases in our site rental cash flows from tenant additions and the related subsequent impact from contracted escalations to result in growth in our operating cash flows as our wireless infrastructure has relatively fixed operating costs (which tend to increase at the rate of inflation). Substantially all of our wireless infrastructure can accommodate additional tenancy, either as currently constructed or with appropriate modifications to the structure (which may include extensions or structural reinforcement), from which we expect to generate high incremental returns. |
• | 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): |
◦ | purchase shares of our common stock from time to time; |
◦ | acquire or construct wireless infrastructure; |
2
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
◦ | acquire land interests under towers; |
◦ | make improvements and structural enhancements to our existing wireless infrastructure; or |
◦ | purchase, repay or redeem our debt. |
Our strategy to create long-term stockholder value is based on our belief that additional demand for our wireless infrastructure will be created by the expected continued growth in demand for wireless connectivity. We believe that such demand for our wireless infrastructure will continue, will result in growth of our cash flows due to tenant additions on our existing wireless infrastructure, and will create other growth opportunities for us, such as demand for new wireless infrastructure.
3
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
HISTORICAL DIVIDEND AND AFFO PER SHARE (1) |
TOWER PORTFOLIO FOOTPRINT | ||
(1) | See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Financial Measures and Other Calculations" in the Appendix for a discussion of the definitions of FFO and AFFO. |
(2) | Dividend per share represents the last quarter annualized ("LQA") which is calculated as the most recently completed quarterly period times four. |
(3) AFFO per share represents the midpoint of the full year 2016 outlook as issued on April 21, 2016.
4
Crown Castle International Corp.
First Quarter 2016
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 | Ba1 |
Standard & Poor’s - Long Term Local Issuer Credit Rating | BBB- |
Note: These credit ratings may not reflect the potential risks relating to the structure or trading of the Company’s securities and are provided solely for informational purposes. Credit ratings are not recommendations to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion. The Company does not undertake any obligation to maintain the ratings or to advise of any change in the ratings. Each agency’s rating should be evaluated independently of any other agency’s rating. An explanation of the significances of the ratings can be obtained from each of the ratings agencies.
EXECUTIVE MANAGEMENT TEAM | |||
Name | Age | Years with Company | Position |
W. Benjamin Moreland | 52 | 16 | President and Chief Executive Officer |
Jay A. Brown | 43 | 16 | Senior Vice President, Chief Financial Officer and Treasurer |
James D. Young | 54 | 10 | Senior Vice President and Chief Operating Officer |
Kenneth J. Simon | 55 | <1 | Senior Vice President and General Counsel |
Patrick Slowey | 59 | 15 | Senior Vice President and Chief Commercial Officer |
Philip M. Kelley | 43 | 18 | Senior Vice President-Corporate Development and Strategy |
BOARD OF DIRECTORS | ||||
Name | Position | Committees | Age | Years as Director |
J. Landis Martin | Chairman | NCG(1) | 70 | 19 |
P. Robert Bartolo | Director | Audit, Compensation | 44 | 2 |
Cindy Christy | Director | Compensation, NCG(1), Strategy | 50 | 8 |
Ari Q. Fitzgerald | Director | Compensation, Strategy | 53 | 13 |
Robert E. Garrison II | Director | Audit, Compensation | 74 | 10 |
Dale N. Hatfield | Director | NCG(1), Strategy | 78 | 14 |
Lee W. Hogan | Director | Audit, Compensation, Strategy | 71 | 14 |
Edward C. Hutcheson | Director | Strategy | 70 | 20 |
John P. Kelly | Director | Strategy | 58 | 15 |
Robert F. McKenzie | Director | Audit, Strategy | 72 | 20 |
Anthony J. Melone | Director | NCG(1), Strategy | 55 | <1 |
W. Benjamin Moreland | Director | 52 | 9 |
(1) | Nominating & Corporate Governance Committee |
5
Crown Castle International Corp.
First Quarter 2016
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 |
Burke & Quick Partners Frederick Moran (561) 504-0936 | Citigroup Michael Rollins (212) 816-1116 | Cowen and Company Colby Synesael (646) 562-1355 |
Credit Suisse Joseph Mastrogiovanni (212) 325-3757 | Deutsche Bank Matthew Niknam (212) 250-4711 | Evercore Partners Jonathan Schildkraut (212) 497-0864 |
Goldman Sachs Brett Feldman (212) 902-8156 | Jefferies Mike McCormack (212) 284-2516 | JPMorgan Philip Cusick (212) 622-1444 |
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 Michael Bowen (503) 727-0721 | Raymond James Ric Prentiss (727) 567-2567 |
RBC Capital Markets Jonathan Atkin (415) 633-8589 | Stifel Matthew Heinz (443) 224-1382 | 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 Scott Tan (212) 438-4162 |
HISTORICAL COMMON STOCK DATA | |||||||||||||||
Three Months Ended | |||||||||||||||
(in millions, except per share data) | 3/31/16 | 12/31/15 | 9/30/15 | 6/30/15 | 3/31/15 | ||||||||||
High price(1) | $ | 87.59 | $ | 87.24 | $ | 83.91 | $ | 83.99 | $ | 85.09 | |||||
Low price(1) | $ | 74.90 | $ | 76.64 | $ | 74.20 | $ | 77.63 | $ | 74.66 | |||||
Period end closing price(2) | $ | 86.50 | $ | 85.55 | $ | 77.25 | 77.82 | $ | 79.20 | ||||||
Dividends paid per common share | $ | 0.885 | $ | 0.885 | $ | 0.82 | $ | 0.82 | $ | 0.82 | |||||
Volume weighted average price for the period(1) | $ | 83.74 | $ | 83.28 | $ | 78.74 | $ | 80.29 | $ | 81.05 | |||||
Common shares outstanding - diluted, at period end | 338 | 334 | 334 | 334 | 334 | ||||||||||
Market value of outstanding common shares, at period end(3) | $ | 29,199 | $ | 28,554 | $ | 25,782 | $ | 25,975 | $ | 26,435 |
(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. |
6
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY PORTFOLIO HIGHLIGHTS | |||
(as of March 31, 2016) | |||
Tower portfolio | |||
Number of towers(1) | 39,749 | ||
Average number of tenants per tower | 2.2 | ||
Remaining contracted customer receivables ($ in billions)(2) | $ | 18 | |
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 site rental gross margin) | 63% / 37% | ||
Weighted average maturity of ground leases (years)(4) | 31 | ||
Small Cells portfolio | |||
Number of miles of fiber (in thousands) | 16.5 | ||
Remaining contracted customer receivables ($ in billions)(2) | $ | 2 | |
Weighted average remaining customer contract term (years)(3) | 6 |
SUMMARY FINANCIAL HIGHLIGHTS | |||||||
Three Months Ended March 31, | |||||||
(dollars in thousands, except per share amounts) | 2016 | 2015 | |||||
Operating Data: | |||||||
Net revenues | |||||||
Site rental | $ | 799,294 | $ | 731,380 | |||
Network services and other | 135,090 | 169,091 | |||||
Net revenues | $ | 934,384 | $ | 900,471 | |||
Gross margin | |||||||
Site rental | $ | 546,673 | $ | 499,167 | |||
Network services and other | 54,119 | 82,173 | |||||
Total gross margin | $ | 600,792 | $ | 581,340 | |||
Net income (loss) attributable to CCIC common stockholders | $ | 36,842 | $ | 111,790 | |||
Net income (loss) attributable to CCIC common stockholders per share - diluted | $ | 0.11 | $ | 0.34 | |||
Non-GAAP Data(5): | |||||||
Adjusted EBITDA | $ | 539,120 | $ | 529,300 | |||
FFO | 316,295 | 356,902 | |||||
AFFO | 395,152 | 365,676 | |||||
AFFO per share | $ | 1.18 | $ | 1.10 |
(1) | Excludes small cells, third-party land interests and impact of the Tower Development Corporation ("TDC") acquisition which closed on April 8, 2016. |
(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 site rental gross margin. |
(5) | See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Measures and Other Calculations" in the Appendix for a discussion of our definitions of FFO and AFFO. |
7
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY FINANCIAL HIGHLIGHTS (CONTINUED) | ||||||||
Three Months Ended March 31, | ||||||||
(dollars in thousands, except per share amounts) | 2016 | 2015 | ||||||
Summary Cash Flow Data: | ||||||||
Net cash provided by (used for) operating activities | $ | 437,656 | $ | 453,058 | ||||
Net cash provided by (used for) investing activities(1) | (207,746 | ) | (219,660 | ) | ||||
Net cash provided by (used for) financing activities | (345,592 | ) | (172,241 | ) | ||||
(dollars in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Balance Sheet Data (at period end): | ||||||||
Cash and cash equivalents | $ | 175,702 | $ | 178,810 | ||||
Property and equipment, net | 9,559,397 | 9,580,057 | ||||||
Total assets | 21,718,251 | 21,936,966 | ||||||
Total debt and other long-term obligations(2) | 11,865,999 | 12,149,959 | ||||||
Total CCIC stockholders' equity | 7,152,994 | 7,089,221 |
(dollars in thousands, except per share amounts) | Three Months Ended March 31, 2016 | |||
Other Data: | ||||
Net debt to last quarter annualized Adjusted EBITDA | 5.5 | x | ||
Dividend per common share | $ | 0.885 | ||
AFFO payout ratio | 75 | % |
OUTLOOK FOR SECOND QUARTER 2016 AND FULL YEAR 2016(3) | ||||||
(dollars in millions, except per share amounts) | Second Quarter 2016 | Full Year 2016 | ||||
Site rental revenues | $801 | to | $806 | $3,207 | to | $3,232 |
Site rental cost of operations | $251 | to | $256 | $1,006 | to | $1,031 |
Site rental gross margin | $547 | to | $552 | $2,191 | to | $2,216 |
Adjusted EBITDA(4) | $543 | to | $548 | $2,193 | to | $2,218 |
Interest expense and amortization of deferred financing costs(5) | $128 | to | $133 | $513 | to | $533 |
FFO(4) | $363 | to | $368 | $1,428 | to | $1,453 |
AFFO(4) | $389 | to | $394 | $1,585 | to | $1,610 |
AFFO per share(4)(6) | $1.15 | to | $1.16 | $4.66 | to | $4.73 |
Net income (loss) | $82 | to | $115 | $325 | to | $424 |
(1) | Includes net cash used for acquisitions of approximately $22 million and $17 million for the three months ended March 31, 2016 and 2015, 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) | Inclusive of the impact of the TDC acquisition, which closed on April 8, 2016. |
(4) | See reconciliation of this non-GAAP financial measure to net income (loss) included herein. |
(5) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" in the Appendix. |
(6) | Based on diluted shares outstanding as of March 31, 2016 of approximately 338 million shares for second quarter 2016. Full year 2016 assumes diluted shares outstanding of approximately 340 million shares, inclusive of the assumed conversion of the mandatory convertible preferred stock in November 2016. |
8
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
OUTLOOK FOR FULL YEAR 2016 SITE RENTAL REVENUE GROWTH | ||||||
(dollars in millions) | Midpoint of Full Year 2016 Outlook | Full Year 2015 | ||||
Reported GAAP site rental revenues | $ | 3,220 | $ | 3,018 | ||
Site rental straight-line revenues | (47 | ) | (111 | ) | ||
Other | — | — | ||||
Site Rental Revenues, as Adjusted(1)(3) | $ | 3,173 | $ | 2,907 | ||
Acquisitions and builds(2) | (86 | ) | ||||
Organic Site Rental Revenues(1)(3)(4) | $ | 3,087 | ||||
Year-Over-Year Revenue Growth | ||||||
Reported GAAP site rental revenues | 6.7 | % | ||||
Site Rental Revenues, as Adjusted | 9.1 | % | ||||
Organic Site Rental Revenues(5) | 6.2 | % |
OUTLOOK FOR ORGANIC SITE RENTAL REVENUE GROWTH | ||
Midpoint of Full Year 2016 Outlook | ||
New leasing activity | 6.0 | % |
Escalators | 3.0 | % |
Organic Site Rental Revenue Growth, before non-renewals | 9.1 | % |
Non-renewals | (2.9 | )% |
Organic Site Rental Revenue Growth(5) | 6.2 | % |
OUTLOOK FOR FULL YEAR 2016 SITE RENTAL GROSS MARGIN GROWTH | ||||||
(dollars in millions) | Midpoint of Full Year 2016 Outlook | Full Year 2015 | ||||
Reported GAAP site rental gross margin | $ | 2,204 | $ | 2,055 | ||
Straight line revenues and expenses, net | 45 | (13 | ) | |||
Other | — | — | ||||
Site Rental Gross Margin, as Adjusted(1)(3) | $ | 2,249 | $ | 2,042 | ||
Acquisitions and builds(2) | (65 | ) | ||||
Organic Site Rental Gross Margin(1)(3)(4) | $ | 2,183 | ||||
Year-Over-Year Gross Margin Growth | ||||||
Reported GAAP site rental gross margin | 7.3 | % | ||||
Site Rental Gross Margin, as Adjusted | 10.1 | % | ||||
Organic Site Rental Gross Margin(6) | 6.9 | % | ||||
Year-Over-Year Incremental Margin | ||||||
Reported GAAP site rental gross margin | 80.9 | % | ||||
Site Rental Gross Margin, as Adjusted | 69.9 | % | ||||
Organic Site Rental Gross Margin(7) | 78.6 | % |
(1) | Includes amortization of prepaid rent. |
(2) | The financial impact of acquisitions, as measured by run-rate contribution, and tower builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build. |
(3) | Includes Site Rental Revenues, as Adjusted, from the construction of new small cell nodes. |
(4) | See definitions provided herein. |
(5) | Calculated as the percentage change from Site Rental Revenues, as Adjusted, for the prior period when compared to Organic Site Rental Revenues for the current period. |
(6) | Calculated as the percentage change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period. |
(7) | Calculated as the change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period, divided by the change from Site Rental Revenues, as Adjusted in the prior period when compared to Organic Site Rental Revenues for the current period. |
9
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CONSOLIDATED BALANCE SHEET (Unaudited) | |||||||
(dollars in thousands, except share amounts) | March 31, 2016 | December 31, 2015 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 175,702 | $ | 178,810 | |||
Restricted cash | 129,419 | 130,731 | |||||
Receivables, net | 254,669 | 313,296 | |||||
Prepaid expenses | 141,529 | 133,194 | |||||
Other current assets | 119,563 | 225,214 | |||||
Total current assets | 820,882 | 981,245 | |||||
Deferred site rental receivables | 1,317,898 | 1,306,408 | |||||
Property and equipment, net | 9,559,397 | 9,580,057 | |||||
Goodwill | 5,531,064 | 5,513,551 | |||||
Other intangible assets, net | 3,707,129 | 3,779,915 | |||||
Long-term prepaid rent and other assets, net | 781,881 | 775,790 | |||||
Total assets | $ | 21,718,251 | $ | 21,936,966 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 141,574 | $ | 159,629 | |||
Accrued interest | 77,673 | 66,975 | |||||
Deferred revenues | 332,711 | 322,623 | |||||
Other accrued liabilities | 172,165 | 199,923 | |||||
Current maturities of debt and other obligations | 87,823 | 106,219 | |||||
Total current liabilities | 811,946 | 855,369 | |||||
Debt and other long-term obligations | 11,778,176 | 12,043,740 | |||||
Other long-term liabilities | 1,975,135 | 1,948,636 | |||||
Total liabilities | 14,565,257 | 14,847,745 | |||||
Commitments and contingencies | |||||||
CCIC stockholders' equity: | |||||||
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: March 31, 2016—337,559,718 and December 31, 2015—333,771,660 | 3,375 | 3,338 | |||||
4.50% Mandatory Convertible Preferred Stock, Series A, $.01 par value; 20,000,000 shares authorized; shares issued and outstanding: March 31, 2016 and December 31, 2015—9,775,000; aggregate liquidation value: March 31, 2016 and December 31, 2015—$977,500 | 98 | 98 | |||||
Additional paid-in capital | 9,874,862 | 9,548,580 | |||||
Accumulated other comprehensive income (loss) | (4,977 | ) | (4,398 | ) | |||
Dividends/distributions in excess of earnings | (2,720,364 | ) | (2,458,397 | ) | |||
Total equity | 7,152,994 | 7,089,221 | |||||
Total liabilities and equity | $ | 21,718,251 | $ | 21,936,966 |
10
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
(dollars in thousands, except share and per share amounts) | 2016 | 2015 | |||||
Net revenues: | |||||||
Site rental | $ | 799,294 | $ | 731,380 | |||
Network services and other | 135,090 | 169,091 | |||||
Net revenues | 934,384 | 900,471 | |||||
Operating expenses: | |||||||
Costs of operations (exclusive of depreciation, amortization and accretion): | |||||||
Site rental | 252,621 | 232,213 | |||||
Network services and other | 80,971 | 86,918 | |||||
General and administrative | 97,581 | 74,056 | |||||
Asset write-down charges | 7,959 | 8,555 | |||||
Acquisition and integration costs | 5,638 | 2,016 | |||||
Depreciation, amortization and accretion | 277,875 | 251,806 | |||||
Total operating expenses | 722,645 | 655,564 | |||||
Operating income (loss) | 211,739 | 244,907 | |||||
Interest expense and amortization of deferred financing costs | (126,378 | ) | (134,439 | ) | |||
Gains (losses) on retirement of long-term obligations | (30,550 | ) | — | ||||
Interest income | 174 | 56 | |||||
Other income (expense) | (3,273 | ) | (225 | ) | |||
Income (loss) from continuing operations before income taxes | 51,712 | 110,299 | |||||
Benefit (provision) for income taxes | (3,872 | ) | 1,435 | ||||
Income (loss) from continuing operations | 47,840 | 111,734 | |||||
Discontinued operations: | |||||||
Income (loss) from discontinued operations, net of tax | — | 13,378 | |||||
Net income (loss) | 47,840 | 125,112 | |||||
Less: Net income (loss) attributable to the noncontrolling interest | — | 2,325 | |||||
Net income (loss) attributable to CCIC stockholders | 47,840 | 122,787 | |||||
Dividends on preferred stock | (10,997 | ) | (10,997 | ) | |||
Net income (loss) attributable to CCIC common stockholders | $ | 36,843 | $ | 111,790 | |||
Net income (loss) attributable to CCIC common stockholders, per common share: | |||||||
Income (loss) from continuing operations, basic | $ | 0.11 | $ | 0.30 | |||
Income (loss) from discontinued operations, basic | $ | — | $ | 0.04 | |||
Net income (loss) attributable to CCIC common stockholders, basic | $ | 0.11 | $ | 0.34 | |||
Income (loss) from continuing operations, diluted | $ | 0.11 | $ | 0.30 | |||
Income (loss) from discontinued operations, diluted | $ | — | $ | 0.04 | |||
Net income (loss) attributable to CCIC common stockholders, diluted | $ | 0.11 | $ | 0.34 | |||
Weighted-average common shares outstanding (in thousands): | |||||||
Basic | 334,155 | 332,712 | |||||
Diluted | 334,929 | 333,485 |
11
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SEGMENT OPERATING RESULTS | |||||||||||||||||||||||||||||
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | ||||||||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Other | Consolidated Total | Towers | Small Cells | Other | Consolidated Total | |||||||||||||||||||||
Segment site rental revenues | $ | 702,840 | $ | 96,454 | $ | 799,294 | $ | 674,907 | $ | 56,473 | $ | 731,380 | |||||||||||||||||
Segment network service and other revenue | 125,010 | 10,080 | 135,090 | 156,385 | 12,706 | 169,091 | |||||||||||||||||||||||
Segment revenues | 827,850 | 106,534 | 934,384 | 831,292 | 69,179 | 900,471 | |||||||||||||||||||||||
Segment site rental cost of operations(1) | 204,565 | 37,483 | 242,048 | 204,633 | 20,513 | 225,146 | |||||||||||||||||||||||
Segment network service and other cost of operations(1) | 69,989 | 8,035 | 78,024 | 76,191 | 9,454 | 85,645 | |||||||||||||||||||||||
Segment cost of operations(1) | 274,554 | 45,518 | 320,072 | 280,824 | 29,967 | 310,791 | |||||||||||||||||||||||
Segment gross margin | 553,296 | 61,016 | 614,312 | 550,468 | 39,212 | 589,680 | |||||||||||||||||||||||
Segment general and administrative expenses(1) | 23,599 | 15,522 | 36,071 | 75,192 | 22,722 | 7,560 | 30,098 | 60,380 | |||||||||||||||||||||
Segment operating profit | 529,697 | 45,494 | (36,071 | ) | 539,120 | 527,746 | 31,652 | (30,098 | ) | 529,300 | |||||||||||||||||||
Stock-based compensation expense | 30,705 | 30,705 | 16,841 | 16,841 | |||||||||||||||||||||||||
Depreciation, amortization and accretion | 277,875 | 277,875 | 251,806 | 251,806 | |||||||||||||||||||||||||
Interest expense and amortization of deferred financing costs | 126,378 | 126,378 | 134,439 | 134,439 | |||||||||||||||||||||||||
Other expenses to reconcile to income (loss) from continuing operations before income taxes(2) | 52,450 | 52,450 | 15,915 | 15,915 | |||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 51,712 | $ | 110,299 |
(1) Segment cost of operations exclude (1) stock-based compensation expense of $8.3 million and $3.2 million for the three months ended March 31, 2016 and 2015, respectively and (2) prepaid lease purchase price adjustments of $5.2 million for each of the three months ended March 31, 2016 and 2015. Segment general and administrative expenses exclude stock-based compensation expense of $22.4 million and $13.7 million for the three months ended March 31, 2016 and 2015, respectively.
(2) | Other expenses to reconcile to income (loss) from continuing operations before income taxes includes a loss on retirement of long-term obligations of approximately $30.6 million for the three months ended March 31, 2016. |
12
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
FFO AND AFFO RECONCILIATIONS | |||||||
Three Months Ended March 31, | |||||||
(dollars in thousands, except share and per share amounts) | 2016 | 2015 | |||||
Net income(1) | $ | 47,840 | $ | 111,734 | |||
Real estate related depreciation, amortization and accretion | 271,493 | 247,610 | |||||
Asset write-down charges | 7,959 | 8,555 | |||||
Dividends on preferred stock | (10,997 | ) | (10,997 | ) | |||
FFO(2)(3)(5) | $ | 316,295 | $ | 356,902 | |||
Weighted average common shares outstanding — diluted(4) | 334,929 | 333,485 | |||||
FFO per share(2)(5) | $ | 0.94 | $ | 1.07 | |||
FFO (from above) | $ | 316,295 | $ | 356,902 | |||
Adjustments to increase (decrease) FFO: | |||||||
Straight-line revenue | (17,335 | ) | (30,539 | ) | |||
Straight-line expense | 23,765 | 24,582 | |||||
Stock-based compensation expense | 30,705 | 16,841 | |||||
Non-cash portion of tax provision | 1,782 | (3,592 | ) | ||||
Non-real estate related depreciation, amortization and accretion | 6,382 | 4,196 | |||||
Amortization of non-cash interest expense | 4,211 | 11,736 | |||||
Other (income) expense | 3,273 | 225 | |||||
Gains (losses) on retirement of long-term obligations | 30,550 | — | |||||
Acquisition and integration costs | 5,638 | 2,016 | |||||
Capital improvement capital expenditures | (6,402 | ) | (7,491 | ) | |||
Corporate capital expenditures | (3,712 | ) | (9,198 | ) | |||
AFFO(2)(3)(5) | $ | 395,152 | $ | 365,676 | |||
Weighted average common shares outstanding — diluted(4) | 334,929 | 333,485 | |||||
AFFO per share(2)(5) | $ | 1.18 | $ | 1.10 |
(1) | Exclusive of income (loss) from discontinued operations and related noncontrolling interest of $13 million for the three months ended March 31, 2015. |
(2) | See "Definitions of Non-GAAP Measures and Other Calculations" in the Appendix for a discussion of the definitions of FFO and AFFO. |
(3) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(4) | The diluted weighted average common shares outstanding assumes no conversion of preferred stock in the share count. |
(5) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
13
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) | |||||||||||||
Three Months Ended March 31, | |||||||||||||
(dollars in thousands) | 2016 | 2015 | |||||||||||
Cash flows from operating activities: | |||||||||||||
Net income (loss) from continuing operations | $ | 47,840 | $ | 111,734 | |||||||||
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities: | |||||||||||||
Depreciation, amortization and accretion | 277,875 | 251,806 | |||||||||||
Gains (losses) on retirement of long-term obligations | 30,550 | — | |||||||||||
Amortization of deferred financing costs and other non-cash interest | 4,211 | 11,736 | |||||||||||
Stock-based compensation expense | 19,895 | 15,244 | |||||||||||
Asset write-down charges | 7,959 | 8,555 | |||||||||||
Deferred income tax benefit (provision) | 1,860 | (3,706 | ) | ||||||||||
Other non-cash adjustments, net | 2,166 | (558 | ) | ||||||||||
Changes in assets and liabilities, excluding the effects of acquisitions: | |||||||||||||
Increase (decrease) in liabilities | 17,426 | 30,032 | |||||||||||
Decrease (increase) in assets | 27,874 | 28,215 | |||||||||||
Net cash provided by (used for) operating activities | 437,656 | 453,058 | |||||||||||
Cash flows from investing activities: | |||||||||||||
Payments for acquisition of businesses, net of cash acquired | (22,029 | ) | (17,493 | ) | |||||||||
Capital expenditures | (193,489 | ) | (201,653 | ) | |||||||||
Other investing activities, net | 7,772 | (514 | ) | ||||||||||
Net cash provided by (used for) investing activities | (207,746 | ) | (219,660 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||
Proceeds from issuance of long-term debt | 3,487,451 | — | |||||||||||
Principal payments on debt and other long-term obligations | (14,152 | ) | (31,497 | ) | |||||||||
Purchases and redemptions of long-term debt | (2,876,390 | ) | — | ||||||||||
Borrowings under revolving credit facility | 2,065,000 | 230,000 | |||||||||||
Payments under revolving credit facility | (2,980,000 | ) | (65,000 | ) | |||||||||
Payments for financing costs | (17,971 | ) | (1,904 | ) | |||||||||
Net proceeds from issuance of capital stock | 323,798 | — | |||||||||||
Purchases of capital stock | (24,354 | ) | (29,372 | ) | |||||||||
Dividends/distributions paid on common stock | (299,090 | ) | (273,685 | ) | |||||||||
Dividends paid on preferred stock | (10,997 | ) | (10,997 | ) | |||||||||
Net (increase) decrease in restricted cash | 1,113 | 10,214 | |||||||||||
Net cash provided by (used for) financing activities | (345,592 | ) | (172,241 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents - continuing operations | (115,682 | ) | 61,157 | ||||||||||
Discontinued operations: | |||||||||||||
Net cash provided by (used for) operating activities | — | 7,736 | |||||||||||
Net cash provided by (used for) investing activities | 113,150 | (3,100 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents - discontinued operations | 113,150 | 4,636 | |||||||||||
Effect of exchange rate changes | (576 | ) | (1,260 | ) | |||||||||
Cash and cash equivalents at beginning of period | 178,810 | 175,620 | (1) | ||||||||||
Cash and cash equivalents at end of period | $ | 175,702 | $ | 240,153 | (1) | ||||||||
Supplemental disclosure of cash flow information: | |||||||||||||
Interest paid | 111,469 | 120,949 | |||||||||||
Income taxes paid | 6,773 | 2,498 |
(1) | Inclusive of cash and cash equivalents included in discontinued operations. |
14
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SITE RENTAL REVENUE GROWTH | |||||||
Three Months Ended March 31, | |||||||
(dollars in millions) | 2016 | 2015 | |||||
Reported GAAP site rental revenues | $ | 799 | $ | 731 | |||
Site rental straight-line revenues | (17 | ) | (31 | ) | |||
Other | — | — | |||||
Site Rental Revenues, as Adjusted(1)(3) | $ | 782 | $ | 700 | |||
Acquisitions and builds(2) | (27 | ) | |||||
Organic Site Rental Revenues(1)(3)(4) | $ | 755 | |||||
Year-Over-Year Revenue Growth | |||||||
Reported GAAP site rental revenues | 9.3 | % | |||||
Site Rental Revenues, as Adjusted | 11.6 | % | |||||
Organic Site Rental Revenues(5) | 7.8 | % |
ORGANIC SITE RENTAL REVENUE GROWTH | |
Three Months Ended March 31, | |
2016 | |
New leasing activity | 6.8% |
Escalators | 3.3% |
Organic Site Rental Revenue growth, before non-renewals | 10.0% |
Non-renewals | (2.3)% |
Organic Site Rental Revenue Growth(5) | 7.8% |
(1) | Includes amortization of prepaid rent; see the table "Summary of Prepaid Rent Activity" on page 17 for further details. |
(2) | The financial impact of acquisitions, as measured by run-rate contribution, and tower builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build. |
(3) | Includes Site Rental Revenues, as Adjusted from the construction of new small cells. |
(4) | See definitions provided herein. |
(5) | Calculated as the percentage change from Site Rental Revenues, as Adjusted, for the prior period when compared to Organic Site Rental Revenues for the current period. |
15
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SITE RENTAL GROSS MARGIN GROWTH | |||||||
Three Months Ended March 31, | |||||||
(dollars in millions) | 2016 | 2015 | |||||
Reported GAAP site rental gross margin | $ | 547 | $ | 499 | |||
Straight line revenues and expenses, net | 6 | (6 | ) | ||||
Other | — | — | |||||
Site rental gross margin, as Adjusted(1)(2) | $ | 553 | $ | 493 | |||
Acquisitions and builds(3) | (19 | ) | |||||
Organic Site Rental Gross Margin(1)(2)(4) | $ | 534 | |||||
Year-Over-Year Gross Margin Growth | |||||||
Reported GAAP site rental gross margin | 9.5 | % | |||||
Site Rental Gross Margin, as Adjusted | 12.1 | % | |||||
Organic Site Rental Gross Margin(5) | 8.2 | % | |||||
Year-Over-Year Incremental Margin | |||||||
Reported GAAP site rental gross margin | 69.9 | % | |||||
Site Rental Gross Margin, as Adjusted | 73.8 | % | |||||
Organic Site Rental Gross Margin(6) | 74.5 | % |
(1) | Includes amortization of prepaid rent. |
(2) | Includes Site Rental Revenues, as Adjusted, from the construction of new small cell nodes. |
(3) | The financial impact of acquisitions, as measured by run-rate contribution, and tower builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build. |
(4) | See definitions provided herein. |
(5) | Calculated as the percentage change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period. |
(6) | Calculated as the change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period, divided by the change from Site Rental Revenues, as Adjusted in the prior period when compared to Organic Site Rental Revenues for the current period. |
16
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF SITE RENTAL STRAIGHT-LINE REVENUES AND EXPENSES(1) | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Total | Towers | Small Cells | Total | |||||||||||||||||
Site rental straight-line revenue | $ | 14,896 | $ | 2,439 | $ | 17,335 | $ | 28,301 | $ | 2,238 | $ | 30,539 | |||||||||||
Site rental straight-line expenses | 23,750 | 15 | 23,765 | 24,557 | 25 | 24,582 |
SUMMARY OF PREPAID RENT ACTIVITY(2) | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Total | Towers | Small Cells | Total | |||||||||||||||||
Prepaid rent received | $ | 42,345 | $ | 32,387 | $ | 74,732 | $ | 67,602 | $ | 50,356 | $ | 117,958 | |||||||||||
Amortization of prepaid rent | 25,266 | 22,446 | 47,712 | 17,192 | 17,259 | 34,451 |
SUMMARY OF CAPITAL EXPENDITURES | |||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||||||||||
(dollars in thousands) | Towers | Small Cells | Other | Total | Towers | Small Cells | Other | Total | |||||||||||||||||||||||
Discretionary: | |||||||||||||||||||||||||||||||
Purchases of land interests | $ | 21,299 | $ | — | $ | — | $ | 21,299 | $ | 23,513 | $ | — | $ | — | $ | 23,513 | |||||||||||||||
Wireless infrastructure construction and improvements | 83,474 | 78,603 | — | 162,077 | 101,282 | 60,170 | — | 161,452 | |||||||||||||||||||||||
Sustaining | 6,268 | 1,550 | 2,295 | 10,113 | 8,338 | 2,733 | 5,617 | 16,688 | |||||||||||||||||||||||
Total | $ | 111,041 | $ | 80,153 | $ | 2,295 | $ | 193,489 | $ | 133,133 | $ | 201,653 | $ | 5,617 | $ | 201,653 |
(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 prepaid rent received from long-term tenant contracts and the amortization thereof for GAAP revenue recognition purposes. |
17
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
PROJECTED REVENUE FROM CUSTOMER LICENSES(1)(2) | |||||||||||||||
Remaining nine months | Years Ended December 31, | ||||||||||||||
(as of March 31, 2016; dollars in millions) | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||
Site rental revenue (GAAP) | $ | 2,400 | $ | 3,218 | $ | 3,241 | $ | 3,262 | $ | 3,284 | |||||
Site rental straight-line revenue | (28 | ) | 27 | 82 | 137 | 195 | |||||||||
Site Rental Revenues, as Adjusted | $ | 2,372 | $ | 3,245 | $ | 3,323 | $ | 3,399 | $ | 3,479 |
PROJECTED GROUND LEASE EXPENSE FROM EXISTING GROUND LEASES(2)(3) | |||||||||||||||
Remaining nine months | Years Ended December 31, | ||||||||||||||
(as of March 31, 2016; dollars in millions) | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||
Ground lease expense (GAAP) | $ | 514 | $ | 681 | $ | 686 | $ | 692 | $ | 699 | |||||
Site rental straight-line expense | (75 | ) | (81 | ) | (70 | ) | (60 | ) | (50 | ) | |||||
Ground Lease Expense, as Adjusted | $ | 439 | $ | 600 | $ | 616 | $ | 632 | $ | 649 |
ANNUALIZED CASH SITE RENTAL REVENUE AT TIME OF RENEWAL(4) | |||||||||||||||
Remaining nine months | Years Ended December 31, | ||||||||||||||
(as of March 31, 2016; dollars in millions) | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||
AT&T | $ | 29 | $ | 22 | $ | 41 | $ | 38 | $ | 51 | |||||
Sprint | 39 | 46 | 38 | 42 | 28 | ||||||||||
T-Mobile | 20 | 26 | 34 | 27 | 24 | ||||||||||
Verizon | 11 | 18 | 20 | 20 | 27 | ||||||||||
All Others Combined | 36 | 34 | 34 | 30 | 33 | ||||||||||
Total | $ | 135 | $ | 146 | $ | 167 | $ | 157 | $ | 163 |
(1) | Based on customer licenses as of March 31, 2016. 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) | Inclusive of the impact of the TDC acquisition, which closed on April 8, 2016. |
(3) | Based on existing ground leases as of March 31, 2016. CPI-linked leases are assumed to escalate at 3% per annum. |
(4) | 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." |
18
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
ESTIMATED REDUCTION TO SITE RENTAL REVENUES FROM NON-RENEWALS FROM LEAP, METROPCS AND CLEARWIRE NETWORK DECOMMISSIONING(1)(2) (dollars in millions) | |||
2016 | 2017 | Thereafter | Total |
$55-$65 | $60-$70 | $50-$70 | $165-$205 |
HISTORICAL ANNUAL NON-RENEWALS AS PERCENTAGE OF SITE RENTAL REVENUES, AS ADJUSTED | ||||
Years Ended December 31, | ||||
2015 | 2014 | 2013 | 2012 | 2011 |
3.6% | 2.6% | 1.7% | 2.2% | 2.0% |
CUSTOMER OVERVIEW | |||
(as of March 31, 2016) | Percentage of Q1 2016 LQA Site Rental Revenues | Weighted Average Current Term Remaining(3) | Long-Term Credit Rating (S&P / Moody’s) |
AT&T | 29% | 7 | BBB+ / Baa1 |
T-Mobile | 22% | 6 | BB |
Sprint | 19% | 5 | B / B3 |
Verizon | 18% | 7 | BBB+ / Baa1 |
All Others Combined | 12% | 4 | N/A |
Total / Weighted Average | 100% | 6 |
(1) | Estimated impact to site rental revenues in the applicable period based on the anticipated timing and amount of decommissioning activity, as of March 31, 2016. |
(2) | 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. |
(3) | Weighted by site rental revenue contributions; excludes renewals at the customers' option. |
19
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF TOWER PORTFOLIO BY VINTAGE | |
(as of March 31, 2016; dollars in thousands) | |
YIELD(1) | NUMBER OF TENANTS PER TOWER |
LQA SITE RENTAL REVENUE PER TOWER | LQA SITE RENTAL GROSS MARGIN PER TOWER |
INVESTED CAPITAL PER TOWER(2) | NUMBER OF TOWERS |
(1) | Yield is calculated as LQA 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. |
20
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
PORTFOLIO OVERVIEW(1) | ||
(as of March 31, 2016; 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. |
21
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
DISTRIBUTION OF TOWER TENANCY (as of March 31, 2016) | |||||
PERCENTAGE OF TOWERS BY TENANTS PER TOWER(1) | |||||
SITES OPERATED GREATER THAN 10 YEARS | SITES OPERATED LESS THAN OR EQUAL TO 10 YEARS |
Average: 2.7 | Average: 2.0 |
GEOGRAPHIC TOWER DISTRIBUTION (as of March 31, 2016)(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. |
22
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
GROUND INTEREST OVERVIEW | ||||||||||||||||
(as of March 31, 2016; dollars in millions) | LQA Site Rental Revenue | Percentage of LQA Site Rental Revenue | LQA Site Rental Gross Margin | Percentage of LQA Site Rental Gross Margin | Number of Towers(1) | Percentage of Towers | Weighted Average Term Remaining (by years)(2) | |||||||||
Less than 10 years | $ | 349 | 13 | % | $ | 196 | 10 | % | 5,685 | 14 | % | |||||
10 to 20 years | 475 | 17 | % | 252 | 13 | % | 8,721 | 22 | % | |||||||
Greater 20 years | 1,166 | 42 | % | 778 | 40 | % | 16,511 | 42 | % | |||||||
Total leased | $ | 1,991 | 72 | % | $ | 1,226 | 63 | % | 30,917 | 78 | % | 31 | ||||
Owned | 768 | 28 | % | 710 | 37 | % | 8,832 | 22 | % | |||||||
Total / Average | $ | 2,759 | 100 | % | $ | 1,936 | 100 | % | 39,749 | 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 site rental gross margin. |
GROUND INTEREST ACTIVITY | |||
(dollars in millions) | Three Months Ended March 31, 2016 | ||
Ground Extensions Under Crown Castle Towers: | |||
Number of ground leases extended | 455 | ||
Average number of years extended | 34 | ||
Percentage increase in consolidated cash ground lease expense due to extension activities(1) | 0.2 | % | |
Ground Purchases Under Crown Castle Towers: | |||
Number of ground leases purchased | 131 | ||
Land lease purchases (including capital expenditures, acquisitions and capital leases) | $ | 30 | |
Percentage of consolidated site rental gross margin from towers residing on land purchased | <1% |
(1) | Includes the impact from the amortization of lump sum payments. |
23
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
CAPITALIZATION OVERVIEW | ||||||||
(dollars in millions) | Face Value as Reported 3/31/2016 | Fixed vs. Floating | Secured vs. Unsecured | Interest Rate(1) | Net Debt to LQA EBITDA(2) | Maturity | ||
Cash | $ | 176 | ||||||
Senior Secured Tower Revenue Notes, Series 2010-2-2010-3(3) | 1,600 | Fixed | Secured | 6.0% | Various(6) | |||
Senior Secured Tower Revenue Notes, Series 2010-5-2010-6(3) | 1,300 | Fixed | Secured | 4.7% | Various(6) | |||
Senior Secured Tower Revenue Notes, Series 2015-1-2015-2(3) | 1,000 | Fixed | Secured | 3.5% | Various(6) | |||
2012 Secured Notes(4) | 1,500 | Fixed | Secured | 3.4% | 2017/2023 | |||
Senior Secured Notes, Series 2009-1(5) | 137 | Fixed | Secured | 7.7% | Various(6) | |||
Capital Leases & other debt | 216 | Various | Secured | Various | Various | |||
Total secured debt | $ | 5,753 | 4.4% | 2.7x | ||||
Senior Unsecured Revolving Credit Facility(7) | 210 | Floating | Unsecured | 1.8% | 2021 | |||
Senior Unsecured Term Loan A | 2,000 | Floating | Unsecured | 1.8% | 2021 | |||
5.250% Senior Notes | 1,650 | Fixed | Unsecured | 5.3% | 2023 | |||
2016 Senior Notes(8) | 1,500 | Fixed | Unsecured | 4.0% | 2021/2026 | |||
4.875% Senior Notes | 850 | Fixed | Unsecured | 4.9% | 2022 | |||
Total unsecured debt | $ | 6,210 | 3.7% | 2.9x | ||||
Total net debt | $ | 11,787 | 4.1% | 5.5x | ||||
Preferred Stock, at liquidation value | 978 | |||||||
Market Capitalization(9) | 29,199 | |||||||
Firm Value(10) | $ | 41,964 |
(1) | Represents the weighted-average stated interest rate. |
(2) | Represents the applicable amount of debt divided by LQA consolidated Adjusted EBITDA. |
(3) | If the Senior Secured Tower Revenue Notes 2010-2, 2010-3 and Senior Secured Tower Revenue Notes 2010-5, and 2010-6 ("2010 Tower Revenue Notes") and Senior Secured Tower Revenue Notes 2015-1 and 2015-2 ("2015 Tower Revenue Notes") are not paid in full on or prior to 2017, 2020, 2022 and 2025, as applicable, then 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 class of the 2010 Tower Revenue Notes and 2015 Tower Revenue Notes, and additional interest (of an additional approximately 5% per annum) will accrue on the respective 2010 Tower Revenue Notes and 2015 Tower Revenue Notes. The Senior Secured Tower Revenue Notes, 2010-2, and 2010-3 consist of two series of notes with principal amounts of $350 million and $1.3 billion, having anticipated repayment dates in 2017 and 2020, respectively. The Senior Secured Tower Revenue Notes, 2010-5 and 2010-6 consist of two series of notes with principal amounts of $300 million and $1.0 billion, having anticipated repayment dates in 2017 and 2020, respectively. The Senior Secured Tower Revenue Notes, 2015-1 and 2015-2 consist of two series of notes with principal amounts of $300 million and $700 million, having anticipated repayment dates in 2022 and 2025, respectively. |
(4) | The 2012 Secured Notes consist of $500 million aggregate principal amount of 2.381% secured notes due 2017 and $1.0 billion aggregate principal amount of 3.849% secured notes due 2023. |
(5) | The Senior Secured Notes, Series 2009-1 consist of $66.8 million of principal as of March 31, 2016 that amortizes through 2019, and $70 million of principal as of March 31, 2016 that amortizes during the period beginning in 2019 and ending in 2029. |
(6) | Notes are prepayable at par if voluntarily repaid six months or less prior to maturity; earlier prepayment may require additional consideration. |
(7) | As of March 31, 2016, the undrawn availability under the $2.5 billion Revolving Credit Facility is $2.3 billion. |
(8) | The 2016 Senior Notes consist of $600 million aggregate principal amount of 3.4% senior notes due 2021 and $900 million aggregate principal amount of 4.45% senior notes due 2026. |
(9) | Market capitalization calculated based on $86.50 closing price and 337.6 million shares outstanding as of March 31, 2016. |
(10) | Represents the sum of net debt, preferred stock (at liquidation value) and market capitalization. |
24
Crown Castle International Corp.
First Quarter 2016
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. |
25
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
LIQUIDITY OVERVIEW(1) | |||
(dollars in thousands) | March 31, 2016 | ||
Cash and cash equivalents(2) | $ | 175,702 | |
Undrawn revolving credit facility availability(3) | 2,290,000 | ||
Restricted cash | 134,419 | ||
Debt and other long-term obligations(4) | 11,865,999 | ||
Total equity | 7,152,994 |
(1) | In addition in August 2015, we established 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 gross sales price of up to $500.0 million to or through sales agents. As of March 31, 2016, 3.8 million shares of common stock were sold under the ATM Program. |
(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. |
26
Crown Castle International Corp.
First Quarter 2016
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 March 31, 2016 | |
Maintenance Financial Covenants(2) | |||||
2016 Credit Facility | CCIC | Total Net Leverage Ratio | ≤ 6.50x | 5.4x | |
2016 Credit Facility | CCIC | Total Senior Secured Leverage Ratio | ≤ 3.50x | 2.6x | |
2016 Credit Facility | CCIC | Consolidated Interest Coverage Ratio(3) | N/A | N/A | |
Restrictive Negative Financial Covenants | |||||
Financial covenants restricting ability to make restricted payments, including dividends | |||||
4.875% Senior Notes | CCIC | Debt to Adjusted Consolidated Cash Flow Ratio | ≤ 7.00x | 5.4x | |
5.25% Senior Notes | CCIC | Debt to Adjusted Consolidated Cash Flow Ratio | ≤ 7.00x | 5.4x | |
Financial covenants restricting ability to incur additional debt | |||||
4.875% Senior Notes | CCIC | Debt to Adjusted Consolidated Cash Flow Ratio | ≤ 7.00x | 5.4x | |
5.25% Senior Notes | CCIC | Debt to Adjusted Consolidated Cash Flow Ratio | ≤ 7.00x | 5.4x | |
2012 Secured Notes | CC Holdings GS V LLC and Crown Castle GS III Corp. | Debt to Adjusted Consolidated Cash Flow Ratio | ≤ 3.50x | 3.8x |
(1) | As defined in the respective debt agreement. |
(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. |
27
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF MAINTENANCE AND FINANCIAL COVENANTS (CONTINUED) | |||||
Debt | Borrower / Issuer | Covenant(1) | Covenant Level Requirement | As of March 31, 2016 | |
Restrictive Negative Financial Covenants | |||||
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 | (2) | 3.5x |
2015 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.75x | (2) | 3.5x |
2009 Securitized Notes | Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.30x | (2) | 5.6x |
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 | (3) | 3.5x |
2015 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.00x | (3) | 3.5x |
2009 Securitized Notes | Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.34x | (3) | 5.6x |
(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) | 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. |
(3) | Rating Agency Confirmation (as defined in the respective debt agreement) is also required. |
28
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
INTEREST RATE SENSITIVITY(1) | |||||||||
Remaining nine months, | Years Ended December 31, | ||||||||
(as of March 31, 2016; dollars in millions) | 2016 | 2017 | 2018 | ||||||
Fixed Rate Debt: | |||||||||
Face Value of Principal Outstanding(2) | $ | 9,522 | $ | 9,503 | $ | 9,483 | |||
Current Interest Payment Obligations(3) | 331 | 440 | 439 | ||||||
Effect of 0.125% Change in Interest Rates(4) | — | <1 | 1 | ||||||
Floating Rate Debt: | |||||||||
Face Value of Principal Outstanding(2) | $ | 2,173 | $ | 2,123 | $ | 2,035 | |||
Current Interest Payment Obligations(5) | 32 | 46 | 50 | ||||||
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 March 31, 2016. 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 March 31, 2016 plus 12.5 bps. |
29
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
DEFINITIONS |
Non-GAAP Financial Measures and Other Calculations
This Supplement includes presentations of Adjusted EBITDA, Segment Gross Margin, Segment Operating Profit, Funds from Operations, Adjusted Funds from Operations, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, which are non-GAAP financial measures. These non-GAAP financial measures are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")). Each of the amounts included in the calculation of Adjusted EBITDA, Segment Gross Margin, Segment Operating Profit, FFO, AFFO, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, are computed in accordance with GAAP, with the exception of: (1) sustaining capital expenditures, which is not defined under GAAP and (2) our adjustment to the income tax provision in calculations of AFFO for periods prior to our REIT conversion.
Our measures of Adjusted EBITDA, Segment Gross Margin, Segment Operating Profit, FFO, AFFO, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, may not be comparable to similarly titled measures of other companies, including other companies in the tower sector or those reported by other REITs. Our FFO and AFFO may not be comparable to those reported in accordance with National Association of Real Estate Investment Trusts, including with respect to the impact of income taxes for periods prior to our REIT conversion.
Adjusted EBITDA, Segment Gross Margin, Segment Operating Profit, FFO, AFFO, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, are presented as additional information because management believes these measures are useful indicators of the financial performance of our core businesses. In addition, Adjusted EBITDA is a measure of current financial performance used in our debt covenant calculations.
Adjusted EBITDA. Crown Castle defines 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.
Segment Gross Margin. Crown Castle defines segment gross margin as segment revenue less segment operating expenses, excluding stock-based compensation expense and prepaid lease purchase price adjustments recorded in cost of operations.
Segment Operating Profit. Crown Castle defines segment operating profit as Segment Gross Margin less general and administrative expenses attributable to the respective segment.
Funds from Operations ("FFO"). Crown Castle defines Funds from Operations as net income plus real estate related depreciation, amortization and accretion and asset write-down charges, less non controlling interest and cash paid for preferred stock dividends, and is a measure of funds from operations attributable to CCIC common stockholders.
FFO per share. Crown Castle defines FFO per share as FFO divided by the diluted weighted average common shares outstanding.
Adjusted Funds from Operations ("AFFO"). Crown Castle defines Adjusted Funds from Operations as FFO before straight-line revenue, straight-line expense, stock-based compensation expense, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, 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 capital improvement capital expenditures and corporate capital expenditures.
30
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
DEFINITIONS (continued) |
AFFO per share. Crown Castle defines AFFO per share as AFFO divided by diluted weighted average common shares outstanding.
AFFO payout ratio. Dividends per common share divided by AFFO per share.
Site Rental Revenues, as Adjusted. Crown Castle defines Site Rental Revenues, as Adjusted, as site rental revenues, as reported, less straight-line revenues.
Organic Site Rental Revenues. Crown Castle defines Organic Site Rental Revenues as site rental revenues, as reported, less straight-line revenues, the impact of tower acquisitions and construction, foreign currency adjustments and certain non recurring items.
Site Rental Gross Margins, as Adjusted. Crown Castle defines Site Rental Gross Margins, as Adjusted, as site rental gross margin as reported less straight-line revenues and straight-line expenses.
Organic Site Rental Gross Margins. Crown Castle defines Organic Site Rental Gross Margins as site rental gross margins, as reported less straight-line revenues, straight-line expenses, the impact of tower acquisitions and construction, foreign currency adjustments and certain non recurring items.
Ground Lease Expense, as Adjusted. Crown Castle defines Ground Lease Expense, as Adjusted as ground lease expense, as reported, less straight line ground lease expense.
Sustaining capital expenditures. Crown Castle defines sustaining capital expenditures as either (1) corporate related capital improvements, such as buildings, information technology equipment and office equipment or (2) capital improvements to tower sites that enable our customers' ongoing quiet enjoyment of the tower.
The tables set forth below reconcile non-GAAP financial measures to comparable GAAP financial measures and provide certain other calculations. The components in these tables may not sum to the total due to rounding.
Amounts reflected herein are adjusted to reflect the sale of our CCAL segment as discontinued operations following the sale on May 28, 2015. See page 2.
Amounts reflected herein are exclusive of the TDC acquisition, which closed on April 8, 2016 unless otherwise noted.
31
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures and Other Calculations:
Adjusted EBITDA for the three and three months ended March 31, 2016 and 2015 is computed as follows:
Three Months Ended March 31, | |||||||
(dollars in thousands) | 2016 | 2015 | |||||
Net income (loss) | $ | 47,840 | $ | 125,112 | |||
Adjustments to increase (decrease) net income (loss): | |||||||
Income (loss) from discontinued operations | — | (13,378 | ) | ||||
Asset write-down charges | 7,959 | 8,555 | |||||
Acquisition and integration costs | 5,638 | 2,016 | |||||
Depreciation, amortization and accretion | 277,875 | 251,806 | |||||
Amortization of prepaid lease purchase price adjustments | 5,204 | 5,174 | |||||
Interest expense and amortization of deferred financing costs(1) | 126,378 | 134,439 | |||||
Gains (losses) on retirement of long-term obligations | 30,550 | — | |||||
Interest income | (174 | ) | (56 | ) | |||
Other income (expense) | 3,273 | 225 | |||||
Benefit (provision) for income taxes | 3,872 | (1,435 | ) | ||||
Stock-based compensation expense | 30,705 | 16,842 | |||||
Adjusted EBITDA(2) | $ | 539,120 | $ | 529,300 |
(1) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein. |
(2) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
32
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Adjusted EBITDA for the quarter ending June 30, 2016 and the year ending December 31, 2016 are forecasted as follows(4):
Q2 2016 | Full Year 2016 | ||||||
(dollars in millions) | Outlook | Outlook | |||||
Net income (loss) | $82 | to | $115 | $325 | to | $424 | |
Adjustments to increase (decrease) net income (loss): | |||||||
Asset write-down charges | $9 | to | $11 | $33 | to | $43 | |
Acquisition and integration costs | $3 | to | $6 | $15 | to | $20 | |
Depreciation, amortization and accretion | $270 | to | $275 | $1,084 | to | $1,104 | |
Amortization of prepaid lease purchase price adjustments | $4 | to | $6 | $20 | to | $22 | |
Interest expense and amortization of deferred financing costs(1) | $128 | to | $133 | $513 | to | $533 | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $31 | to | $31 | |
Interest income | $(2) | to | $0 | $(3) | to | $(1) | |
Other income (expense) | $(5) | to | $(2) | $(8) | to | $(6) | |
Benefit (provision) for income taxes | $5 | to | $9 | $16 | to | $24 | |
Stock-based compensation expense | $21 | to | $23 | $93 | to | $98 | |
Adjusted EBITDA(2) | $543 | to | $548 | $2,193 | to | $2,218 |
The components of interest expense and amortization of deferred financing costs for the quarters ending March 31, 2016 and 2015 are as follows:
Three Months Ended March 31, | |||||||
(dollars in thousands) | 2016 | 2015 | |||||
Interest expense on debt obligations | $ | 122,167 | $ | 122,703 | |||
Amortization of deferred financing costs and adjustments on long-term debt | 5,106 | 4,738 | |||||
Amortization of interest rate swaps(3) | — | 7,491 | |||||
Other, net | (895 | ) | (493 | ) | |||
Interest expense and amortization of deferred financing costs | $ | 126,378 | $ | 129,877 |
The components of interest expense and amortization of deferred financing costs for the quarter ending June 30, 2016 and the year ending December 31, 2016 are forecasted as follows:
Q2 2016 | Full Year 2016 | ||||||
(dollars in millions) | Outlook | Outlook | |||||
Interest expense on debt obligations | $125 | to | $127 | $501 | to | $511 | |
Amortization of deferred financing costs | $4 | to | $6 | $17 | to | $19 | |
Amortization of adjustments on long-term debt | $0 | to | $1 | $1 | to | $3 | |
Other, net | $(1) | to | $(1) | $(4) | to | $(2) | |
Interest expense and amortization of deferred financing costs | $128 | to | $133 | $513 | to | $533 |
(1) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein. |
(2) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
(3) | Relates to the amortization of interest rate swaps; the swaps were cash settled in prior periods. |
(4) | Inclusive of the impact of the TDC acquisition, which closed on April 8, 2016. |
33
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
FFO and AFFO for the three months ended March 31, 2016 and 2015 are computed as follows:
Three Months Ended March 31, | |||||||
(dollars in thousands, except share and per share amounts) | 2016 | 2015 | |||||
Net income(1) | $ | 47,840 | $ | 111,734 | |||
Real estate related depreciation, amortization and accretion | 271,493 | 247,610 | |||||
Asset write-down charges | 7,959 | 8,555 | |||||
Dividends on preferred stock | (10,997 | ) | (10,997 | ) | |||
FFO(2)(3)(5) | $ | 316,295 | $ | 356,902 | |||
FFO (from above) | $ | 316,295 | $ | 356,902 | |||
Adjustments to increase (decrease) FFO: | |||||||
Straight-line revenue | (17,335 | ) | (30,539 | ) | |||
Straight-line expense | 23,765 | 24,582 | |||||
Stock-based compensation expense | 30,705 | 16,841 | |||||
Non-cash portion of tax provision | 1,782 | (3,592 | ) | ||||
Non-real estate related depreciation, amortization and accretion | 6,382 | 4,196 | |||||
Amortization of non-cash interest expense | 4,211 | 11,736 | |||||
Other (income) expense | 3,273 | 225 | |||||
Gains (losses) on retirement of long-term obligations | 30,550 | — | |||||
Acquisition and integration costs | 5,638 | 2,016 | |||||
Capital improvement capital expenditures | (6,402 | ) | (7,491 | ) | |||
Corporate capital expenditures | (3,712 | ) | (9,198 | ) | |||
AFFO(2)(3)(5) | $ | 395,152 | $ | 365,676 | |||
Weighted average common shares outstanding — diluted(4) | 334,929 | 333,485 | |||||
AFFO per share(2)(5) | $ | 1.18 | $ | 1.10 |
(1) | Exclusive of income (loss) from discontinued operations and related noncontrolling interest of $13 million for the three months ended March 31, 2015. |
(2) | See “Definitions of Non-GAAP Financial Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO. |
(3) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(4) | The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count. |
(5) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
34
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
FFO and AFFO for the years ended December 31, 2015, 2014, 2012, 2011, 2010, 2009, 2008 and 2007 are computed as follows:
Years Ended December 31, | |||||||||||||||||||||||||||||||
(in thousands of dollars, except share and per share amounts) | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||
Net income(1) | $ | 525,286 | $ | 346,314 | $ | 60,001 | $ | 124,997 | $ | 145,070 | $ | (330,183 | ) | $ | (128,893 | ) | $ | (60,675 | ) | ||||||||||||
Real estate related depreciation, amortization and accretion | 1,018,303 | 971,562 | 730,076 | 572,007 | 503,388 | 496,584 | 494,191 | 491,459 | |||||||||||||||||||||||
Asset write-down charges | 33,468 | 14,246 | 13,595 | 15,226 | 21,986 | 13,243 | 18,611 | 16,696 | |||||||||||||||||||||||
Adjustment for noncontrolling interest(2) | — | — | — | 268 | 349 | — | — | — | |||||||||||||||||||||||
Dividends on preferred stock | (43,988 | ) | (43,988 | ) | — | (2,481 | ) | (19,487 | ) | (19,878 | ) | (19,878 | ) | (19,878 | ) | ||||||||||||||||
FFO(4)(5)(7) | $ | 1,533,069 | $ | 1,288,133 | $ | 803,672 | $ | 710,014 | $ | 651,305 | $ | 159,766 | $ | 364,032 | $ | 427,602 | |||||||||||||||
FFO (from above) | $ | 1,533,069 | $ | 1,288,133 | $ | 803,672 | $ | 710,014 | $ | 651,305 | $ | 159,766 | $ | 364,032 | $ | 427,602 | |||||||||||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||||||||||||||||||
Straight-line revenue | (111,263 | ) | (183,393 | ) | (212,856 | ) | (248,227 | ) | (195,456 | ) | (149,314 | ) | (90,269 | ) | (28,133 | ) | |||||||||||||||
Straight-line expense | 98,738 | 101,890 | 78,619 | 52,271 | 38,141 | 37,617 | 37,469 | 39,172 | |||||||||||||||||||||||
Stock-based compensation expense | 67,148 | 56,431 | 39,031 | 41,785 | 32,611 | 36,541 | 29,225 | 25,897 | |||||||||||||||||||||||
Non-cash portion of tax provision(3) | (63,935 | ) | (19,490 | ) | 185,723 | (64,939 | ) | 4,970 | (29,033 | ) | (78,304 | ) | (106,857 | ) | |||||||||||||||||
Non-real estate related depreciation, amortization and accretion | 17,875 | 14,219 | 11,266 | 19,421 | 19,293 | 16,848 | 7,825 | 7,375 | |||||||||||||||||||||||
Amortization of non-cash interest expense | 37,126 | 80,854 | 99,244 | 109,337 | 102,944 | 85,454 | 61,357 | 24,831 | |||||||||||||||||||||||
Other (income) expense | (57,028 | ) | (11,992 | ) | 3,902 | 5,363 | 5,603 | 824 | (1,139 | ) | 61,837 | ||||||||||||||||||||
Gains (losses) on retirement of long-term obligations | 4,157 | 44,629 | 37,127 | 131,974 | — | 138,367 | 91,079 | (42 | ) | ||||||||||||||||||||||
Net gain (loss) on interest rate swaps | — | — | — | — | — | 286,435 | 92,966 | 37,888 | |||||||||||||||||||||||
Acquisition and integration costs | 15,678 | 34,145 | 25,574 | 18,216 | 3,310 | 2,102 | — | 2,504 | |||||||||||||||||||||||
Adjustment for noncontrolling interest(2) | — | — | — | (268 | ) | (349 | ) | — | — | — | |||||||||||||||||||||
Capital improvement capital expenditures | (46,789 | ) | (31,056 | ) | (17,520 | ) | (19,997 | ) | (12,442 | ) | (13,727 | ) | (17,355 | ) | (13,780 | ) | |||||||||||||||
Corporate capital expenditures | (58,142 | ) | (50,317 | ) | (27,099 | ) | (14,049 | ) | (8,421 | ) | (8,392 | ) | (9,335 | ) | (12,039 | ) | |||||||||||||||
AFFO(4)(5)(7) | $ | 1,436,635 | $ | 1,324,054 | $ | 1,026,684 | $ | 740,901 | $ | 641,510 | $ | 563,487 | $ | 487,550 | $ | 466,255 | |||||||||||||||
Weighted average common shares outstanding — diluted(6) | 334,062 | 333,265 | 299,293 | 291,270 | 285,947 | 287,764 | 286,622 | 282,007 | |||||||||||||||||||||||
AFFO per share(4)(7) | $ | 4.30 | $ | 3.97 | $ | 3.43 | $ | 2.54 | $ | 2.24 | $ | 1.96 | $ | 1.70 | $ | 1.66 |
(1) Exclusive of income from discontinued operations and related noncontrolling interest.
(2) Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs.
(3) | 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. |
(4) | See "Definitions of Non-GAAP Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO. |
(5) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(6) | The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count. |
(7) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
35
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
FFO and AFFO for the three months ended June 30, 2015 and 2014 are computed as follows:
Three Months Ended June 30, | |||||||
(in thousands of dollars, except share and per share amounts) | 2015 | 2014 | |||||
Net income(1) | $ | 166,526 | $ | 25,304 | |||
Real estate related depreciation, amortization and accretion | 248,918 | 243,094 | |||||
Asset write-down charges | 3,620 | 3,105 | |||||
Dividends on preferred stock | (10,997 | ) | (10,997 | ) | |||
FFO(2)(3)(5) | $ | 408,067 | $ | 260,506 | |||
FFO (from above) | $ | 408,067 | $ | 260,506 | |||
Adjustments to increase (decrease) FFO: | |||||||
Straight-line revenue | (31,326 | ) | (49,774 | ) | |||
Straight-line expense | 24,981 | 26,717 | |||||
Stock-based compensation expense | 15,975 | 17,883 | |||||
Non-cash portion of tax provision | (10,783 | ) | (5,060 | ) | |||
Non-real estate related depreciation, amortization and accretion | 4,235 | 3,489 | |||||
Amortization of non-cash interest expense | 12,068 | 20,604 | |||||
Other (income) expense | (194 | ) | 5,920 | ||||
Gains (losses) on retirement of long-term obligations | 4,181 | 44,629 | |||||
Gains (losses) on foreign currency swaps | (59,779 | ) | — | ||||
Acquisition and integration costs | 2,377 | 19,125 | |||||
Capital improvement capital expenditures | (10,662 | ) | (4,148 | ) | |||
Corporate capital expenditures | (16,757 | ) | (7,619 | ) | |||
AFFO(2)(3)(5) | $ | 342,385 | $ | 332,274 | |||
Weighted average common shares outstanding — diluted(4) | 333,733 | 333,081 | |||||
AFFO per share(2)(5) | $ | 1.03 | $ | 1.00 |
(1) Exclusive of income from discontinued operations and related noncontrolling interest.
(2) | See "Definitions of Non-GAAP Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO. |
(3) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(4) | The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count. |
(5) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
36
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
FFO and AFFO for the quarter ending June 30, 2016 and the year ending December 31, 2016 are forecasted as follows(6):
Q2 2016 | Full Year 2016 | ||||||
(in millions of dollars, except share and per share amounts) | Outlook | Outlook | |||||
Net income | $82 | to | $115 | $325 | to | $424 | |
Real estate related depreciation, amortization and accretion | $265 | to | $268 | $1,060 | to | $1,075 | |
Asset write-down charges | $9 | to | $11 | $33 | to | $43 | |
Dividends on preferred stock | $(11) | to | $(11) | $(44) | to | $(44) | |
FFO(2)(3)(5) | $363 | to | $368 | $1,428 | to | $1,453 | |
FFO (from above) | $363 | to | $368 | $1,428 | to | $1,453 | |
Adjustments to increase (decrease) FFO: | |||||||
Straight-line revenue | $(20) | to | $(15) | $(54) | to | $(39) | |
Straight-line expense | $21 | to | $26 | $84 | to | $99 | |
Stock-based compensation expense | $21 | to | $23 | $93 | to | $98 | |
Non-cash portion of tax provision | $0 | to | $5 | $4 | to | $19 | |
Non-real estate related depreciation, amortization and accretion | $5 | to | $7 | $24 | to | $29 | |
Amortization of non-cash interest expense | $3 | to | $6 | $14 | to | $20 | |
Other (income) expense | $(5) | to | $(2) | $(8) | to | $(6) | |
Gains (losses) on retirement of long-term obligations | $0 | to | $0 | $31 | to | $31 | |
Acquisition and integration costs | $3 | to | $6 | $15 | to | $20 | |
Capital improvement capital expenditures | $(7) | to | $(5) | $(46) | to | $(41) | |
Corporate capital expenditures | $(11) | to | $(9) | $(34) | to | $(29) | |
AFFO(2)(3)(5) | $389 | to | $394 | $1,585 | to | $1,610 | |
Weighted-average common shares outstanding—diluted(1)(4) | 338.3 | 340.3 | |||||
AFFO per share(2)(5) | $1.15 | to | $1.16 | $4.66 | to | $4.73 |
(1) | Based on diluted shares outstanding as of March 31, 2016 of approximately 338 million shares for second quarter 2016. Full year 2016 assumes diluted shares outstanding of approximately 340 million shares, inclusive of the assumed conversion of the mandatory convertible preferred stock in November 2016. |
(2) | See definitions herein. See also “Definitions of Non-GAAP Financial Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO. |
(3) | FFO and AFFO are reduced by cash paid for preferred stock dividends. |
(4) | The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count other than as discussed in footnote (1). |
(5) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
(6) | Inclusive of the impact of the TDC acquisition, which closed on April 8, 2016. |
37
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
The historical operating results for our operating segments are as follows:
Three Months Ended | |||||||||||||||||||||||
(Dollars in thousands; unaudited) | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | |||||||||||||||
Towers | |||||||||||||||||||||||
Segment site rental revenues | 693,898 | 686,934 | 678,306 | 674,907 | 672,414 | 667,337 | 665,971 | 672,211 | |||||||||||||||
Segment network service and other revenue | 145,972 | 138,566 | 150,732 | 156,385 | 179,978 | 170,630 | 158,662 | 122,516 | |||||||||||||||
Segment revenues | 839,870 | 825,500 | 829,038 | 831,292 | 852,392 | 837,967 | 824,633 | 794,727 | |||||||||||||||
Segment site rental cost of operations(1) | 206,449 | 209,056 | 207,037 | 204,633 | 204,143 | 206,885 | 204,650 | 198,654 | |||||||||||||||
Segment network service and other cost of operations(1) | 79,861 | 75,302 | 77,671 | 76,191 | 102,823 | 96,121 | 93,590 | 67,367 | |||||||||||||||
Segment cost of operations(1) | 286,310 | 284,358 | 284,708 | 280,824 | 306,966 | 303,006 | 298,240 | 266,021 | |||||||||||||||
Segment gross margin | 553,560 | 541,142 | 544,330 | 550,468 | 545,426 | 534,961 | 526,393 | 528,706 | |||||||||||||||
Segment general and administrative expenses(1) | 23,654 | 22,994 | 22,529 | 22,722 | 21,794 | 21,416 | 18,541 | 16,772 | |||||||||||||||
Segment operating profit | 529,906 | 518,148 | 521,801 | 527,746 | 523,632 | 513,545 | 507,852 | 511,934 | |||||||||||||||
Small Cells | |||||||||||||||||||||||
Segment site rental revenues | 91,438 | 77,672 | 58,785 | 56,473 | 51,002 | 50,285 | 44,813 | 42,581 | |||||||||||||||
Segment network service and other revenue | 14,528 | 14,935 | 11,614 | 12,706 | 22,475 | 4,630 | 8,797 | 4,454 | |||||||||||||||
Segment revenues | 105,966 | 92,607 | 70,399 | 69,179 | 73,477 | 54,915 | 53,610 | 47,035 | |||||||||||||||
Segment site rental cost of operations(1) | 33,377 | 30,449 | 22,856 | 20,513 | 18,751 | 17,157 | 14,185 | 15,189 | |||||||||||||||
Segment network service and other cost of operations(1) | 13,128 | 10,213 | 10,367 | 9,454 | 20,997 | 4,536 | 6,379 | 3,751 | |||||||||||||||
Segment cost of operations(1) | 46,505 | 40,662 | 33,223 | 29,967 | 39,748 | 21,693 | 20,564 | 18,940 | |||||||||||||||
Segment gross margin | 59,461 | 51,945 | 37,176 | 39,212 | 33,729 | 33,222 | 33,046 | 28,095 | |||||||||||||||
Segment general and administrative expenses(1) | 12,715 | 10,194 | 7,910 | 7,560 | 8,044 | 6,236 | 5,644 | 5,945 | |||||||||||||||
Segment operating profit | 46,746 | 41,751 | 29,266 | 31,652 | 25,685 | 26,986 | 27,402 | 22,150 |
38
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Three Months Ended | |||||||||||||||||||||||
(Dollars in thousands; unaudited) | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | |||||||||||||||
Other | |||||||||||||||||||||||
Segment site rental revenues | — | — | — | — | — | — | — | — | |||||||||||||||
Segment network service and other revenue | — | — | — | — | — | — | — | — | |||||||||||||||
Segment revenues | — | — | — | — | — | — | — | — | |||||||||||||||
Segment site rental cost of operations(1) | — | — | — | — | — | — | — | — | |||||||||||||||
Segment network service and other cost of operations(1) | — | — | — | — | — | — | — | — | |||||||||||||||
Segment cost of operations(1) | — | — | — | — | — | — | — | — | |||||||||||||||
Segment gross margin | — | — | — | — | — | — | — | — | |||||||||||||||
Segment general and administrative expenses(1) | 36,854 | 30,744 | 30,140 | 30,098 | 29,728 | 26,928 | 25,714 | 25,554 | |||||||||||||||
Segment operating profit | (36,854 | ) | (30,744 | ) | (30,140 | ) | (30,098 | ) | (29,728 | ) | (26,928 | ) | (25,714 | ) | (25,554 | ) | |||||||
Stock-based compensation expense | 17,866 | 16,466 | 15,975 | 16,841 | 13,234 | 13,358 | 17,884 | 11,956 | |||||||||||||||
Depreciation, amortization and accretion | 269,558 | 261,661 | 253,153 | 251,806 | 246,816 | 247,206 | 246,584 | 245,175 | |||||||||||||||
Interest expense and amortization of deferred financing costs | 128,346 | 129,877 | 134,466 | 134,439 | 141,070 | 141,288 | 144,534 | 146,400 | |||||||||||||||
Other expenses to reconcile to income (loss) before income taxes | 23,377 | 20,654 | (45,049 | ) | 15,915 | (7,034 | ) | 14,573 | 78,335 | 14,813 | |||||||||||||
Income (loss) before income taxes | 100,651 | 100,497 | 162,382 | 110,299 | 125,503 | 97,178 | 22,203 | 90,186 |
(1) | Segment cost of operations exclude (1) stock-based compensation expense of $4.0 million, $3.7 million, $3.4 million, $3.1 million, $2.7 million, $2.7 million, $4.5 million and $1.6 million for the three months ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively and (2) prepaid lease purchase price adjustments of $5.1 million, $5.1 million, $5.1 million, $5.2 million, $5.4 million, $5.0 million, $5.7 million and $3.9 million for the three months ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $13.8 million, $12.8 million, $12.5 million, $13.7 million, $10.6 million, $10.6 million, $13.4 million and $10.4 million for the three months ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively. |
39
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Twelve Months Ended December 31, | |||||
(Dollars in thousands; unaudited) | 2015 | 2014 | |||
Towers | |||||
Segment site rental revenues | 2,734,045 | 2,677,933 | |||
Segment network service and other revenue | 591,655 | 631,786 | |||
Segment revenues | 3,325,700 | 3,309,719 | |||
Segment site rental cost of operations(1) | 827,175 | 814,332 | |||
Segment network service and other cost of operations(1) | 309,025 | 359,901 | |||
Segment cost of operations(1) | 1,136,200 | 1,174,233 | |||
Segment gross margin | 2,189,500 | 2,135,486 | |||
Segment general and administrative expenses(1) | 91,899 | 78,523 | |||
Segment operating profit | 2,097,601 | 2,056,963 | |||
Small Cells | |||||
Segment site rental revenues | 284,368 | 188,681 | |||
Segment network service and other revenue | 53,783 | 40,356 | |||
Segment revenues | 338,151 | 229,037 | |||
Segment site rental cost of operations(1) | 107,195 | 65,282 | |||
Segment network service and other cost of operations(1) | 43,162 | 35,663 | |||
Segment cost of operations(1) | 150,357 | 100,945 | |||
Segment gross margin | 187,794 | 128,092 | |||
Segment general and administrative expenses(1) | 38,379 | 25,869 | |||
Segment operating profit | 149,415 | 102,223 | |||
Other | |||||
Segment site rental revenues | — | — | |||
Segment network service and other revenue | — | — | |||
Segment revenues | — | — | |||
Segment site rental cost of operations(1) | — | — | |||
Segment network service and other cost of operations(1) | — | — | |||
Segment cost of operations(1) | — | — | |||
Segment gross margin | — | — | |||
Segment general and administrative expenses(1) | 127,836 | 107,924 | |||
Segment operating profit | (127,836 | ) | (107,924 | ) | |
Stock-based compensation expense | 67,148 | 56,432 | |||
Depreciation, amortization and accretion | 1,036,178 | 985,781 | |||
Interest expense and amortization of deferred financing costs | 527,128 | 573,292 | |||
Other expenses to reconcile to income (loss) before income taxes | 14,897 | 100,687 | |||
Income (loss) before income taxes | 473,829 | 335,070 |
(1) | Segment cost of operations exclude (1) stock-based compensation expense of $14.3 million and $11.5 million for the years ended December 31, 2014 and 2015, respectively and (2) prepaid lease purchase price adjustments of $20.5 million and $20.0 million for the years ended December 31, 2014 and 2015, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $52.8 million and $45.0 million for the years ended December 31, 2014 and 2015, respectively. |
40
Crown Castle International Corp.
First Quarter 2016
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Net debt to Last Quarter Annualized Adjusted EBITDA calculation:
Three Months Ended March 31, | |||||||
(dollars in millions) | 2016 | 2015 | |||||
Total face value of debt | $ | 11,962.6 | $ | 12,071.3 | |||
Ending cash and cash equivalents | 175.7 | 240.2 | |||||
Total net debt | $ | 11,786.9 | $ | 11,831.1 | |||
Adjusted EBITDA for the three months ended March 31, | $ | 539.1 | $ | 529.3 | |||
Last quarter annualized Adjusted EBITDA | 2,156.5 | 2,117.2 | |||||
Net debt to Last Quarter Annualized Adjusted EBITDA | 5.5 | x | 5.6 | x |
Cash Interest Coverage Ratio Calculation:
Three Months Ended March 31, | |||||||
(dollars in thousands) | 2016 | 2015 | |||||
Adjusted EBITDA | $ | 539,120 | $ | 529,300 | |||
Interest expense on debt obligations | 122,167 | 122,703 | |||||
Interest Coverage Ratio | 4.4 | x | 4.3 | x |
AFFO Payout Ratio Calculation:
Three Months Ended March 31, | |||||||
(per share) | 2016 | 2015 | |||||
Dividend per share | $ | 0.89 | $ | 0.82 | |||
AFFO per share | $ | 1.18 | $ | 1.10 | |||
AFFO Payout Ratio(1) | 75 | % | 75 | % |
(1) | AFFO is calculated exclusive of income from discontinued operations and related noncontrolling interest. See page 2. |
41