Exhibit 99.2
Supplemental Information Package
and Non-GAAP Reconciliations
Fourth Quarter • December 31, 2017
The pathway to possible.
CrownCastle.com
Crown Castle International Corp
Fourth Quarter 2017
| TABLE OF CONTENTS | |
| Page | |
| Company Overview | |
| Company Profile | |
| Strategy | |
| AFFO per Share | |
| Tower Portfolio Footprint | |
| Corporate Information | |
| Research Coverage | |
| Historical Common Stock Data | |
| Portfolio and Financial Highlights | |
| Outlook | |
| Financials & Metrics | |
| Condensed Consolidated Balance Sheet | |
| Condensed Consolidated Statement of Operations | |
| Segment Operating Results | |
| FFO and AFFO Reconciliations | |
| Condensed Consolidated Statement of Cash Flows | |
| Components of Changes in Site Rental Revenues | |
| Summary of Straight-Lined and Prepaid Rent Activity | |
| Summary of Capital Expenditures | |
| Lease Renewal and Lease Distribution | |
| Customer Overview | |
| Asset Portfolio Overview | |
| Summary of Tower Portfolio by Vintage | |
| Portfolio Overview | |
| Ground Interest Overview | |
| Ground Interest Activity | |
| Capitalization Overview | |
| Capitalization Overview | |
| Debt Maturity Overview | |
| Liquidity Overview | |
| Maintenance and Financial Covenants | |
| Interest Rate Sensitivity | |
| Appendix | |
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 first quarter 2018 and full year 2018.
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 financial measures, segment measures and other calculations 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.
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Crown Castle International Corp.
Fourth Quarter 2017
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 communications infrastructure, including: (1) towers and other structures, such as rooftops (collectively, "towers"), and (2) fiber primarily supporting small cell networks ("small cells") and fiber solutions (collectively, "fiber," and together with towers, "communications infrastructure"). Our towers have a significant presence in each of the top 100 basic trading areas, and the majority of our fiber is located in major metropolitan areas. Crown Castle owns, operates and leases shared communications infrastructure that has been acquired or constructed over time and is geographically dispersed throughout the U.S., and which consists of (1) approximately 40,000 towers and (2) approximately 60,000 route miles of fiber primarily supporting small cells and fiber solutions.
Our core business is providing access, including space or capacity, to our shared communications infrastructure via long-term contracts in various forms, including lease, license, sublease and service agreements (collectively, "contracts"). We seek to increase our site rental revenues by adding more customers on our communications infrastructure, which we expect to result in significant incremental cash flows due to our low incremental operating costs.
We operate as a Real Estate Investment Trust ("REIT") for U.S. federal income tax purposes.
STRATEGY | ||||
Our strategy is to create long-term stockholder value via a combination of (1) growing cash flows generated from our portfolio of communications 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 communications infrastructure. We seek to maximize our site rental cash flows by working with our customers to provide them quick access to our communications infrastructure and entering into associated long-term contracts. Customer additions or modifications of existing customer equipment (collectively, "customer additions") enable our customers to expand coverage and capacity in order to meet increasing demand for data connectivity, while generating high incremental returns for our business. We believe our product offerings of towers, small cells and fiber solutions provide a comprehensive solution to our customers' growing connectivity needs through our shared communications infrastructure model, which is an efficient and cost effective way to serve our customers. We also believe that there will be considerable future demand for our communications infrastructure based on the location of our communications infrastructure and the rapid growth in demand for data. |
| • | 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): |
| ◦ | purchases of shares of our common stock from time to time; |
| ◦ | acquisitions or construction of towers, fiber and small cells; |
| ◦ | acquisitions of land interests under towers; |
| ◦ | improvements and structural enhancements to our existing communications infrastructure; or |
| ◦ | purchases, repayment or redemption of our debt. |
Our strategy to create long-term stockholder value is based on our belief that additional demand for our communications infrastructure will be created by the expected continued growth in the demand for data. We believe that such demand for our communications infrastructure will continue, will result in growth of our cash flows due to customer additions on our existing communications infrastructure, and will create other growth opportunities for us, such as demand for new communications infrastructure.
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
AFFO PER SHARE(1)(2) | ||||
| (1) | See reconciliations and definitions provided herein. Our AFFO for historical periods may not be comparable to those periods presented prospectively from and after January 1, 2018, including our first quarter 2018 and full year 2018 Outlook included herein. See also "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for further information. |
| (2) | Attributable to CCIC common stockholders. |
| (3) | Full year 2017 AFFO per share was impacted by (a) two months of contribution from the Lightower acquisition, which closed on November 1, 2017 and (b) the associated pre-funding of the Lightower acquisition through (1) our July 2017 common stock offering, (2) our July 2017 preferred stock offering, and (3) our August 2017 senior unsecured notes offering. |
| (4) | AFFO per share represents the midpoint of the full year 2018 Outlook as issued on January 24, 2018. |
| TOWER PORTFOLIO FOOTPRINT | ||
 | ||
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| GENERAL COMPANY INFORMATION | |
| Principal executive offices | 1220 Augusta Drive, Suite 600, Houston, TX 77057 |
| Common shares trading symbol | CCI |
| Stock exchange listing | New York Stock Exchange |
| Fiscal year ending date | December 31 |
| Fitch - Long Term Issuer Default Rating | BBB- |
| Moody’s - Long Term Corporate Family Rating | Baa3 |
| Standard & Poor’s - Long Term Local Issuer Credit Rating | BBB- |
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 |
| Jay A. Brown | 45 | 18 | President and Chief Executive Officer |
| Daniel K. Schlanger | 44 | 1 | Senior Vice President and Chief Financial Officer |
| James D. Young | 56 | 12 | Senior Vice President and Chief Operating Officer - Fiber |
| Robert C. Ackerman | 65 | 19 | Senior Vice President and Chief Operating Officer - Towers and Small Cells |
| Kenneth J. Simon | 57 | 2 | Senior Vice President and General Counsel |
| Michael J. Kavanagh | 49 | 7 | Senior Vice President and Chief Commercial Officer |
| Philip M. Kelley | 45 | 20 | Senior Vice President - Corporate Development and Strategy |
| BOARD OF DIRECTORS | ||||
| Name | Position | Committees | Age | Years as Director |
| J. Landis Martin | Chairman | NCG(1) | 72 | 21 |
| P. Robert Bartolo | Director | Audit, Compensation | 46 | 3 |
| Cindy Christy | Director | Compensation, NCG(1), Strategy | 51 | 10 |
| Ari Q. Fitzgerald | Director | Compensation, NCG(1), Strategy | 55 | 15 |
| Robert E. Garrison II | Director | Audit, Compensation | 75 | 12 |
| Lee W. Hogan | Director | Audit, Compensation, Strategy | 73 | 16 |
| Edward C. Hutcheson | Director | Strategy | 72 | 22 |
| Robert F. McKenzie | Director | Audit, Strategy | 74 | 22 |
| Anthony J. Melone | Director | NCG(1), Strategy | 57 | 2 |
| W. Benjamin Moreland | Director | 54 | 11 | |
| Jay A. Brown | Director | 45 | 1 | |
| (1) | Nominating & Corporate Governance Committee |
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| RESEARCH COVERAGE | ||
| Equity Research | ||
Bank of America David Barden (646) 855-1320 | Barclays Amir Rozwadowski (212) 526-4043 | BTIG Walter Piecyk (646) 450-9258 |
| Citigroup Michael Rollins (212) 816-1116 | Cowen and Company Colby Synesael (646) 562-1355 | Deutsche Bank Matthew Niknam (212) 250-4711 |
| Goldman Sachs Brett Feldman (212) 902-8156 | Guggenheim Robert Gutman (212) 518-9148 | Jefferies Scott Goldman (212) 284-4606 |
| JPMorgan Philip Cusick (212) 622-1444 | Macquarie Amy Yong (212) 231-2624 | MoffettNathanson Nick Del Deo (212) 519-0025 |
| Morgan Stanley Simon Flannery (212) 761-6432 | New Street Research Spencer Kurn (212) 921-2067 | Oppenheimer & Co. Timothy Horan (212) 667-8137 |
Pacific Crest Securities Brandon Nispel (503) 821-3871 | Raymond James Ric Prentiss (727) 567-2567 | RBC Capital Markets Jonathan Atkin (415) 633-8589 |
SunTrust Robinson Humphrey Greg Miller (212) 303-4169 | UBS Batya Levi (212) 713-8824 | Wells Fargo Securities, LLC Jennifer Fritzsche (312) 920-3548 |
| Rating Agency | ||
Fitch John Culver (312) 368-3216 | Moody’s Dilara Sukhov (212) 553-1653 | Standard & Poor’s Ryan Gilmore (212) 438-0602 |
| HISTORICAL COMMON STOCK DATA | |||||||||||||||
| Three Months Ended | |||||||||||||||
| (in millions, except per share data) | 12/31/17 | 9/30/17 | 6/30/17 | 3/31/17 | 12/31/16 | ||||||||||
High price(1) | $ | 113.89 | $ | 106.89 | $ | 102.11 | $ | 92.85 | $ | 91.25 | |||||
Low price(1) | $ | 98.39 | $ | 91.33 | $ | 90.61 | $ | 80.77 | $ | 75.43 | |||||
Period end closing price(2) | $ | 111.01 | $ | 99.04 | $ | 98.34 | $ | 91.85 | $ | 83.49 | |||||
| Dividends paid per common share | $ | 1.05 | $ | 0.95 | $ | 0.95 | $ | 0.95 | $ | 0.95 | |||||
Volume weighted average price for the period(1) | $ | 106.78 | $ | 99.80 | $ | 95.89 | $ | 86.57 | $ | 82.99 | |||||
| Common shares outstanding, at period end | 406 | 406 | 366 | 361 | 361 | ||||||||||
Market value of outstanding common shares, at period end(3) | $ | 45,101 | $ | 40,236 | $ | 36,003 | $ | 33,191 | $ | 30,100 | |||||
| (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. |
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| SUMMARY PORTFOLIO HIGHLIGHTS | |||
| (as of December 31, 2017) | |||
| Towers | |||
Number of towers(1) | 40,080 | ||
| Average number of tenants per tower | 2.2 | ||
Remaining contracted customer receivables ($ in billions)(2) | $ | 18 | |
Weighted average remaining customer contract term (years)(3) | 5 | ||
| Percent of towers in the Top 50 / 100 Basic Trading Areas | 56% / 71% | ||
| Percent of ground leased / owned (by Towers segment site rental gross margin) | 62% / 38% | ||
Weighted average maturity of ground leases (years)(4) | 34 | ||
| Fiber | |||
| Number of route miles of fiber (in thousands) | 60 | ||
Remaining contracted customer receivables ($ in billions)(2) | $ | 5 | |
Weighted average remaining customer contract term (years)(3) | 5 | ||
| SUMMARY FINANCIAL HIGHLIGHTS | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| (dollars in thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Operating Data: | ||||||||||||||||
| Net revenues | ||||||||||||||||
| Site rental | $ | 1,050,686 | $ | 817,381 | $ | 3,669,191 | $ | 3,233,307 | ||||||||
| Network services and other | 187,404 | 215,035 | 686,414 | 687,918 | ||||||||||||
| Net revenues | $ | 1,238,090 | $ | 1,032,416 | $ | 4,355,605 | $ | 3,921,225 | ||||||||
| Costs of operations (exclusive of depreciation, amortization and accretion) | ||||||||||||||||
| Site rental | $ | 328,945 | $ | 261,127 | $ | 1,143,914 | $ | 1,023,350 | ||||||||
| Network services and other | 109,650 | 131,105 | 419,787 | 417,171 | ||||||||||||
| Total cost of operations | $ | 438,595 | $ | 392,232 | $ | 1,563,701 | $ | 1,440,521 | ||||||||
| Net income (loss) attributable to CCIC common stockholders | $ | 69,745 | $ | 124,710 | $ | 386,256 | $ | 323,982 | ||||||||
Net income (loss) attributable to CCIC common stockholders per share—diluted(5) | $ | 0.17 | $ | 0.35 | $ | 1.01 | $ | 0.95 | ||||||||
Non-GAAP Data(6): | ||||||||||||||||
| Adjusted EBITDA | $ | 707,012 | $ | 574,617 | $ | 2,481,761 | $ | 2,227,523 | ||||||||
FFO(7) | 429,302 | 386,875 | 1,643,297 | 1,429,521 | ||||||||||||
AFFO(7) | 511,797 | 406,402 | 1,860,405 | 1,609,864 | ||||||||||||
AFFO per share(5)(7) | $ | 1.25 | $ | 1.15 | $ | 4.85 | $ | 4.72 | ||||||||
| (1) | Excludes small cells and third-party land interests. |
| (2) | Excludes renewal terms at customers' option. |
| (3) | Excludes renewal terms at customers' option, weighted by site rental revenues. |
| (4) | Includes renewal terms at the Company's option, weighted by Towers segment site rental gross margin. |
| (5) | Based on diluted weighted-average common shares outstanding of 408.1 million, 352.9 million, 383.2 and 340.9 million for the three months ended December 31, 2017 and 2016 and the twelve months ended December 31, 2017 and 2016, respectively. |
| (6) | See reconciliations of Non-GAAP financial measures provided herein. See also "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of Adjusted EBITDA, FFO and AFFO. |
| (7) | Attributable to CCIC common stockholders. |
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| SUMMARY FINANCIAL HIGHLIGHTS (CONTINUED) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| (dollars in thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Summary Cash Flow Data: | ||||||||||||||||
| Net cash provided by (used for) operating activities | $ | 626,895 | $ | 477,549 | $ | 2,044,186 | $ | 1,782,264 | ||||||||
Net cash provided by (used for) investing activities(1) | (7,523,147 | ) | (270,649 | ) | (10,494,021 | ) | (1,410,232 | ) | ||||||||
| Net cash provided by (used for) financing activities | 490,897 | 204,260 | 8,195,152 | (96,292 | ) | |||||||||||
| (dollars in thousands) | December 31, 2017 | December 31, 2016 | ||||||
| Balance Sheet Data (at period end): | ||||||||
| Cash and cash equivalents | $ | 314,094 | $ | 567,599 | ||||
| Property and equipment, net | 12,932,885 | 9,805,315 | ||||||
| Total assets | 32,229,570 | 22,675,092 | ||||||
Total debt and other long-term obligations(2) | 16,159,620 | 12,171,142 | ||||||
| Total CCIC stockholders' equity | 12,339,082 | 7,557,115 | ||||||
| (dollars in thousands, except per share amounts) | Three Months Ended December 31, 2017 | |||
| Other Data: | ||||
Net debt to last quarter annualized Adjusted EBITDA(3) | 5.6 | x | ||
| Dividend per common share | $ | 1.05 | ||
| OUTLOOK FOR FIRST QUARTER 2018 AND FULL YEAR 2018 | ||||||
| (dollars in millions, except per share amounts) | First Quarter 2018 | Full Year 2018 | ||||
| Site rental revenues | $1,132 | to | $1,142 | $4,582 | to | $4,627 |
Site rental cost of operations(4) | $341 | to | $351 | $1,360 | to | $1,405 |
| Net income (loss) | $116 | to | $141 | $511 | to | $591 |
Net income (loss) per share—diluted(5)(6) | $0.28 | to | $0.35 | $1.25 | to | $1.45 |
Adjusted EBITDA(7) | $745 | to | $755 | $3,049 | to | $3,094 |
Interest expense and amortization of deferred financing costs(8) | $157 | to | $167 | $642 | to | $687 |
FFO(6)(7) | $477 | to | $487 | $1,965 | to | $2,010 |
AFFO(7)(9) | $538 | to | $548 | $2,219 | to | $2,264 |
AFFO per share(5)(7)(9) | $1.32 | to | $1.34 | $5.44 | to | $5.55 |
| (1) | Includes net cash used for acquisitions of approximately $7.1 billion and $12 million for the three months ended December 31, 2017 and 2016, respectively, and $9.3 billion and $557 million for the twelve months ended December 31, 2017 and 2016, respectively. |
| (2) | Balances reflect debt issuance costs as a direct reduction from the respective carrying amounts of debt, with the exception of debt issuance costs associated with the Company's revolving credit facilities. |
| (3) | The Net Debt to Last Quarter Annualized Adjusted EBITDA calculation does not give effect to a full quarter ownership of Lightower, as this acquisition closed on November 1, 2017. For the quarter ended December 31, 2017, Lightower contribution to the Company's Adjusted EBITDA was $83 million. |
| (4) | Exclusive of depreciation, amortization and accretion. |
| (5) | The assumption for first quarter 2018 and full year 2018 diluted weighted-average common shares outstanding is 408.1 million based on diluted common shares outstanding as of December 31, 2017. For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of the 6.875% Mandatory Convertible Preferred Stock in the share count. |
| (6) | Calculated using net income (loss) attributable to CCIC common stockholders. |
| (7) | See reconciliation of this non-GAAP financial measure to net income (loss) and definition included herein. Our AFFO for historical periods may not be comparable to those periods presented prospectively from and after January 1, 2018, including our first quarter 2018 and full year 2018 Outlook included herein. See also "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for further information. |
| (8) | See the reconciliation of "components of interest expense and amortization of deferred financing costs" in the Appendix. |
| (9) | Attributable to CCIC common stockholders. |
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| OUTLOOK FOR FULL YEAR 2018 COMPONENTS OF CHANGES IN SITE RENTAL REVENUES | |||
| (dollars in millions) | Full Year 2017 | Full Year 208 Outlook | |
Components of changes in site rental revenues(1): | |||
Prior year site rental revenues exclusive of straight-lined revenues associated with fixed escalators(2)(3) | $3,186 | $3,670 | |
New leasing activity(2)(3) | 166 | 190-220 | |
| Escalators | 84 | 80-90 | |
| Non-renewals | (90) | (95)-(75) | |
Organic Contribution to Site Rental Revenues(4) | 160 | 185-225 | |
| Straight-lined revenues associated with fixed escalators | — | (40)-(20) | |
Acquisitions and builds(5) | 323 | 745-765 | |
| Other | — | — | |
| Total GAAP site rental revenues | $3,669 | $4,582-$4,627 | |
| Year-over-year changes in revenue: | |||
| Reported GAAP site rental revenues | 13.5% | 25.5%(6) | |
Organic Contribution to Site Rental Revenues(4)(7) | 5.1% | 5.6%(6) | |
| (1) | See additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent herein. |
| (2) | Includes revenues from amortization of prepaid rent in accordance with GAAP. |
| (3) | Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. |
| (4) | See definitions provided herein. |
| (5) | The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build. |
| (6) | Calculated based on midpoint of Full Year 2018 Outlook. |
| (7) | Calculated as the percentage change from prior year site rental revenues, exclusive of straight-lined revenues associated with fixed escalations, compared to Organic Contribution to Site Rental Revenues for the current period. |
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) | |||||||
| (dollars in thousands, except share amounts) | December 31, 2017 | December 31, 2016 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 314,094 | $ | 567,599 | |||
| Restricted cash | 121,065 | 124,547 | |||||
| Receivables, net | 397,585 | 373,532 | |||||
| Prepaid expenses | 162,366 | 128,721 | |||||
| Other current assets | 138,670 | 130,362 | |||||
| Total current assets | 1,133,780 | 1,324,761 | |||||
| Deferred site rental receivables | 1,300,338 | 1,317,658 | |||||
| Property and equipment, net | 12,932,885 | 9,805,315 | |||||
| Goodwill | 10,021,468 | 5,757,676 | |||||
| Other intangible assets, net | 5,961,759 | 3,650,072 | |||||
| Long-term prepaid rent and other assets, net | 879,340 | 819,610 | |||||
| Total assets | $ | 32,229,570 | $ | 22,675,092 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 230,279 | $ | 188,516 | |||
| Accrued interest | 131,790 | 97,019 | |||||
| Deferred revenues | 457,116 | 353,005 | |||||
| Other accrued liabilities | 357,646 | 221,066 | |||||
| Current maturities of debt and other obligations | 115,251 | 101,749 | |||||
| Total current liabilities | 1,292,082 | 961,355 | |||||
| Debt and other long-term obligations | 16,044,369 | 12,069,393 | |||||
| Other long-term liabilities | 2,554,037 | 2,087,229 | |||||
| Total liabilities | 19,890,488 | 15,117,977 | |||||
| Commitments and contingencies | |||||||
| CCIC stockholders' equity: | |||||||
| Common stock, $0.01 par value; 600,000,000 shares authorized; shares issued and outstanding: December 31, 2017—406,280,673 and December 31, 2016—360,536,659 | 4,063 | 3,605 | |||||
| 6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value; 20,000,000 shares authorized; shares issued and outstanding: December 31, 2017—1,649,998 and December 31, 2016—0; aggregate liquidation value: December 31, 2017—$1,649,998 and December 31, 2016—$0 | 17 | — | |||||
| Additional paid-in capital | 16,843,607 | 10,938,236 | |||||
| Accumulated other comprehensive income (loss) | (3,989 | ) | (5,888 | ) | |||
| Dividends/distributions in excess of earnings | (4,504,616 | ) | (3,378,838 | ) | |||
| Total equity | 12,339,082 | 7,557,115 | |||||
| Total liabilities and equity | $ | 32,229,570 | $ | 22,675,092 | |||
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Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| (dollars in thousands, except share and per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
| Net revenues: | |||||||||||||||
| Site rental | $ | 1,050,686 | $ | 817,381 | $ | 3,669,191 | $ | 3,233,307 | |||||||
| Network services and other | 187,404 | 215,035 | 686,414 | 687,918 | |||||||||||
| Net revenues | 1,238,090 | 1,032,416 | 4,355,605 | 3,921,225 | |||||||||||
| Operating expenses: | |||||||||||||||
| Costs of operations (exclusive of depreciation, amortization and accretion): | |||||||||||||||
| Site rental | 328,945 | 261,127 | 1,143,914 | 1,023,350 | |||||||||||
| Network services and other | 109,650 | 131,105 | 419,787 | 417,171 | |||||||||||
| General and administrative | 127,466 | 92,122 | 426,698 | 371,031 | |||||||||||
| Asset write-down charges | 7,038 | 6,202 | 17,322 | 34,453 | |||||||||||
| Acquisition and integration costs | 34,351 | 5,994 | 61,431 | 17,453 | |||||||||||
| Depreciation, amortization and accretion | 362,211 | 273,826 | 1,242,408 | 1,108,551 | |||||||||||
| Total operating expenses | 969,661 | 770,376 | 3,311,560 | 2,972,009 | |||||||||||
| Operating income (loss) | 268,429 | 262,040 | 1,044,045 | 949,216 | |||||||||||
| Interest expense and amortization of deferred financing costs | (160,280 | ) | (129,376 | ) | (590,682 | ) | (515,032 | ) | |||||||
| Gains (losses) on retirement of long-term obligations | — | — | (3,525 | ) | (52,291 | ) | |||||||||
| Interest income | 6,176 | 342 | 18,761 | 796 | |||||||||||
| Other income (expense) | (1,468 | ) | (4,212 | ) | 1,994 | (8,835 | ) | ||||||||
| Income (loss) from continuing operations before income taxes | 112,857 | 128,794 | 470,593 | 373,854 | |||||||||||
| Benefit (provision) for income taxes | (14,753 | ) | (4,084 | ) | (26,043 | ) | (16,881 | ) | |||||||
| Net income (loss) | 98,104 | 124,710 | 444,550 | 356,973 | |||||||||||
| Dividends on preferred stock | (28,359 | ) | — | (58,294 | ) | (32,991 | ) | ||||||||
| Net income (loss) attributable to CCIC common stockholders | $ | 69,745 | $ | 124,710 | $ | 386,256 | $ | 323,982 | |||||||
| Net income (loss) attributable to CCIC common stockholders, per common share: | |||||||||||||||
| Net income (loss) attributable to CCIC common stockholders, basic | $ | 0.17 | $ | 0.35 | $ | 1.01 | $ | 0.95 | |||||||
| Net income (loss) attributable to CCIC common stockholders, diluted | $ | 0.17 | $ | 0.35 | $ | 1.01 | $ | 0.95 | |||||||
| Weighted-average common shares outstanding (in thousands): | |||||||||||||||
| Basic | 406,278 | 352,116 | 381,740 | 340,349 | |||||||||||
| Diluted | 408,130 | 352,878 | 383,221 | 340,879 | |||||||||||
10
Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| SEGMENT OPERATING RESULTS | |||||||||||||||||||||||||||||
| Three Months Ended December 31, 2017 | Three Months Ended December 31, 2016 | ||||||||||||||||||||||||||||
| (dollars in thousands) | Towers | Fiber | Other | Consolidated Total | Towers | Fiber | Other | Consolidated Total | |||||||||||||||||||||
| Segment site rental revenues | $ | 740,560 | $ | 310,126 | $ | 1,050,686 | $ | 712,549 | $ | 104,832 | $ | 817,381 | |||||||||||||||||
| Segment network services and other revenue | 175,939 | 11,465 | 187,404 | 169,647 | 45,388 | 215,035 | |||||||||||||||||||||||
| Segment revenues | 916,499 | 321,591 | 1,238,090 | 882,196 | 150,220 | 1,032,416 | |||||||||||||||||||||||
| Segment site rental cost of operations | 212,090 | 105,633 | 317,723 | 214,878 | 38,057 | 252,935 | |||||||||||||||||||||||
| Segment network services and other cost of operations | 98,516 | 9,613 | 108,129 | 95,289 | 34,207 | 129,496 | |||||||||||||||||||||||
Segment cost of operations(1) | 310,606 | 115,246 | 425,852 | 310,167 | 72,264 | 382,431 | |||||||||||||||||||||||
Segment site rental gross margin(2) | 528,470 | 204,493 | 732,963 | 497,671 | 66,775 | 564,446 | |||||||||||||||||||||||
Segment network services and other gross margin(2) | 77,423 | 1,852 | 79,275 | 74,358 | 11,181 | 85,539 | |||||||||||||||||||||||
Segment general and administrative expenses(1) | 24,537 | 34,278 | 46,411 | 105,226 | 24,574 | 14,956 | 35,838 | 75,368 | |||||||||||||||||||||
Segment operating profit(2) | 581,356 | 172,067 | (46,411 | ) | 707,012 | 547,455 | 63,000 | (35,838 | ) | 574,617 | |||||||||||||||||||
| Stock-based compensation expense | 29,976 | 29,976 | 21,241 | 21,241 | |||||||||||||||||||||||||
| Depreciation, amortization and accretion | 362,211 | 362,211 | 273,826 | 273,826 | |||||||||||||||||||||||||
| Interest expense and amortization of deferred financing costs | 160,280 | 160,280 | 129,376 | 129,376 | |||||||||||||||||||||||||
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(3) | 41,688 | 41,688 | 21,380 | 21,380 | |||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | $ | 112,857 | $ | 128,794 | |||||||||||||||||||||||||
| (1) | Segment cost of operations excludes (1) stock-based compensation expense of $7.7 million and $4.5 million for the three months ended December 31, 2017 and 2016, respectively and (2) prepaid lease purchase price adjustments of $5.0 million and $5.3 million for the three months ended December 31, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $22.3 million and $16.8 million for the three months ended December 31, 2017 and 2016, respectively. |
| (2) | See "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of segment site rental gross margin, segment network services and other gross margin and segment operating profit. |
| (3) | See condensed consolidated statement of operations for further information. |
11
Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| SEGMENT OPERATING RESULTS | |||||||||||||||||||||||||||||
| Twelve Months Ended December 31, 2017 | Twelve Months Ended December 31, 2016 | ||||||||||||||||||||||||||||
| (dollars in thousands) | Towers | Fiber | Other | Consolidated Total | Towers | Fiber | Other | Consolidated Total | |||||||||||||||||||||
| Segment site rental revenues | $ | 2,899,554 | $ | 769,637 | $ | 3,669,191 | $ | 2,830,708 | $ | 402,599 | $ | 3,233,307 | |||||||||||||||||
| Segment network services and other revenue | 636,532 | 49,882 | 686,414 | 603,689 | 84,229 | 687,918 | |||||||||||||||||||||||
| Segment revenues | 3,536,086 | 819,519 | 4,355,605 | 3,434,397 | 486,828 | 3,921,225 | |||||||||||||||||||||||
| Segment site rental cost of operations | 844,795 | 264,059 | 1,108,854 | 840,209 | 147,459 | 987,668 | |||||||||||||||||||||||
| Segment network services and other cost of operations | 374,134 | 40,691 | 414,825 | 344,595 | 64,859 | 409,454 | |||||||||||||||||||||||
Segment cost of operations(1) | 1,218,929 | 304,750 | 1,523,679 | 1,184,804 | 212,318 | 1,397,122 | |||||||||||||||||||||||
Segment site rental gross margin(2) | 2,054,759 | 505,578 | 2,560,337 | 1,990,499 | 255,140 | 2,245,639 | |||||||||||||||||||||||
Segment network services and other gross margin(2) | 262,398 | 9,191 | 271,589 | 259,094 | 19,370 | 278,464 | |||||||||||||||||||||||
Segment general and administrative expenses(1) | 93,662 | 89,048 | 167,455 | 350,165 | 92,903 | 60,676 | 143,001 | 296,580 | |||||||||||||||||||||
Segment operating profit(2) | 2,223,495 | 425,721 | (167,455 | ) | 2,481,761 | 2,156,690 | 213,834 | (143,001 | ) | 2,227,523 | |||||||||||||||||||
| Stock-based compensation expense | 96,435 | 96,435 | 96,538 | 96,538 | |||||||||||||||||||||||||
| Depreciation, amortization and accretion | 1,242,408 | 1,242,408 | 1,108,551 | 1,108,551 | |||||||||||||||||||||||||
| Interest expense and amortization of deferred financing costs | 590,682 | 590,682 | 515,032 | 515,032 | |||||||||||||||||||||||||
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes(3) | 81,643 | 81,643 | 133,548 | 133,548 | |||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | $ | 470,593 | $ | 373,854 | |||||||||||||||||||||||||
| (1) | Segment cost of operations excludes (1) stock-based compensation expense of $19.9 million and $22.1 million for the twelve months ended December 31, 2017 and 2016, respectively and (2) prepaid lease purchase price adjustments of $20.1 million and $21.3 million for the twelve months ended December 31, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $76.5 million and $74.5 million for the twelve months ended December 31, 2017 and 2016, respectively. |
| (2) | See "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of segment site rental gross margin, segment network services and other gross margin and segment operating profit. |
| (3) | See condensed consolidated statement of operations for further information. |
12
Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| FFO AND AFFO RECONCILIATIONS | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| (dollars in thousands, except share and per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
| Net income (loss) | $ | 98,104 | $ | 124,710 | $ | 444,550 | $ | 356,973 | |||||||
| Real estate related depreciation, amortization and accretion | 354,095 | 266,961 | 1,211,360 | 1,082,083 | |||||||||||
| Asset write-down charges | 7,038 | 6,202 | 17,322 | 34,453 | |||||||||||
| Dividends on preferred stock | (29,935 | ) | (10,997 | ) | (29,935 | ) | (43,988 | ) | |||||||
FFO(1)(2)(3)(4) | $ | 429,302 | $ | 386,875 | $ | 1,643,297 | $ | 1,429,521 | |||||||
Weighted average common shares outstanding—diluted(5) | 408,130 | 352,878 | 383,221 | 340,879 | |||||||||||
FFO per share(1)(3)(4) | $ | 1.05 | $ | 1.10 | $ | 4.29 | $ | 4.19 | |||||||
| FFO (from above) | $ | 429,302 | $ | 386,875 | $ | 1,643,297 | $ | 1,429,521 | |||||||
| Adjustments to increase (decrease) FFO: | |||||||||||||||
| Straight-lined revenue | (2,640 | ) | (5,001 | ) | 314 | (47,377 | ) | ||||||||
| Straight-lined expense | 22,699 | 23,114 | 92,602 | 94,246 | |||||||||||
| Stock-based compensation expense | 29,976 | 21,241 | 96,435 | 96,538 | |||||||||||
| Non-cash portion of tax provision | 11,916 | 2,091 | 9,214 | 7,322 | |||||||||||
| Non-real estate related depreciation, amortization and accretion | 8,116 | 6,865 | 31,048 | 26,468 | |||||||||||
| Amortization of non-cash interest expense | 1,731 | 3,040 | 9,368 | 14,333 | |||||||||||
| Other (income) expense | 1,468 | 4,212 | (1,994 | ) | 8,835 | ||||||||||
| (Gains) losses on retirement of long-term obligations | — | — | 3,525 | 52,291 | |||||||||||
| Acquisition and integration costs | 34,351 | 5,994 | 61,431 | 17,453 | |||||||||||
| Capital improvement capital expenditures | (13,519 | ) | (17,467 | ) | (40,844 | ) | (42,818 | ) | |||||||
| Corporate capital expenditures | (11,604 | ) | (24,563 | ) | (43,991 | ) | (46,948 | ) | |||||||
AFFO(1)(2)(3)(4) | $ | 511,797 | $ | 406,402 | $ | 1,860,405 | $ | 1,609,864 | |||||||
Weighted average common shares outstanding—diluted(5) | 408,130 | 352,878 | 383,221 | 340,879 | |||||||||||
AFFO per share(1)(3)(4) | $ | 1.25 | $ | 1.15 | $ | 4.85 | $ | 4.72 | |||||||
| (1) | See "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" in the Appendix for a discussion of our definitions of FFO and AFFO. |
| (2) | FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid. |
| (3) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
| (4) | Attributable to CCIC common stockholders. |
| (5) | Based on the diluted weighted-average common shares outstanding for the three and twelve months ended December 31, 2017 and 2016. For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of the 6.875% Mandatory Convertible Preferred Stock in the share count. |
13
Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) | ||||||||||||
| Twelve Months Ended December 31, | ||||||||||||
| (dollars in thousands) | 2017 | 2016 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) | $ | 444,550 | $ | 356,973 | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||||||||||||
| Depreciation, amortization and accretion | 1,242,408 | 1,108,551 | ||||||||||
| (Gains) losses on retirement of long-term obligations | 3,525 | 52,291 | ||||||||||
| Amortization of deferred financing costs and other non-cash interest | 9,368 | 14,333 | ||||||||||
| Stock-based compensation expense | 91,647 | 79,338 | ||||||||||
| Asset write-down charges | 17,322 | 34,453 | ||||||||||
| Deferred income tax (benefit) provision | 14,888 | 8,603 | ||||||||||
| Other non-cash adjustments, net | (1,320 | ) | 5,059 | |||||||||
| Changes in assets and liabilities, excluding the effects of acquisitions: | ||||||||||||
| Increase (decrease) in liabilities | 176,226 | 236,642 | ||||||||||
| Decrease (increase) in assets | 45,572 | (113,979 | ) | |||||||||
| Net cash provided by (used for) operating activities | 2,044,186 | 1,782,264 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Payments for acquisition of businesses, net of cash acquired | (9,260,135 | ) | (556,854 | ) | ||||||||
| Capital expenditures | (1,228,071 | ) | (873,883 | ) | ||||||||
| Net (payments) receipts from settled swaps | (328 | ) | 8,141 | |||||||||
| Other investing activities, net | (5,487 | ) | 12,364 | |||||||||
| Net cash provided by (used for) investing activities | (10,494,021 | ) | (1,410,232 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from issuance of long-term debt | 3,092,323 | 5,201,010 | ||||||||||
| Principal payments on debt and other long-term obligations | (118,880 | ) | (95,787 | ) | ||||||||
| Purchases and redemptions of long-term debt | — | (4,044,834 | ) | |||||||||
| Borrowings under revolving credit facility | 2,820,000 | 3,440,000 | ||||||||||
| Payments under revolving credit facility | (1,840,000 | ) | (4,565,000 | ) | ||||||||
| Payments for financing costs | (29,240 | ) | (41,533 | ) | ||||||||
| Net proceeds from issuance of common stock | 4,221,329 | 1,325,865 | ||||||||||
| Purchases of capital stock | (23,307 | ) | (24,936 | ) | ||||||||
| Net proceeds from issuance of preferred stock | 1,607,759 | — | ||||||||||
| Dividends/distributions paid on common stock | (1,508,705 | ) | (1,239,158 | ) | ||||||||
| Dividends paid on preferred stock | (29,935 | ) | (43,988 | ) | ||||||||
| Net (increase) decrease in restricted cash | 3,808 | (7,931 | ) | |||||||||
| Net cash provided by (used for) financing activities | 8,195,152 | (96,292 | ) | |||||||||
| Net increase (decrease) in cash and cash equivalents - continuing operations | (254,683 | ) | 275,740 | |||||||||
| Discontinued operations: | ||||||||||||
| Net cash provided by (used for) investing activities | — | 113,150 | ||||||||||
| Net increase (decrease) in cash and cash equivalents - discontinued operations | — | 113,150 | ||||||||||
| Effect of exchange rate changes | 1,178 | (101 | ) | |||||||||
| Cash and cash equivalents at beginning of period | 567,599 | 178,810 | ||||||||||
| Cash and cash equivalents at end of period | $ | 314,094 | $ | 567,599 | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Interest paid | 546,543 | 470,655 | ||||||||||
| Income taxes paid | 16,427 | 13,821 | ||||||||||
14
Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| COMPONENTS OF CHANGES IN SITE RENTAL REVENUES | |||||||
| Three Months Ended December 31, | |||||||
| (dollars in millions) | 2017 | 2016 | |||||
Components of changes in site rental revenues(1): | |||||||
Prior year site rental revenues exclusive of straight-lined revenues associated with fixed escalators(2)(3) | $ | 812 | $ | 763 | |||
New leasing activity(2)(3) | 42 | 38 | |||||
| Escalators | 20 | 22 | |||||
| Non-renewals | (18 | ) | (21 | ) | |||
Organic Contribution to Site Rental Revenues(4) | 44 | 39 | |||||
| Straight-lined revenues associated with fixed escalators | 3 | 5 | |||||
Acquisitions and builds(5) | 192 | 10 | |||||
| Other | — | — | |||||
| Total GAAP site rental revenues | $ | 1,051 | $ | 817 | |||
| Year-over-year changes in revenue: | |||||||
| Reported GAAP site rental revenues | 28.6 | % | |||||
Organic Contribution to Site Rental Revenues(4)(6) | 5.5 | % | |||||
| (1) | See additional information regarding Crown Castle's site rental revenues including projected revenue from customer licenses, tenant non-renewals, straight-lined revenues and prepaid rent herein. |
| (2) | Includes revenues from amortization of prepaid rent in accordance with GAAP. |
| (3) | Includes revenues from the construction of new small cell nodes, exclusive of straight-lined revenues related to fixed escalators. |
| (4) | See definitions provided herein. |
| (5) | The financial impact of acquisitions, as measured by the initial contribution, and tower builds is excluded from Organic Contribution to Site Rental Revenues until the one-year anniversary of the acquisition or build. |
| (6) | Calculated as the percentage change from prior year site rental revenues, exclusive of straight-lined revenues associated with fixed escalations, compared to Organic Contribution to Site Rental Revenues for the current period. |
15
Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF SITE RENTAL STRAIGHT-LINED REVENUES AND EXPENSES ASSOCIATED WITH FIXED ESCALATORS(1) | |||||||||||||||||||||||
| Three Months Ended December 31, | |||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||
| (dollars in thousands) | Towers | Fiber | Total | Towers | Fiber | Total | |||||||||||||||||
| Site rental straight-lined revenue | $ | 1,620 | $ | 1,020 | $ | 2,640 | $ | 2,647 | $ | 2,354 | $ | 5,001 | |||||||||||
| Site rental straight-lined expenses | 22,265 | 434 | 22,699 | 23,010 | 104 | 23,114 | |||||||||||||||||
| Twelve Months Ended December 31, | |||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||
| (dollars in thousands) | Towers | Fiber | Total | Towers | Fiber | Total | |||||||||||||||||
| Site rental straight-lined revenue | $ | (8,263 | ) | $ | 7,949 | $ | (314 | ) | $ | 37,976 | $ | 9,401 | $ | 47,377 | |||||||||
| Site rental straight-lined expenses | 91,510 | 1,092 | 92,602 | 93,993 | 253 | 94,246 | |||||||||||||||||
SUMMARY OF PREPAID RENT ACTIVITY(2) | |||||||||||||||||||||||
| Three Months Ended December 31, | |||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||
| (dollars in thousands) | Towers | Fiber | Total | Towers | Fiber | Total | |||||||||||||||||
| Prepaid rent received | $ | 44,608 | $ | 69,346 | $ | 113,954 | $ | 37,576 | $ | 64,169 | $ | 101,745 | |||||||||||
| Amortization of prepaid rent | 30,674 | 38,634 | 69,308 | 27,124 | 25,512 | 52,636 | |||||||||||||||||
| Twelve Months Ended December 31, | |||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||
| (dollars in thousands) | Towers | Fiber | Total | Towers | Fiber | Total | |||||||||||||||||
| Prepaid rent received | $ | 137,174 | $ | 205,169 | $ | 342,343 | $ | 149,913 | $ | 165,186 | $ | 315,099 | |||||||||||
| Amortization of prepaid rent | 118,587 | 125,539 | 244,126 | 103,975 | 99,518 | 203,493 | |||||||||||||||||
| (1) | In accordance with GAAP accounting, if payment terms call for fixed escalations, or rent free periods, the revenue is recognized on a straight-line basis over the fixed, non-cancelable term of the contract. Since the Company recognizes revenue on a straight-line basis, a portion of the site rental revenue in a given period represents cash collected or contractually collectible in other periods. |
| (2) | Reflects up front payments received from long-term tenant contracts and other deferred credits (commonly referred to as prepaid rent), and the amortization thereof for GAAP revenue recognition purposes. |
16
Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| SUMMARY OF CAPITAL EXPENDITURES | |||||||||||||||||||||||||||||||
| Three Months Ended December 31, | |||||||||||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||||||||||
| (dollars in thousands) | Towers | Fiber | Other | Total | Towers | Fiber | Other | Total | |||||||||||||||||||||||
| Discretionary: | |||||||||||||||||||||||||||||||
| Purchases of land interests | $ | 14,634 | $ | — | $ | — | $ | 14,634 | $ | 16,718 | $ | — | $ | — | $ | 16,718 | |||||||||||||||
| Communications infrastructure construction and improvements | 76,184 | 260,618 | — | 336,802 | 77,028 | 123,929 | — | 200,957 | |||||||||||||||||||||||
| Sustaining: | |||||||||||||||||||||||||||||||
| Capital improvement and corporate | 10,608 | 7,785 | 6,730 | 25,123 | 16,880 | 6,293 | 18,857 | 42,030 | |||||||||||||||||||||||
| Total | $ | 101,426 | $ | 268,403 | $ | 6,730 | $ | 376,559 | $ | 110,626 | $ | 130,222 | $ | 18,857 | $ | 259,705 | |||||||||||||||
PROJECTED REVENUE FROM CUSTOMER LICENSES(1) | |||||||||||||||
| Years Ended December 31, | |||||||||||||||
| (as of December 31, 2017; dollars in millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
| Components of site rental revenue: | |||||||||||||||
| Site rental revenues exclusive of straight-line associated with fixed escalators | 4,534 | $ | 4,617 | $ | 4,708 | $ | 4,797 | $ | 4,870 | ||||||
| Straight-lined site rental revenues associated with fixed escalators | (8 | ) | (84 | ) | (159 | ) | (220 | ) | (251 | ) | |||||
| GAAP site rental revenue | $ | 4,526 | $ | 4,533 | $ | 4,549 | $ | 4,576 | $ | 4,619 | |||||
PROJECTED GROUND LEASE EXPENSE FROM EXISTING GROUND LEASES(2) | |||||||||||||||
| Years Ended December 31, | |||||||||||||||
| (as of December 31, 2017; dollars in millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
| Components of ground lease expense: | |||||||||||||||
| Ground lease expense exclusive of straight-line associated with fixed escalators | $ | 785 | $ | 800 | $ | 817 | $ | 836 | $ | 856 | |||||
| Straight-lined site rental ground lease expense associated with fixed escalators | 83 | 72 | 60 | 48 | 36 | ||||||||||
| GAAP ground lease expense | $ | 867 | $ | 871 | $ | 877 | $ | 884 | $ | 892 | |||||
| (1) | Based on customer licenses as of December 31, 2017. All customer licenses are assumed to renew for a new term at current term end date. CPI-linked customer contracts are assumed to escalate at 3% per annum. |
| (2) | Based on existing ground leases as of December 31, 2017. CPI-linked leases are assumed to escalate at 3% per annum. |
17
Crown Castle International Corp.
Fourth Quarter 2017
COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
ANNUALIZED RENTAL CASH PAYMENTS AT TIME OF RENEWAL(1) | |||||||||||||||
| Years Ended December 31, | |||||||||||||||
| (as of December 31, 2017; dollars in millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
| AT&T | $ | 45 | $ | 40 | $ | 50 | $ | 77 | $ | 62 | |||||
| Sprint | 11 | 29 | 18 | 29 | 23 | ||||||||||
| T-Mobile | 24 | 59 | 25 | 43 | 615 | ||||||||||
| Verizon | 25 | 28 | 36 | 34 | 41 | ||||||||||
| All Others Combined | 206 | 162 | 142 | 81 | 84 | ||||||||||
| Total | $ | 312 | $ | 319 | $ | 271 | $ | 264 | $ | 825 | |||||
| CUSTOMER OVERVIEW | |||
| (as of December 31, 2017) | Percentage of Q4 2017 LQA Site Rental Revenues | Weighted Average Current Term Remaining(2) | Long-Term Credit Rating (S&P / Moody’s) |
| AT&T | 22% | 5 | BBB+ / Baa1 |
| T-Mobile | 20% | 5 | BB+ |
| Verizon | 19% | 7 | BBB+ / Baa1 |
| Sprint | 15% | 7 | B / B2 |
| All Others Combined | 23% | 3 | N/A |
| Total / Weighted Average | 100% | 5 | |
| (1) | Reflects lease renewals by year by customer; dollar amounts represent annualized cash site rental revenues from assumed renewals or extension as reflected in the table "Projected Revenue from Customer Contracts." |
| (2) | Weighted by site rental revenue contributions; excludes renewals at the customers' option. |
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COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| SUMMARY OF TOWER PORTFOLIO BY VINTAGE | |
| (as of December 31, 2017; dollars in thousands) | |
YIELD(1) | NUMBER OF TENANTS PER TOWER |
| LQA SITE RENTAL REVENUE PER TOWER | LQA TOWERS SEGMENT SITE RENTAL GROSS MARGIN PER TOWER |
INVESTED CAPITAL PER TOWER(2) | NUMBER OF TOWERS |
| (1) | Yield is calculated as LQA Towers segment site rental gross margin divided by invested capital. |
| (2) | Reflects gross total assets, including incremental capital invested by the Company since time of acquisition or construction completion. Inclusive of invested capital related to land at the tower site. |
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Crown Castle International Corp.
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| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
PORTFOLIO OVERVIEW(1) | ||
| (as of December 31, 2017; dollars in thousands) | ||
| NUMBER OF TOWERS | TENANTS PER TOWER | LQA SITE RENTAL REVENUE PER TOWER |
| (1) | Includes towers and rooftops, excludes small cells and third-party land interests. |
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Crown Castle International Corp.
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| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| DISTRIBUTION OF TOWER TENANCY (as of December 31, 2017) | |||||
PERCENTAGE OF TOWERS BY TENANTS PER TOWER(1) | |||||
| SITES ACQUIRED AND BUILT 2006 AND PRIOR | SITES ACQUIRED AND BUILT 2007 TO PRESENT | ||||
| Average: 2.6 | Average: 2.0 |
GEOGRAPHIC TOWER DISTRIBUTION (as of December 31, 2017)(1) | |
| PERCENTAGE OF TOWERS BY GEOGRAPHIC LOCATION | PERCENTAGE OF LQA SITE RENTAL REVENUE BY GEOGRAPHIC LOCATION |
| (1) | Includes towers and rooftops, excludes small cells and third-party land interests. |
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Crown Castle International Corp.
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COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| GROUND INTEREST OVERVIEW | ||||||||||||||||
| (as of December 31, 2017; dollars in millions) | LQA Site Rental Revenue | Percentage of LQA Site Rental Revenue | LQA Towers Segment Site Rental Gross Margin | Percentage of LQA Towers Segment Site Rental Gross Margin | Number of Towers(1) | Percentage of Towers | Weighted Average Term Remaining (by years)(2) | |||||||||
| Less than 10 years | $ | 356 | 12 | % | $ | 196 | 10 | % | 5,724 | 14 | % | |||||
| 10 to 20 years | 463 | 16 | % | 250 | 12 | % | 7,721 | 19 | % | |||||||
| Greater 20 years | 1,239 | 42 | % | 826 | 40 | % | 16,946 | 43 | % | |||||||
| Total leased | $ | 2,058 | 70 | % | $ | 1,272 | 62 | % | 30,391 | 76 | % | 34 | ||||
| Owned | 858 | 30 | % | 790 | 38 | % | 9,689 | 24 | % | |||||||
| Total / Average | $ | 2,916 | 100 | % | $ | 2,062 | 100 | % | 40,080 | 100 | % | |||||
| (1) | Includes towers and rooftops, excludes small cells and third-party land interests. |
| (2) | Includes renewal terms at the Company’s option; weighted by Towers segment site rental gross margin. |
| GROUND INTEREST ACTIVITY | ||||||
| (dollars in millions) | Three Months Ended December 31, 2017 | Twelve Months Ended December 31, 2017 | ||||
| Ground Extensions Under Crown Castle Towers: | ||||||
| Number of ground leases extended | 427 | 1,609 | ||||
| Average number of years extended | 36 | 33 | ||||
Percentage increase in consolidated cash ground lease expense due to extension activities(1) | 0.1 | % | 0.4 | % | ||
| Ground Purchases Under Crown Castle Towers: | ||||||
| Number of ground leases purchased | 81 | 370 | ||||
| Land lease purchases (including capital expenditures, acquisitions and capital leases) | $ | 22 | $ | 113 | ||
| Percentage of Towers segment site rental gross margin from towers residing on land purchased | <1% | 1 | % | |||
| (1) | Includes the impact from the amortization of lump sum payments. |
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Crown Castle International Corp.
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| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| CAPITALIZATION OVERVIEW | ||||||||
| (dollars in millions) | Face Value as of 12/31/2017 | Fixed vs. Variable | Secured vs. Unsecured | Interest Rate(1) | Net Debt to LQA EBITDA(2) | Maturity | ||
| Cash and cash equivalents | $ | 314 | ||||||
Senior Secured Tower Revenue Notes, Series 2010-3(3) | 1,250 | Fixed | Secured | 6.1% | 2040(3) | |||
Senior Secured Tower Revenue Notes, Series 2010-6(3) | 1,000 | Fixed | Secured | 4.9% | 2040(3) | |||
Senior Secured Tower Revenue Notes, Series 2015-1(3) | 300 | Fixed | Secured | 3.2% | 2042(3) | |||
Senior Secured Tower Revenue Notes, Series 2015-2(3) | 700 | Fixed | Secured | 3.7% | 2045(3) | |||
| 3.849% Secured Notes | 1,000 | Fixed | Secured | 3.8% | 2023 | |||
| Senior Secured Notes, Series 2009-1, Class A-1 | 33 | Fixed | Secured | 6.3% | 2019 | |||
| Senior Secured Notes, Series 2009-1, Class A-2 | 70 | Fixed | Secured | 9.0% | 2029 | |||
| Capital leases & other obligations | 228 | Various | Secured | Various | Various | |||
| Total secured debt | $ | 4,581 | 4.8% | 1.6x | ||||
Senior Unsecured Revolving Credit Facility(3)(4) | 980 | Variable | Unsecured | 2.6% | 2022 | |||
| Senior Unsecured Term Loan A | 2,401 | Variable | Unsecured | 2.6% | 2022 | |||
| 5.250% Senior Notes | 1,650 | Fixed | Unsecured | 5.3% | 2023 | |||
| 4.875% Senior Notes | 850 | Fixed | Unsecured | 4.9% | 2022 | |||
| 3.400% Senior Notes | 850 | Fixed | Unsecured | 3.4% | 2021 | |||
| 4.450% Senior Notes | 900 | Fixed | Unsecured | 4.5% | 2026 | |||
| 3.700% Senior Notes | 750 | Fixed | Unsecured | 3.7% | 2026 | |||
| 2.250% Senior Notes | 700 | Fixed | Unsecured | 2.3% | 2021 | |||
| 4.000% Senior Notes | 500 | Fixed | Unsecured | 4.0% | 2027 | |||
| 4.750% Senior Notes | 350 | Fixed | Unsecured | 4.8% | 2047 | |||
| 3.200% Senior Notes | 750 | Fixed | Unsecured | 3.2% | 2024 | |||
| 3.650% Senior Notes | 1,000 | Fixed | Unsecured | 3.7% | 2027 | |||
| Total unsecured debt | $ | 11,681 | 3.7% | 4.1x | ||||
| Total net debt | $ | 15,948 | 4.0% | 5.6x | ||||
| Preferred Stock, at liquidation value | 1,650 | |||||||
Market Capitalization(5) | 45,101 | |||||||
Firm Value(6) | $ | 62,699 | ||||||
| (1) | Represents the weighted-average stated interest rate. |
| (2) | Represents the applicable amount of debt divided by LQA consolidated Adjusted EBITDA. The Net Debt to Last Quarter Annualized Adjusted EBITDA calculation does not give effect to a full quarter ownership of Lightower, as this acquisition closed on November 1, 2017. For the quarter ended December 31, 2017, Lightower contribution to the Company's Adjusted EBITDA was $83 million. |
| (3) | If the respective series of such debt is not paid in full on or prior to an applicable date then the Excess Cash Flow (as defined in the indenture) of the issuers of such notes will be used to repay principal of the applicable series, and additional interest (of an additional approximately 5% per annum) will accrue on the respective series. The Senior Secured Tower Revenue Notes, Series 2010-3 and 2010-6 have anticipated repayment dates in 2020. The Senior Secured Tower Revenue Notes, Series 2015-1 and 2015-2 have anticipated repayment dates of 2022 and 2025, respectively. Notes are prepayable at par if voluntarily repaid six months or less prior to maturity; earlier prepayment may require additional consideration. In January 2018, the Company issued $750.0 million aggregate principal amount of 3.150% senior unsecured notes due July 2023 and $1.0 billion aggregate principal amount of 3.800% senior unsecured notes due February 2028 and used the net proceeds of such offering to repay (a) in full the Senior Secured Tower Revenue Notes, Series 2010-3 and (b) a portion of the outstanding borrowings under the 2016 Revolver. |
| (4) | As of December 31, 2017, the undrawn availability under the $3.5 billion Revolving Credit Facility is $2.5 billion. |
| (5) | Market capitalization calculated based on $111.01 closing price and 406 million shares outstanding as of December 31, 2017. |
| (6) | Represents the sum of net debt, preferred stock (at liquidation value) and market capitalization. |
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Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
DEBT MATURITY OVERVIEW(1)(2) |
(as of December 31, 2017; dollars in millions)
| (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. |
| (2) | The debt maturity overview does not reflect the Company's January 2018 senior unsecured notes offering and the use of proceeds from such offering, including the repayment in full of the Senior Secured Tower Revenue Notes, Series 2010-3, which had an Anticipated Repayment Date in 2020. |
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Crown Castle International Corp.
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COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
LIQUIDITY OVERVIEW(1) | |||
| (dollars in thousands) | December 31, 2017 | ||
Cash and cash equivalents(2) | $ | 314,094 | |
Undrawn revolving credit facility availability(3)(4) | 2,500,967 | ||
| Restricted cash | 126,065 | ||
Debt and other long-term obligations(4)(5) | 16,159,620 | ||
| Total equity | 12,339,082 | ||
| (1) | We have an At-The-Market stock offering program ("ATM Program") through which we may, from time to time, issue and sell shares of our common stock having an aggregate cumulative gross sales price of up to $500.0 million to or through sales agents. As of December 31, 2017, 4.1 million shares of common stock had been sold under the ATM Program generating net proceeds of $346.3 million. |
| (2) | Exclusive of restricted cash. |
| (3) | Availability at any point in time is subject to reaffirmation of the representations and warranties in, and there being no default under, our credit agreement governing our Senior Unsecured Credit Facility. |
| (4) | Does not give effect to our January 2018 issuance of $750.0 million aggregate principal amount of 3.150% senior unsecured notes due July 2023 and $1.0 billion aggregate principal amount of 3.800% senior unsecured notes due February 2028, and the associated use of proceeds. |
| (5) | 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. |
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Crown Castle International Corp.
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| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
SUMMARY OF MAINTENANCE AND FINANCIAL COVENANTS(6) | |||||
| Debt | Borrower / Issuer | Covenant(1) | Covenant Level Requirement | As of December 31, 2017 | |
Maintenance Financial Covenants(2) | |||||
| 2016 Credit Facility | CCIC | Total Net Leverage Ratio | ≤ 6.50x | 5.5x | |
| 2016 Credit Facility | CCIC | Total Senior Secured Leverage Ratio | ≤ 3.50x | 1.5x | |
| 2016 Credit Facility | CCIC | Consolidated Interest Coverage Ratio(3) | N/A | N/A | |
| Restrictive Negative Financial Covenants | |||||
| Financial covenants restricting ability to incur additional debt | |||||
| 2012 Secured Notes | CC Holdings GS V LLC and Crown Castle GS III Corp. | Debt to Adjusted Consolidated Cash Flow Ratio | ≤ 3.50x | 2.5x | |
| Financial covenants requiring excess cash flows to be deposited in a cash trap reserve account and not released | |||||
| 2010 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.75x | (4) | 4.7x |
| 2015 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.75x | (4) | 4.7x |
| 2009 Securitized Notes | Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries | Debt Service Coverage Ratio | > 1.30x | (4) | 7.7x |
| Financial covenants restricting ability of relevant issuer to issue additional notes under the applicable indenture | |||||
| 2010 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.00x | (5) | 4.7x |
| 2015 Tower Revenue Notes | Crown Castle Towers LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.00x | (5) | 4.7x |
| 2009 Securitized Notes | Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries | Debt Service Coverage Ratio | ≥ 2.34x | (5) | 7.7x |
| (1) | As defined in the respective debt agreement. In the indentures for the 2010 Tower Revenue Notes, 2015 Tower Revenue Notes and the 2009 Securitized Notes, the defined term for Debt Service Coverage Ratio is "DSCR". |
| (2) | Failure to comply with the financial maintenance covenants would, absent a waiver, result in an event of default under the credit agreement governing our 2016 Credit Facility. |
| (3) | Applicable solely to the extent that the senior unsecured debt rating by any two of S&P, Moody's and Fitch is lower than BBB-, Baa3 or BBB-, respectively. If applicable, the consolidated interest coverage ratio must be greater than or equal to 2.50. |
| (4) | The 2010 Tower Revenue Notes, 2015 Tower Revenue Notes, and 2009 Securitized Notes also include the potential for amortization events, which could result in applying current and future cash flow to the prepayment of debt with applicable prepayment consideration. An amortization event occurs when the Debt Service Coverage Ratio falls below 1.45x, 1.45x or 1.15x, in each case as described under the indentures for the 2010 Tower Revenue Notes, 2015 Tower Revenue Notes, or 2009 Securitized Notes, respectively. |
| (5) | Rating Agency Confirmation (as defined in the respective debt agreement) is also required. |
| (6) | Does not give effect to our January 2018 issuance of $750.0 million aggregate principal amount of 3.150% senior unsecured notes due July 2023 and $1.0 billion aggregate principal amount of 3.800% senior unsecured notes due February 2028, and the associated use of proceeds. |
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Crown Castle International Corp.
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COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
INTEREST RATE SENSITIVITY(1)(7) | ||||||
| Years Ended December 31, | ||||||
| (as of December 31, 2017; dollars in millions) | 2018 | 2019 | ||||
| Fixed Rate Debt: | ||||||
Face Value of Principal Outstanding(2) | $ | 12,633 | $ | 12,617 | ||
Current Interest Payment Obligations(3) | 544 | 543 | ||||
Effect of 0.125% Change in Interest Rates(4) | — | — | ||||
| Floating Rate Debt: | ||||||
Face Value of Principal Outstanding(2) | $ | 3,319 | $ | 3,196 | ||
Current Interest Payment Obligations(5) | 107 | 116 | ||||
Effect of 0.125% Change in Interest Rates(6) | 4 | 4 | ||||
| (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 December 31, 2017. Calculation assumes no changes to future interest rate margin spread over LIBOR due to changes in the Borrower’s senior unsecured credit rating. |
| (6) | Interest expense calculated based on current interest rates using the 1-month LIBOR forward curve as of December 31, 2017 plus 12.5 bps. |
| (7) | Does not give effect to our January 2018 issuance of $750.0 million aggregate principal amount of 3.150% senior unsecured notes due July 2023 and $1.0 billion aggregate principal amount of 3.800% senior unsecured notes due February 2028, and the associated use of proceeds. |
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Crown Castle International Corp.
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| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| DEFINITIONS |
Non-GAAP Financial Measures, Segment Measures and Other Calculations
This Supplement includes presentations of Adjusted EBITDA, Adjusted Funds from Operations ("AFFO"), Funds from Operations ("FFO") and Organic Contribution to Site Rental Revenues, which are non-GAAP financial measures. These non-GAAP financial measures are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")).
Our measures of Adjusted EBITDA, AFFO, FFO and Organic Contribution to Site Rental Revenues may not be comparable to similarly titled measures of other companies, including other companies in the communications infrastructure sector or other REITs. Our definition of FFO is consistent with guidelines from the National Association of Real Estate Investment Trusts with the exception of the impact of income taxes in periods prior to our REIT conversion in 2014.
In addition to the non-GAAP financial measures used herein, we also provide Segment Site Rental Gross Margin, Segment Network Services and Other Gross Margin and Segment Operating Profit, which are key measures used by management to evaluate our operating segments for purposes of making decisions about allocating capital and assessing performance. These segment measures are provided pursuant to GAAP requirements related to segment reporting. In addition, we provide the components of certain GAAP measures, such as capital expenditures.
Adjusted EBITDA, AFFO, FFO and Organic Contribution to Site Rental Revenues, are presented as additional information because management believes these measures are useful indicators of the financial performance of our business. Among other things, management believes that:
| • | Adjusted EBITDA is useful to investors or other interested parties in evaluating our financial performance. Adjusted EBITDA is the primary measure used by management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of, our operations. Management believes that Adjusted EBITDA helps investors or other interested parties meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors, by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results. Management also believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of the communications infrastructure sector and other REITs to measure financial performance without regard to items such as depreciation, amortization and accretion, which can vary depending upon accounting methods and the book value of assets. In addition, Adjusted EBITDA is similar to the measure of current financial performance generally used in our debt covenant calculations. Adjusted EBITDA should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance. |
| • | AFFO and AFFO per share are useful to investors or other interested parties in evaluating our financial performance. Management believes that AFFO and AFFO per share help investors or other interested parties meaningfully evaluate our financial performance as they include (1) the impact of our capital structure (primarily interest expense on our outstanding debt and dividends on our preferred stock) and (2) sustaining capital expenditures and excludes the impact of our (a) asset base (primarily depreciation, amortization and accretion) and (b) certain non-cash items, including straight-lined revenues and expenses related to fixed escalations and rent free periods. GAAP requires rental revenues and expenses related to leases that contain specified rental increases over the life of the lease to be recognized evenly over the life of the lease. In accordance with GAAP, if payment terms call for fixed escalations, or rent free periods, the revenue or expense is recognized on a straight-lined basis over the fixed, non-cancelable term of the contract. Management notes that the Company uses AFFO and AFFO per share only as a performance measure. AFFO and AFFO per share should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flows from operations or as residual cash flow available for discretionary investment. |
| • | FFO and FFO per share are useful to investors or other interested parties in evaluating our financial performance. Management believes that FFO may be used by investors or other interested parties as a basis to compare our financial performance with that of other REITs. FFO and FFO per share help investors or other interested parties meaningfully evaluate financial performance by excluding the impact of our asset base (primarily depreciation, amortization and accretion). FFO and FFO per share are not key performance indicators used by the Company. FFO and FFO per share should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flow from operations. |
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| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
| • | Organic Contribution to Site Rental Revenues is useful to investors or other interested parties in understanding the components of the year-over-year changes in our site rental revenues computed in accordance with GAAP. Management uses the Organic Contribution to Site Rental Revenues to assess year-over-year growth rates for our rental activities, to evaluate current performance, to capture trends in rental rates, new leasing activities and customer non-renewals in our core business, as well to forecast future results. Organic Contribution to Site Rental Revenues is not meant as an alternative measure of revenue and should be considered only as a supplement in understanding and assessing the performance of our site rental revenues computed in accordance with GAAP. |
We define our non-GAAP financial measures, segment measures and other calculations as follows:
Non-GAAP Financial Measures
Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, cumulative effect of a change in accounting principle, (income) loss from discontinued operations and stock-based compensation expense.
Adjusted Funds from Operations. We define Adjusted Funds from Operations as FFO before straight-lined revenue, straight-lined expense, stock-based compensation expense, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, acquisition and integration costs, and adjustments for noncontrolling interests, and less capital improvement capital expenditures and corporate capital expenditures (i.e., sustaining capital expenditures). See "Sustaining capital expenditures" and "Integration capital expenditures" below for further information regarding our calculation of certain components of AFFO.
AFFO per share. We define AFFO per share as AFFO divided by diluted weighted average common shares outstanding.
Funds from Operations. We define Funds from Operations as net income plus real estate related depreciation, amortization and accretion and asset write-down charges, less noncontrolling interest and cash paid for preferred stock dividends, and is a measure of funds from operations attributable to CCIC common stockholders.
FFO per share. We define FFO per share as FFO divided by the diluted weighted average common shares outstanding.
Organic Contribution to Site Rental Revenues. We define the Organic Contribution to Site Rental Revenues as the sum of the change in GAAP site rental revenues related to (1) new leasing activity, including revenues from the construction of small cells and the impact of prepaid rent, (2) escalators and less (3) non-renewals of customer contracts.
Segment Measures
Segment Site Rental Gross Margin. We define Segment Site Rental Gross Margin as segment site rental revenues less segment site rental cost of operations, excluding stock-based compensation expense and prepaid lease purchase price adjustments recorded in consolidated site rental cost of operations.
Segment Network Services and Other Gross Margin. We define Segment Network Services and Other Gross Margin as segment network services and other revenues less segment network services and other cost of operations, excluding stock-based compensation expense recorded in consolidated network services and other cost of operations.
Segment Operating Profit. We define Segment Operating Profit as segment revenues less segment cost of operations and segment general and administrative expenses, excluding stock-based compensation expense and prepaid lease purchase price adjustments recorded in cost of operations.
As a result of our 2017 acquisitions of fiber assets, we have changed the name of our "Small Cells" operating segment to "Fiber". The change did not impact the composition of the aforementioned segment.
Other Calculations
Discretionary capital expenditures. We define discretionary capital expenditures as those capital expenditures made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They consist of (1) improvements to existing communications infrastructure and construction of new communications infrastructure (collectively referred to as "revenue generating") and (2) purchases of land assets under towers as we seek to manage our interests in the land beneath our towers.
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Sustaining capital expenditures. We define sustaining capital expenditures as those capital expenditures made with respect to either (1) corporate capital expenditures, such as buildings, information technology equipment and office equipment or (2) capital improvement capital expenditures to our communications infrastructure assets that enable our customers' ongoing quiet enjoyment of the communications infrastructure. For periods presented prior to 2018, integration capital expenditures are included within sustaining capital expenditures, as discussed in "Integration capital expenditures" below.
Integration capital expenditures. We anticipate incurring initial capital expenditures related to integrating Lightower into our existing business. We anticipate that the majority of these expected capital expenditures will be incurred beginning in 2018 and will primarily relate to the overall integration of Lightower’s information technology assets into our business. We believe these expenditures are not indicative of our ongoing financial performance, and therefore their inclusion in our AFFO may hinder usefulness to investors and other interested parties. Moreover, integration capital expenditures were approximately $3.6 million and $0.1 million the years ended December 31, 2017 and 2016, respectively, and as such, we believe that these costs have not previously been significant enough to warrant separate consideration with regard to the impact to AFFO.
As such, for periods presented prior to 2018, integration capital expenditures were included as a component within sustaining capital expenditures. For periods presented beginning January 1, 2018, including our Outlook for first quarter and full year 2018 included herein, we no longer reflect integration capital expenditures within sustaining capital expenditures and consider integration capital expenditures as its own component of our capital expenditures.
Because of our reclassification of integration capital expenditures, our AFFO for historical periods may not be comparable to those periods presented prospectively from and after January 1, 2018, including our Outlook for first quarter 2018 and full year 2018 Outlook included herein.
We define integration capital expenditures as those capital expenditures made specifically with respect to recent acquisitions that are essential to integrating acquired companies into our business.
The tables set forth below reconcile the non-GAAP financial measures used herein to comparable GAAP financial measures. The components in these tables may not sum to the total due to rounding.
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Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Financial Measures and Other Calculations:
Reconciliation of Historical Adjusted EBITDA:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| (dollars in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
| Net income (loss) | $ | 98,104 | $ | 124,710 | $ | 444,550 | $ | 356,973 | |||||||
| Adjustments to increase (decrease) net income (loss): | |||||||||||||||
| Asset write-down charges | 7,038 | 6,202 | 17,322 | 34,453 | |||||||||||
| Acquisition and integration costs | 34,351 | 5,994 | 61,431 | 17,453 | |||||||||||
| Depreciation, amortization and accretion | 362,211 | 273,826 | 1,242,408 | 1,108,551 | |||||||||||
| Amortization of prepaid lease purchase price adjustments | 5,007 | 5,314 | 20,120 | 21,312 | |||||||||||
Interest expense and amortization of deferred financing costs(1) | 160,280 | 129,376 | 590,682 | 515,032 | |||||||||||
| (Gains) losses on retirement of long-term obligations | — | — | 3,525 | 52,291 | |||||||||||
| Interest income | (6,176 | ) | (342 | ) | (18,761 | ) | (796 | ) | |||||||
| Other (income) expense | 1,468 | 4,212 | (1,994 | ) | 8,835 | ||||||||||
| (Benefit) provision for income taxes | 14,753 | 4,084 | 26,043 | 16,881 | |||||||||||
| Stock-based compensation expense | 29,976 | 21,241 | 96,435 | 96,538 | |||||||||||
Adjusted EBITDA(2)(3) | $ | 707,012 | $ | 574,617 | $ | 2,481,761 | $ | 2,227,523 | |||||||
| (1) | See the reconciliation of "components of historical interest expense and amortization of deferred financing costs" herein. |
| (2) | See "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA. |
| (3) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
31
Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Reconciliation of Current Outlook for Adjusted EBITDA:
| Q1 2018 | Full Year 2018 | ||||||
| (dollars in millions) | Outlook | Outlook | |||||
| Net income (loss) | $116 | to | $141 | $511 | to | $591 | |
| Adjustments to increase (decrease) net income (loss): | |||||||
| Asset write-down charges | $9 | to | $11 | $35 | to | $45 | |
| Acquisition and integration costs | $13 | to | $17 | $45 | to | $55 | |
| Depreciation, amortization and accretion | $380 | to | $400 | $1,566 | to | $1,601 | |
| Amortization of prepaid lease purchase price adjustments | $4 | to | $6 | $19 | to | $21 | |
Interest expense and amortization of deferred financing costs(1) | $157 | to | $167 | $642 | to | $687 | |
| (Gains) losses on retirement of long-term obligations | $0 | to | $0 | $0 | to | $0 | |
| Interest income | $(1) | to | $1 | $(2) | to | $2 | |
| Other (income) expense | $(1) | to | $3 | $3 | to | $5 | |
| (Benefit) provision for income taxes | $8 | to | $12 | $34 | to | $42 | |
| Stock-based compensation expense | $27 | to | $31 | $116 | to | $124 | |
Adjusted EBITDA(2)(3) | $745 | to | $755 | $3,049 | to | $3,094 | |
Components of Historical Interest Expense and Amortization of Deferred Financing Costs:
| Three Months Ended December 31, | |||||||
| (dollars in thousands) | 2017 | 2016 | |||||
| Interest expense on debt obligations | $ | 158,549 | $ | 126,336 | |||
| Amortization of deferred financing costs and adjustments on long-term debt, net | 5,062 | 4,565 | |||||
| Other, net | (3,331 | ) | (1,525 | ) | |||
| Interest expense and amortization of deferred financing costs | $ | 160,280 | $ | 129,376 | |||
Components of Current Outlook for Interest Expense and Amortization of Deferred Financing Costs:
| Q1 2018 | Full Year 2018 | ||||||
| (dollars in millions) | Outlook | Outlook | |||||
| Interest expense on debt obligations | $157 | to | $162 | $645 | to | $665 | |
| Amortization of deferred financing costs and adjustments on long-term debt, net | $4 | to | $7 | $18 | to | $23 | |
| Other, net | $(4) | to | $(2) | $(13) | to | $(8) | |
| Interest expense and amortization of deferred financing costs | $157 | to | $167 | $642 | to | $687 | |
| (1) | See the reconciliation of "components of current outlook for interest expense and amortization of deferred financing costs" herein. |
| (2) | See "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" herein for a discussion of our definition of Adjusted EBITDA. |
| (3) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
32
Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Reconciliation of Historical FFO and AFFO:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| (dollars in thousands, except share and per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
| Net income (loss) | $ | 98,104 | $ | 124,710 | $ | 444,550 | $ | 356,973 | |||||||
| Real estate related depreciation, amortization and accretion | 354,095 | 266,961 | 1,211,360 | 1,082,083 | |||||||||||
| Asset write-down charges | 7,038 | 6,202 | 17,322 | 34,453 | |||||||||||
| Dividends on preferred stock | (29,935 | ) | (10,997 | ) | (29,935 | ) | (43,988 | ) | |||||||
FFO(1)(2)(3)(4) | $ | 429,302 | $ | 386,875 | $ | 1,643,297 | $ | 1,429,521 | |||||||
| FFO (from above) | $ | 429,302 | $ | 386,875 | $ | 1,643,297 | $ | 1,429,521 | |||||||
| Adjustments to increase (decrease) FFO: | |||||||||||||||
| Straight-lined revenue | (2,640 | ) | (5,001 | ) | 314 | (47,377 | ) | ||||||||
| Straight-lined expense | 22,699 | 23,114 | 92,602 | 94,246 | |||||||||||
| Stock-based compensation expense | 29,976 | 21,241 | 96,435 | 96,538 | |||||||||||
| Non-cash portion of tax provision | 11,916 | 2,091 | 9,214 | 7,322 | |||||||||||
| Non-real estate related depreciation, amortization and accretion | 8,116 | 6,865 | 31,048 | 26,468 | |||||||||||
| Amortization of non-cash interest expense | 1,731 | 3,040 | 9,368 | 14,333 | |||||||||||
| Other (income) expense | 1,468 | 4,212 | (1,994 | ) | 8,835 | ||||||||||
| Gains (losses) on retirement of long-term obligations | — | — | 3,525 | 52,291 | |||||||||||
| Acquisition and integration costs | 34,351 | 5,994 | 61,431 | 17,453 | |||||||||||
| Capital improvement capital expenditures | (13,519 | ) | (17,467 | ) | (40,844 | ) | (42,818 | ) | |||||||
| Corporate capital expenditures | (11,604 | ) | (24,563 | ) | (43,991 | ) | (46,948 | ) | |||||||
AFFO(1)(2)(3)(4) | $ | 511,797 | $ | 406,402 | $ | 1,860,405 | $ | 1,609,864 | |||||||
Weighted average common shares outstanding—diluted(5) | 408,130 | 352,878 | 383,221 | 340,879 | |||||||||||
AFFO per share(1)(3)(4) | $ | 1.25 | $ | 1.15 | $ | 4.85 | $ | 4.72 | |||||||
| (1) | See “Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO. |
| (2) | FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid. |
| (3) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
| (4) | Attributable to CCIC common stockholders. |
| (5) | Based on the diluted weighted-average common shares outstanding for the three and twelve months ended December 31, 2017 and 2016. For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of the 6.875% Mandatory Convertible Preferred Stock in the share count. |
33
Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Reconciliation of Historical FFO and AFFO:
| Years Ended December 31, | |||||||||||
| (in thousands of dollars, except share and per share amounts) | 2016 | 2015 | 2014 | ||||||||
| Net income (loss) | $ | 356,973 | $ | 525,286 | $ | 346,314 | |||||
| Real estate related depreciation, amortization and accretion | 1,082,083 | 1,018,303 | 971,562 | ||||||||
| Asset write-down charges | 34,453 | 33,468 | 14,246 | ||||||||
| Dividends on preferred stock | (43,988 | ) | (43,988 | ) | (43,988 | ) | |||||
FFO(1)(2)(3)(4) | $ | 1,429,521 | $ | 1,533,069 | $ | 1,288,133 | |||||
| FFO (from above) | $ | 1,429,521 | $ | 1,533,069 | $ | 1,288,133 | |||||
| Adjustments to increase (decrease) FFO: | |||||||||||
| Straight-lined revenue | (47,377 | ) | (111,263 | ) | (183,393 | ) | |||||
| Straight-lined expense | 94,246 | 98,738 | 101,890 | ||||||||
| Stock-based compensation expense | 96,538 | 67,148 | 56,431 | ||||||||
Non-cash portion of tax provision(5) | 7,322 | (63,935 | ) | (19,490 | ) | ||||||
| Non-real estate related depreciation, amortization and accretion | 26,468 | 17,875 | 14,219 | ||||||||
| Amortization of non-cash interest expense | 14,333 | 37,126 | 80,854 | ||||||||
| Other (income) expense | 8,835 | (57,028 | ) | (11,992 | ) | ||||||
| (Gains) losses on retirement of long-term obligations | 52,291 | 4,157 | 44,629 | ||||||||
| Acquisition and integration costs | 17,453 | 15,678 | 34,145 | ||||||||
| Capital improvement capital expenditures | (42,818 | ) | (46,789 | ) | (31,056 | ) | |||||
| Corporate capital expenditures | (46,948 | ) | (58,142 | ) | (50,317 | ) | |||||
AFFO(1)(2)(3)(4) | $ | 1,609,864 | $ | 1,436,635 | $ | 1,324,054 | |||||
Weighted average common shares outstanding—diluted(6) | 340,879 | 334,062 | 333,265 | ||||||||
AFFO per share(1)(3)(4) | $ | 4.72 | $ | 4.30 | $ | 3.97 | |||||
| (1) | See "Definitions of Non-GAAP Measures, Segment Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO. |
| (2) | FFO and AFFO are reduced by cash paid for preferred stock dividends during the period in which they are paid. |
| (3) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
| (4) | Attributable to CCIC common stockholders. |
| (5) | 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. |
| (6) | Based on the diluted weighted-average common shares outstanding for the twelve months ended December 31, 2016, 2015, 2014 and 2013. |
34
Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Reconciliation of Current Outlook for FFO and AFFO:
| Q1 2018 | Full Year 2018 | ||||||
| (in millions of dollars, except share and per share amounts) | Outlook | Outlook | |||||
| Net income (loss) | $116 | to | $141 | $511 | to | $591 | |
| Real estate related depreciation, amortization and accretion | $367 | to | $377 | $1,500 | to | $1,520 | |
| Asset write-down charges | $9 | to | $11 | $35 | to | $45 | |
| Dividends on preferred stock | $(28) | to | $(28) | $(113) | to | $(113) | |
FFO(1)(2)(3) | $477 | to | $487 | $1,965 | to | $2,010 | |
Weighted-average common shares outstanding—diluted(4) | 408.1 | 408.1 | |||||
FFO per share(1)(2)(3) | $1.17 | to | $1.19 | $4.81 | to | $4.92 | |
| FFO (from above) | $477 | to | $487 | $1,965 | to | $2,010 | |
| Adjustments to increase (decrease) FFO: | |||||||
| Straight-lined revenue | $(7) | to | $3 | $21 | to | $41 | |
| Straight-lined expense | $17 | to | $27 | $72 | to | $92 | |
| Stock-based compensation expense | $27 | to | $31 | $116 | to | $124 | |
| Non-cash portion of tax provision | $3 | to | $13 | $(8) | to | $7 | |
| Non-real estate related depreciation, amortization and accretion | $13 | to | $23 | $66 | to | $81 | |
| Amortization of non-cash interest expense | $0 | to | $5 | $5 | to | $15 | |
| Other (income) expense | $(1) | to | $3 | $3 | to | $5 | |
| (Gains) losses on retirement of long-term obligations | $0 | to | $0 | $0 | to | $0 | |
| Acquisition and integration costs | $13 | to | $17 | $45 | to | $55 | |
| Capital improvement capital expenditures | $(22) | to | $(12) | $(76) | to | $(61) | |
| Corporate capital expenditures | $(21) | to | $(11) | $(56) | to | $(41) | |
AFFO(1)(2)(3) | $538 | to | $548 | $2,219 | to | $2,264 | |
Weighted-average common shares outstanding—diluted(4) | 408.1 | 408.1 | |||||
AFFO per share(1)(2)(3) | $1.32 | to | $1.34 | $5.44 | to | $5.55 | |
| (1) | See “Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO. Our AFFO for historical periods may not be comparable to those periods presented prospectively from and after January 1, 2018, including our first quarter 2018 and full year 2018 Outlook included herein. See also "Definitions of Non-GAAP Financial Measures, Segment Measures and Other Calculations" in the Appendix for further information. |
| (2) | The above reconciliation excludes line items included in our definition which are not applicable for the periods shown. |
| (3) | Attributable to CCIC common stockholders. |
| (4) | The assumption for first quarter 2018 and full year 2018 diluted weighted-average common shares outstanding is 408.1 million based on diluted common shares outstanding as of December 31, 2017. For all periods presented, the diluted weighted-average common shares outstanding does not include any assumed conversion of the 6.875% Mandatory Convertible Preferred Stock in the share count. |
35
Crown Castle International Corp.
Fourth Quarter 2017
| COMPANY OVERVIEW | FINANCIALS & METRICS | ASSET PORTFOLIO OVERVIEW | CAPITALIZATION OVERVIEW | APPENDIX |
Net debt to Last Quarter Annualized Adjusted EBITDA calculation:
| Three Months Ended December 31, | |||||||
| (dollars in millions) | 2017 | 2016 | |||||
| Total face value of debt | $ | 16,261.8 | $ | 12,261.7 | |||
Ending cash and cash equivalents(1) | 314.1 | 567.6 | |||||
| Total net debt | $ | 15,947.7 | $ | 11,694.1 | |||
| Adjusted EBITDA for the three months ended December 31, | $ | 707.0 | $ | 574.6 | |||
| Last quarter annualized Adjusted EBITDA | 2,828.0 | 2,298.5 | |||||
| Net debt to Last Quarter Annualized Adjusted EBITDA | 5.6 | x | (2) | 5.1 | x | ||
Cash Interest Coverage Ratio Calculation:
| Three Months Ended December 31, | |||||||
| (dollars in thousands) | 2017 | 2016 | |||||
| Adjusted EBITDA | $ | 707,012 | $ | 574,617 | |||
| Interest expense on debt obligations | 158,943 | 126,336 | |||||
| Interest Coverage Ratio | 4.4 | x | 4.5 | x | |||
| (1) | Excludes restricted cash. |
| (2) | The Net Debt to Last Quarter Annualized Adjusted EBITDA calculation does not give effect to a full quarter ownership of Lightower, as this acquisition closed on November 1, 2017. For the quarter ended December 31, 2017, Lightower contribution to the Company's Adjusted EBITDA was $83 million. |
36