HIGHLIGHTS
Crown Castle International Corp. (NYSE:CCI) ("Crown Castle") today
reported results for the quarter and year ended December 31,
2015 and announced that the Board of Directors has approved a
succession plan for its Chief Executive Officer. Effective
June 1, 2016, Jay Brown, currently Crown Castle’s Chief Financial
Officer, will become Crown Castle’s President and Chief Executive
Officer. Ben Moreland, currently Crown Castle’s President and
Chief Executive Officer, will remain in an executive position as
Executive Vice-Chairman of the Board of Directors.
"The fourth quarter 2015 results demonstrate the
continuing investments being made by the wireless carriers as they
seek to improve network quality and capacity in order to meet
consumer demand," stated Mr. Moreland. "In addition to
delivering great results throughout the year, we accomplished a
number of strategic objectives in 2015 that strengthened our
portfolio of assets, expanded our growth opportunities and
fortified our balance sheet. Looking ahead to the remainder
of 2016 and beyond, we believe the positive underlying fundamentals
driving the increase in mobile data and the resulting need for
continued network investments remain strong, as evidenced by our
increased full year 2016 Outlook and our long-term goal of
achieving 6% to 7% annual growth in dividend per share. Our
confidence in delivering this level of growth is underpinned by our
long-term, high quality tenant leases that represent $20 billion in
future contracted rent payments and the attractive value
proposition that we offer to the wireless carriers. As a
shared wireless infrastructure provider, Crown Castle provides the
wireless carriers with quick and cost-effective access to wireless
infrastructure as they seek to upgrade and enhance their networks
to meet increasing consumer demand for mobile data."
RESULTS FOR THE QUARTER
The table below sets forth select financial
results for the three month period ended December 31,
2015. For further information, refer to the financial
statements and non-GAAP financial measure reconciliations and other
calculations included in this press release. Unless otherwise
indicated, figures presented in this press release do not include
financial results of Crown Castle’s former Australian subsidiary
("CCAL"). As previously announced, Crown Castle completed the
sale of CCAL on May 28, 2015.
|
|
|
|
($ in millions,except per share amounts) |
Actual |
MidpointQ4 2015 Outlook(a) |
Actual Compared to Outlook |
Q4 2014 |
Q4 2015 |
$ Change |
% Change |
Site Rental Revenues |
$ |
723 |
|
$ |
785 |
|
+$ |
62 |
|
|
9 |
% |
$ |
781 |
|
+$ |
4 |
|
Site Rental Gross Margin |
$ |
494 |
|
$ |
538 |
|
+$ |
44 |
|
|
9 |
% |
$ |
537 |
|
+$ |
1 |
|
Adjusted EBITDA |
$ |
520 |
|
$ |
540 |
|
+$ |
20 |
|
|
4 |
% |
$ |
539 |
|
+$ |
1 |
|
AFFO |
$ |
328 |
|
$ |
372 |
|
+$ |
44 |
|
|
13 |
% |
$ |
371 |
|
+$ |
1 |
|
AFFO per Share |
$ |
0.98 |
|
$ |
1.11 |
|
+$ |
0.13 |
|
|
13 |
% |
$ |
1.11 |
|
$ |
— |
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(a) As issued on October 21,
2015 |
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- Crown Castle exceeded the midpoint of its previously provided
fourth quarter 2015 Outlook for site rental revenues, site rental
gross margin, Adjusted EBITDA and AFFO.
- Site rental revenue growth of $62 million from fourth quarter
2014 to fourth quarter 2015 is comprised of $49 million in Organic
Site Rental Revenue growth, less $17 million in adjustments for
straight-line accounting, plus $30 million in contributions from
acquisitions, including Sunesys, and other items. The Organic
Site Rental Revenue growth of $49 million represents approximately
7% year-over-year growth, comprised of 10% growth from new leasing
activity and contracted tenant escalations, net of 3% of tenant
non-renewals.
- During fourth quarter 2015, the Sunesys acquisition generated
$26 million in site rental revenues, $19 million in site rental
gross margin and $4 million in general and administrative
expenses. The Sunesys acquisition closed on August 4,
2015.
RESULTS FOR THE YEAR
The table below sets forth select financial
results for the twelve month period ended December 31,
2015.
|
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|
|
($ in millions,except per share amounts) |
Actual |
MidpointFull Year 2015 Outlook(a) |
Actual Compared to Outlook |
|
2014 |
|
|
2015 |
|
$ Change |
% Change |
Site Rental Revenues |
$ |
2,867 |
|
$ |
3,018 |
|
+$ |
151 |
|
|
5 |
% |
$ |
3,014 |
|
+$ |
4 |
|
Site Rental Gross Margin |
$ |
1,960 |
|
$ |
2,055 |
|
+$ |
95 |
|
|
5 |
% |
$ |
2,053 |
|
+$ |
2 |
|
Adjusted EBITDA |
$ |
2,051 |
|
$ |
2,119 |
|
+$ |
68 |
|
|
3 |
% |
$ |
2,118 |
|
+$ |
1 |
|
AFFO |
$ |
1,324 |
|
$ |
1,437 |
|
+$ |
113 |
|
|
9 |
% |
$ |
1,436 |
|
+$ |
1 |
|
AFFO per Share |
$ |
3.97 |
|
$ |
4.30 |
|
+$ |
0.33 |
|
|
8 |
% |
$ |
4.30 |
|
$ |
— |
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(a) As issued on October 21,
2015 |
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- Site rental revenue growth of $151 million from full year 2014
to full year 2015 is comprised of $166 million in Organic Site
Rental Revenue growth, less $72 million in adjustments for
straight-line accounting, plus $57 million in contributions from
acquisitions, including Sunesys, and other items. The Organic
Site Rental Revenue growth of $166 million represents approximately
6% year-over-year growth, comprised of 10% growth from new leasing
activity and contracted tenant escalations, net of 4% of tenant
non-renewals.
- For full year 2015, the Sunesys acquisition generated $42
million in site rental revenues, $30 million in site rental gross
margin and $6 million in general and administrative expenses.
INVESTING AND FINANCING
ACTIVITIES
During fourth quarter 2015, Crown Castle
invested approximately $251 million in capital expenditures,
comprised of $23 million of land purchases, $29 million of
sustaining capital expenditures and $199 million of revenue
generating capital expenditures. Revenue generating capital
expenditures consisted of $90 million on existing sites and $109
million on the construction of new sites, primarily small cell
construction activity.
On December 31, 2015, Crown Castle paid a
quarterly common stock dividend of $0.885 per common share, or
approximately $295 million in the aggregate. During the
twelve month period ended December 31, 2015, Crown Castle paid
quarterly common stock dividends, in the aggregate, of $3.345 per
common share, of which $2.419 per common share has been
characterized as capital gains distributions. For further
information regarding the tax characterization of Crown Castle's
2015 common stock and preferred stock distributions, please refer
to Crown Castle's press release issued on January 20, 2016.
As of December 31, 2015, Crown Castle had
approximately $179 million in cash and cash equivalents (excluding
restricted cash). Further, on January 21, 2016, Crown Castle
International Corp. announced it completed a new $5.5 billion
Senior Unsecured Credit Facility ("New Facility") consisting of a
$2.5 billion five-year Senior Unsecured Revolving Credit Facility
("Revolver") maturing on January 21, 2021, a $2.0 billion Senior
Unsecured Term Loan A Facility maturing on January 21, 2021 and a
$1.0 billion Senior Unsecured 364-Day Revolving Facility maturing
on January 19, 2017. The proceeds from the New Facility,
together with cash on hand, were used to repay all outstanding
borrowings under the existing Senior Secured Credit Facility of
Crown Castle Operating Company. As of January 26, 2016, Crown
Castle had approximately $1.6 billion of availability under its
Revolver.
"We delivered great results throughout 2015 and
accomplished several significant milestones that I believe position
us to continue our track record of creating value for our
shareholders," stated Mr. Brown. "During 2015, we achieved an
investment grade credit rating from each of S&P and Fitch
Ratings. Further, in 2015, we redeployed capital from the
divestiture of our Australian business to further grow and
strengthen our leadership position in wireless infrastructure in
the U.S., which we believe is the most attractive market for
wireless investment. We believe the quality of our
U.S.-focused portfolio of approximately 40,000 towers and 16,000
miles of fiber supporting small cell deployments, together with the
strength of our balance sheet, illustrates the importance we place
on generating a high-quality, growing dividend stream and
attractive total returns for our shareholders."
SUCCESSION PLAN FOR CHIEF EXECUTIVE
OFFICER
As approved by Crown Castle’s Board of
Directors, effective June 1, 2016, Mr. Brown will become Crown
Castle’s President and Chief Executive Officer. Crown Castle
currently expects that Mr. Brown will be nominated to stand for
election to its Board of Directors at the 2016 annual meeting of
stockholders. Mr. Moreland will remain in an executive
position as Executive Vice-Chairman of the Board of Directors with
principal responsibility for overseeing Crown Castle’s strategy and
ensuring leadership continuity.
"The Board of Directors is extremely pleased to
put in place a succession plan that we believe ensures continuity
of the Company’s strategy and vision," stated J. Landis Martin,
Crown Castle’s Chairman of the Board of Directors. "Over the
last eight years, Mr. Moreland, Mr. Brown and Crown Castle’s
leadership team have positioned Crown Castle as the leading
wireless infrastructure provider in the U.S. by focusing on
execution and disciplined capital allocation. With the appointment
of Mr. Brown as Chief Executive Officer, the Board of Directors is
confident that this focus remains unchanged as we continue to
deliver value for our shareholders, customers and employees."
"It has truly been an honor to work with the
most talented employees and leadership team in the industry, and I
am proud of what we have accomplished," stated Mr. Moreland.
"It has been a privilege to lead Crown Castle, and I would like to
thank our leadership team and employees for their support and
dedication. Having worked closely with Jay for nearly 17
years, I am confident that he is the right leader for Crown Castle
as we continue to take the company to new heights. In my new
role, I look forward to working with Jay, the leadership team and
the Board to help guide the overall strategy at Crown Castle as we
continue to capitalize on the strong wireless industry
fundamentals."
"Crown Castle is well-positioned for the
tremendous opportunities that lie ahead in the U.S. as the wireless
carriers continue to enhance their networks for consumers," stated
Mr. Brown. "As such, our strategy remains unchanged. As
Crown Castle has been for a long time, we will remain focused on
driving long-term shareholder returns through disciplined capital
allocation and delivering for our customers. I am excited
about the new role and the opportunity to lead the Crown Castle
team, which our customers rank as the best in the industry.
Since 1999, Ben and I have worked closely together and he has been
a great friend and mentor. I look forward to continuing to
work together as we lead Crown Castle to the next chapter of
growth."
Mr. Brown was appointed Senior Vice President,
Chief Financial Officer and Treasurer effective July 2008. Mr.
Brown was appointed Treasurer in May 2004 and served as Vice
President of Finance from August 2001 until his appointment as
Chief Financial Officer. Prior to that time and since joining
Crown Castle in August of 1999, Mr. Brown served in a number of
positions in corporate development and corporate finance. Mr. Brown
is a certified public accountant.
The Company is conducting an executive search
for the Chief Financial Officer to succeed Mr. Brown.
OUTLOOK
This Outlook section contains forward-looking
statements, and actual results may differ materially.
Information regarding potential risks which could cause actual
results to differ from the forward-looking statements herein is set
forth below and in Crown Castle's filings with the Securities and
Exchange Commission ("SEC").
The following table sets forth Crown Castle's
current Outlook for first quarter 2016 and full year 2016:
|
|
|
(in
millions, except per share amounts) |
First Quarter 2016 |
Full Year 2016 |
Site
rental revenues |
$ |
788 |
|
to |
$ |
793 |
|
$ |
3,162 |
|
to |
$ |
3,187 |
|
Site
rental cost of operations |
$ |
245 |
|
to |
$ |
250 |
|
$ |
992 |
|
to |
$ |
1,017 |
|
Site
rental gross margin |
$ |
540 |
|
to |
$ |
545 |
|
$ |
2,160 |
|
to |
$ |
2,185 |
|
Adjusted EBITDA(a) |
$ |
533 |
|
to |
$ |
538 |
|
$ |
2,168 |
|
to |
$ |
2,193 |
|
Interest expense and
amortization of deferred financing costs(b) |
$ |
127 |
|
to |
$ |
132 |
|
$ |
517 |
|
to |
$ |
537 |
|
FFO(a) |
$ |
326 |
|
to |
$ |
331 |
|
$ |
1,411 |
|
to |
$ |
1,436 |
|
AFFO(a) |
$ |
378 |
|
to |
$ |
383 |
|
$ |
1,561 |
|
to |
$ |
1,586 |
|
AFFO
per share(a)(c) |
$ |
1.13 |
|
to |
$ |
1.15 |
|
$ |
4.64 |
|
to |
$ |
4.72 |
|
Net
income (loss) |
$ |
54 |
|
to |
$ |
95 |
|
$ |
356 |
|
to |
$ |
463 |
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(a) See reconciliation of this non-GAAP financial
measures to net income (loss) included herein. |
(b) See the reconciliation of "components of interest
expense and amortization of deferred financing costs" herein for a
discussion of non-cash interest expense. |
(c) Based on diluted shares outstanding as of
December 31, 2015 of approximately 334 million shares for the
first quarter 2016. Full year 2016 assumes diluted shares
outstanding of approximately 336 million shares, inclusive of the
assumed conversion of the mandatory convertible preferred stock in
November 2016. |
|
Full Year 2016 Outlook
The table below compares the results for full
year 2015, the midpoint of the current full year 2016 Outlook and
the midpoint of the previously provided full year 2016 Outlook for
select metrics:
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|
FY 2015 to Midpoint of FY 2016 Outlook Comparison |
Previous Full Year 2016 Outlook(a) |
Current Compared to Previous Outlook |
($ in
millions, except per share amounts) |
Full Year 2015 Actual |
Current Full Year2016 Outlook |
$ Change |
% Change |
Site Rental Revenues |
$ |
3,018 |
|
$ |
3,175 |
|
+$ |
157 |
|
|
+5 |
% |
$ |
3,165 |
|
+$ |
10 |
|
Site Rental Gross Margin |
$ |
2,055 |
|
$ |
2,173 |
|
+$ |
118 |
|
|
+6 |
% |
$ |
2,166 |
|
+$ |
7 |
|
Adjusted EBITDA |
$ |
2,119 |
|
$ |
2,181 |
|
+$ |
62 |
|
|
+3 |
% |
$ |
2,169 |
|
+$ |
12 |
|
AFFO |
$ |
1,437 |
|
$ |
1,574 |
|
+$ |
137 |
|
|
+10 |
% |
$ |
1,563 |
|
+$ |
11 |
|
AFFO per Share |
$ |
4.30 |
|
$ |
4.68 |
|
+$ |
0.38 |
|
|
+9 |
% |
$ |
4.66 |
|
+$ |
0.02 |
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(a) As issued on October 21,
2015 |
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- The chart below reconciles the components of expected growth,
at the midpoint, in site rental revenues and Organic Site Rental
Revenue from 2015 to 2016 of approximately $157 million and $165
million, respectively. Organic Site Rental Revenue growth is
expected be approximately 6%, at the midpoint, from 2015 to
2016.
An infographic accompanying this release is available
athttp://www.globenewswire.com/NewsRoom/AttachmentNg/82bb62e6-ea01-429a-8428-aedd2c1f268f
- The chart below reconciles the components of expected growth in
AFFO from 2015 to 2016 of approximately $137 million at the
midpoint.
An infographic accompanying this release is available
athttp://www.globenewswire.com/NewsRoom/AttachmentNg/347d5eb1-f0a0-4dc3-9dc6-3d71626c0059
- Expected network services gross margin contribution for full
year 2016 remains $230 million to $250 million, which is unchanged
from the previously provided full year 2016 Outlook, compared to
full year 2015 contribution of $288 million. The
year-over-year decline is primarily driven by equipment
decommissioning fees generated during 2015 which are not expected
to recur in 2016. Network services gross margin
contribution for first quarter 2016 is expected to be $50 million
to $60 million compared to fourth quarter 2015 contribution of $66
million.
- Sunesys is expected to generate approximately $105 million in
site rental revenues, $75 million in site rental gross margin and
$15 million in general and administrative expenses during full year
2016.
- Additional information regarding Crown Castle's expectations
for site rental revenue growth, including tenant non-renewals, is
available in Crown Castle's quarterly Supplemental Information
Package posted in the Investors section of its website.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for
Thursday, January 28, 2016, at 8:00 a.m. eastern time. The
conference call may be accessed by dialing 877-857-6173 and asking
for the Crown Castle call (access code 331503) at least 30 minutes
prior to the start time. The conference call may also be
accessed live over the Internet at
http://investor.crowncastle.com. Supplemental materials for
the call have been posted on the Crown Castle website at
http://investor.crowncastle.com.
A telephonic replay of the conference call will
be available from 11:00 a.m. eastern time on Thursday, January 28,
2016, through 11:00 a.m. eastern time on Wednesday, April 27, 2016,
and may be accessed by dialing 888-203-1112 and using access code
331503. An audio archive will also be available on the
company's website at http://investor.crowncastle.com shortly
after the call and will be accessible for approximately 90
days.
ABOUT CROWN CASTLE
Crown Castle provides wireless carriers with the
infrastructure they need to keep people connected and businesses
running. With approximately 40,000 towers and 17,000 small cell
nodes supported by approximately 16,000 miles of fiber, Crown
Castle is the nation's largest provider of shared wireless
infrastructure with a significant presence in the top 100 US
markets. For more information on Crown Castle, please visit
www.crowncastle.com.
Non-GAAP Financial Measures and Other
Calculations
This press release includes presentations of
Adjusted EBITDA, Funds from Operations, Adjusted Funds from
Operations, Organic Site Rental Revenues, and Site Rental Revenues,
as Adjusted, which are non-GAAP financial measures. These
non-GAAP financial measures are not intended as alternative
measures of operating results or cash flow from operations (as
determined in accordance with Generally Accepted Accounting
Principles ("GAAP")). Each of the amounts included in the
calculation of Adjusted EBITDA, FFO, AFFO, Organic Site Rental
Revenues, and Site Rental Revenues, as Adjusted, are computed in
accordance with GAAP, with the exception of: (1) sustaining capital
expenditures, which is not defined under GAAP and (2) our
adjustment to the income tax provision in calculations of AFFO for
periods prior to our REIT conversion.
Our measures of Adjusted EBITDA, FFO, AFFO,
Organic Site Rental Revenues and Site Rental Revenues, as Adjusted,
may not be comparable to similarly titled measures of other
companies, including other companies in the tower sector or those
reported by other REITs. Our FFO and AFFO may not be
comparable to those reported in accordance with National
Association of Real Estate Investment Trusts, including with
respect to the impact of income taxes for periods prior to our REIT
conversion.
Adjusted EBITDA, FFO, AFFO, Organic Site Rental
Revenues and Site Rental Revenues, as Adjusted, are presented as
additional information because management believes these measures
are useful indicators of the financial performance of our core
businesses. In addition, Adjusted EBITDA is a measure of
current financial performance used in our debt covenant
calculations.
Adjusted EBITDA. Crown Castle defines Adjusted
EBITDA as net income (loss) plus restructuring charges (credits),
asset write-down charges, acquisition and integration costs,
depreciation, amortization and accretion, amortization of prepaid
lease purchase price adjustments, interest expense and amortization
of deferred financing costs, gains (losses) on retirement of
long-term obligations, net gain (loss) on interest rate swaps,
gains (losses) on foreign currency swaps, impairment of
available-for-sale securities, interest income, other income
(expense), benefit (provision) for income taxes, cumulative effect
of a change in accounting principle, income (loss) from
discontinued operations and stock-based compensation expense.
Funds from Operations ("FFO"). Crown Castle
defines Funds from Operations as net income plus real estate
related depreciation, amortization and accretion and asset
write-down charges, less 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. Crown Castle defines FFO per
share as FFO divided by the diluted weighted average common shares
outstanding.
Adjusted Funds from Operations ("AFFO").
Crown Castle defines Adjusted Funds from Operations as FFO before
straight-line revenue, straight-line expense, stock-based
compensation expense, non-cash portion of tax provision, non-real
estate related depreciation, amortization and accretion,
amortization of non-cash interest expense, other (income) expense,
gain (loss) on retirement of long-term obligations, net gain (loss)
on interest rate swaps, acquisition and integration costs, and
adjustments for noncontrolling interests, and less capital
improvement capital expenditures and corporate capital
expenditures.
AFFO per share. Crown Castle defines AFFO per
share as AFFO divided by diluted weighted average common shares
outstanding.
Site Rental Revenues, as Adjusted. Crown Castle
defines Site Rental Revenues, as Adjusted, as site rental revenues,
as reported, less straight-line revenues.
Organic Site Rental Revenues. Crown Castle
defines Organic Site Rental Revenues as site rental revenues, as
reported, less straight-line revenues, the impact of tower
acquisitions and construction, foreign currency adjustments and
certain non recurring items.
Sustaining capital expenditures. Crown
Castle defines sustaining capital expenditures as either (1)
corporate related capital improvements, such as buildings,
information technology equipment and office equipment or (2)
capital improvements to tower sites that enable our customers'
ongoing quiet enjoyment of the tower.
The tables set forth below reconcile these
non-GAAP financial measures to comparable GAAP financial
measures. The components in these tables may not sum to the
total due to rounding.
Reconciliations of Non-GAAP Financial
Measures to Comparable GAAP Financial Measures and Other
Calculations:
Adjusted EBITDA for the three and twelve
months ended December 31, 2015 and 2014 is computed as
follows:
|
|
|
|
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
December 31, 2015 |
|
December 31, 2014 |
|
December 31, 2015 |
|
December 31, 2014 |
(in millions) |
|
|
|
|
|
|
|
Net income (loss) |
$ |
141.1 |
|
|
$ |
152.6 |
|
|
$ |
1,524.3 |
|
|
$ |
398.8 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
Income (loss) from discontinued
operations |
1.7 |
|
|
(24.0 |
) |
|
(999.0 |
) |
|
(52.5 |
) |
Asset write-down charges |
13.8 |
|
|
3.6 |
|
|
33.5 |
|
|
14.2 |
|
Acquisition and integration
costs |
3.7 |
|
|
5.3 |
|
|
15.7 |
|
|
34.1 |
|
Depreciation, amortization and
accretion |
269.6 |
|
|
246.8 |
|
|
1,036.2 |
|
|
985.8 |
|
Amortization of prepaid lease
purchase price adjustments |
5.1 |
|
|
5.4 |
|
|
20.5 |
|
|
20.0 |
|
Interest expense and amortization
of deferred financing costs(a) |
128.3 |
|
|
141.1 |
|
|
527.1 |
|
|
573.3 |
|
Gains (losses) on retirement of
long-term obligations |
— |
|
|
— |
|
|
4.2 |
|
|
44.6 |
|
Interest income |
(0.7 |
) |
|
— |
|
|
(1.9 |
) |
|
(0.3 |
) |
Other income (expense) |
1.5 |
|
|
(21.3 |
) |
|
(57.0 |
) |
|
(12.0 |
) |
Benefit (provision) for income
taxes(c) |
(42.1 |
) |
|
(3.1 |
) |
|
(51.5 |
) |
|
(11.2 |
) |
Stock-based compensation
expense |
17.9 |
|
|
13.2 |
|
|
67.1 |
|
|
56.4 |
|
Adjusted
EBITDA(b) |
$ |
539.8 |
|
|
$ |
519.6 |
|
|
$ |
2,119.2 |
|
|
$ |
2,051.3 |
|
|
(a) See the
reconciliation of "components of interest expense and amortization
of deferred financing costs" herein for a discussion of non-cash
interest expense. |
(b) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
(c) For the
three months and year ended December 31, 2015, primarily consists
of the de-recognition of net deferred tax liabilities related to
the Company completing all the necessary steps to include the small
cells as part of the REIT. |
|
Adjusted EBITDA for the quarter ending March 31, 2016
and the year ending December 31, 2016 is forecasted as
follows:
|
Q1 2016 |
|
Full Year 2016 |
(in
millions) |
Outlook |
|
Outlook |
Net income (loss) |
$ |
54 |
|
to |
$ |
95 |
|
|
$ |
356 |
|
to |
$ |
463 |
|
Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
Asset write-down charges |
$ |
4 |
|
to |
$ |
6 |
|
|
$ |
15 |
|
to |
$ |
25 |
|
Acquisition and integration
costs |
$ |
2 |
|
to |
$ |
5 |
|
|
$ |
10 |
|
to |
$ |
15 |
|
Depreciation, amortization and
accretion |
$ |
263 |
|
to |
$ |
268 |
|
|
$ |
1,050 |
|
to |
$ |
1,070 |
|
Amortization of prepaid lease
purchase price adjustments |
$ |
4 |
|
to |
$ |
6 |
|
|
$ |
20 |
|
to |
$ |
22 |
|
Interest expense and amortization
of deferred financing costs(a) |
$ |
127 |
|
to |
$ |
132 |
|
|
$ |
517 |
|
to |
$ |
537 |
|
Gains (losses) on retirement of
long-term obligations |
$ |
25 |
|
to |
$ |
33 |
|
|
$ |
25 |
|
to |
$ |
33 |
|
Interest income |
$ |
(2 |
) |
to |
$ |
0 |
|
|
$ |
(3 |
) |
to |
$ |
(1 |
) |
Other income (expense) |
$ |
(1 |
) |
to |
$ |
2 |
|
|
$ |
1 |
|
to |
$ |
3 |
|
Benefit (provision) for income
taxes |
$ |
2 |
|
to |
$ |
6 |
|
|
$ |
16 |
|
to |
$ |
24 |
|
Stock-based compensation
expense |
$ |
19 |
|
to |
$ |
21 |
|
|
$ |
79 |
|
to |
$ |
84 |
|
Adjusted
EBITDA(b) |
$ |
533 |
|
to |
$ |
538 |
|
|
$ |
2,168 |
|
to |
$ |
2,193 |
|
|
(a) See the
reconciliation of "components of interest expense and amortization
of deferred financing costs" herein for a discussion of non-cash
interest expense. |
(b) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
|
FFO and AFFO for the quarter ending
March 31, 2016 and the year ending December 31, 2016 are
forecasted as follows:
|
Q1 2016 |
|
Full Year 2016 |
(in millions, except
share and per share amounts) |
Outlook |
|
Outlook |
Net income |
$ |
54 |
|
to |
$ |
95 |
|
|
$ |
356 |
|
to |
$ |
463 |
|
Real estate related
depreciation, amortization and accretion |
$ |
259 |
|
to |
$ |
262 |
|
|
$ |
1,033 |
|
to |
$ |
1,048 |
|
Asset write-down
charges |
$ |
4 |
|
to |
$ |
6 |
|
|
$ |
15 |
|
to |
$ |
25 |
|
Dividends on preferred
stock |
$ |
(11 |
) |
to |
$ |
(11 |
) |
|
$ |
(44 |
) |
to |
$ |
(44 |
) |
FFO(b)(c)(e) |
$ |
326 |
|
to |
$ |
331 |
|
|
$ |
1,411 |
|
to |
$ |
1,436 |
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
326 |
|
to |
$ |
331 |
|
|
$ |
1,411 |
|
to |
$ |
1,436 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
Straight-line revenue |
$ |
(20 |
) |
to |
$ |
(15 |
) |
|
$ |
(50 |
) |
to |
$ |
(35 |
) |
Straight-line expense |
$ |
21 |
|
to |
$ |
26 |
|
|
$ |
81 |
|
to |
$ |
96 |
|
Stock-based compensation
expense |
$ |
19 |
|
to |
$ |
21 |
|
|
$ |
79 |
|
to |
$ |
84 |
|
Non-cash portion of tax
provision |
$ |
0 |
|
to |
$ |
5 |
|
|
$ |
5 |
|
to |
$ |
20 |
|
Non-real estate related
depreciation, amortization and accretion |
$ |
4 |
|
to |
$ |
6 |
|
|
$ |
17 |
|
to |
$ |
22 |
|
Amortization of non-cash interest
expense |
$ |
4 |
|
to |
$ |
7 |
|
|
$ |
17 |
|
to |
$ |
23 |
|
Other (income) expense |
$ |
(1 |
) |
to |
$ |
2 |
|
|
$ |
1 |
|
to |
$ |
3 |
|
Gains (losses) on retirement of
long-term obligations |
$ |
25 |
|
to |
$ |
33 |
|
|
$ |
25 |
|
to |
$ |
33 |
|
Acquisition and integration
costs |
$ |
2 |
|
to |
$ |
5 |
|
|
$ |
10 |
|
to |
$ |
15 |
|
Capital improvement capital
expenditures |
$ |
(12 |
) |
to |
$ |
(10 |
) |
|
$ |
(48 |
) |
to |
$ |
(43 |
) |
Corporate capital expenditures |
$ |
(10 |
) |
to |
$ |
(8 |
) |
|
$ |
(31 |
) |
to |
$ |
(26 |
) |
AFFO(b)(c)(e) |
$ |
378 |
|
to |
$ |
383 |
|
|
$ |
1,561 |
|
to |
$ |
1,586 |
|
Weighted average common shares
outstanding — diluted(a)(d) |
|
334.3 |
|
|
|
336.3 |
|
AFFO per
share(b)(e) |
$ |
1.13 |
|
to |
$ |
1.15 |
|
|
$ |
4.64 |
|
to |
$ |
4.72 |
|
|
(a) Based on
diluted shares outstanding as of December 31, 2015 of
approximately 334 million shares for the first quarter 2016.
Full year 2016 assumes diluted shares outstanding of approximately
336 million shares, inclusive of the assumed conversion of the
mandatory convertible preferred stock in November 2016. |
(b) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion of the definitions of FFO and AFFO. |
(c) FFO and
AFFO are reduced by cash paid for preferred stock dividends. |
(d) The
diluted weighted average common shares outstanding assumes no
conversion of preferred stock in the share count other than as
discussed in footnote (a). |
(e) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
|
Organic Site Rental Revenue growth for the year ending
December 31, 2016 is forecasted as follows:
|
Midpoint of Full Year |
|
|
(in millions of
dollars) |
2016 Outlook |
|
Full Year 2015 |
GAAP site rental
revenues |
$ |
3,175 |
|
|
$ |
3,018 |
|
Site rental
straight-line revenues |
(43 |
) |
|
(111 |
) |
Other -
Non-recurring |
— |
|
|
— |
|
Site Rental Revenues,
as Adjusted(a)(c) |
$ |
3,132 |
|
|
$ |
2,907 |
|
Cash adjustments: |
|
|
|
Other |
— |
|
|
|
Acquisitions and
builds(b) |
(62 |
) |
|
|
Organic Site Rental
Revenues(a)(c)(d) |
$ |
3,070 |
|
|
|
Year-Over-Year
Revenue Growth |
|
|
|
GAAP site rental
revenues |
5.2 |
% |
|
|
Site Rental Revenues,
as Adjusted |
7.7 |
% |
|
|
Organic Site Rental
Revenues(e)(f) |
5.6 |
% |
|
|
|
(a) Includes amortization of prepaid rent. |
(b) The financial impact of acquisitions and
tower builds is excluded from organic site rental revenues until
the one-year anniversary of the acquisition or build. |
(c) Includes Site Rental Revenues, as Adjusted,
from the construction of new small cell nodes. |
(d) See "Non-GAAP Financial Measures and Other
Calculations" herein. |
(e) Year-over-year Organic Site Rental Revenue
growth for the year ending December 31, 2016: |
|
|
Midpoint of Full Year 2016 Outlook |
New leasing activity |
6.0 |
% |
Escalators |
3.0 |
% |
Organic Site Rental Revenue growth,
before non-renewals |
9.0 |
% |
Non-renewals |
(3.4 |
)% |
Organic Site Rental Revenue
growth |
5.6 |
% |
|
(f)
Calculated as the percentage change from Site Rental
Revenues, as Adjusted, for the prior period when compared to
Organic Site Rental Revenues for the current period. |
|
Organic Site Rental Revenue growth for the quarter and
year ended December 31, 2015 is as follows:
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
(in millions of
dollars) |
2015 |
|
2014 |
|
2015 |
|
2014 |
Reported GAAP site
rental revenues |
$ |
785 |
|
|
$ |
723 |
|
|
$ |
3,018 |
|
|
$ |
2,867 |
|
Site rental
straight-line revenues |
(22 |
) |
|
(39 |
) |
|
(111 |
) |
|
(183 |
) |
Other -
Non-recurring |
— |
|
|
— |
|
|
— |
|
|
(5 |
) |
Site Rental Revenues,
as Adjusted(a)(c) |
$ |
763 |
|
|
$ |
685 |
|
|
$ |
2,907 |
|
|
$ |
2,678 |
|
Cash adjustments: |
|
|
|
|
|
|
|
Other |
— |
|
|
|
|
— |
|
|
|
Acquisitions and
builds(b) |
(30 |
) |
|
|
|
(63 |
) |
|
|
Organic Site Rental
Revenues(a)(c)(d) |
$ |
734 |
|
|
|
|
$ |
2,844 |
|
|
|
Year-Over-Year
Revenue Growth |
|
|
|
|
|
|
|
Reported GAAP site
rental revenues |
8.6 |
% |
|
|
|
5.3 |
% |
|
|
Site Rental Revenues,
as Adjusted |
11.4 |
% |
|
|
|
8.5 |
% |
|
|
Organic Site Rental
Revenues(e)(f) |
7.1 |
% |
|
|
|
6.2 |
% |
|
|
|
(a) Includes amortization of prepaid rent. |
(b) The financial impact of acquisitions and
tower builds is excluded from organic site rental revenues until
the one-year anniversary of the acquisition or build. |
(c) Includes Site Rental Revenues, as Adjusted
from the construction of new small cells. |
(d) See "Non-GAAP Financial Measures and Other
Calculations" herein. |
(e) Quarter-over-quarter and year-over-year
Organic Site Rental Revenue growth for the period ending
December 31, 2015: |
|
|
Three Months Ended December 31, 2015 |
Twelve Months Ended December 31, 2015 |
New leasing activity |
6.9 |
% |
6.4 |
% |
Escalators |
3.4 |
% |
3.4 |
% |
Organic Site Rental Revenue growth,
before non-renewals |
10.3 |
% |
9.8 |
% |
Non-renewals |
(3.2 |
)% |
(3.6 |
)% |
Organic Site Rental Revenue
Growth |
7.1 |
% |
6.2 |
% |
|
(f)
Calculated as the percentage change from Site Rental
Revenues, as Adjusted, for the prior period when compared to
Organic Site Rental Revenues for the current period. |
|
FFO and AFFO for the three and twelve months ended
December 31, 2015 and 2014 are computed as
follows:
|
For the Three Months Ended |
|
For the Twelve Months Ended |
(in millions, except
share and per share amounts) |
December 31, 2015 |
|
December 31, 2014 |
|
December 31, 2015 |
|
December 31, 2014 |
Net income(a) |
$ |
142.7 |
|
|
$ |
128.6 |
|
|
$ |
525.3 |
|
|
$ |
346.3 |
|
Real estate related
depreciation, amortization and accretion |
264.7 |
|
|
243.1 |
|
|
1,018.3 |
|
|
971.6 |
|
Asset write-down
charges |
13.8 |
|
|
3.6 |
|
|
33.5 |
|
|
14.2 |
|
Dividends on preferred
stock |
(11.0 |
) |
|
(11.0 |
) |
|
(44.0 |
) |
|
(44.0 |
) |
FFO(b)(c)(e) |
$ |
410.3 |
|
|
$ |
364.3 |
|
|
$ |
1,533.1 |
|
|
$ |
1,288.1 |
|
Weighted average common shares
outstanding — diluted(d) |
334.3 |
|
|
333.6 |
|
|
334.1 |
|
|
333.3 |
|
FFO per
share(b)(e) |
$ |
1.23 |
|
|
$ |
1.09 |
|
|
$ |
4.59 |
|
|
$ |
3.87 |
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
410.3 |
|
|
$ |
364.3 |
|
|
$ |
1,533.1 |
|
|
$ |
1,288.1 |
|
Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
Straight-line revenue |
(22.3 |
) |
|
(38.7 |
) |
|
(111.3 |
) |
|
(183.4 |
) |
Straight-line expense |
24.8 |
|
|
25.9 |
|
|
98.7 |
|
|
101.9 |
|
Stock-based compensation
expense |
17.9 |
|
|
13.2 |
|
|
67.1 |
|
|
56.4 |
|
Non-cash portion of tax
provision(f) |
(43.7 |
) |
|
(4.9 |
) |
|
(63.9 |
) |
|
(19.5 |
) |
Non-real estate related
depreciation, amortization and accretion |
4.8 |
|
|
3.8 |
|
|
17.9 |
|
|
14.2 |
|
Amortization of non-cash interest
expense |
4.7 |
|
|
19.5 |
|
|
37.1 |
|
|
80.9 |
|
Other (income) expense |
1.5 |
|
|
(21.3 |
) |
|
(57.0 |
) |
|
(12.0 |
) |
Gains (losses) on retirement of
long-term obligations |
— |
|
|
— |
|
|
4.2 |
|
|
44.6 |
|
Acquisition and integration
costs |
3.7 |
|
|
5.3 |
|
|
15.7 |
|
|
34.1 |
|
Capital improvement capital
expenditures |
(14.3 |
) |
|
(15.6 |
) |
|
(46.8 |
) |
|
(31.1 |
) |
Corporate capital expenditures |
(15.2 |
) |
|
(23.1 |
) |
|
(58.1 |
) |
|
(50.3 |
) |
AFFO(b)(c)(e) |
$ |
372.2 |
|
|
$ |
328.3 |
|
|
$ |
1,436.6 |
|
|
$ |
1,324.1 |
|
Weighted average common shares
outstanding — diluted(d) |
334.3 |
|
|
333.6 |
|
|
334.1 |
|
|
333.3 |
|
AFFO per
share(b)(e) |
$ |
1.11 |
|
|
$ |
0.98 |
|
|
$ |
4.30 |
|
|
$ |
3.97 |
|
|
(a)
Exclusive of income (loss) from discontinued operations and
related noncontrolling interest of $(2 million) and $24 million for
the three months ended December 31, 2015 and 2014, respectively and
$1.0 billion and $52 million for the twelve months ended December
31, 2015 and 2014, respectively. |
(b) See
"Non-GAAP Financial Measures and Other Calculations" herein for a
discussion of our definitions of FFO and AFFO. |
(c) FFO and
AFFO are reduced by cash paid for preferred stock dividends. |
(d) The
diluted weighted average common shares outstanding assumes no
conversion of preferred stock in the share count. |
(e) The
above reconciliation excludes line items included in our definition
which are not applicable for the periods shown. |
(f) For the
three months and year ended December 31, 2015, primarily consists
of the de-recognition of net deferred tax liabilities related to
the Company completing all the necessary steps to include the small
cells as part of the REIT. |
|
The components of interest expense and amortization of
deferred financing costs for the three months ended
December 31, 2015 and 2014 are as follows:
|
For the Three Months Ended |
(in millions) |
December 31, 2015 |
|
December 31, 2014 |
Interest expense on
debt obligations |
$ |
123.6 |
|
|
$ |
121.5 |
|
Amortization of
deferred financing costs |
5.5 |
|
|
5.5 |
|
Amortization of
adjustments on long-term debt |
0.1 |
|
|
(0.9 |
) |
Amortization of
interest rate swaps(a) |
— |
|
|
15.3 |
|
Other, net |
(0.8 |
) |
|
(0.3 |
) |
Interest
expense and amortization of deferred financing costs |
$ |
128.3 |
|
|
$ |
141.1 |
|
|
(a) Relates to the amortization of interest rate
swaps; the swaps were cash settled in prior periods. |
|
The components of interest expense and
amortization of deferred financing costs for the quarter ending
March 31, 2016 and the year ending December 31, 2016 are forecasted
as follows:
|
Q1 2016 |
|
Full Year 2016 |
(in millions) |
Outlook |
|
Outlook |
Interest expense on
debt obligations |
$ |
124 |
|
to |
$ |
126 |
|
|
$ |
502 |
|
to |
$ |
512 |
|
Amortization of
deferred financing costs |
$ |
4 |
|
to |
$ |
6 |
|
|
$ |
21 |
|
to |
$ |
23 |
|
Amortization of
adjustments on long-term debt |
$ |
0 |
|
to |
$ |
1 |
|
|
$ |
(1 |
) |
to |
$ |
1 |
|
Other, net |
$ |
0 |
|
to |
$ |
0 |
|
|
$ |
(3 |
) |
to |
$ |
(1 |
) |
Interest
expense and amortization of deferred financing costs |
$ |
127 |
|
to |
$ |
132 |
|
|
$ |
517 |
|
to |
$ |
537 |
|
Debt balances and maturity dates as of
December 31, 2015 are as follows:
(in millions) |
Face Value |
|
Face Value |
|
|
|
|
|
As Adjusted(a) |
|
Final Maturity |
Revolver |
— |
|
855.0 |
|
Jan.
2021 |
Senior Unsecured
364-day Revolving Credit Facility |
— |
|
1,000.0 |
|
Jan.
2017 |
Senior Unsecured Term
Loan A |
— |
|
2,000.0 |
|
Jan.
2021 |
2012
Revolver |
1,125.0 |
|
— |
|
Jan.
2019 |
Term
Loan A |
629.4 |
|
— |
|
Jan.
2019 |
Term
Loan B |
2,247.0 |
|
— |
|
Jan.
2021 |
4.875% Senior Notes |
850.0 |
|
850.0 |
|
Apr.
2022 |
5.25% Senior Notes |
1,650.0 |
|
1,650.0 |
|
Jan.
2023 |
2012 Secured
Notes(b) |
1,500.0 |
|
1,500.0 |
|
Dec.
2017/Apr. 2023 |
Senior Secured Notes, Series 2009-1(c) |
141.6 |
|
141.6 |
|
Various |
Senior Secured Tower Revenue Notes, Series 2010-2-2010-3(d) |
1,600.0 |
|
1,600.0 |
|
Various |
Senior Secured Tower Revenue Notes, Series 2010-4-2010-6(e) |
1,300.0 |
|
1,300.0 |
|
Various |
Senior Secured Tower Revenue Notes, Series 2015-1-2015-2(f) |
1,000.0 |
|
1,000.0 |
|
Various |
Capital Leases and Other Obligations |
209.8 |
|
209.8 |
|
Various |
Total Debt |
$ |
12,252.7 |
|
|
$ |
12,106.3 |
|
|
|
Less:
Cash and Cash Equivalents(g) |
$ |
178.8 |
|
|
$ |
136.4 |
|
|
|
Net Debt |
$ |
12,073.9 |
|
|
$ |
11,969.9 |
|
|
|
|
(a) After
giving effect to the issuance of the New Facility, the repayment of
the previously existing revolving credit facility ("2012
Revolver"), Term Loan A, and Term Loan B and the receipt of the
installment payment from the sale of CCAL in January 2016. |
(b) The 2012
Secured Notes consist of $500 million aggregate principal amount of
2.381% secured notes due 2017 and $1.0 billion aggregate principal
amount of 3.849% secured notes due 2023. |
(c) The
Senior Secured Notes, Series 2009-1 consist of $71.6 million of
principal as of December 31, 2015 that amortizes during the
period beginning January 2010 and ending in 2019, and $70.0 million
of principal that amortizes during the period beginning in 2019 and
ending in 2029. |
(d) The
Senior Secured Tower Revenue Notes Series 2010-2 and 2010-3 have
principal amounts of $350.0 million and $1.25 billion with
anticipated repayment dates of 2017 and 2020, respectively. |
(e) The
Senior Secured Tower Revenue Notes Series 2010-5 and 2010-6 have
principal amounts of $300.0 million and $1.0 billion with
anticipated repayment dates of 2017 and 2020, respectively. |
(f) The
Senior Secured Tower Revenue Notes Series 2015-1 and 2015-2 have
principal amounts of $300.0 million and $700.0 million with
anticipated repayment dates of 2022 and 2025, respectively. |
(g) Excludes
restricted cash. |
|
Net Debt to Last Quarter Annualized Adjusted EBITDA is
computed as follows:
(in millions) |
For the Three Months Ended December 31, 2015 |
Total face value of
debt(a) |
$ |
12,106.3 |
|
Ending cash and cash
equivalents(a) |
136.4 |
|
Total Net Debt(a) |
$ |
11,969.9 |
|
|
|
Adjusted EBITDA for the
three months ended December 31, 2015 |
$ |
539.8 |
|
Last quarter annualized
adjusted EBITDA |
2,159.2 |
|
Net Debt to
Last Quarter Annualized Adjusted EBITDA |
5.5 |
x |
|
|
|
(a) After
giving effect to the issuance of the New Facility, the repayment of
the 2012 Revolver, Term Loan A, and Term Loan B and the receipt of
the installment payment from the sale of CCAL in January 2016. |
|
Sustaining capital expenditures for the
three months ended December 31, 2015 and 2014 is computed as
follows:
|
For the Three Months Ended |
(in millions) |
December 31, 2015 |
|
December 31, 2014 |
Capital
Expenditures |
$ |
250.7 |
|
|
$ |
259.6 |
|
Less: Land
purchases |
22.7 |
|
|
32.1 |
|
Less: Wireless
infrastructure construction and improvements |
198.5 |
|
|
188.7 |
|
Sustaining
capital expenditures |
$ |
29.5 |
|
|
$ |
38.7 |
|
|
Cautionary Language Regarding
Forward-Looking Statements
This press release contains forward-looking
statements and information that are based on our management's
current expectations. Such statements include our Outlook and
plans, projections, and estimates regarding (1) potential benefits,
returns and shareholder value which may be derived from our
business, assets, investments, dividends and acquisitions,
including on a long-term basis, (2) our strategy and strategic
position and strength of our business, (3) wireless consumer
demand, (4) demand for our wireless infrastructure and services,
(5) the executive management succession plan, (6) carrier network
investments and upgrades, and the benefits which may be derived
therefrom, (7) our growth and long-term prospects, (8) our
dividends, including our dividend plans, the amount and growth of
our dividends, the potential benefits therefrom and the tax
characterization thereof, (9) the U.S. wireless market, (10)
leasing activity, including the impact of such leasing activity on
our results and Outlook, (11) the Sunesys acquisition, including
potential benefits and impact therefrom and growth related thereto,
(12) our investments, including in small cells, and the potential
benefits therefrom, (13) non-renewal of leases and decommissioning
of networks, including timing, the impact thereof and
decommissioning fees, (14) capital expenditures, including
sustaining capital expenditures, (15) timing items, (16)
straight-line adjustments, (17) tower acquisitions and builds, (18)
expenses, including general and administrative expense, (19) site
rental revenues and Site Rental Revenues, as Adjusted, (20) site
rental cost of operations, (21) site rental gross margin and
network services gross margin, (22) Adjusted EBITDA, (23) interest
expense and amortization of deferred financing costs, (24) FFO,
including on a per share basis, (25) AFFO, including on a per share
basis, (26) Organic Site Rental Revenues and Organic Site Rental
Revenue growth, (27) net income (loss), (28) our common shares
outstanding, including on a diluted basis, and (29) the utility of
certain financial measures, including non-GAAP financial
measures. Such forward-looking statements are subject to
certain risks, uncertainties and assumptions prevailing market
conditions and the following:
- Our business depends on the demand for wireless communications
and wireless infrastructure, and we may be adversely affected by
any slowdown in such demand. Additionally, a reduction in
carrier network investment may materially and adversely affect our
business (including reducing demand for new tenant additions and
network services).
- A substantial portion of our revenues is derived from a small
number of customers, and the loss, consolidation or financial
instability of any of our limited number of customers may
materially decrease revenues or reduce demand for our wireless
infrastructure and network services.
- Our substantial level of indebtedness could adversely affect
our ability to react to changes in our business, and the terms of
our debt instruments and 4.50% Mandatory Convertible Preferred
Stock limit our ability to take a number of actions that our
management might otherwise believe to be in our best
interests. In addition, if we fail to comply with our
covenants, our debt could be accelerated.
- We have a substantial amount of indebtedness. In the
event we do not repay or refinance such indebtedness, we could face
substantial liquidity issues and might be required to issue equity
securities or securities convertible into equity securities, or
sell some of our assets to meet our debt payment obligations.
- Sales or issuances of a substantial number of shares of our
common stock may adversely affect the market price of our common
stock.
- As a result of competition in our industry, including from some
competitors with significantly more resources or less debt than we
have, we may find it more difficult to achieve favorable rental
rates on our new or renewing customer contracts.
- The business model for our small cell operations contains
differences from our traditional site rental business, resulting in
different operational risks. If we do not successfully
operate that business model or identify or manage those operational
risks, such operations may produce results that are less than
anticipated.
- New technologies may significantly reduce demand for our
wireless infrastructure and negatively impact our revenues.
- New wireless technologies may not deploy or be adopted by
customers as rapidly or in the manner projected.
- If we fail to retain rights to our wireless infrastructure,
including the land under our sites, our business may be adversely
affected.
- Our network services business has historically experienced
significant volatility in demand, which reduces the predictability
of our results.
- The expansion and development of our business, including
through acquisitions, increased product offerings, or other
strategic growth opportunities, may cause disruptions in our
business, which may have an adverse effect on our business,
operations or financial results.
- If we fail to comply with laws and regulations which regulate
our business and which may change at any time, we may be fined or
even lose our right to conduct some of our business.
- If radio frequency emissions from wireless handsets or
equipment on our wireless infrastructure are demonstrated to cause
negative health effects, potential future claims could adversely
affect our operations, costs or revenues.
- Certain provisions of our certificate of incorporation, bylaws
and operative agreements, and domestic and international
competition laws may make it more difficult for a third party to
acquire control of us or for us to acquire control of a third
party, even if such a change in control would be beneficial to our
stockholders.
- Future dividend payments to our stockholders will reduce the
availability of our cash on hand available to fund future
discretionary investments, and may result in a need to incur
indebtedness or issue equity securities to fund growth
opportunities. In such event, the then current economic,
credit market or equity market conditions will impact the
availability or cost of such financing, which may hinder our
ability to grow our per share results of operations.
- Remaining qualified to be taxed as a REIT involves highly
technical and complex provisions of the US Internal Revenue
Code. Failure to remain qualified as a REIT would result in
our inability to deduct dividends to stockholders when computing
our taxable income, which would reduce our available cash.
- Complying with REIT requirements, including the 90%
distribution requirement, may limit our flexibility or cause us to
forgo otherwise attractive opportunities, including certain
discretionary investments and potential financing
alternatives.
- If we fail to pay scheduled dividends on the 4.50% Mandatory
Convertible Preferred Stock, in cash, common stock or any
combination of cash and common stock, we will be prohibited from
paying dividends on our common stock, which may jeopardize our
status as a REIT.
- We have limited experience operating as a REIT. Our failure to
successfully operate as a REIT may adversely affect our financial
condition, cash flow, the per share trading price of our common
stock, or our ability to satisfy debt service obligations.
- REIT ownership limitations and transfer restrictions may
prevent or restrict certain transfers of our capital stock.
Should one or more of these or other risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those expected.
More information about potential risk factors which could affect
our results is included in our filings with the SEC. As used
in this release, the term "including," and any variation thereof,
means "including without limitation."
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)(in thousands, except share amounts)
|
December 31, 2015 |
|
December 31, 2014 |
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
178,810 |
|
|
$ |
151,312 |
|
Restricted cash |
130,731 |
|
|
147,411 |
|
Receivables, net |
313,296 |
|
|
313,308 |
|
Prepaid expenses |
133,194 |
|
|
138,873 |
|
Other current assets |
225,214 |
|
|
119,309 |
|
Assets from discontinued
operations |
— |
|
|
412,783 |
|
Total current assets |
981,245 |
|
|
1,282,996 |
|
Deferred site rental
receivables |
1,306,408 |
|
|
1,202,058 |
|
Property and equipment,
net |
9,580,057 |
|
|
8,982,783 |
|
Goodwill |
5,513,551 |
|
|
5,196,485 |
|
Other intangible
assets, net |
3,779,915 |
|
|
3,681,551 |
|
Long-term prepaid rent,
deferred financing costs and other assets, net |
875,069 |
|
|
797,403 |
|
Total assets |
$ |
22,036,245 |
|
|
$ |
21,143,276 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
159,629 |
|
|
$ |
162,397 |
|
Accrued interest |
66,975 |
|
|
66,943 |
|
Deferred revenues |
322,623 |
|
|
279,882 |
|
Other accrued liabilities |
199,923 |
|
|
182,081 |
|
Current maturities of debt and
other obligations |
106,219 |
|
|
113,335 |
|
Liabilities from discontinued
operations |
— |
|
|
127,493 |
|
Total current liabilities |
855,369 |
|
|
932,131 |
|
Debt and other
long-term obligations |
12,143,019 |
|
|
11,807,526 |
|
Other long-term
liabilities |
1,948,636 |
|
|
1,666,391 |
|
Total liabilities |
14,947,024 |
|
|
14,406,048 |
|
Commitments and
contingencies |
|
|
|
CCIC stockholders'
equity: |
|
|
|
Common stock, $.01 par value;
600,000,000 shares authorized; shares issued and outstanding:
December 31, 2015—333,771,660 and December 31,
2014—333,856,632 |
3,338 |
|
|
3,339 |
|
4.50% Mandatory Convertible
Preferred Stock, Series A, $.01 par value; 20,000,000 shares
authorized; shares issued and outstanding: December 31, 2015
and 2014—9,775,000; aggregate liquidation value: December 31,
2015 and 2014—$977,500 |
98 |
|
|
98 |
|
Additional paid-in capital |
9,548,580 |
|
|
9,512,396 |
|
Accumulated other comprehensive
income (loss) |
(4,398 |
) |
|
15,820 |
|
Dividends/distributions in excess
of earnings |
(2,458,397 |
) |
|
(2,815,428 |
) |
Total CCIC stockholders'
equity |
7,089,221 |
|
|
6,716,225 |
|
Noncontrolling interest
from discontinued operations |
— |
|
|
21,003 |
|
Total equity |
7,089,221 |
|
|
6,737,228 |
|
Total liabilities and equity |
$ |
22,036,245 |
|
|
$ |
21,143,276 |
|
CROWN CASTLE INTERNATIONAL
CORP. CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (UNAUDITED) (in thousands, except share
and per share amounts)
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
|
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Site rental |
$ |
785,336 |
|
|
$ |
723,416 |
|
|
$ |
3,018,413 |
|
|
$ |
2,866,613 |
|
Network services and other |
160,500 |
|
|
202,452 |
|
|
645,438 |
|
|
672,143 |
|
Net revenues |
945,836 |
|
|
925,868 |
|
|
3,663,851 |
|
|
3,538,756 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Costs of operations (exclusive of
depreciation, amortization and accretion): |
|
|
|
|
|
|
|
Site rental |
247,625 |
|
|
229,877 |
|
|
963,869 |
|
|
906,152 |
|
Network services and other |
94,381 |
|
|
124,939 |
|
|
357,557 |
|
|
400,454 |
|
General and administrative |
87,042 |
|
|
70,124 |
|
|
310,921 |
|
|
257,296 |
|
Asset write-down charges |
13,817 |
|
|
3,573 |
|
|
33,468 |
|
|
14,246 |
|
Acquisition and integration
costs |
3,677 |
|
|
5,293 |
|
|
15,678 |
|
|
34,145 |
|
Depreciation, amortization and
accretion |
269,558 |
|
|
246,816 |
|
|
1,036,178 |
|
|
985,781 |
|
Total operating expenses |
716,100 |
|
|
680,622 |
|
|
2,717,671 |
|
|
2,598,074 |
|
Operating income
(loss) |
229,736 |
|
|
245,246 |
|
|
946,180 |
|
|
940,682 |
|
Interest expense and
amortization of deferred financing costs |
(128,346 |
) |
|
(141,070 |
) |
|
(527,128 |
) |
|
(573,291 |
) |
Gains (losses) on
retirement of long-term obligations |
— |
|
|
— |
|
|
(4,157 |
) |
|
(44,629 |
) |
Interest income |
736 |
|
|
— |
|
|
1,906 |
|
|
315 |
|
Other income
(expense) |
(1,482 |
) |
|
21,329 |
|
|
57,028 |
|
|
11,993 |
|
Income (loss) from
continuing operations before income taxes |
100,644 |
|
|
125,505 |
|
|
473,829 |
|
|
335,070 |
|
Benefit (provision) for
income taxes |
42,077 |
|
|
3,125 |
|
|
51,457 |
|
|
11,244 |
|
Income (loss) from
continuing operations |
142,721 |
|
|
128,630 |
|
|
525,286 |
|
|
346,314 |
|
Discontinued
operations: |
|
|
|
|
|
|
|
Income (loss) from discontinued
operations, net of tax |
— |
|
|
23,957 |
|
|
19,690 |
|
|
52,460 |
|
Net gain (loss) from disposal of
discontinued operations, net of tax |
(1,659 |
) |
|
— |
|
|
979,359 |
|
|
— |
|
Income (loss) from discontinued
operations, net of tax |
(1,659 |
) |
|
23,957 |
|
|
999,049 |
|
|
52,460 |
|
Net income (loss) |
141,062 |
|
|
152,587 |
|
|
1,524,335 |
|
|
398,774 |
|
Less: Net income (loss)
attributable to the noncontrolling interest |
— |
|
|
4,517 |
|
|
3,343 |
|
|
8,261 |
|
Net income (loss)
attributable to CCIC stockholders |
141,062 |
|
|
148,070 |
|
|
1,520,992 |
|
|
390,513 |
|
Dividends on preferred
stock |
(10,997 |
) |
|
(10,997 |
) |
|
(43,988 |
) |
|
(43,988 |
) |
Net income (loss)
attributable to CCIC common stockholders |
$ |
130,065 |
|
|
$ |
137,073 |
|
|
$ |
1,477,004 |
|
|
$ |
346,525 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to CCIC common stockholders, per common share: |
|
|
|
|
|
|
|
Income (loss) from continuing
operations, basic |
$ |
0.39 |
|
|
$ |
0.35 |
|
|
$ |
1.45 |
|
|
$ |
0.91 |
|
Income (loss) from discontinued
operations, basic |
$ |
— |
|
|
$ |
0.06 |
|
|
$ |
2.99 |
|
|
$ |
0.13 |
|
Net income (loss) attributable to
CCIC common stockholders, basic |
$ |
0.39 |
|
|
$ |
0.41 |
|
|
$ |
4.44 |
|
|
$ |
1.04 |
|
Income (loss) from continuing
operations, diluted |
$ |
0.39 |
|
|
$ |
0.35 |
|
|
$ |
1.44 |
|
|
$ |
0.91 |
|
Income (loss) from discontinued
operations, diluted |
$ |
— |
|
|
$ |
0.06 |
|
|
$ |
2.98 |
|
|
$ |
0.13 |
|
Net income (loss) attributable to
CCIC common stockholders, diluted |
$ |
0.39 |
|
|
$ |
0.41 |
|
|
$ |
4.42 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding (in thousands): |
|
|
|
|
|
|
|
Basic |
333,107 |
|
|
332,416 |
|
|
333,002 |
|
|
332,302 |
|
Diluted |
334,320 |
|
|
333,554 |
|
|
334,062 |
|
|
333,265 |
|
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (UNAUDITED)(in thousands)
|
Twelve Months Ended December 31, |
|
|
2015 |
|
2014 |
|
Cash flows from operating activities: |
|
|
|
|
Net income (loss) from continuing
operations |
$ |
525,286 |
|
|
$ |
346,314 |
|
|
Adjustments
to reconcile net income (loss) from continuing operations to net
cash provided by (used for) operating activities: |
|
|
|
|
Depreciation,
amortization and accretion |
1,036,178 |
|
|
985,781 |
|
|
Gains (losses) on
retirement of long-term obligations |
4,157 |
|
|
44,629 |
|
|
Gains (losses) on
settled swaps |
(54,475 |
) |
|
— |
|
|
Amortization of
deferred financing costs and other non-cash interest |
37,126 |
|
|
80,854 |
|
|
Stock-based
compensation expense |
60,773 |
|
|
51,497 |
|
|
Asset write-down
charges |
33,468 |
|
|
14,246 |
|
|
Deferred income tax
benefit (provision) |
(60,618 |
) |
|
(21,859 |
) |
|
Other non-cash
adjustments, net |
(8,915 |
) |
|
(25,679 |
) |
|
Changes in assets and
liabilities, excluding the effects of acquisitions: |
|
|
|
|
Increase (decrease) in
liabilities |
320,625 |
|
|
411,005 |
|
|
Decrease (increase) in
assets |
(99,580 |
) |
|
(286,591 |
) |
|
Net cash provided by
(used for) operating activities |
1,794,025 |
|
|
1,600,197 |
|
|
Cash flows from investing activities: |
|
|
|
|
Payments for
acquisition of businesses, net of cash acquired |
(1,102,179 |
) |
|
(461,651 |
) |
|
Capital
expenditures |
(908,892 |
) |
|
(758,535 |
) |
|
Receipts from foreign
currency swaps |
54,475 |
|
|
— |
|
|
Other investing
activities, net |
(3,138 |
) |
|
3,477 |
|
|
Net cash provided by
(used for) investing activities |
(1,959,734 |
) |
|
(1,216,709 |
) |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from issuance
of long-term debt |
1,000,000 |
|
|
845,750 |
|
|
Principal payments on
debt and other long-term obligations |
(102,866 |
) |
|
(116,426 |
) |
|
Purchases and
redemptions of long-term debt |
(1,069,337 |
) |
|
(836,899 |
) |
|
Purchases of capital
stock |
(29,657 |
) |
|
(21,872 |
) |
|
Borrowings under
revolving credit facility |
1,790,000 |
|
|
1,019,000 |
|
|
Payments under
revolving credit facility |
(1,360,000 |
) |
|
(698,000 |
) |
|
Payments for financing
costs |
(19,642 |
) |
|
(15,899 |
) |
|
Net decrease (increase)
in restricted cash |
16,458 |
|
|
30,010 |
|
|
Dividends/distributions
paid on common stock |
(1,116,444 |
) |
|
(624,297 |
) |
|
Dividends paid on
preferred stock |
(43,988 |
) |
|
(44,354 |
) |
|
Net cash provided by
(used for) financing activities |
(935,476 |
) |
|
(462,987 |
) |
|
Net
increase (decrease) in cash and cash equivalents - continuing
operations |
(1,101,185 |
) |
|
(79,499 |
) |
|
Discontinued operations: |
|
|
|
|
Net cash provided by
(used for) operating activities |
2,700 |
|
|
65,933 |
|
|
Net cash provided by
(used for) investing activities |
1,103,577 |
|
|
(26,196 |
) |
|
Net
increase (decrease) in cash and cash equivalents - discontinued
operations |
1,106,277 |
|
|
39,737 |
|
|
Effect of exchange rate changes |
(1,902 |
) |
|
(8,012 |
) |
|
Cash and cash equivalents at beginning of
period |
175,620 |
|
(a) |
223,394 |
|
(a) |
Cash and cash equivalents at end of period |
$ |
178,810 |
|
|
$ |
175,620 |
|
(a) |
Supplemental disclosure of cash flow
information: |
|
|
|
|
Interest paid |
489,970 |
|
|
491,076 |
|
|
Income taxes paid |
28,771 |
|
|
18,770 |
|
|
|
________________(a) Inclusive
of cash and cash equivalents included in discontinued
operations. |
|
Contacts:
Jay Brown, CFO
Son Nguyen, VP - Corporate Finance
Crown Castle International Corp.
713-570-3050
Crown Castle (NYSE:CCI)
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