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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Crown Castle Inc | NYSE:CCI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.03 | -0.03% | 93.75 | 400,384 | 12:34:53 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
76-0470458
|
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
1220 Augusta Drive, Suite 600, Houston, Texas 77057-2261
(Address of principal executives office) (Zip Code)
|
|
(713) 570-3000
(Registrant's telephone number, including area code)
|
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
|
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
o
|
|
|
|
|
|
Page
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|||
ITEM 1.
|
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ITEM 2.
|
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ITEM 3.
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ITEM 4.
|
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|
|||
ITEM 1.
|
LEGAL PROCEEDINGS
|
|
|
ITEM 1A.
|
|
||
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
|
ITEM 6.
|
|
||
|
|||
EXHIBIT INDEX
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
175,702
|
|
|
$
|
178,810
|
|
Restricted cash
|
129,419
|
|
|
130,731
|
|
||
Receivables, net
|
254,669
|
|
|
313,296
|
|
||
Prepaid expenses
|
141,529
|
|
|
133,194
|
|
||
Other current assets
|
119,563
|
|
|
225,214
|
|
||
Total current assets
|
820,882
|
|
|
981,245
|
|
||
Deferred site rental receivables
|
1,317,898
|
|
|
1,306,408
|
|
||
Property and equipment, net of accumulated depreciation of $6,003,357 and $5,798,875, respectively
|
9,559,397
|
|
|
9,580,057
|
|
||
Goodwill
|
5,531,064
|
|
|
5,513,551
|
|
||
Other intangible assets, net
|
3,707,129
|
|
|
3,779,915
|
|
||
Long-term prepaid rent and other assets, net
|
781,881
|
|
|
775,790
|
|
||
Total assets
|
$
|
21,718,251
|
|
|
$
|
21,936,966
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
141,574
|
|
|
$
|
159,629
|
|
Accrued interest
|
77,673
|
|
|
66,975
|
|
||
Deferred revenues
|
332,711
|
|
|
322,623
|
|
||
Other accrued liabilities
|
172,165
|
|
|
199,923
|
|
||
Current maturities of debt and other obligations
|
87,823
|
|
|
106,219
|
|
||
Total current liabilities
|
811,946
|
|
|
855,369
|
|
||
Debt and other long-term obligations
|
11,778,176
|
|
|
12,043,740
|
|
||
Other long-term liabilities
|
1,975,135
|
|
|
1,948,636
|
|
||
Total liabilities
|
14,565,257
|
|
|
14,847,745
|
|
||
Commitments and contingencies (note 8)
|
|
|
|
||||
CCIC stockholders' equity:
|
|
|
|
||||
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: March 31, 2016—337,559,718 and December 31, 2015—333,771,660
|
3,375
|
|
|
3,338
|
|
||
4.50% Mandatory Convertible Preferred Stock, Series A, $.01 par value; 20,000,000 shares authorized; shares issued and outstanding: March 31, 2016 and December 31, 2015—9,775,000; aggregate liquidation value: March 31, 2016 and December 31, 2015—$977,500
|
98
|
|
|
98
|
|
||
Additional paid-in capital
|
9,874,862
|
|
|
9,548,580
|
|
||
Accumulated other comprehensive income (loss)
|
(4,977
|
)
|
|
(4,398
|
)
|
||
Dividends/distributions in excess of earnings
|
(2,720,364
|
)
|
|
(2,458,397
|
)
|
||
Total equity
|
7,152,994
|
|
|
7,089,221
|
|
||
Total liabilities and equity
|
$
|
21,718,251
|
|
|
$
|
21,936,966
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net revenues:
|
|
|
|
||||
Site rental
|
$
|
799,294
|
|
|
$
|
731,380
|
|
Network services and other
|
135,090
|
|
|
169,091
|
|
||
Net revenues
|
934,384
|
|
|
900,471
|
|
||
Operating expenses:
|
|
|
|
||||
Costs of operations
(a)
:
|
|
|
|
||||
Site rental
|
252,621
|
|
|
232,213
|
|
||
Network services and other
|
80,971
|
|
|
86,918
|
|
||
General and administrative
|
97,581
|
|
|
74,056
|
|
||
Asset write-down charges
|
7,959
|
|
|
8,555
|
|
||
Acquisition and integration costs
|
5,638
|
|
|
2,016
|
|
||
Depreciation, amortization and accretion
|
277,875
|
|
|
251,806
|
|
||
Total operating expenses
|
722,645
|
|
|
655,564
|
|
||
Operating income (loss)
|
211,739
|
|
|
244,907
|
|
||
Interest expense and amortization of deferred financing costs
|
(126,378
|
)
|
|
(134,439
|
)
|
||
Gains (losses) on retirement of long-term obligations
|
(30,550
|
)
|
|
—
|
|
||
Interest income
|
174
|
|
|
56
|
|
||
Other income (expense)
|
(3,273
|
)
|
|
(225
|
)
|
||
Income (loss) from continuing operations before income taxes
|
51,712
|
|
|
110,299
|
|
||
Benefit (provision) for income taxes
|
(3,872
|
)
|
|
1,435
|
|
||
Income (loss) from continuing operations
|
47,840
|
|
|
111,734
|
|
||
Discontinued operations (see note 3):
|
|
|
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
13,378
|
|
||
Net income (loss)
|
47,840
|
|
|
125,112
|
|
||
Less: Net income (loss) attributable to the noncontrolling interest
|
—
|
|
|
2,325
|
|
||
Net income (loss) attributable to CCIC stockholders
|
47,840
|
|
|
122,787
|
|
||
Dividends on preferred stock
|
(10,997
|
)
|
|
(10,997
|
)
|
||
Net income (loss) attributable to CCIC common stockholders
|
$
|
36,843
|
|
|
$
|
111,790
|
|
Net income (loss)
|
$
|
47,840
|
|
|
$
|
125,112
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Interest rate swaps reclassified into "interest expense and amortization of deferred financing costs", net of taxes
|
—
|
|
|
7,491
|
|
||
Foreign currency translation adjustments
|
(579
|
)
|
|
(16,262
|
)
|
||
Total other comprehensive income (loss)
|
(579
|
)
|
|
(8,771
|
)
|
||
Comprehensive income (loss)
|
47,261
|
|
|
116,341
|
|
||
Less: Comprehensive income (loss) attributable to the noncontrolling interest
|
—
|
|
|
1,070
|
|
||
Comprehensive income (loss) attributable to CCIC stockholders
|
$
|
47,261
|
|
|
$
|
115,271
|
|
Net income (loss) attributable to CCIC common stockholders, per common share:
|
|
|
|
||||
Income (loss) from continuing operations, basic
|
$
|
0.11
|
|
|
$
|
0.30
|
|
Income (loss) from discontinued operations, basic
|
$
|
—
|
|
|
$
|
0.04
|
|
Net income (loss) attributable to CCIC common stockholders, basic
|
$
|
0.11
|
|
|
$
|
0.34
|
|
Income (loss) from continuing operations, diluted
|
$
|
0.11
|
|
|
$
|
0.30
|
|
Income (loss) from discontinued operations, diluted
|
$
|
—
|
|
|
$
|
0.04
|
|
Net income (loss) attributable to CCIC common stockholders, diluted
|
$
|
0.11
|
|
|
$
|
0.34
|
|
Weighted-average common shares outstanding (in thousands):
|
|
|
|
||||
Basic
|
334,155
|
|
332,712
|
|
|||
Diluted
|
334,929
|
|
333,485
|
|
(a)
|
Exclusive of depreciation, amortization and accretion shown separately.
|
|
Three Months Ended March 31,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss) from continuing operations
|
$
|
47,840
|
|
|
$
|
111,734
|
|
|
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities:
|
|
|
|
|
||||
Depreciation, amortization and accretion
|
277,875
|
|
|
251,806
|
|
|
||
Gains (losses) on retirement of long-term obligations
|
30,550
|
|
|
—
|
|
|
||
Amortization of deferred financing costs and other non-cash interest
|
4,211
|
|
|
11,736
|
|
|
||
Stock-based compensation expense
|
19,895
|
|
|
15,244
|
|
|
||
Asset write-down charges
|
7,959
|
|
|
8,555
|
|
|
||
Deferred income tax benefit (provision)
|
1,860
|
|
|
(3,706
|
)
|
|
||
Other non-cash adjustments, net
|
2,166
|
|
|
(558
|
)
|
|
||
Changes in assets and liabilities, excluding the effects of acquisitions:
|
|
|
|
|
||||
Increase (decrease) in accrued interest
|
10,698
|
|
|
1,754
|
|
|
||
Increase (decrease) in accounts payable
|
(9,417
|
)
|
|
(6,918
|
)
|
|
||
Increase (decrease) in deferred revenues, deferred ground lease payables, other accrued liabilities and other liabilities
|
16,145
|
|
|
35,196
|
|
|
||
Decrease (increase) in receivables
|
58,991
|
|
|
35,876
|
|
|
||
Decrease (increase) in prepaid expenses, deferred site rental receivables, long-term prepaid rent, restricted cash and other assets
|
(31,117
|
)
|
|
(7,661
|
)
|
|
||
Net cash provided by (used for) operating activities
|
437,656
|
|
|
453,058
|
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Payments for acquisitions of businesses, net of cash acquired
|
(22,029
|
)
|
|
(17,493
|
)
|
|
||
Capital expenditures
|
(193,489
|
)
|
|
(201,653
|
)
|
|
||
Other investing activities, net
|
7,772
|
|
|
(514
|
)
|
|
||
Net cash provided by (used for) investing activities
|
(207,746
|
)
|
|
(219,660
|
)
|
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
3,496,901
|
|
|
—
|
|
|
||
Principal payments on debt and other long-term obligations
|
(14,152
|
)
|
|
(31,497
|
)
|
|
||
Purchases and redemptions of long-term debt
|
(2,876,390
|
)
|
|
—
|
|
|
||
Borrowings under revolving credit facility
|
2,065,000
|
|
|
230,000
|
|
|
||
Payments under revolving credit facility
|
(2,980,000
|
)
|
|
(65,000
|
)
|
|
||
Payments for financing costs
|
(27,421
|
)
|
|
(1,904
|
)
|
|
||
Net proceeds from issuance of capital stock
|
323,798
|
|
|
—
|
|
|
||
Purchases of capital stock
|
(24,354
|
)
|
|
(29,372
|
)
|
|
||
Dividends/distributions paid on common stock
|
(299,090
|
)
|
|
(273,685
|
)
|
|
||
Dividends paid on preferred stock
|
(10,997
|
)
|
|
(10,997
|
)
|
|
||
Net (increase) decrease in restricted cash
|
1,113
|
|
|
10,214
|
|
|
||
Net cash provided by (used for) financing activities
|
(345,592
|
)
|
|
(172,241
|
)
|
|
||
Net increase (decrease) in cash and cash equivalents - continuing operations
|
(115,682
|
)
|
|
61,157
|
|
|
||
Discontinued operations (see note 3):
|
|
|
|
|
||||
Net cash provided by (used for) operating activities
|
—
|
|
|
7,736
|
|
|
||
Net cash provided by (used for) investing activities
|
113,150
|
|
|
(3,100
|
)
|
|
||
Net increase (decrease) in cash and cash equivalents - discontinued operations
|
113,150
|
|
|
4,636
|
|
|
||
Effect of exchange rate changes
|
(576
|
)
|
|
(1,260
|
)
|
|
||
Cash and cash equivalents at beginning of period
|
178,810
|
|
|
175,620
|
|
(a)
|
||
Cash and cash equivalents at end of period
|
$
|
175,702
|
|
|
$
|
240,153
|
|
(a)
|
(a)
|
Inclusive of cash and cash equivalents included in discontinued operations.
|
|
CCIC Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
4.50% Mandatory Convertible Preferred Stock
|
|
|
|
AOCI
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Shares
|
|
($.01 Par)
|
|
Shares
|
|
($.01 Par)
|
|
Additional
paid-in
capital
|
|
Foreign Currency Translation Adjustments
|
|
Derivative Instruments, net of tax
|
|
Dividends/Distributions in Excess of Earnings
|
|
Noncontrolling
Interest from discontinued operations
|
|
Total
|
||||||||||||||||||
Balance, January 1, 2016
|
333,771,660
|
|
|
$
|
3,338
|
|
|
9,775,000
|
|
|
$
|
98
|
|
|
$
|
9,548,580
|
|
|
$
|
(4,398
|
)
|
|
$
|
—
|
|
|
$
|
(2,458,397
|
)
|
|
$
|
—
|
|
|
$
|
7,089,221
|
|
Stock-based compensation related activity, net of forfeitures
|
243,110
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
26,873
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,875
|
|
||||||||
Purchases and retirement of capital stock
|
(283,116
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(24,351
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,354
|
)
|
||||||||
Net proceeds from issuance of Common Stock
|
3,828,064
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
323,760
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
323,798
|
|
||||||||
Other comprehensive income (loss)
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(579
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(579
|
)
|
||||||||
Common stock dividends/distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(298,810
|
)
|
|
—
|
|
|
(298,810
|
)
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,997
|
)
|
|
—
|
|
|
(10,997
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,840
|
|
|
—
|
|
|
47,840
|
|
||||||||
Balance, March 31, 2016
|
337,559,718
|
|
|
$
|
3,375
|
|
|
9,775,000
|
|
|
$
|
98
|
|
|
$
|
9,874,862
|
|
|
$
|
(4,977
|
)
|
|
$
|
—
|
|
|
$
|
(2,720,364
|
)
|
|
$
|
—
|
|
|
$
|
7,152,994
|
|
(a)
|
See the condensed statement of operations and other comprehensive income (loss) for the components of "other comprehensive income (loss)."
|
|
CCIC Stockholders
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Common Stock
|
|
4.50% Mandatory Convertible Preferred Stock
|
|
|
|
AOCI
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Shares
|
|
($.01 Par)
|
|
Shares
|
|
($.01 Par)
|
|
Additional
paid-in capital |
|
Foreign Currency Translation Adjustments
|
|
Derivative Instruments, net of tax
|
|
Dividends/Distributions in Excess of Earnings
|
|
Noncontrolling
Interest from discontinued operations
|
|
Total
|
||||||||||||||||||
Balance, January 1, 2015
|
333,856,632
|
|
|
$
|
3,339
|
|
|
9,775,000
|
|
|
$
|
98
|
|
|
$
|
9,512,396
|
|
|
$
|
34,545
|
|
|
$
|
(18,725
|
)
|
|
$
|
(2,815,428
|
)
|
|
$
|
21,003
|
|
|
$
|
6,737,228
|
|
Stock-based compensation related activity, net of forfeitures
|
238,416
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
20,309
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,311
|
|
||||||||
Purchases and retirement of capital stock
|
(333,089
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(29,370
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,372
|
)
|
||||||||
Other comprehensive income (loss)
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,007
|
)
|
|
7,491
|
|
|
—
|
|
|
(1,255
|
)
|
|
(8,771
|
)
|
||||||||
Common stock dividends/distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(274,718
|
)
|
|
—
|
|
|
(274,718
|
)
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,997
|
)
|
|
—
|
|
|
(10,997
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,787
|
|
|
2,325
|
|
|
125,112
|
|
||||||||
Balance, March 31, 2015
|
333,761,959
|
|
|
$
|
3,339
|
|
|
9,775,000
|
|
|
$
|
98
|
|
|
$
|
9,503,335
|
|
|
$
|
19,538
|
|
|
$
|
(11,234
|
)
|
|
$
|
(2,978,356
|
)
|
|
$
|
22,073
|
|
|
$
|
6,558,793
|
|
(a)
|
See the condensed statement of operations and other comprehensive income (loss) for the components of "other comprehensive income (loss)" and note
4
with respect to the reclassification adjustments.
|
|
|
1.
|
General
|
2.
|
Summary of Significant Accounting Policies
|
3.
|
Discontinued Operations
|
|
Three Months Ended March 31,
|
||
|
2015
(b)
|
||
Total revenues
|
$
|
40,530
|
|
Total cost of operations
(a)
|
10,727
|
|
|
Depreciation, amortization, and accretion
|
6,254
|
|
|
Total other expenses
|
5,455
|
|
|
Pre-tax income from discontinued operations
|
18,094
|
|
|
Income (loss) from discontinued operations, net of tax
|
$
|
13,378
|
|
(a)
|
Exclusive of depreciation, amortization, and accretion shown seperately.
|
(b)
|
No interest expense has been allocated to discontinued operations.
|
4.
|
Debt and Other Obligations
|
|
Original
Issue Date
|
|
Contractual
Maturity
Date (a)
|
|
Balance as of
March 31, 2016
(e)
|
|
Balance as of
December 31, 2015
(e)
|
|
Stated Interest
Rate as of
March 31, 2016(a)
|
|||||
Bank debt - variable rate:
|
|
|
|
|
|
|
|
|
|
|||||
2016 Revolver
|
Jan. 2016
|
|
Jan. 2021
|
|
$
|
210,000
|
|
(b)
|
$
|
—
|
|
|
1.8
|
%
|
2016 Term Loan A
|
Jan. 2016
|
|
Jan. 2021
|
|
1,989,788
|
|
(b)
|
—
|
|
|
1.8
|
%
|
||
2012 Revolver
|
Jan. 2012
|
|
Jan. 2019
|
|
—
|
|
(b)
|
1,125,000
|
|
|
N/A
|
|
||
Tranche A Term Loans
|
Jan. 2012
|
|
Jan. 2019
|
|
—
|
|
(b)
|
627,846
|
|
|
N/A
|
|
||
Tranche B Term Loans
|
Jan. 2012
|
|
Jan. 2021
|
|
—
|
|
(b)
|
2,219,602
|
|
|
N/A
|
|
||
Total bank debt
|
|
|
|
|
2,199,788
|
|
|
3,972,448
|
|
|
|
|||
Securitized debt - fixed rate:
|
|
|
|
|
|
|
|
|
|
|||||
Secured Notes, Series 2009-1
|
July 2009
|
|
Aug. 2019
|
|
65,523
|
|
|
70,219
|
|
|
6.3
|
%
|
||
Secured Notes, Series 2009-2
|
July 2009
|
|
Aug. 2029
|
|
68,678
|
|
|
68,658
|
|
|
9.0
|
%
|
||
Tower Revenue Notes, Series 2010-2
|
Jan. 2010
|
|
Jan. 2037
|
(c)
|
349,363
|
|
|
349,171
|
|
|
5.5
|
%
|
||
Tower Revenue Notes, Series 2010-3
|
Jan. 2010
|
|
Jan. 2040
|
(c)
|
1,242,834
|
|
|
1,242,368
|
|
|
6.1
|
%
|
||
Tower Revenue Notes, Series 2010-5
|
Aug. 2010
|
|
Aug. 2037
|
(c)
|
298,967
|
|
|
298,774
|
|
|
4.2
|
%
|
||
Tower Revenue Notes, Series 2010-6
|
Aug. 2010
|
|
Aug. 2040
|
(c)
|
992,198
|
|
|
991,749
|
|
|
4.9
|
%
|
||
Tower Revenue Notes, Series 2015-1
|
May 2015
|
|
May 2042
|
(c)
|
296,095
|
|
|
295,937
|
|
|
3.2
|
%
|
||
Tower Revenue Notes, Series 2015-2
|
May 2015
|
|
May 2045
|
(c)
|
690,504
|
|
|
690,247
|
|
|
3.7
|
%
|
||
Total securitized debt
|
|
|
|
|
4,004,162
|
|
|
4,007,123
|
|
|
|
|||
Bonds - fixed rate:
|
|
|
|
|
|
|
|
|
|
|||||
5.250% Senior Notes
|
Oct. 2012
|
|
Jan. 2023
|
|
1,635,517
|
|
|
1,634,989
|
|
|
5.3
|
%
|
||
2.381% Secured Notes
|
Dec. 2012
|
|
Dec. 2017
|
|
497,521
|
|
|
497,160
|
|
|
2.4
|
%
|
||
3.849% Secured Notes
|
Dec. 2012
|
|
Apr. 2023
|
|
990,241
|
|
|
989,895
|
|
|
3.9
|
%
|
||
4.875% Senior Notes
|
Apr. 2014
|
|
Apr. 2022
|
|
839,012
|
|
|
838,579
|
|
|
4.9
|
%
|
||
3.400% Senior Notes
|
Feb. 2016
|
|
Feb. 2021
|
|
594,888
|
|
(d)
|
—
|
|
|
3.4
|
%
|
||
4.450% Senior Notes
|
Feb. 2016
|
|
Feb. 2026
|
|
889,057
|
|
(d)
|
—
|
|
|
4.5
|
%
|
||
Total bonds
|
|
|
|
|
5,446,236
|
|
|
3,960,623
|
|
|
|
|||
Other:
|
|
|
|
|
|
|
|
|
|
|||||
Capital leases and other obligations
|
Various
|
|
Various
|
|
215,813
|
|
|
209,765
|
|
|
Various
|
|
||
Total debt and other obligations
|
|
|
|
|
11,865,999
|
|
|
12,149,959
|
|
|
|
|||
Less: current maturities and short-term debt and other current obligations
|
|
|
|
|
87,823
|
|
|
106,219
|
|
|
|
|||
Non-current portion of long-term debt and other long-term obligations
|
|
|
|
|
$
|
11,778,176
|
|
|
$
|
12,043,740
|
|
|
|
(a)
|
See the
2015
Form 10-K, including note 8, for additional information regarding the maturity and principal amortization provisions and interest rates relating to the Company's indebtedness.
|
(b)
|
In January 2016, the Company completed a Senior Unsecured Credit Facility ("2016 Credit Facility"), comprised of (1) a
$2.5 billion
Senior Unsecured Revolving Credit Facility ("2016 Revolver") maturing in January 2021, (2) a
$2.0 billion
Senior Unsecured Term Loan A Facility ("2016 Term Loan A") maturing in January 2021 and (3) a previously outstanding
$1.0 billion
Senior Unsecured 364-Day Revolving Credit Facility ("364-Day Facility") maturing in January 2017. The 2016 Credit Facility bears interest at a per annum rate equal to LIBOR plus
1.125%
to
2.000%
, based on the Company's senior unsecured debt rating. The Company used the net proceeds from the 2016 Credit Facility (1) to repay the previously outstanding 2012 Credit Facility, and (2) general corporate purposes. In February 2016, the Company used a portion of the net proceeds from the 2016 Senior Notes offering to repay in full all outstanding borrowings under the previously outstanding 364-Day Facility. As of
March 31, 2016
, the undrawn availability under the 2016 Revolver was $
2.3 billion
. See note 12.
|
(c)
|
If the respective series of such debt is not paid in full on or prior to an applicable date then Excess Cash Flow (as defined in the indenture) of the issuers of such notes will be used to repay principal of the applicable series, and additional interest (of an additional approximately
5%
per annum) will accrue on the respective series. See the
2015
Form 10-K for additional information regarding these provisions. See note 12.
|
(d)
|
In February 2016, the Company issued
$1.5 billion
aggregate principal amount of senior unsecured notes ("2016 Senior Notes"), which consist of (1)
$600.0 million
aggregated principal amount of
3.40%
senior notes with a final maturity date of February 2021 and (2)
$900.0 million
aggregate principal amount of
4.45%
senior notes with a final maturity date of February 2026. The Company used net proceeds from the 2016 Senior Notes offering, together with cash on hand, to (1) repay in full all outstanding borrowings under the previously outstanding 364-Day Facility and (2) to repay
$500.0 million
of outstanding borrowings under the 2016 Revolver.
|
(e)
|
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. See note 2.
|
|
Nine Months Ending
December 31,
|
|
Years Ending December 31,
|
|
|
|
|
|
Unamortized Adjustments, Net
|
|
Total Debt and Other Obligations Outstanding
|
||||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total Cash Obligations
|
|
|
||||||||||||||||||||
Scheduled contractual maturities
|
$
|
76,484
|
|
|
$
|
598,573
|
|
|
$
|
132,647
|
|
|
$
|
136,629
|
|
|
$
|
200,502
|
|
|
$
|
10,817,732
|
|
|
$
|
11,962,567
|
|
|
$
|
(96,568
|
)
|
|
$
|
11,865,999
|
|
|
Three Months Ended March 31, 2016
|
||||||||||
|
Principal Amount
|
|
Cash Paid
(a)
|
|
Gains (Losses)
(b)
|
||||||
2012 Revolver
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,930
|
)
|
Tranche A Term Loans
|
629,375
|
|
|
629,375
|
|
|
(1,498
|
)
|
|||
Tranche B Term Loans
|
2,247,015
|
|
|
2,247,015
|
|
|
(27,122
|
)
|
|||
Total
|
$
|
2,876,390
|
|
|
$
|
2,876,390
|
|
|
$
|
(30,550
|
)
|
(a)
|
Exclusive of accrued interest.
|
(b)
|
Inclusive of $
30.5 million
related to the write off of deferred financing costs.
|
(c)
|
See discussion of the repayment of the Company's 2012 Credit Facility above.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Interest expense on debt obligations
|
$
|
122,167
|
|
|
$
|
122,703
|
|
Amortization of deferred financing costs and adjustments on long-term debt
|
5,106
|
|
|
4,738
|
|
||
Amortization of interest rate swaps
(a)
|
—
|
|
|
7,491
|
|
||
Other, net of capitalized interest
|
(895
|
)
|
|
(493
|
)
|
||
Total
|
$
|
126,378
|
|
|
$
|
134,439
|
|
(a)
|
Amounts reclassified from "accumulated other comprehensive income (loss)."
|
5.
|
Fair Value Disclosures
|
|
Level in Fair Value Hierarchy
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
1
|
|
$
|
175,702
|
|
|
$
|
175,702
|
|
|
$
|
178,810
|
|
|
$
|
178,810
|
|
Restricted cash, current and non-current
|
1
|
|
134,419
|
|
|
134,419
|
|
|
135,731
|
|
|
135,731
|
|
||||
Foreign currency swaps
|
2
|
|
—
|
|
|
—
|
|
|
10,749
|
|
|
10,749
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt and other obligations
|
2
|
|
11,865,999
|
|
|
12,464,505
|
|
|
12,149,959
|
|
|
12,555,143
|
|
6.
|
Income Taxes
|
7.
|
Per Share Information
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net income (loss) from continuing operations
|
$
|
47,840
|
|
|
$
|
111,734
|
|
Dividends on preferred stock
|
(10,997
|
)
|
|
(10,997
|
)
|
||
Net income (loss) from continuing operations attributable to CCIC common stockholders for basic and diluted computations
|
$
|
36,843
|
|
|
$
|
100,737
|
|
|
|
|
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
13,378
|
|
||
Less: Net income (loss) attributable to the noncontrolling interest
|
—
|
|
|
2,325
|
|
||
Net income (loss) from discontinued operations attributable to CCIC common stockholders for basic and diluted computations
|
$
|
—
|
|
|
$
|
11,053
|
|
|
|
|
|
||||
Weighted-average number of common shares outstanding (in thousands):
|
|
|
|
||||
Basic weighted-average number of common stock outstanding
|
334,155
|
|
|
332,712
|
|
||
Effect of assumed dilution from potential common shares relating to restricted stock units and restricted stock awards
|
774
|
|
|
773
|
|
||
Diluted weighted-average number of common shares outstanding
|
334,929
|
|
|
333,485
|
|
||
|
|
|
|
||||
Net income (loss) attributable to CCIC common stockholders, per common share:
|
|
|
|
||||
Income (loss) from continuing operations, basic
|
0.11
|
|
|
0.30
|
|
||
Income (loss) from discontinued operations, basic
|
—
|
|
|
0.04
|
|
||
Net income (loss) attributable to CCIC common stockholders, basic
|
0.11
|
|
|
0.34
|
|
||
Income (loss) from continuing operations, diluted
|
0.11
|
|
|
0.30
|
|
||
Income (loss) from discontinued operations, diluted
|
—
|
|
|
0.04
|
|
||
Net income (loss) attributable to CCIC common stockholders, diluted
|
0.11
|
|
|
0.34
|
|
8.
|
Commitments and Contingencies
|
9.
|
Equity
|
Equity Type
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Dividends Per Share
|
|
Aggregate
Payment
Amount
(In millions)
|
|
||||
Common Stock
|
|
February 18, 2016
|
|
March 18, 2016
|
|
March 31, 2016
|
|
$
|
0.885
|
|
|
$
|
300.0
|
|
(a)
|
Convertible Preferred Stock
|
|
December 16, 2015
|
|
January 16, 2016
|
|
February 1, 2016
|
|
$
|
1.1250
|
|
|
$
|
11.0
|
|
|
Convertible Preferred Stock
|
|
March 22, 2016
|
|
April 15, 2016
|
|
May 2, 2016
|
|
$
|
1.1250
|
|
|
$
|
11.0
|
|
(b)
|
(a)
|
Inclusive of dividends accrued for holders of unvested restricted stock units and payments of previously accrued dividends for holders of restricted stock units that have vested during the three months ended March 31, 2016.
|
(b)
|
Represents amount paid on May 2, 2016 based on holders of record on April 15, 2016.
|
10.
|
Operating Segments
|
|
Three Months Ended March 31, 2016
|
|
Three Months Ended March 31, 2015
|
||||||||||||||||||||||||||||
|
Towers
|
|
Small Cells
|
|
Other
|
|
Consolidated
Total
|
|
Towers
|
|
Small Cells
|
|
Other
|
|
Consolidated
Total
|
||||||||||||||||
Segment site rental revenues
|
$
|
702,840
|
|
|
$
|
96,454
|
|
|
|
|
$
|
799,294
|
|
|
$
|
674,907
|
|
|
$
|
56,473
|
|
|
|
|
$
|
731,380
|
|
||||
Segment network services and other revenues
|
125,010
|
|
|
10,080
|
|
|
|
|
135,090
|
|
|
156,385
|
|
|
12,706
|
|
|
|
|
169,091
|
|
||||||||||
Segment revenues
|
827,850
|
|
|
106,534
|
|
|
|
|
934,384
|
|
|
831,292
|
|
|
69,179
|
|
|
|
|
900,471
|
|
||||||||||
Segment site rental cost of operations
(a)
|
204,565
|
|
|
37,483
|
|
|
|
|
242,048
|
|
|
204,633
|
|
|
20,513
|
|
|
|
|
225,146
|
|
||||||||||
Segment network services and other cost of operations
(a)
|
69,989
|
|
|
8,035
|
|
|
|
|
78,024
|
|
|
76,191
|
|
|
9,454
|
|
|
|
|
85,645
|
|
||||||||||
Segment cost of operations
(a)
|
274,554
|
|
|
45,518
|
|
|
|
|
320,072
|
|
|
280,824
|
|
|
29,967
|
|
|
|
|
310,791
|
|
||||||||||
Segment site rental gross margin
|
498,275
|
|
|
58,971
|
|
|
|
|
557,246
|
|
|
470,274
|
|
|
35,960
|
|
|
|
|
506,234
|
|
||||||||||
Segment network services and other gross margin
|
55,021
|
|
|
2,045
|
|
|
|
|
57,066
|
|
|
80,194
|
|
|
3,252
|
|
|
|
|
83,446
|
|
||||||||||
Segment general and administrative expenses
(a)
|
23,599
|
|
|
15,522
|
|
|
36,071
|
|
|
75,192
|
|
|
22,722
|
|
|
7,560
|
|
|
30,098
|
|
|
60,380
|
|
||||||||
Segment operating profit
|
529,697
|
|
|
45,494
|
|
|
(36,071
|
)
|
|
539,120
|
|
|
527,746
|
|
|
31,652
|
|
|
(30,098
|
)
|
|
529,300
|
|
||||||||
Stock-based compensation expense
|
|
|
|
|
$
|
30,705
|
|
|
30,705
|
|
|
|
|
|
|
$
|
16,841
|
|
|
16,841
|
|
||||||||||
Depreciation, amortization and accretion
|
|
|
|
|
277,875
|
|
|
277,875
|
|
|
|
|
|
|
251,806
|
|
|
251,806
|
|
||||||||||||
Interest expense and amortization of deferred financing costs
|
|
|
|
|
126,378
|
|
|
126,378
|
|
|
|
|
|
|
134,439
|
|
|
134,439
|
|
||||||||||||
Other expenses to reconcile to income (loss) from continuing operations before income taxes
|
|
|
|
|
52,450
|
|
|
52,450
|
|
|
|
|
|
|
15,915
|
|
|
15,915
|
|
||||||||||||
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
51,712
|
|
|
|
|
|
|
|
|
$
|
110,299
|
|
||||||||||||
Capital expenditures
|
$
|
111,041
|
|
|
$
|
80,153
|
|
|
$
|
2,295
|
|
|
$
|
193,489
|
|
|
$
|
133,133
|
|
|
$
|
62,903
|
|
|
$
|
5,617
|
|
|
$
|
201,653
|
|
Total assets (at period end)
|
$
|
18,090,100
|
|
|
$
|
3,188,474
|
|
|
$
|
439,677
|
|
|
$
|
21,718,251
|
|
|
$
|
18,234,547
|
|
|
$
|
2,238,790
|
|
|
$
|
526,493
|
|
|
$
|
20,999,830
|
|
(a)
|
Segment cost of operations exclude (1) stock-based compensation expense of
$8.3 million
and
$3.2 million
for the three months ended March 31, 2016 and 2015, respectively and (2) prepaid lease purchase price adjustments of
$5.2 million
for each of the three months ended March 31, 2016 and 2015. Segment general and administrative expenses exclude stock-based compensation expense of
$22.4 million
and
$13.7 million
for the three months ended March 31, 2016 and 2015, respectively.
|
11.
|
Supplemental Cash Flow Information
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
111,469
|
|
|
$
|
120,949
|
|
Income taxes paid
|
6,773
|
|
|
2,498
|
|
||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Increase (decrease) in accounts payable for purchases of property and equipment
|
(8,638
|
)
|
|
(13,557
|
)
|
||
Purchase of property and equipment under capital leases and installment purchases
|
12,269
|
|
|
12,407
|
|
12.
|
Subsequent Events
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Grow cash flows from our wireless infrastructure.
We seek to maximize the site rental cash flows derived from our wireless infrastructure by adding tenants on our wireless infrastructure through long-term leases. We believe that the rapid growth in wireless connectivity will result in considerable future demand for our existing wireless infrastructure. We seek to maximize additional tenancy on our wireless infrastructure by working with wireless customers to quickly provide them access to our wireless infrastructure via tenant additions or modifications of existing tenant equipment installations to enable them to expand coverage and capacity in order to meet increasing demand for wireless connectivity. We expect increases in our site rental cash flows from tenant additions and the related subsequent impact from contracted escalations to result in growth in our operating cash flows as our wireless infrastructure has relatively fixed operating costs (which tend to increase at the rate of inflation). We believe there is considerable additional future demand for our existing wireless infrastructure based on their location and the anticipated growth in the wireless communication services industry. Substantially all of our wireless infrastructure can accommodate additional tenancy, either as currently constructed or with appropriate modifications to the structure (which may include extensions or structural reinforcement), from which we expect to generate high incremental returns.
|
•
|
Return cash provided by operating activities to stockholders in the form of dividends
. We believe that distributing a meaningful portion of our cash provided by operating activities appropriately provides stockholders with increased certainty for a portion of expected long-term stockholder value while still retaining sufficient flexibility to invest in our business and deliver growth. We believe this decision reflects the translation of the high-quality, long-term contractual cash flows of our business into stable capital returns to stockholders.
|
•
|
Invest capital efficiently to grow cash flows and long-term dividends per share.
We seek to invest our available capital, including the net cash provided by our operating activities and external financing sources, in a manner that will increase long-term stockholder value on a risk-adjusted basis. Our historical investments have included the following (in no particular order):
|
◦
|
purchase shares of our common stock from time to time;
|
◦
|
acquire or construct wireless infrastructure;
|
◦
|
acquire land interests under towers;
|
◦
|
make improvements and structural enhancements to our existing wireless infrastructure; or
|
◦
|
purchase, repay or redeem our debt.
|
•
|
We operate as a REIT for U.S. federal income tax purposes.
|
◦
|
As a REIT, we are generally entitled to a deduction for dividends that we pay and therefore are not subject to U.S. federal corporate income tax on our taxable income that is distributed to our stockholders.
|
◦
|
To qualify and be taxed as a REIT, we will generally be required to distribute at least 90% of our REIT taxable income, after the utilization of our NOLs (determined without regard to the dividends paid deduction and excluding net capital gain), each year to our stockholders.
|
◦
|
See note
6
to our condensed consolidated financial statements for further discussion of our REIT status.
|
•
|
Potential growth resulting from wireless network expansion and new entrants
|
◦
|
We expect wireless carriers will continue their focus on improving network quality and expanding capacity by utilizing a combination of towers and small cells solutions. We believe our product offerings of towers and small cells provide a comprehensive wireless solution to our customers growing wireless infrastructure needs.
|
◦
|
We expect existing and potential new customer demand for our wireless infrastructure will result from (1) new technologies, (2) increased usage of wireless applications (including mobile entertainment, mobile internet usage, and machine-to-machine applications), (3) adoption of other emerging and embedded wireless devices (including smartphones, laptops, tablets, and other devices), (4) increasing smartphone penetration, (5) wireless carrier focus on expanding quality and capacity, including through the use of small cells, or (6) the availability of additional spectrum.
|
◦
|
Substantially all of our wireless infrastructure can accommodate additional tenancy, either as currently constructed or with appropriate modifications to the structure.
|
◦
|
U.S. wireless carriers continue to invest in their networks.
|
•
|
Site rental revenues under long-term tenant leases with contractual escalations
|
◦
|
Initial terms of five to 15 years with multiple renewal periods at the option of the tenant of five to ten years each.
|
◦
|
Weighted-average remaining term of approximately six years, exclusive of renewals at the tenant's option, currently representing approximately $20 billion of expected future cash inflows.
|
•
|
Revenues predominately from large wireless carriers
|
◦
|
Approximately
89%
of our site rental revenues were derived from AT&T, Sprint, T-Mobile, and Verizon Wireless. See also
"Item 2. MD&A—General Overview—Outlook Highlights"
presented below.
|
•
|
Majority of land interests under our towers under long-term control
|
◦
|
Nearly 90% of our tower site rental gross margin and more than 75% of our tower site rental gross margin is derived from towers that reside on land that we own or control for greater than ten and 20 years, respectively. The aforementioned amounts include towers that reside on land interests that are owned, including fee interests and perpetual easements, which represent over one-third of our tower site rental gross margin.
|
•
|
Relatively fixed wireless infrastructure operating costs
|
◦
|
Our wireless infrastructure operating costs tend to increase at approximately the rate of inflation and are not typically influenced by tenant additions.
|
•
|
Minimal sustaining capital expenditure requirements
|
◦
|
Sustaining capital expenditures represented approximately
1%
of net revenues.
|
•
|
Debt portfolio with long-dated maturities extended over multiple years, with the majority of such debt having a fixed rate (see
"Item 3. Quantitative and Qualitative Disclosures About Market Risk"
for a further discussion of our debt)
|
◦
|
81%
of our debt is fixed rate after giving effect to our April 2016 TDC Acquisition and May 2016 Refinancing Activities (see note 12 to our condensed consolidated financial statements).
|
◦
|
Our debt service coverage and leverage ratios were comfortably within their respective financial maintenance covenants.
|
◦
|
In January 2016, we completed a new senior unsecured credit facility and utilized the proceeds to repay the previously outstanding 2012 Credit Facility. In February 2016, we issued $1.5 billion aggregate principal
|
◦
|
In May 2016, we issued 3.4% senior notes due February 2021 and 3.7% senior notes due June 2026, in aggregate principal amounts of $250 million and $750 million, respectively. See note 12 to our condensed consolidated financial statements and
"Item 2. Liquidity and Capital Resources".
|
•
|
Significant cash flows from operations
|
◦
|
Net cash provided by operating activities was
$437.7 million
.
|
◦
|
We expect to grow our core business of providing access to our wireless infrastructure as a result of contractual escalators and future anticipated demand for our wireless infrastructure.
|
•
|
Returning cash flows provided by operations to stockholders in the form of dividends
|
◦
|
During March 2016, we paid a common stock cash dividend of $.885 per share, totaling approximately
$299.1 million
. We currently expect our anticipated quarterly dividends to result in aggregate annual cash payments of approximately
$1.2 billion
during 2016, or an annual amount of $3.54 per share. Over time, we expect to increase our dividend per share generally commensurate with our realized growth in cash flows. Future dividends are subject to the approval of our board of directors.
|
•
|
Investing capital efficiently to grow long-term dividends per share
|
◦
|
Discretionary capital expenditures were
$183.4 million
, including wireless infrastructure improvements in order to support additional site rentals, construction of wireless infrastructure and land purchases.
|
•
|
We expect that our full year 2016 site rental revenue growth will benefit from similar levels of tenant additions as in 2015, as large wireless carriers upgrade and enhance their networks, partially offset by anticipated non-renewals of tenant leases primarily resulting from our customers' decommissioning of the Acquired Networks.
|
•
|
We expect capital expenditures for 2016 to equal or exceed 2015 levels. We also expect sustaining capital expenditures to be approximately 2% of net revenues for full year 2016.
|
($ in thousands)
|
|
Three Months Ended March 31,
|
|
|
|
|
||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
Site rental revenues
|
|
$799,294
|
|
$731,380
|
|
+$67,914
|
|
9%
|
Site rental gross margin
|
|
$546,673
|
|
$499,167
|
|
+$47,506
|
|
10%
|
Network services and other gross margin
|
|
$54,119
|
|
$82,173
|
|
$(28,054)
|
|
(34)%
|
Adjusted EBITDA
(a)
|
|
$539,120
|
|
$529,300
|
|
+$9,820
|
|
2%
|
Net income attributable to CCIC common stockholders
|
|
$36,842
|
|
$111,790
|
|
$(74,948)
|
|
(67)%
|
(a)
|
See reconciliation of Adjusted EBITDA in
"Item 2. MD&A—Accounting and Reporting Matters—Non-GAAP Financial Measures".
|
(a)
|
Includes amortization of prepaid rent.
|
($ in thousands)
|
|
Three Months Ended March 31,
|
|
|
|
|
||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
Segment site rental revenues
|
|
$702,840
|
|
$674,907
|
|
+$27,933
|
|
4%
|
Segment site rental gross margin
|
|
$498,275
|
|
$470,274
|
|
+$28,001
|
|
6%
|
Segment network services and other gross margin
|
|
$55,021
|
|
$80,194
|
|
$(25,173)
|
|
(31)%
|
Segment gross margin
|
|
$553,296
|
|
$550,468
|
|
+$2,828
|
|
1%
|
Segment operating profit
|
|
$529,697
|
|
$527,746
|
|
+$1,951
|
|
—%
|
($ in thousands)
|
|
Three Months Ended March 31,
|
|
|
|
|
||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
Segment site rental revenues
|
|
$96,454
|
|
$56,473
|
|
+$39,981
|
|
71%
|
Segment site rental gross margin
|
|
$58,971
|
|
$35,960
|
|
+$23,011
|
|
64%
|
Segment network services and other gross margin
|
|
$2,045
|
|
$3,252
|
|
$(1,207)
|
|
(37)%
|
Segment gross margin
|
|
$61,016
|
|
$39,212
|
|
+$21,804
|
|
56%
|
Segment operating profit
|
|
$45,494
|
|
$31,652
|
|
+$13,842
|
|
44%
|
|
March 31, 2016
|
||
|
(In thousands of dollars)
|
||
Cash and cash equivalents
(a)
|
$
|
175,702
|
|
Undrawn 2016 Revolver availability
(b)
|
2,191,000
|
|
|
Total debt and other long-term obligations
|
12,312,669
|
|
|
Total equity
|
7,140,994
|
|
(a)
|
Exclusive of restricted cash.
|
(b)
|
Availability at any point in time is subject to certain restrictions based on the maintenance of financial covenants contained in the 2016 Credit Facility. See our
2015
Form 10-K.
|
•
|
Our liquidity sources may include (1) cash on hand, (2) net cash provided by operating activities (net of cash interest payments), (3) undrawn availability from our 2016 Revolver, and (4) issuances of equity pursuant to our ATM Program. Our liquidity uses over the next 12 months are expected to include (1) debt service obligations of
$87.8 million
(principal payments), (2) common stock dividend payments expected to be $3.54 per share, or an aggregate of approximately
$1.2 billion
, subject to future approval by our board of directors (see
"Item 2. MD&A—Business Fundamentals and Results"
), (3) Convertible Preferred Stock dividend payments prior to anticipated conversion in November 2016 of approximately $33 million, and (4) sustaining and discretionary capital expenditures (expected to be equal to or greater than current levels). During the next 12 months, we expect that our liquidity sources should be sufficient to cover our expected uses. As CCIC is a holding company, our cash flow from operations is generated by our operating subsidiaries.
|
•
|
We have no scheduled contractual debt maturities other than principal payments on amortizing debt. See
"Item 3. Quantitative and Qualitative Disclosures About Market Risk"
for a tabular presentation as of
March 31, 2016
of our scheduled contractual debt maturities and a discussion of anticipated repayment dates.
|
|
Three Months Ended March 31,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands of dollars)
|
||||||||||
Net increase (decrease) in cash and cash equivalents provided by (used for) from continuing operations:
|
|
|
|
|
|
||||||
Operating activities
|
$
|
437,656
|
|
|
$
|
453,058
|
|
|
$
|
(15,402
|
)
|
Investing activities
|
(207,746
|
)
|
|
(219,660
|
)
|
|
11,914
|
|
|||
Financing activities
|
(345,592
|
)
|
|
(172,241
|
)
|
|
(173,351
|
)
|
|||
Net increase (decrease) in cash and cash equivalents from continuing operations
|
(115,682
|
)
|
|
61,157
|
|
|
(176,839
|
)
|
|||
Net increase (decrease) in cash and cash equivalents from discontinued operations
|
113,150
|
|
|
4,636
|
|
|
108,514
|
|
|||
Effect of exchange rate changes on cash
|
(576
|
)
|
|
(1,260
|
)
|
|
684
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(3,108
|
)
|
|
$
|
64,533
|
|
|
$
|
(67,641
|
)
|
•
|
Discretionary capital expenditures made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They consist of improvements to existing wireless infrastructure, construction of new wireless infrastructure, and, to a lesser extent, purchases of land assets under towers as we seek to manage our interests in the land beneath our towers. Improvements to existing wireless infrastructure to accommodate new leasing typically vary based on, among other factors: (1) the type of wireless infrastructure, (2) the scope, volume, and mix of work performed on the wireless infrastructure, (3) existing capacity prior to installation, or (4) changes in structural engineering regulations and standards. Our decisions regarding capital expenditures are influenced by the availability and cost of capital and expected returns on alternative uses of cash, such as payments of dividends and investments.
|
•
|
Sustaining capital expenditures consist of (1) corporate-related capital improvements and (2) maintenance on our wireless infrastructure assets that enable our customers' ongoing quiet enjoyment of the wireless infrastructure.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net income (loss)
|
$
|
47,840
|
|
|
$
|
125,112
|
|
Adjustments to increase (decrease) net income (loss):
|
|
|
|
||||
Income (loss) from discontinued operations
|
—
|
|
|
(13,378
|
)
|
||
Asset write-down charges
|
7,959
|
|
|
8,555
|
|
||
Acquisition and integration costs
|
5,638
|
|
|
2,016
|
|
||
Depreciation, amortization and accretion
|
277,875
|
|
|
251,806
|
|
||
Amortization of prepaid lease purchase price adjustments
|
5,204
|
|
|
5,174
|
|
||
Interest expense and amortization of deferred financing costs
|
126,378
|
|
|
134,439
|
|
||
Gains (losses) on retirement of long-term obligations
|
30,550
|
|
|
—
|
|
||
Interest income
|
(174
|
)
|
|
(56
|
)
|
||
Other income (expense)
|
3,273
|
|
|
225
|
|
||
Benefit (provision) for income taxes
|
3,872
|
|
|
(1,435
|
)
|
||
Stock-based compensation expense
|
30,705
|
|
|
16,842
|
|
||
Adjusted EBITDA
(a)
|
$
|
539,120
|
|
|
$
|
529,300
|
|
(a)
|
The above reconciliation excludes the items included in the Company's Adjusted EBITDA definition which are not applicable to the periods shown.
|
|
•
|
it is the primary measure used by our management to evaluate the economic productivity of our operations, including the efficiency of our employees and the profitability associated with their performance, the realization of lease revenues under our long-term leases, our ability to obtain and maintain our tenants, and our ability to operate our wireless infrastructure effectively;
|
•
|
it is similar to the measure of current financial performance generally used in our debt covenant calculations;
|
•
|
although specific definitions may vary, it is widely used in the wireless infrastructure sector to measure operating performance without regard to items such as depreciation, amortization and accretion which can vary depending upon accounting methods and the book value of assets; and
|
•
|
we believe it helps investors 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 operating results.
|
•
|
with respect to compliance with our debt covenants, which require us to maintain certain financial ratios including, or similar to, Adjusted EBITDA;
|
•
|
as a performance goal in employee annual incentive compensation;
|
•
|
as a measurement of operating performance because it assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our operating results;
|
•
|
in presentations to our board of directors to enable it to have the same measurement of operating performance used by management;
|
•
|
for planning purposes, including preparation of our annual operating budget;
|
•
|
as a valuation measure in strategic analyses in connection with the purchase and sale of assets; and
|
•
|
in determining self-imposed limits on our debt levels, including the evaluation of our leverage ratio and interest coverage ratio.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
the potential refinancing of our existing debt (
$12.3 billion
outstanding at
March 31, 2016
and
$12.1 billion
at
December 31, 2015
);
|
•
|
our
$2.3 billion
and
$4.0 billion
of floating rate debt at
March 31, 2016
and
December 31, 2015
, respectively, which represented approximately
19%
and
33%
of our total debt, as of
March 31, 2016
and as of
December 31, 2015
, respectively; and
|
•
|
potential future borrowings of incremental debt, including borrowings on our 2016 Credit Facility.
|
|
Future Principal Payments and Interest Rates by the Debt Instruments' Contractual Year of Maturity
|
||||||||||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
|
Fair Value
(a)
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate
(c)
|
$
|
38,984
|
|
|
$
|
548,573
|
|
(f)
|
$
|
45,147
|
|
|
$
|
36,629
|
|
|
$
|
25,502
|
|
|
$
|
9,407,733
|
|
|
$
|
10,102,568
|
|
|
$
|
10,620,857
|
|
Average interest rate
(b)(c)(d)
|
4.4
|
%
|
|
2.6
|
%
|
|
4.8
|
%
|
|
5.0
|
%
|
|
5.2
|
%
|
|
6.3
|
%
|
|
6.1
|
%
|
|
|
|||||||||
Variable rate
(e)
|
$
|
37,500
|
|
|
$
|
50,000
|
|
|
$
|
87,500
|
|
|
$
|
100,000
|
|
|
$
|
175,000
|
|
|
$
|
1,859,000
|
|
|
$
|
2,309,000
|
|
|
$
|
2,289,000
|
|
Average interest rate
(e)
|
2.1
|
%
|
|
2.4
|
%
|
|
2.7
|
%
|
|
2.9
|
%
|
|
3.1
|
%
|
|
3.2
|
%
|
|
3.1
|
%
|
|
|
(a)
|
The fair value of our debt is based on indicative quotes (that is, non-binding quotes) from brokers that require judgment to interpret market information, including implied credit spreads for similar borrowings on recent trades or bid/ask offers. These fair values are not necessarily indicative of the amount which could be realized in a current market exchange.
|
(b)
|
The average interest rate represents the weighted-average stated coupon rate (see footnotes (c) and (d)).
|
(c)
|
The impact of principal payments that will
commence following
the anticipated repayment dates is not considered.
The January 2010 Tower Revenue Notes consist of two series of notes with principal amounts of $350.0 million and $1.3 billion, having anticipated repayment dates in January 2017 and January 2020, respectively. The August 2010 Tower Revenue Notes consist of two series of notes with principal amounts of $300.0 million and $1.0 billion, having anticipated repayment dates in August 2017 and August 2020, respectively.
The May 2015 Tower Revenue Notes consist of two series of notes with principal amounts of $300.0 million and $700.0 million, having anticipated repayment dates of May 2022 and May 2025, respectively. See note 12 to our condensed consolidated financial statements
for a discussion of our intended use of proceeds from our May 2016 Refinancing Activities, which includes the repayment of (1) $350.0 million of the January 2010 Tower Revenue Notes, having an anticipated repayment date in January 2017, and (2) $300.0 million of the August 2010 Tower Revenue Notes, having an anticipated repayment date in August 2017
.
|
(d)
|
If the Tower Revenue Notes are not repaid in full by the applicable anticipated repayment dates, the applicable interest rate increases by approximately 5% per annum and monthly principal payments commence using the Excess Cash Flow of the issuers of the Tower Revenue Notes. The Tower Revenue Notes are presented based on their contractual maturity dates ranging from 2037 to 2045 and include the impact of an assumed 5% increase in interest rate that would occur following the anticipated repayment dates but exclude the impact of monthly principal payments that would commence using Excess Cash Flow
|
(e)
|
Predominantly consists of $2.0 billion 2016 Term Loan A maturing in 2021. See note
4
to our condensed consolidated financial statements.
|
(f)
|
Predominantly consists of $500.0 million in aggregate principal of 2.381% secured notes due December 2017.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
|
|
(In thousands)
|
|
|
|
|
|
|
|||||
January 1 - January 31, 2016
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||
February 1 - February 29, 2016
|
|
283
|
|
|
86.02
|
|
|
—
|
|
|
—
|
|
|
March 1 - March 31, 2016
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
283
|
|
|
$
|
86.02
|
|
|
—
|
|
|
—
|
|
ITEM 6.
|
EXHIBITS
|
|
|
CROWN CASTLE INTERNATIONAL CORP.
|
||
|
|
|
|
|
Date:
|
May 9, 2016
|
|
By:
|
/s/ Jay A. Brown
|
|
|
|
|
Jay A. Brown
|
|
|
|
|
Senior Vice President,
|
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
Date:
|
May 9, 2016
|
|
By:
|
/s/ Rob A. Fisher
|
|
|
|
|
Rob A. Fisher
|
|
|
|
|
Vice President and Controller
|
|
|
|
|
(Principal Accounting Officer)
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
(a)
|
3.1
|
|
Restated Certificate of Incorporation of Crown Castle International Corp. (including the Certificate of Designations of 4.50% Mandatory Convertible Preferred Stock, Series A, incorporated therein as Exhibit I)
|
|
|
|
|
(b)
|
3.2
|
|
Amended and Restated By-Laws of Crown Castle International Corp., dated July 30, 2015
|
|
|
|
|
(d)
|
4.1
|
|
Fourth Supplemental Indenture dated February 8, 2016, between Crown Castle International Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture dated April 15, 2014, between Crown Castle International Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee
|
|
|
|
|
(g)
|
4.2
|
|
Fifth Supplemental Indenture dated May 6, 2016, between Crown Castle International Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture dated April 15, 2014, between Crown Castle International Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee
|
|
|
|
|
(c)
|
10.1
|
|
Credit Agreement dated as of January 21, 2016, among Crown Castle International Corp., the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent
|
|
|
|
|
(e)
|
10.2
|
|
Form of Severance Agreement between Crown Castle International Corp. and each of Kenneth J. Simon and Daniel K. Schlanger
|
|
|
|
|
(f)
|
10.3
|
|
2016 Executive Management Team Annual Incentive Plan
|
|
|
|
|
(f)
|
10.4
|
|
Form of 2013 Long-Term Incentive Plan Restricted Stock Units Agreement
|
|
|
|
|
(f)
|
10.5
|
|
Amended and Restated Severance Agreement between Crown Castle International Corp. and Jay A. Brown, effective as of June 1, 2016
|
|
|
|
|
(f)
|
10.6
|
|
Amended and Restated Severance Agreement between Crown Castle International Corp. and W. Benjamin Moreland, effective as of June 1, 2016
|
|
|
|
|
(f)
|
10.7
|
|
Form of Amendment to Severance Agreement between Crown Castle International Corp. and certain executive officers, including James D. Young, Patrick Slowey and Philip M. Kelley
|
|
|
|
|
(f)
|
10.8
|
|
Summary of Non-Employee Director Compensation
|
|
|
|
|
*
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
|
|
|
|
|
*
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
|
|
|
|
|
*
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002
|
|
|
|
|
*
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
*
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
*
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
*
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
*
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
*
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
(a)
|
Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (File No. 001-16441) on December 16, 2014.
|
(b)
|
Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (File No. 001-16441) on August 4, 2015.
|
(d)
|
Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (File No. 001-16441) on February 8, 2016.
|
(e)
|
Incorporated by reference to the exhibit previously filed by the Registrant on Form 10-K (File No. 001-16441) for the year ended December 31, 2015.
|
(f)
|
Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (File No. 001-16441) on February 24, 2016.
|
(g)
|
Incorporated by reference to the exhibit previously filed by the Registrant on Form 8-K (File No. 001-16441) on May 6, 2016.
|
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