EX-99.2 3 q22015supplement.htm EX 99.2 Q2 2015 Supplement
Exhibit 99.2















Supplemental Information Package
and Non-GAAP Reconciliations
Second Quarter • June 30, 2015




The Foundation for a Wireless World.
CrownCastle.com

Crown Castle International Corp
Second Quarter 2015

TABLE OF CONTENTS
 
Page
Company Overview
 
Company Profile
Strategy
Historical Dividend and AFFO per Share
Portfolio Footprint
Corporate Information
Research Coverage
Historical Common Stock Data
Portfolio and Financial Highlights
7
Outlook
Financials & Metrics
 
Consolidated Balance Sheet
Consolidated Statement of Operations
FFO and AFFO Reconciliations
Consolidated Statement of Cash Flows
Site Rental Revenue Growth
Site Rental Gross Margin Growth
Summary of Straight-Line, Prepaid Rent Activity, and Capital Expenditures
Lease Renewal and Lease Distribution
Customer Overview
Asset Portfolio Overview
 
Summary of Tower Portfolio by Vintage
Portfolio Overview
Ground Interest Overview
Ground Interest Activity
Small Cell Network Overview
Capitalization Overview
 
Capitalization Overview
Debt Maturity Overview
Liquidity Overview
Maintenance and Financial Covenants
Interest Rate Sensitivity
Appendix

Cautionary Language Regarding Forward-Looking Statements
This supplemental information package ("Supplement") contains forward-looking statements and information that are based on our management's current expectations as of the date of this Supplement. Statements that are not historical facts are hereby identified as forward-looking statements. Words such as "Outlook", "guide", "forecast", "estimate", "anticipate", "project", "plan", "intend", "believe", "expect", "likely", "predicted", and any variations of these words and similar expressions are intended to identify such forward looking statements. Such statements include, but are not limited to, our Outlook for the third quarter 2015 and full year 2015 .

Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including, but not limited to, prevailing market conditions. Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors which could affect our results is included in our filings with the Securities and Exchange Commission. Crown Castle assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The components of financial information presented herein, both historical and forward looking, may not sum due to rounding. Definitions and reconciliations of non-GAAP measures, including FFO and AFFO, are provided in the Appendix to this Supplement.

As used herein, the term "including" and any variation thereof, means "including without limitation." The use of the word "or" herein is not exclusive.

1
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


COMPANY PROFILE 
Crown Castle International Corp. (to which the terms "Crown Castle," "CCIC," "we," "our," "our Company," "the Company" or "us" as used herein refer) owns, operates and leases shared wireless infrastructure, including: (1) towers and other structures, such as rooftops (collectively, "towers"), and to a lesser extent, (2) distributed antenna systems, a type of small cell network ("small cells"), and (3) interests in land under third party towers in various forms ("third party land interests") (collectively, "wireless infrastructure"). Crown Castle offers significant wireless communications coverage in each of the top 100 US markets. Crown Castle owns, operates and manages approximately 40,000 towers in the US.
Our core business is providing access, including space or capacity, to our wireless infrastructure via long-term contracts in various forms, including license, sublease and lease agreements (collectively, "leases"). Our wireless infrastructure can accommodate multiple customers for antennas or other equipment necessary for the transmission of signals for wireless communication devices. We seek to increase our site rental revenues by adding more tenants on our wireless infrastructure, which we expect to result in significant incremental cash flows due to our relatively fixed operating costs.
Effective January 1, 2014, Crown Castle commenced operating as a Real Estate Investment Trust ("REIT") for U.S. federal income tax purposes as it relates to our towers and third party land interests. In August 2014, we received a favorable private letter ruling from the IRS, which provides that the real property portion of our small cells and the related rents qualify as real property and rents from real property, respectively, under the rules governing REITs. We are evaluating the impact of this private letter ruling and, subject to board approval, we expect to take appropriate action to include at least some part of our small cells as part of the REIT during 2015.
On May 28, 2015, Crown Castle completed the sale of CCAL for an aggregate purchase price of approximately $1.6 billion. At the time of the sale, CCAL was 77.6% owned by Crown Castle. Crown Castle's net proceeds of approximately $1.3 billion, inclusive of an installment payment of approximately $125 million due from the buyers on January 2016, are after accounting for its ownership interest, repayment of intercompany debt owed to it by CCAL and transaction fees and expenses. During the second quarter of 2015, Crown Castle used net proceeds from the sale of CCAL to repay outstanding borrowings under its revolving credit facility and portions of its term loans. We have classified the historical balances, results of operations, and cash flows of CCAL as amounts from discontinued operations.

Crown Castle expects to utilize approximately $1.0 billion of its approximately $2.0 net operating loss carryforward to fully offset the expected taxable gain from the sale of CCAL.   Further, as a result of the sale of CCAL, Crown Castle expects that a significant portion of its common stock dividend distributions during 2015 will be characterized as capital gains distributions.

 

STRATEGY 
Our strategy is to create long-term stockholder value via a combination of (1) growing cash flows generated from our portfolio of wireless infrastructure, (2) returning a meaningful portion of our cash provided by operating activities to our stockholders in the form of dividends and (3) investing capital efficiently to grow long-term dividends per share. We measure our efforts to create "long-term stockholder value" by the combined payment of dividends to stockholders and growth in our per share results. The key elements of our strategy are to:
•
Grow cash flows from our wireless infrastructure. We seek to maximize the site rental cash flows derived from our wireless infrastructure by adding tenants on our wireless infrastructure through long-term leases as our customers deploy and improve their wireless networks. We seek to maximize new tenant additions or modifications of existing tenant installations (collectively, "new tenant additions") through our focus on customer service and deployment speed. Due to the relatively fixed nature of the costs to operate our wireless infrastructure (which tend to increase at approximately the rate of inflation), we expect increases in our site rental cash flows from new tenant additions and the related subsequent impact from contracted escalations to result in growth in our operating cash flows. 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 we expect to have high incremental returns.

2
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

•
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 long-term dividends per share. We seek to invest our capital available, 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.
Our strategy to create long-term stockholder value is based on our belief that additional demand for our wireless infrastructure will be created by the expected continued growth in the wireless communication services industry, which is predominately driven by the demand for wireless data services by consumers. We believe that such demand for our wireless infrastructure will continue, will result in growth of our cash flows due to new tenant additions on our existing wireless infrastructure, and will create other growth opportunities for us, such as demand for new wireless infrastructure.


3
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


HISTORICAL DIVIDEND AND AFFO PER SHARE (1)

PORTFOLIO FOOTPRINT
(1)
See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Financial Measures and Other Calculations" in the Appendix for a discussion of the definitions of FFO and AFFO.
(2)
Last quarter annualized ("LQA") calculated as the most recently completed quarterly period times four.


4
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

GENERAL COMPANY INFORMATION
Principal executive offices
1220 Augusta Drive, Suite 600, Houston, TX 77057
Common shares trading symbol
CCI
Stock exchange listing
New York Stock Exchange
Fiscal year ending date
December 31
Fitch - Long Term Issuer Default Rating
BBB-
Moody’s - Long Term Corporate Family Rating
Ba2
Standard & Poor’s - Long Term Local Issuer Credit Rating
BB+

Note: These credit ratings may not reflect the potential risks relating to the structure or trading of the Company’s securities and are provided solely for informational purposes. Credit ratings are not recommendations to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion. The Company does not undertake any obligation to maintain the ratings or to advise of any change in the ratings. Each agency’s rating should be evaluated independently of any other agency’s rating. An explanation of the significances of the ratings can be obtained from each of the ratings agencies.

EXECUTIVE MANAGEMENT TEAM
Name
Age
Years with Company
Position
W. Benjamin Moreland
51
15
President and Chief Executive Officer
Jay A. Brown
42
15
Senior Vice President, Chief Financial Officer and Treasurer
James D. Young
53
9
Senior Vice President and Chief Operating Officer
E. Blake Hawk
65
16
Executive Vice President and General Counsel
Patrick Slowey
58
14
Senior Vice President and Chief Commercial Officer
Philip M. Kelley
42
18
Senior Vice President-Corporate Development and Strategy

BOARD OF DIRECTORS
Name
Position
Committees
Age
Years as Director
J. Landis Martin
Chairman
NCG(1) 
69
18
P. Robert Bartolo
Director
Audit, Compensation
43
1
Cindy Christy
Director
NCG(1), Strategy
49
7
Ari Q. Fitzgerald
Director
Compensation, Strategy
52
12
Robert E. Garrison II
Director
Audit, Compensation
73
10
Dale N. Hatfield
Director
NCG(1), Strategy
77
13
Lee W. Hogan
Director
Audit, Compensation, Strategy
70
14
Edward C. Hutcheson
Director
Strategy
69
18
John P. Kelly
Director
Strategy
57
15
Robert F. McKenzie
Director
Audit, Strategy
71
20
Anthony J. Melone
Director
 
55
*
W. Benjamin Moreland
Director
 
51
8

(1)
Nominating & Corporate Governance Committee
*
Appointed May 2015

5
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

RESEARCH COVERAGE
Equity Research
Bank of America
David Barden
(646) 855-1320
BTIG
Walter Piecyk
(646) 450-9258
Barclays
Amir Rozwadowski
(212) 526-4043
Canaccord Genuity
Greg Miller
(212) 389-8128
Citigroup
Michael Rollins
(212) 816-1116
Cowen and Company
Colby Synesael
(646) 562-1355
Credit Suisse
Joseph Mastrogiovanni
(212) 325-3757
Evercore Partners
Jonathan Schildkraut
(212) 497-0864
Goldman Sachs
Brett Feldman
(212) 902-8156
Jefferies
Mike McCormack
(212) 284-2516
JPMorgan
Philip Cusick
(212) 622-1444
Macquarie
Kevin Smithen
(212) 231-0695
Morgan Stanley
Simon Flannery
(212) 761-6432
New Street Research
Spencer Kurn
(212) 921-2067
Oppenheimer & Co.
Timothy Horan
(212) 667-8137
Pacific Crest Securities
Michael Bowen
(503) 727-0721
Raymond James
Ric Prentiss
(727) 567-2567
RBC Capital Markets
Jonathan Atkin
(415) 633-8589
UBS
Batya Levi
(212) 713-8824
Wells Fargo Securities, LLC
Jennifer Fritzsche
(312) 920-3548
 
 
 
 
Rating Agency
Fitch
John Culver
(312) 368-3216
Moody’s
Phil Kibel
(212) 553-1653
Standard & Poor’s
Scott Tan
(212) 438-4162

HISTORICAL COMMON STOCK DATA
 
Three Months Ended
(in millions, except per share data)
6/30/15
3/31/15
12/31/14
9/30/14
6/30/14
High price(1)
$
86.61

$
87.74

$
82.46

$
78.37

$
74.94

Low price(1)
$
80.11

$
77.04

$
72.61

$
70.02

$
68.50

Period end closing price(2)
$
80.30

$
81.72

$
77.17

78.11

$
71.71

Dividends paid per common share
$
0.82

$
0.82

$
0.82

$
0.35

$
0.35

Volume weighted average price for the period(1)
$
82.84

$
83.63

$
77.56

$
74.51

$
72.00

Common shares outstanding - diluted, at period end
334

334

334

334

334

Market value of outstanding common shares, at period end(3)
$
26,801

$
27,276

$
25,765

$
26,078

$
23,944


(1)
Based on the sales price, adjusted for common stock dividends, as reported by Bloomberg.
(2)
Based on the period end closing price, adjusted for dividends, as reported by Bloomberg.
(3)
Period end market value of outstanding common shares is calculated as the product of (a) shares of common stock outstanding at period end and (b) closing share price at period end, adjusted for dividends, as reported by Bloomberg.



6
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

SUMMARY PORTFOLIO HIGHLIGHTS
(as of June 30, 2015)
 
Number of towers(1)
39,667

Average number of tenants per tower
2.2

Remaining contracted customer receivables ($ in billions)(2)
$
20

Weighted average remaining customer contract term (years)(3)
7

Percent of towers in the Top 50 / 100 Basic Trading Areas
56%/71%

Percent of ground leased / owned (by site rental gross margin)
64%/36%

Weighted average maturity of ground leases (years)(4)
30


SUMMARY FINANCIAL HIGHLIGHTS
 
Three Months Ended June 30,
 
Six Months Ended
 June 30,
(dollars in thousands, except per share amounts)
2015
 
2014
 
2015
 
2014
Operating Data:
 
 
 
 
 
 
 
Net revenues
 
 
 
 
 
 
 
Site rental
$
737,091

 
$
710,783

 
$
1,468,471

 
$
1,425,575

Network services and other
162,346

 
167,459

 
331,437

 
294,430

Net revenues
$
899,437

 
$
878,242

 
$
1,799,908

 
$
1,720,005

 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
Site rental
$
500,060

 
$
483,751

 
$
999,227

 
$
979,899

Network services and other
72,946

 
65,558

 
155,119

 
120,729

Total gross margin
$
573,006

 
$
549,309

 
$
1,154,346

 
$
1,100,628

 
 
 
 
 
 
 
 
Net income (loss) attributable to CCIC common stockholders
$
1,142,363

 
$
23,012

 
$
1,254,153

 
$
113,512

Net income (loss) attributable to CCIC common stockholders per share - diluted
$
3.42

 
$
0.07

 
$
3.76

 
$
0.34

 
 
 
 
 
 
 
 
Non-GAAP Data(5):
 
 
 
 
 
 
 
Adjusted EBITDA
$
520,926

 
$
509,537

 
$
1,050,225

 
$
1,018,067

FFO
408,067

 
260,506

 
764,970

 
587,153

AFFO
342,385

 
332,274

 
708,062

 
663,511

AFFO per share
$
1.03

 
$
1.00

 
$
2.12

 
$
1.99

 
 
 
 
 
 
 
 
Summary Cash Flow Data:
 
 
 
 
 
 
 
Net cash provided by (used for) operating activities
$
465,818

 
$
374,842

 
$
918,878

 
$
722,936

Net cash provided by (used for) investing activities(6)
(219,553
)
 
(183,862
)
 
(439,213
)
 
(382,708
)
Net cash provided by (used for) financing activities
(1,251,923
)
 
(181,300
)
 
(1,424,165
)
 
(355,756
)

(1)
Includes towers and rooftops, excludes small cells and third-party land interests.
(2)
Excludes renewal terms at customers' opinion.
(3)
Excludes renewal terms at customers' option, weighted by site rental revenues.
(4)
Includes renewal terms at the Company's option, weighted by site rental gross margin.
(5)
See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Measures and Other Calculations" in the Appendix for a discussion of our definitions of FFO and AFFO.
(6)
Includes net cash used for acquisitions of approximately $47 million and $26 million for the three months ended June 30, 2015 and 2014, respectively and $65 million and $86 million for the six months ended June 30, 2015 and 2014, respectively.


7
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

SUMMARY FINANCIAL HIGHLIGHTS (CONTINUED)
 
 
Three Months Ended June 30,
(dollars in thousands, except per share amounts)
 
2015
 
2014
Other Data:
 
 
 
 
Net debt to last quarter annualized Adjusted EBITDA
 
5.2
x
 
5.6
x
Dividend per common share
 
$
0.82

 
$
0.35

AFFO payout ratio(1)
 
80
%
 
35
%
 
 
 
 
 
(dollars in thousands)
 
June 30, 2015
 
December 31, 2014
Balance Sheet Data (at period end):
 
 
 
 
Cash and cash equivalents
 
$
338,609

 
$
151,312

Property and equipment, net
 
9,042,284

 
8,982,783

Total assets
 
21,011,629

 
21,143,276

Total debt and other long-term obligations
 
11,131,304

 
11,920,861

Total CCIC stockholders' equity
 
7,404,236

 
6,716,225


OUTLOOK FOR THIRD QUARTER 2015 AND FULL YEAR 2015(2)
(dollars in millions, except per share amounts)
Third Quarter 2015
Full Year 2015
Site rental revenues
$740 to $745
$2,949 to $2,959
Site rental cost of operations
$237 to $242
$942 to $952
Site rental gross margin
$500 to $505
$2,000 to $2,010
Adjusted EBITDA(4)
$510 to $515
$2,073 to $2,088
Interest expense and amortization of deferred financing costs(3)
$125 to $130
$513 to $528
FFO(4)
$347 to $352
$1,463 to $1,478
AFFO(4)
$341 to $346
$1,405 to $1,420
AFFO per share(4)(5)
$1.02 to $1.04
$4.21 to $4.25
Net income (loss)
$90 to $123
$1,463 to $1,542
Net income (loss) per share - diluted(3)
$0.27 to $0.37
$4.38 to $4.62
Net income (loss) attributable to CCIC common stockholders
$79 to $112
$1,419 to $1,498
Net income (loss) attributable to CCIC common stockholders per share - diluted(3)
$0.24 to $0.34
$4.25 to $4.49

(1)
AFFO is calculated exclusive of income from discontinued operations and related noncontrolling interest. See page 2.
(2)
Results of operations and income from the sale of CCAL are classified as amounts from discontinued operations. Outlook amounts are exclusive of income from discontinued operations and related noncontrolling interest, except for net income. See page 2.
(3)
See the reconciliation of "components of interest expense and amortization of deferred financing costs" in the Appendix.
(4)
See reconciliations and definitions provided herein.
(5)
Based on 333.7 million diluted shares outstanding as of June 30, 2015.


8
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

OUTLOOK FOR FULL YEAR 2015 SITE RENTAL REVENUE GROWTH
(dollars in millions)
Midpoint of Full Year 2015 Outlook
Full Year 2014
Reported GAAP site rental revenues
$
2,954

$
2,867

Site rental straight-line revenues
(111
)
(183
)
Other - Non-recurring
—

(5
)
Site Rental Revenues, as Adjusted(1)(3)
$
2,844

$
2,678

Cash adjustments:
 
 
Other
—

 
New tower acquisitions and builds(2)
(20
)
 
Organic Site Rental Revenues(1)(3)(4)
$
2,823

 
Year-Over-Year Revenue Growth
 
 
Reported GAAP site rental revenues
3.0
%
 
Site Rental Revenues, as Adjusted
6.2
%
 
Organic Site Rental Revenues(5)
5.4
%
 
OUTLOOK FOR ORGANIC SITE RENTAL REVENUE GROWTH
 
Midpoint of Full Year 2015 Outlook
New leasing activity
6.0
 %
Escalators
3.4
 %
Organic Site Rental Revenue Growth, before non-renewals
9.4
 %
Non-renewals
(4.0
)%
Organic Site Rental Revenue Growth(5)
5.4
 %
OUTLOOK FOR FULL YEAR 2015 SITE RENTAL GROSS MARGIN GROWTH
(dollars in millions)
Midpoint of Full Year 2015 Outlook
Full Year 2014
Reported GAAP site rental gross margin
$
2,005

$
1,960

Straight line revenues and expenses, net
(15
)
(82
)
Other - Non-recurring
—

(5
)
Site Rental Gross Margin, as Adjusted(1)(3)
$
1,990

$
1,874

Cash adjustments:

 
Other
—

 
New tower acquisitions and builds(2)
(16
)
 
Organic Site Rental Gross Margin(1)(3)(4)
$
1,974

 
Year-Over-Year Gross Margin Growth
 
 
Reported GAAP site rental gross margin
2.3
%
 
Site Rental Gross Margin, as Adjusted
6.2
%
 
Organic Site Rental Gross Margin(6)
5.3
%
 
Year-Over-Year Incremental Margin
 
 
Reported GAAP site rental gross margin
51.0
%
 
Site Rental Gross Margin, as Adjusted
70.2
%
 
Organic Site Rental Gross Margin(7)
68.6
%
 

(1)
Includes amortization of prepaid rent.
(2)
The financial impact of new tower acquisitions and builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build.
(3)
Includes Site Rental Revenues, as Adjusted, from the construction of new small cell nodes.
(4)
See definitions provided herein.
(5)
Calculated as the percentage change from Site Rental Revenues, as Adjusted, for the prior period when compared to Organic Site Rental Revenues for the current period.
(6)
Calculated as the percentage change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period.
(7)
Calculated as the change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period, divided by the change from Site Rental Revenues, as Adjusted in the prior period when compared to Organic Site Rental Revenues for the current period.

9
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


CONSOLIDATED BALANCE SHEET (Unaudited)
(dollars in thousands, except share amounts)
June 30,
2015
 
December 31,
2014
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
338,609

 
$
151,312

Restricted cash
143,016

 
147,411

Receivables, net
253,342

 
313,308

Prepaid expenses
138,355

 
138,873

Deferred income tax assets
29,842

 
24,806

Other current assets
214,396

 
94,503

Assets from discontinued operations
—

 
412,783

Total current assets
1,117,560

 
1,282,996

Deferred site rental receivables
1,256,517

 
1,202,058

Property and equipment, net
9,042,284

 
8,982,783

Goodwill
5,160,106

 
5,196,485

Other intangible assets, net
3,631,987

 
3,681,551

Long-term prepaid rent, deferred financing costs and other assets, net
803,175

 
797,403

Total assets
$
21,011,629

 
$
21,143,276

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
153,909

 
$
162,397

Accrued interest
67,067

 
66,943

Deferred revenues
313,355

 
279,882

Other accrued liabilities
151,211

 
182,081

Current maturities of debt and other obligations
94,702

 
113,335

Liabilities from discontinued operations
—

 
127,493

Total current liabilities
780,244

 
932,131

Debt and other long-term obligations
11,036,602

 
11,807,526

Deferred income tax liabilities
35,117

 
39,889

Other long-term liabilities
1,755,430

 
1,626,502

Total liabilities
13,607,393

 
14,406,048

Commitments and contingencies
 
 
 
CCIC stockholders' equity:
 
 
 
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: June 30, 2015—333,762,344 and December 31, 2014—333,856,632
3,339

 
3,339

4.50% Mandatory Convertible Preferred Stock, Series A, $.01 par value; 20,000,000 shares authorized; shares issued and outstanding: June 30, 2015 and December 31, 2014—9,775,000; aggregate liquidation value: June 30, 2015 and December 31, 2014—$977,500
98

 
98

Additional paid-in capital
9,518,103

 
9,512,396

Accumulated other comprehensive income (loss)
(6,866
)
 
15,820

Dividends/distributions in excess of earnings
(2,110,438
)
 
(2,815,428
)
Total CCIC stockholders' equity
7,404,236

 
6,716,225

Noncontrolling interest from discontinued operations
—

 
21,003

Total equity
7,404,236

 
6,737,228

Total liabilities and equity
$
21,011,629

 
$
21,143,276




10
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(dollars in thousands, except share and per share amounts)
2015
 
2014
 
2014
 
2015
Net revenues:
 
 
 
 
 
 
 
Site rental
$
737,091

 
$
710,783

 
$
1,468,471

 
$
1,425,575

Network services and other
162,346

 
167,459

 
331,437

 
294,430

Net revenues
899,437

 
878,242

 
1,799,908

 
1,720,005

Operating expenses:
 
 
 
 
 
 
 
Costs of operations (exclusive of depreciation, amortization and accretion):
 
 
 
 
 
 
 
Site rental
237,031

 
227,032

 
469,244

 
445,676

Network services and other
89,400

 
101,901

 
176,318

 
173,701

General and administrative
73,125

 
63,318

 
147,181

 
121,959

Asset write-down charges
3,620

 
3,105

 
12,175

 
5,741

Acquisition and integration costs
2,377

 
19,125

 
4,393

 
24,784

Depreciation, amortization and accretion
253,153

 
246,583

 
504,959

 
491,759

Total operating expenses
658,706

 
661,064

 
1,314,270

 
1,263,620

Operating income (loss)
240,731

 
217,178

 
485,638

 
456,385

Interest expense and amortization of deferred financing costs
(134,466
)
 
(144,534
)
 
(268,905
)
 
(290,934
)
Gains (losses) on retirement of long-term obligations
(4,181
)
 
(44,629
)
 
(4,157
)
 
(44,629
)
Gains (losses) on foreign currency swaps
59,779

 
—

 
59,779

 
—

Interest income
325

 
108

 
381

 
222

Other income (expense)
194

 
(5,920
)
 
(55
)
 
(8,656
)
Income (loss) from continuing operations before income taxes
162,382

 
22,203

 
272,681

 
112,388

Benefit (provision) for income taxes
4,144

 
3,101

 
5,579

 
6,141

Income (loss) from continuing operations
166,526

 
25,304

 
278,260

 
118,529

Discontinued operations:
 
 
 
 
 
 
 
Income (loss) from discontinued operations, net of tax
6,312

 
10,053

 
19,690

 
19,621

Net gain (loss) from disposal of discontinued operations, net of tax
981,540

 
—

 
981,540

 
—

Income (loss) from discontinued operations, net of tax
987,852

 
10,053

 
1,001,230

 
19,621

Net income (loss)
1,154,378

 
35,357

 
1,279,490

 
138,150

Less: Net income (loss) attributable to the noncontrolling interest
1,018

 
1,348

 
3,343

 
2,644

Net income (loss) attributable to CCIC stockholders
1,153,360

 
34,009

 
1,276,147

 
135,506

Dividends on preferred stock
(10,997
)
 
(10,997
)
 
(21,994
)
 
(21,994
)
Net income (loss) attributable to CCIC common stockholders
$
1,142,363

 
$
23,012

 
$
1,254,153

 
$
113,512

 
 
 
 
 
 
 
 
Net income (loss) attributable to CCIC common stockholders, per common share:
 
 
 
 
 
 
 
Income (loss) from continuing operations, basic
$
0.47

 
$
0.04

 
$
0.77

 
$
0.29

Income (loss) from discontinued operations, basic
$
2.96

 
$
0.03

 
$
3.00

 
$
0.05

Net income (loss) attributable to CCIC common stockholders, basic
$
3.43

 
$
0.07

 
$
3.77

 
$
0.34

Income (loss) from continuing operations, diluted
$
0.47

 
$
0.04

 
$
0.77

 
$
0.29

Income (loss) from discontinued operations, diluted
$
2.95

 
$
0.03

 
$
2.99

 
$
0.05

Net income (loss) attributable to CCIC common stockholders, diluted
$
3.42

 
$
0.07

 
$
3.76

 
$
0.34

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding (in thousands):
 
 
 
 
 
 
 
Basic
333,091

 
332,344

 
332,902

 
332,189

Diluted
333,733

 
333,081

 
333,665

 
333,034




11
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

FFO AND AFFO RECONCILIATIONS
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(dollars in thousands, except share and per share amounts)
2015
 
2014
 
2015
 
2014
Net income(1)
$
166,526

 
$
25,304

 
$
278,260

 
$
118,529

Real estate related depreciation, amortization and accretion
248,918

 
243,094

 
496,529

 
484,876

Asset write-down charges
3,620

 
3,105

 
12,175

 
5,741

Dividends on preferred stock
(10,997
)
 
(10,997
)
 
(21,994
)
 
(21,994
)
FFO(2)(3)(5)
$
408,067

 
$
260,506

 
$
764,970

 
$
587,153

Weighted average common shares outstanding — diluted(4)
333,733

 
333,081

 
333,665

 
333,034

FFO per share(2)(5)
$
1.22

 
$
0.78

 
$
2.29

 
$
1.76

 
 
 
 
 
 
 
 
FFO (from above)
$
408,067

 
$
260,506

 
$
764,970

 
$
587,153

Adjustments to increase (decrease) FFO:
 
 
 
 
 
 
 
Straight-line revenue
(31,326
)
 
(49,774
)
 
(61,865
)
 
(98,999
)
Straight-line expense
24,981

 
26,717

 
49,563

 
51,937

Stock-based compensation expense
15,975

 
17,883

 
32,816

 
29,840

Non-cash portion of tax provision
(10,783
)
 
(5,060
)
 
(14,375
)
 
(9,883
)
Non-real estate related depreciation, amortization and accretion
4,235

 
3,489

 
8,430

 
6,883

Amortization of non-cash interest expense
12,068

 
20,604

 
23,804

 
41,485

Other (income) expense
(194
)
 
5,920

 
55

 
8,656

Gains (losses) on retirement of long-term obligations
4,181

 
44,629

 
4,157

 
44,629

Gains (losses) on foreign currency swaps
(59,779
)
 
—

 
(59,779
)
 
—

Acquisition and integration costs
2,377

 
19,125

 
4,393

 
24,784

Capital improvement capital expenditures
(10,662
)
 
(4,148
)
 
(18,152
)
 
(7,919
)
Corporate capital expenditures
(16,757
)
 
(7,619
)
 
(25,955
)
 
(15,056
)
AFFO(2)(3)(5)
$
342,385

 
$
332,274

 
$
708,062

 
$
663,511

Weighted average common shares outstanding — diluted(4)
333,733

 
333,081

 
333,665

 
333,034

AFFO per share(2)(5)
$
1.03

 
$
1.00

 
$
2.12

 
$
1.99


(1)
Exclusive of income from discontinued operations and related noncontrolling interest of $988 million and $10 million for the three months ended June 30, 2015 and 2014, respectively and $1.0 billion and $20 million for the six months ended June 30, 2015 and 2014, respectively.
(2)
See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Measures and Other Calculations" in the Appendix for a discussion of the definitions of FFO and AFFO.
(3)
FFO and AFFO are reduced by cash paid for preferred stock dividends.
(4)
The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count.
(5)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.


12
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 
Six Months Ended June 30,
(dollars in thousands)
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income (loss) from continuing operations
$
278,260

 
$
118,529

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities:
 
 
 
Depreciation, amortization and accretion
504,959

 
491,759

Gains (losses) on retirement of long-term obligations
4,157

 
44,629

Gains (losses) on foreign currency swaps
(59,779
)
 
—

Amortization of deferred financing costs and other non-cash interest
23,804

 
41,485

Stock-based compensation expense
30,131

 
27,373

Asset write-down charges
12,175

 
5,741

Deferred income tax benefit (provision)
(10,170
)
 
(9,882
)
Other non-cash adjustments, net
(1,024
)
 
(1,468
)
Changes in assets and liabilities, excluding the effects of acquisitions:
 
 
 
Increase (decrease) in liabilities
131,661

 
160,585

Decrease (increase) in assets
4,704

 
(155,815
)
Net cash provided by (used for) operating activities
918,878

 
722,936

Cash flows from investing activities:
 
 
 
Payments for acquisition of businesses, net of cash acquired
(64,725
)
 
(85,788
)
Capital expenditures
(420,883
)
 
(299,298
)
Receipts from foreign currency swaps
54,475

 
—

Other investing activities, net
(8,080
)
 
2,378

Net cash provided by (used for) investing activities
(439,213
)
 
(382,708
)
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
(53,718
)
 
(55,385
)
Purchases and redemptions of long-term debt
(1,069,337
)
 
(836,899
)
Purchases of capital stock
(29,490
)
 
(21,730
)
Borrowings under revolving credit facility
450,000

 
494,000

Payments under revolving credit facility
(1,145,000
)
 
(534,000
)
Payments for financing costs
(16,348
)
 
(15,834
)
Net decrease (increase) in restricted cash
9,093

 
24,386

Dividends/distributions paid on common stock
(547,371
)
 
(233,684
)
Dividends paid on preferred stock
(21,994
)
 
(22,360
)
Net cash provided by (used for) financing activities
(1,424,165
)
 
(355,756
)
Net increase (decrease) in cash and cash equivalents - continuing operations
(944,500
)
 
(15,528
)
Discontinued operations:
 
 
 
Net cash provided by (used for) operating activities
4,881

 
40,740

Net cash provided by (used for) investing activities
1,103,577

 
(15,096
)
Net increase (decrease) in cash and cash equivalents - discontinued operations
1,108,458

 
25,644

Effect of exchange rate changes
(969
)
 
(6,031
)
Cash and cash equivalents at beginning of period(1)
175,620

 
223,394

Cash and cash equivalents at end of period
$
338,609

 
$
227,479

Supplemental disclosure of cash flow information:
 
 
 
Interest paid
244,977

 
248,183

Income taxes paid
8,489

 
12,690


(1)
Inclusive of cash and cash equivalents included in discontinued operations.

13
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SITE RENTAL REVENUE GROWTH
 
Three Months Ended June 30,
(dollars in millions)
2015
 
2014
Reported GAAP site rental revenues
$
737

 
$
711

Site rental straight-line revenues
(31
)
 
(50
)
Other - Non-recurring
—

 
—

Site Rental Revenues, as Adjusted(1)(3)
$
706

 
$
661

Cash adjustments:
 
 
 
Other
—

 
 
New tower acquisitions and builds(2)
(6
)
 
 
Organic Site Rental Revenues(1)(3)(4)
$
700

 
 
Year-Over-Year Revenue Growth
 
 
 
Reported GAAP site rental revenues
3.7
%
 
 
Site Rental Revenues, as Adjusted
6.8
%
 
 
Organic Site Rental Revenues(5)
5.9
%
 
 

ORGANIC SITE RENTAL REVENUE GROWTH
 
Three Months Ended June 30,
 
2015
New leasing activity
6.3%
Escalators
3.4%
Organic Site Rental Revenue growth, before non-renewals
9.8%
Non-renewals
(3.8)%
Organic Site Rental Revenue Growth(5)
5.9%

(1)
Includes amortization of prepaid rent; see the table "Summary of Prepaid Rent Activity" on page 16 for further details.
(2)
The financial impact of new tower acquisitions and builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build.
(3)
Includes Site Rental Revenues, as Adjusted from the construction of new small cells.
(4)
See definitions provided herein.
(5)
Calculated as the percentage change from Site Rental Revenues, as Adjusted, for the prior period when compared to Organic Site Rental Revenues for the current period.

14
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SITE RENTAL GROSS MARGIN GROWTH
 
Three Months Ended June 30,
(dollars in millions)
2015
 
2014
Reported GAAP site rental gross margin
$
500

 
$
484

Straight line revenues and expenses, net
(6
)
 
(22
)
Other - Non-recurring
—

 
—

Site rental gross margin, as Adjusted(1)(2)
$
494

 
$
462

Cash adjustments:
 
 
 
Other
—

 
 
New tower acquisitions and builds(3)
(4
)
 
 
Organic Site Rental Gross Margin(1)(2)(4)
$
489

 
 
Year-Over-Year Gross Margin Growth
 
 
 
Reported GAAP site rental gross margin
3.4
%
 
 
Site Rental Gross Margin, as Adjusted
6.8
%
 
 
Organic Site Rental Gross Margin(5)
5.9
%
 
 
Year-Over-Year Incremental Margin
 
 
 
Reported GAAP site rental gross margin
62.0
%
 
 
Site Rental Gross Margin, as Adjusted
70.6
%
 
 
Organic Site Rental Gross Margin(6)
69.3
%
 
 

(1)
Includes amortization of prepaid rent.
(2)
Includes Site Rental Revenues, as Adjusted, from the construction of new small cell nodes.
(3)
The financial impact of new tower acquisitions and builds is excluded from organic site rental revenues until the one-year anniversary of the acquisition or build.
(4)
See definitions provided herein.
(5)
Calculated as the percentage change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period.
(6)
Calculated as the change from Site Rental Gross Margin, as Adjusted for the prior period when compared to Organic Site Rental Gross Margin in the current period, divided by the change from Site Rental Revenues, as Adjusted in the prior period when compared to Organic Site Rental Revenues for the current period.


15
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SUMMARY OF SITE RENTAL STRAIGHT-LINE REVENUES AND EXPENSES(1)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(dollars in thousands)
2015
 
2014
 
2015
 
2014
Total site rental straight-line revenue
$
31,326

 
$
49,774

 
$
61,865

 
$
98,999

Total site rental straight-line expenses
24,981

 
26,717

 
49,563

 
51,937


SUMMARY OF PREPAID RENT ACTIVITY(2)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(dollars in thousands)
2015
 
2014
 
2015
 
2014
Prepaid rent received
$
98,979

 
$
83,607

 
$
216,937

 
$
151,830

Amortization of prepaid rent
(34,611
)
 
(22,116
)
 
(69,062
)
 
(41,458
)

SUMMARY OF CAPITAL EXPENDITURES
 
Three Months Ended June 30,
(dollars in thousands)
2015
 
2014
Discretionary:
 
 
 
Purchases of land interests
$
28,269

 
$
20,950

Wireless infrastructure construction and improvements
163,542

 
127,743

Sustaining
27,419

 
11,767

Total
$
219,230

 
$
160,460


(1)
In accordance with GAAP accounting, if payment terms call for fixed escalations, or rent free periods, the revenue is recognized on a straight-line basis over the fixed, non-cancelable term of the contract. Since the Company recognizes revenue on a straight-line basis, a portion of the site rental revenue in a given period represents cash collected or contractually collectible in other periods.
(2)
Reflects prepaid rent received from long-term tenant contracts and the amortization thereof for GAAP revenue recognition purposes.

16
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


PROJECTED REVENUE FROM EXISTING CUSTOMER CONTRACTS(1)
 
Remaining six months
Years Ended December 31,
(dollars in millions)
2015
2016
2017
2018
2019
Site rental revenue (GAAP)
$
1,461

$
2,918

$
2,933

$
2,951

$
2,972

Site rental straight-line revenue
(47
)
(34
)
34

87

140

Site Rental Revenues, as Adjusted
$
1,413

$
2,884

$
2,967

$
3,039

$
3,111


PROJECTED GROUND LEASE EXPENSE FROM EXISTING GROUND LEASES(2)
 
Remaining six months
Years Ended December 31,
(as of June 30, 2015; dollars in millions)
2015
2016
2017
2018
2019
Ground lease expense (GAAP)
$
323

$
650

$
656

$
662

$
669

Site rental straight-line expense
(46
)
(82
)
(71
)
(61
)
(51
)
Ground Lease Expense, as Adjusted
$
277

$
568

$
585

$
601

$
618


ANNUALIZED CASH SITE RENTAL REVENUE AT TIME OF RENEWAL(3)
 
Remaining six months
Years Ended December 31,
(as of June 30, 2015; dollars in millions)
2015
2016
2017
2018
2019
AT&T
$
9

$
40

$
18

$
40

$
36

Sprint(4)
11

42

39

36

42

T-Mobile
8

26

25

33

26

Verizon
7

13

17

18

18

All Others Combined
24

38

30

32

30

Total
$
59

$
159

$
129

$
159

$
152


(1)
Based on existing contracts as of June 30, 2015. All contracts, except for Sprint contracts associated with the iDen network and contracts where non-renewal notices have been received, are assumed to renew for a new term at current term end date. CPI-linked customer contracts are assumed to escalate at 3% per annum.
(2)
Based on existing ground leases as of June 30, 2015. CPI-linked leases are assumed to escalate at 3% per annum.
(3)
Reflects lease renewals by year by customer; dollar amounts represent annualized cash site rental revenues from assumed renewals or extension as reflected in the table "Projected Revenue from Existing Customer Contracts."
(4)
Excludes Sprint leases associated with the iDen network, which are assumed to not renew as reflected in the table "Projected Revenue from Existing Customer Contracts."


17
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


ESTIMATED REDUCTION TO SITE RENTAL REVENUES FROM NON-RENEWALS FROM LEAP, METROPCS AND CLEARWIRE NETWORK DECOMMISSIONING(1)(2) (dollars in millions)
2015
2016
2017
2018
Thereafter
Total
$25-$35
$70-$80
$25-$35
$20-$30
$35-$45
$175-$225

TOTAL SITE RENTAL REVENUES FROM LEAP, METROPCS AND CLEARWIRE BY LEASE MATURITY(3)
(dollars in millions)
2015
2016
2017
2018
Thereafter
Total
Towers Leasing
$70
$70
$45
$30
$45
$260
Small Cells Leasing
$—
$5
$5
$5
$80
$95
Total
$70
$75
$50
$35
$125
$355

HISTORICAL ANNUAL NON-RENEWALS AS PERCENTAGE OF SITE RENTAL REVENUES, AS ADJUSTED
Years Ended December 31,
2014
2013
2012
2011
2010
2.6%
1.7%
2.2%
2.0%
2.1%



CUSTOMER OVERVIEW
(as of June 30, 2015)
Percentage of Q2 2015 LQA Site
Rental Revenues
Weighted Average Current
Term Remaining(4)
Long-Term Credit Rating
(S&P / Moody’s)
AT&T
33%
7
BBB+ / Baa1
T-Mobile
25%
7
BB
Sprint
21%
6
B+ / B1
Verizon
18%
8
BBB+ / Baa1
All Others Combined
3%
4
N/A
Total / Weighted Average
100%
7
 

(1)
Estimated impact to site rental revenues in the applicable period based on run-rate site rental revenues as of June 30, 2015.
(2)
Depending on the eventual network deployment and decommissioning plans of AT&T, T-Mobile and Sprint, the impact and timing of such renewals may vary from Crown Castle's expectations.
(3)
Estimated amount of total site rental revenues maturing in the applicable period, based on run-rate site rental revenues as of June 30, 2015.
(4)
Weighted by site rental revenue contributions; excludes renewals at the customers' option.


18
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

SUMMARY OF TOWER PORTFOLIO BY VINTAGE
(as of June 30, 2015; dollars in thousands)
 
YIELD(1)
NUMBER OF TENANTS PER TOWER


LQA SITE RENTAL REVENUE PER TOWER
LQA SITE RENTAL GROSS MARGIN PER TOWER
INVESTED CAPITAL PER TOWER(2)
NUMBER OF TOWERS

(1)
Yield is calculated as LQA site rental gross margin divided by invested capital.
(2)
Reflects gross total assets, including incremental capital invested by the Company since time of acquisition or construction completion. Inclusive of invested capital related to land at the tower site.

19
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


PORTFOLIO OVERVIEW(1)
(as of June 30, 2015; dollars in thousands)
NUMBER OF TOWERS
TENANTS PER TOWER
LQA SITE RENTAL REVENUE PER TOWER


(1)
Includes towers and rooftops, excludes small cells and third-party land interests.


20
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


DISTRIBUTION OF TOWER TENANCY (as of June 30, 2015)
PERCENTAGE OF TOWERS BY TENANTS PER TOWER(1)
SITES OPERATED GREATER THAN 10 YEARS
SITES OPERATED LESS THAN OR EQUAL TO TEN YEARS
Average: 2.8
Average: 2.0
 
 
GEOGRAPHIC TOWER DISTRIBUTION (as of June 30, 2015)(1)
PERCENTAGE OF TOWERS BY GEOGRAPHIC LOCATION
PERCENTAGE OF LQA SITE RENTAL REVENUE BY GEOGRAPHIC LOCATION

(1)
Includes towers and rooftops, excludes small cells and third-party land interests.

21
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


GROUND INTEREST OVERVIEW
(as of June 30, 2015;
dollars in millions)
LQA Site Rental Revenue
Percentage of LQA Site Rental Revenue
LQA Site Rental Gross Margin
Percentage of LQA Site Rental Gross Margin
Number of Towers(1)
Percentage of Towers
Weighted Average Term Remaining (by years)(2)
Less than 10 years
$
343

13
%
$
197

11
%
5,664

14
%
 
10 to 20 years
526

20
%
287

16
%
9,765

25
%
 
Greater 20 years
1,080

41
%
704

38
%
15,790

40
%
 
Total leased
$
1,949

73
%
$
1,189

64
%
31,219

79
%
30

 
 
 
 
 
 
 
 
Owned
716

27
%
658

36
%
8,448

21
%
 
Total / Average
$
2,665

100
%
$
1,847

100
%
39,667

100
%
 

(1)
Includes towers and rooftops, excludes small cells and third-party land interests.
(2)
Includes renewal terms at the Company’s option; weighted by site rental gross margin.


GROUND INTEREST ACTIVITY
(dollars in millions)
Three Months Ended
 June 30, 2015
Six Months Ended June 30, 2015
Ground Extensions Under Crown Castle Towers:
 
 
  Number of ground leases extended
510

969
  Average number of years extended
38

35
Percentage increase in consolidated cash ground lease expense due to extension activities(1)
0.2
%
0.2
%
 
 
 
Ground Purchases Under Crown Castle Towers:
 
 
  Number of ground leases purchased
114

229
  Land lease purchases (including capital expenditures, acquisitions and capital leases)
$
35

$
68

Percentage of consolidated site rental gross margin from towers residing on land purchased
<1%

<1%


SMALL CELL NETWORK OVERVIEW
Number of Nodes(3) 
(in thousands)
Miles of Fiber
(in thousands)
Percentage of LQA Site Rental Revenues
Weighted Average Current
Term Remaining for
Customer Contracts(2)
15
7
8%
7

(1)
Includes the impact from the amortization of lump sum payments.
(2)
Excludes renewal terms at customers’ option; weighted by site rental revenue.
(3)
Includes nodes currently in-process.



22
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



CAPITALIZATION OVERVIEW
(dollars in millions)
Face Value as Reported 6/30/15
Fixed vs. Floating
Secured vs. Unsecured
Interest Rate(1)
Net Debt to LQA EBITDA(2)
Maturity
Cash
$
339

 
 
 
 
 
 
 
 
 
 
 
 
Senior Secured Tower Revenue Notes, Series 2010-2-2010-3(3)
1,600

Fixed
Secured
6.0%
 
Various(7)
Senior Secured Tower Revenue Notes, Series 2010-5-2010-6(3)
1,300

Fixed
Secured
4.7%
 
Various(7)
Senior Secured Tower Revenue Notes, Series 2015-1-2015-2(3)
1,000

Fixed
Secured
3.5%
 
Various(7)
2012 Secured Notes(4)
1,500

Fixed
Secured
3.4%
 
2017/2023
Senior Secured Notes, Series 2009-1(5)
151

Fixed
Secured
7.5%
 
Various(7)
Subtotal
$
5,551

 
 
4.0%
2.7x
 
Revolving Credit Facility(6)
—

Floating
Secured
1.9%
 
2019
Term Loan A
638

Floating
Secured
1.9%
 
2019
Term Loan B
2,258

Floating
Secured
3.0%
 
2021
Total CCOC Facility Debt
$
2,896

 
 
2.8%
1.4x
 
4.875% Senior Notes
850

Fixed
Unsecured
4.9%
 
2022
5.250% Senior Notes
1,650

Fixed
Unsecured
5.3%
 
2023
Capital Leases & other debt
188

Various
Various
Various
 
Various
Total HoldCo and other debt
$
2,688

 
 
5.2%
1.3x
 
Total net debt
$
10,796

 
 
4.2%
5.2x
 
Preferred Stock, at liquidation value
978

 
 
 
 
 
Market Capitalization(8)
26,801

 
 
 
 
 
Firm Value(9)
$
38,576

 
 
 
 
 

(1)
Represents the weighted-average stated interest rate.
(2)
Represents the applicable amount of debt divided by LQA consolidated Adjusted EBITDA.
(3)
If the Senior Secured Tower Revenue Notes 2010-2, 2010-3 and Senior Secured Tower Revenue Notes 2010-5, and 2010-6 ("2010 Tower Revenue Notes") and Senior Secured Tower Revenue Notes 2015-1 and 2015-2 ("2015 Tower Revenue Notes") are not paid in full on or prior to 2017, 2020, 2022 and 2025, as applicable, then Excess Cash Flow (as defined in the indenture) of the issuers (of such notes) will be used to repay principal of the applicable series and class of the 2010 Tower Revenue Notes and 2015 Tower Revenue Notes, and additional interest (of an additional approximately 5% per annum) will accrue on the respective 2010 Tower Revenue Notes and 2015 Tower Revenue Notes. The Senior Secured Tower Revenue Notes, 2010-2, and 2010-3 consist of two series of notes with principal amounts of $350 million and $1.3 billion, having anticipated repayment dates in 2017 and 2020, respectively. The Senior Secured Tower Revenue Notes, 2010-5 and 2010-6 consist of two series of notes with principal amounts of $300 million and $1.0 billion, having anticipated repayment dates in 2017 and 2020, respectively. The Senior Secured Tower Revenue Notes, 2015-1 and 2015-2 consist of two series of notes with principal amounts of $300 million and $700 million, having anticipated repayment dates in 2022 and 2025, respectively.
(4)
The 2012 Secured Notes consist of $500 million aggregate principal amount of 2.381% secured notes due 2017 and $1.0 billion aggregate principal amount of 3.849% secured notes due 2030.
(5)
The Senior Secured Notes, Series 2009-1 consist of $81 million of principal as of June 30, 2015 that amortizes through 2019, and $70 million of principal as of June 30, 2015 that amortizes during the period beginning in 2019 and ending in 2029.
(6)
As of June 30, 2015, the undrawn availability under the $2.2 billion Revolving Credit Facility is $2.2 billion.
(7)
Notes are prepayable at par if voluntarily repaid six months or less prior to maturity; earlier prepayment may require additional consideration.
(8)
Market capitalization calculated based on 80.30 closing price and 333.8 million shares outstanding as of June 30, 2015.
(9)
Represents the sum of net debt, preferred stock (at liquidation value) and market capitalization.

23
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



DEBT MATURITY OVERVIEW(1)


(1)
Where applicable, maturities reflect the Anticipated Repayment Date as defined in the respective debt agreement; excludes capital leases and other obligations; amounts presented at face value net of repurchases held at CCIC.

24
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



LIQUIDITY OVERVIEW
(dollars in thousands)
June 30, 2015
Cash and cash equivalents(1)
$
338,609

Undrawn revolving credit facility availability(2)
2,230,000

Restricted cash
148,016

Debt and other long-term obligations
11,131,304

Total equity
7,408,136


(1)
Exclusive of restricted cash.
(2)
Availability at any point in time is subject to reaffirmation of the representations and warranties in, and there being no default under, our credit agreement governing our senior credit facilities ("2012 Credit Facility").

25
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SUMMARY OF MAINTENANCE AND FINANCIAL COVENANTS
Debt
Borrower / Issuer
Covenant(1)
Covenant Level Requirement
 
As of June 30, 2015
Maintenance Financial Covenants(2)
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
 
4.1x
2012 Credit Facility
CCOC
Consolidated Interest Coverage Ratio
≥ 2.50x
 
6.1x
 
 
 
 
 
 
Restrictive Negative Financial Covenants
 
 
 
 
Financial covenants restricting ability to make restricted payments, including dividends
4.875% Senior Notes
CCIC
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 7.00x
 
5.5x
5.25% Senior Notes
CCIC
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 7.00x
 
5.5x
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
 
4.1x
 
 
 
 
 
 
Financial covenants restricting ability to incur additional debt
4.875% Senior Notes
CCIC
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 7.00x
 
5.5x
5.25% Senior Notes
CCIC
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 7.00x
 
5.5x
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
(3) 
4.1x
2012 Credit Facility
CCOC
Holdings Leverage Ratio
≤ 7.00x
(4) 
5.5x
2012 Credit Facility
CCOC
Consolidated Interest Coverage Ratio
≥ 2.50x
 
6.1x
2012 Secured Notes
CC Holdings GS V LLC and Crown Castle GS III Corp.
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 3.50x
 
4.0x
 
 
 
 
 
 
Financial covenants restricting ability to make investments
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
 
4.1x

(1)
As defined in the respective debt agreement.
(2)
Failure to comply with the financial maintenance covenants would, absent a waiver, result in an event of default under the credit agreement governing our 2012 Credit Facility.
(3)
Applicable for debt issued at CCOC or its subsidiaries.
(4)
Applicable for debt issued at CCIC or its subsidiaries.

26
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SUMMARY OF MAINTENANCE AND FINANCIAL COVENANTS (CONTINUED)
Debt
Borrower / Issuer
Covenant(1)
Covenant Level Requirement
 
As of June 30, 2015
Restrictive Negative Financial Covenants
Financial covenants requiring excess cash flows to be deposited in a cash trap reserve account and not released
2010 Tower Revenue Notes
Crown Castle Towers LLC and its Subsidiaries
Debt Service Coverage Ratio
> 1.75x
(2) 
3.5x
2015 Tower Revenue Notes
Crown Castle Towers LLC and its Subsidiaries
Debt Service Coverage Ratio
> 1.75x
(2) 
3.5x
2009 Securitized Notes
Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries
Debt Service Coverage Ratio
> 1.30x
(2) 
4.9x
 
 
 
 
 
 
Financial covenants restricting ability of relevant issuer to issue additional notes under the applicable indenture
2010 Tower Revenue Notes
Crown Castle Towers LLC and its Subsidiaries
Debt Service Coverage Ratio
≥ 2.00x
(3) 
3.5x
2015 Tower Revenue Notes
Crown Castle Towers LLC and its Subsidiaries
Debt Service Coverage Ratio
≥ 2.00x
(3) 
3.5x
2009 Securitized Notes
Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries
Debt Service Coverage Ratio
≥ 2.34x
(3) 
4.9x

(1)
As defined in the respective debt agreement. In the indentures for the 2010 Tower Revenue Notes, WCP Securitized Notes, and the 2009 Securitized Notes, the defined term for Debt Service Coverage Ratio is "DSCR".
(2)
The 2010 Tower Revenue Notes, 2015 Tower Revenue Notes, and 2009 Securitized Notes also include the potential for amortization events, which could result in applying current and future cash flow to the prepayment of debt with applicable prepayment consideration. An amortization event occurs when the Debt Service Coverage Ratio falls below 1.45x, 1.45x or 1.15x, in each case as described under the indentures for the 2010 Tower Revenue Notes, 2015 Tower Revenue Notes, or 2009 Securitized Notes, respectively.
(3)
Rating Agency Confirmation (as defined in the respective debt agreement) is also required.

27
Crown Castle International Corp.
Second Quarter 2015
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



INTEREST RATE SENSITIVITY(1)
 
Remaining six months,
Years Ended December 31,
(as of June 30, 2015; dollars in millions)
2015
2016
2017
Fixed Rate Debt:
 
 
 
Face Value of Principal Outstanding(2)
$
8,051

$
8,022

$
8,003

Current Interest Payment Obligations(3)
191

381

380

Effect of 0.125% Change in Interest Rates(4)
<1

<1

1

Floating Rate Debt:
 
 
 
Face Value of Principal Outstanding(2)
$
2,896

$
2,820

$
2,764

Current Interest Payment Obligations(5)
40

85

102

Effect of 0.125% Change in Interest Rates(6)
<1

2

3


(1)
Excludes capital lease and other obligations.
(2)
Face value net of required amortizations; assumes no maturity or balloon principal payments; excludes capital leases.
(3)
Interest expense calculated based on current interest rates.
(4)
Interest expense calculated based on current interest rates until the sooner of the (1) stated maturity date or (2) the Anticipated Repayment Date, at which time the face value amount outstanding of such indebtedness is refinanced at current rates plus 12.5 bps.
(5)
Interest expense calculated based on current interest rates. Forward LIBOR assumptions are derived from the 1-month LIBOR forward curve as of June 30, 2015. Calculation takes into account any LIBOR floors in place and assumes no changes to future interest rate margin spread over LIBOR due to changes in the Borrower’s net leverage ratio.
(6)
Interest expense calculated based on current interest rates using forward LIBOR assumptions until the stated maturity date, at which time the face value amount outstanding of such indebtedness is refinanced at current rates plus 12.5 bps. Absent the effect of LIBOR floors, a 12.5 bps increase to forward LIBOR assumptions would increase interest expense for the remaining six months of 2015, 2016, and 2017, by approximately $2 million, $4 million, and $3 million, respectively.



28
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



DEFINITIONS
Non-GAAP Financial Measures and Other Calculations

This Supplement includes presentations of Adjusted EBITDA, Funds from Operations, Adjusted Funds from Operations, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, which are non-GAAP financial measures. These non-GAAP financial measures are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")). Each of the amounts included in the calculation of Adjusted EBITDA, FFO, AFFO, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, are computed in accordance with GAAP, with the exception of: (1) sustaining capital expenditures, which is not defined under GAAP and (2) our adjustment to the income tax provision in calculations of AFFO for periods prior to our REIT conversion.
Our measures of Adjusted EBITDA, FFO, AFFO, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, may not be comparable to similarly titled measures of other companies, including other companies in the tower sector or those reported by other REITs. Our FFO and AFFO may not be comparable to those reported in accordance with National Association of Real Estate Investment Trusts, including with respect to the impact of income taxes for periods prior to our REIT conversion.
Adjusted EBITDA, FFO, AFFO, Organic Site Rental Revenues, Site Rental Revenues, as Adjusted, Organic Site Rental Gross Margin, and Site Rental Gross Margin, as Adjusted, and Ground Lease Expense, as Adjusted, are presented as additional information because management believes these measures are useful indicators of the financial performance of our core businesses. In addition, Adjusted EBITDA is a measure of current financial performance used in our debt covenant calculations.
Adjusted EBITDA. Crown Castle defines Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, gains (losses) on retirement of long-term obligations, net gain (loss) on interest rate swaps, gains (losses) on foreign currency swaps, impairment of available-for-sale securities, interest income, other income (expense), benefit (provision) for income taxes, cumulative effect of 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 non controlling interest and cash paid for preferred stock dividends, and is a measure of funds from operations attributable to CCIC common stockholders.
FFO per share. Crown Castle defines FFO per share as FFO divided by the diluted weighted average common shares outstanding.
Adjusted Funds from Operations ("AFFO"). Crown Castle defines Adjusted Funds from Operations as FFO before straight-line revenue, straight-line expense, stock-based compensation expense, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, gains (loss) on retirement of long-term obligations, net gain (loss) on interest rate swaps, gains (losses) on foreign currency swaps, acquisition and integration costs, and adjustments for noncontrolling interests, and less capital improvement capital expenditures and corporate capital expenditures.
AFFO per share. Crown Castle defines AFFO per share as AFFO divided by diluted weighted average common shares outstanding.
AFFO payout ratio. Dividends per common share divided by AFFO per share.
Site Rental Revenues, as Adjusted. Crown Castle defines Site Rental Revenues, as Adjusted, as site rental revenues, as reported, less straight-line revenues.

29
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



DEFINITIONS (continued)
Organic Site Rental Revenues. Crown Castle defines Organic Site Rental Revenues as site rental revenues, as reported, less straight-line revenues, the impact of tower acquisitions and construction, foreign currency adjustments and certain non recurring items.
Site Rental Gross Margins, as Adjusted. Crown Castle defines Site Rental Gross Margins, as Adjusted, as site rental gross margin as reported less straight-line revenues and straight-line expenses.
Organic Site Rental Gross Margins. Crown Castle defines Organic Site Rental Gross Margins as site rental gross margins, as reported less straight-line revenues, straight-line expenses, the impact of tower acquisitions and construction, foreign currency adjustments and certain non recurring items.
Ground Lease Expense, as Adjusted. Crown Castle defines Ground Lease Expense, as Adjusted as ground lease expense, as reported, less straight line ground lease expense.
Sustaining capital expenditures. Crown Castle defines sustaining capital expenditures as either (1) corporate related capital improvements, such as buildings, information technology equipment and office equipment or (2) capital improvements to tower sites that enable our customers' ongoing quiet enjoyment of the tower.
The tables set forth below reconcile non-GAAP financial measures to comparable GAAP financial measures and provide certain other calculations. The components in these tables may not sum to the total due to rounding.
Amounts reflected herein are adjusted to reflect the sale of our CCAL segment as discontinued operations following the sale on May 28, 2015. See page 2.

30
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



Adjusted EBITDA for the three and six months ended June 30, 2015 and 2014 is computed as follows:
 
Three Months Ended June 30,
 
Six Months Ended
June 30,
(dollars in thousands)
2015
 
2014
 
2015

2014
Net income (loss)
$
1,154,378

 
$
35,357

 
$
1,279,490

 
$
138,150

Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
 
 
Income (loss) from discontinued operations
(987,852
)
 
(10,053
)
 
(1,001,230
)
 
(19,621
)
Asset write-down charges
3,620

 
3,105

 
12,175

 
5,741

Acquisition and integration costs
2,377

 
19,125

 
4,393

 
24,784

Depreciation, amortization and accretion
253,153

 
246,583

 
504,959

 
491,759

Amortization of prepaid lease purchase price adjustments
5,070

 
5,663

 
10,244

 
9,558

Interest expense and amortization of deferred financing costs(1)
134,466

 
144,534

 
268,905

 
290,934

Gains (losses) on retirement of long-term obligations
4,181

 
44,629

 
4,157

 
44,629

Gains (losses) on foreign currency swaps
(59,779
)
 
—

 
(59,779
)
 
—

Interest income
(325
)
 
(108
)
 
(381
)
 
(222
)
Other income (expense)
(194
)
 
5,920

 
55

 
8,656

Benefit (provision) for income taxes
(4,144
)
 
(3,101
)
 
(5,579
)
 
(6,141
)
Stock-based compensation expense
15,975

 
17,883

 
32,816

 
29,840

Adjusted EBITDA(2)
$
520,926

 
$
509,537

 
$
1,050,225

 
$
1,018,067

(1)
See the reconciliation of "components of interest expense and amortization of deferred financing costs" herein.
(2)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.


31
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


Adjusted EBITDA for the quarter ending September 30, 2015 and the year ending December 31, 2015 is forecasted as follows:
 
Q3 2015
 
Full Year 2015
(dollars in millions)
Outlook
 
Outlook
Net income (loss)
$90 to $123
 
$1,463 to $1,542
Adjustments to increase (decrease) net income (loss):
 
 
 
Income (loss) from discontinued operations
$0 to $0
 
$(1,001) to $(1,001)
Asset write-down charges
$4 to $6
 
$17 to $27
Acquisition and integration costs
$2 to $5
 
$9 to $12
Depreciation, amortization and accretion
$251 to $256
 
$1,000 to $1,020
Amortization of prepaid lease purchase price adjustments
$4 to $6
 
$19 to $21
Interest expense and amortization of deferred financing costs(1)
$125 to $130
 
$513 to $528
Gains (losses) on retirement of long-term obligations
$0 to $0
 
$4 to $4
Gains (losses) on foreign currency swaps
$0 to $0
 
$(60) to $(60)
Interest income
$(2) to $0
 
$(2) to $0
Other income (expense)
$(1) to $2
 
$0 to $2
Benefit (provision) for income taxes
$(6) to $(2)
 
$(17) to $(9)
Stock-based compensation expense
$15 to $17
 
$63 to $68
Adjusted EBITDA(2)
$510 to $515
 
$2,073 to $2,088

The components of interest expense and amortization of deferred financing costs for the quarters ending June 30, 2015 and 2014 are as follows:
 
Three Months Ended June 30,
(dollars in thousands)
2015
 
2014
Interest expense on debt obligations
$
122,398


$
123,930

Amortization of deferred financing costs
5,554

 
5,521

Amortization of adjustments on long-term debt
(381
)
 
(896
)
Amortization of interest rate swaps(3)
7,490

 
16,162

Other, net
(595
)
 
(183
)
Interest expense and amortization of deferred financing costs
$
134,466

 
$
144,534


The components of interest expense and amortization of deferred financing costs for the quarter ending September 30, 2015 and the year ending December 31, 2015 are forecasted as follows:
 
Q3 2015
 
Full Year 2015
(dollars in millions)
Outlook
 
Outlook
Interest expense on debt obligations
$118 to $120
 
$478 to $488
Amortization of deferred financing costs
$4 to $6
 
$21 to $23
Amortization of adjustments on long-term debt
$0 to $1
 
$(2) to $0
Amortization of interest rate swaps(3)
$3 to $5
 
$16 to $21
Other, net
$0 to $0
 
$(3) to $(1)
Interest expense and amortization of deferred financing costs
$125 to $130
 
$513 to $528

(1)
See the reconciliation of “components of interest expense and amortization of deferred financing costs” herein.
(2)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
(3)
Relates to the amortization of interest rate swaps; the swaps were cash settled in prior periods.



32
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



FFO and AFFO for the three and six months ended June 30, 2015 and 2014 are computed as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(dollars in thousands, except share and per share amounts)
2015
 
2014
 
2015
 
2014
Net income(1)
$
166,526

 
$
25,304

 
$
278,260

 
$
118,529

Real estate related depreciation, amortization and accretion
248,918

 
243,094

 
496,529

 
484,876

Asset write-down charges
3,620

 
3,105

 
12,175

 
5,741

Dividends on preferred stock
(10,997
)
 
(10,997
)
 
(21,994
)
 
(21,994
)
FFO(2)(3)(5)
$
408,067

 
$
260,506

 
$
764,970

 
$
587,153

 
 
 
 
 
 
 
 
FFO (from above)
$
408,067

 
$
260,506

 
$
764,970

 
$
587,153

Adjustments to increase (decrease) FFO:
 
 
 
 
 
 
 
Straight-line revenue
(31,326
)
 
(49,774
)
 
(61,865
)
 
(98,999
)
Straight-line expense
24,981

 
26,717

 
49,563

 
51,937

Stock-based compensation expense
15,975

 
17,883

 
32,816

 
29,840

Non-cash portion of tax provision
(10,783
)
 
(5,060
)
 
(14,375
)
 
(9,883
)
Non-real estate related depreciation, amortization and accretion
4,235

 
3,489

 
8,430

 
6,883

Amortization of non-cash interest expense
12,068

 
20,604

 
23,804

 
41,485

Other (income) expense
(194
)
 
5,920

 
55

 
8,656

Gains (losses) on retirement of long-term obligations
4,181

 
44,629

 
4,157

 
44,629

Gains (losses) on foreign currency swaps
(59,779
)
 
—

 
(59,779
)
 
—

Acquisition and integration costs
2,377

 
19,125

 
4,393

 
24,784

Capital improvement capital expenditures
(10,662
)
 
(4,148
)
 
(18,152
)
 
(7,919
)
Corporate capital expenditures
(16,757
)
 
(7,619
)
 
(25,955
)
 
(15,056
)
AFFO(2)(3)(5)
$
342,385

 
$
332,274

 
$
708,062

 
$
663,511

Weighted average common shares outstanding — diluted(4)
333,733

 
333,081

 
333,665

 
333,034

AFFO per share(2)(5)
$
1.03

 
$
1.00

 
$
2.12

 
$
1.99


(1)
Exclusive of income from discontinued operations and related noncontrolling interest of $988 million and $10 million for the three months ended June 30, 2015 and 2014, respectively and $1.0 billion and $20 million for the six months ended June 30, 2015 and 2014, respectively.
(2)
See definitions herein. See also “Definitions of Non-GAAP Financial Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO.
(3)
FFO and AFFO are reduced by cash paid for preferred stock dividends.
(4)
The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count.
(5)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.



33
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


FFO and AFFO for the years ended December 31, 2014, 2013, 2012, 2011, 2010, 2009, 2008 and 2007 are computed as follows:
 
Years Ended December 31,
(in thousands of dollars, except share and per share amounts)
2014
 
2013
 
2012
 
2011
 
2010
 
2009
 
2008
 
2007
Net income(1)
$
346,314

 
$
60,001

 
$
124,997

 
$
145,070

 
$
(330,183
)
 
$
(128,893
)
 
$
(60,675
)
 
$
(228,228
)
Real estate related depreciation, amortization and accretion
971,562

 
730,076

 
572,007

 
503,388

 
496,584

 
494,191

 
491,459

 
502,046

Asset write-down charges
14,246

 
13,595

 
15,226

 
21,986

 
13,243

 
18,611

 
16,696

 
65,515

Adjustment for noncontrolling interest(2)
—

 
—

 
268

 
349

 
—

 
—

 
—

 
362

Dividends on preferred stock
(43,988
)
 
—

 
(2,481
)
 
(19,487
)
 
(19,878
)
 
(19,878
)
 
(19,878
)
 
(19,878
)
FFO(4)(5)(7)
$
1,288,133

 
$
803,672

 
$
710,014

 
$
651,305

 
$
159,766

 
$
364,032

 
$
427,602

 
$
319,817

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FFO (from above)
$
1,288,133

 
$
803,672

 
$
710,014

 
$
651,305

 
$
159,766


$
364,032


$
427,602

 
$
319,817

Adjustments to increase (decrease) FFO:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Straight-line revenue
(183,393
)
 
(212,856
)
 
(248,227
)
 
(195,456
)
 
(149,314
)
 
(90,269
)
 
(28,133
)
 
(30,912
)
Straight-line expense
101,890

 
78,619

 
52,271

 
38,141

 
37,617

 
37,469

 
39,172

 
40,026

Stock-based compensation expense
56,431

 
39,031

 
41,785

 
32,611

 
36,541

 
29,225

 
25,897

 
20,375

Non-cash portion of tax provision(3)
(19,490
)
 
185,723

 
(64,939
)
 
4,970

 
(29,033
)
 
(78,304
)
 
(106,857
)
 
(95,622
)
Non-real estate related depreciation, amortization and accretion
14,219

 
11,266

 
19,421

 
19,293

 
16,848

 
7,825

 
7,375

 
10,343

Amortization of non-cash interest expense
80,854

 
99,244

 
109,337

 
102,944

 
85,454

 
61,357

 
24,831

 
23,913

Other (income) expense
(11,992
)
 
3,902

 
5,363

 
5,603

 
824

 
(1,139
)
 
61,837

 
80,551

Gains (losses) on retirement of long-term obligations
44,629

 
37,127

 
131,974

 
—

 
138,367

 
91,079

 
(42
)
 
—

Net gain (loss) on interest rate swaps
—

 
—

 
—

 
—

 
286,435

 
92,966

 
37,888

 
—

Acquisition and integration costs
34,145

 
25,574

 
18,216

 
3,310

 
2,102

 
—

 
2,504

 
25,418

Adjustment for noncontrolling interest(2)
—

 
—

 
(268
)
 
(349
)
 
—

 
—

 
—

 
(362
)
Capital improvement capital expenditures
(31,056
)
 
(17,520
)
 
(19,997
)
 
(12,442
)
 
(13,727
)
 
(17,355
)
 
(13,780
)
 
(9,073
)
Corporate capital expenditures
(50,317
)
 
(27,099
)
 
(14,049
)
 
(8,421
)
 
(8,392
)
 
(9,335
)
 
(12,039
)
 
(12,206
)
AFFO(4)(5)(7)
$
1,324,054

 
$
1,026,684

 
$
740,901

 
$
641,510

 
$
563,487

 
$
487,550

 
$
466,255

 
$
372,266

Weighted average common shares outstanding — diluted(6)
333,265

 
299,293

 
291,270

 
285,947

 
287,764

 
286,622

 
282,007

 
279,937

AFFO per share(4)(7)
$
3.97

 
$
3.43

 
$
2.54

 
$
2.24

 
$
1.96

 
$
1.70

 
$
1.66

 
$
1.33


(1)    Exclusive of income from discontinued operations and related noncontrolling interest.
(2)    Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs.
(3)
Adjusts the income tax provision to reflect our estimate of the cash taxes paid had we been a REIT for all periods presented, and is primarily comprised of foreign taxes. As a result income tax expense (benefit) is lower by the amount of the adjustment.
(4)
See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO.
(5)
FFO and AFFO are reduced by cash paid for preferred stock dividends.
(6)
The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count.
(7)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.

34
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



FFO and AFFO for the three months ended September 30, 2014 and 2013 are computed as follows:
 
Three Months Ended September 30,
(in thousands of dollars, except share and per share amounts)
2014
 
2013
Net income(1)
$
99,155

 
$
39,595

Real estate related depreciation, amortization and accretion
243,634

 
184,323

Asset write-down charges
4,932

 
3,022

Dividends on preferred stock
(10,997
)
 
—

FFO(3)(4)(6)
$
336,723

 
$
226,940

 
 
 
 
FFO (from above)
$
336,723

 
$
226,940

Adjustments to increase (decrease) FFO:
 
 
 
Straight-line revenue
(45,708
)
 
(52,059
)
Straight-line expense
24,057

 
20,091

Stock-based compensation expense
13,358

 
9,862

Non-cash portion of tax provision(2)
(4,708
)
 
31,477

Non-real estate related depreciation, amortization and accretion
3,572

 
2,198

Amortization of non-cash interest expense
19,837

 
20,771

Other (income) expense
694

 
654

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

 
1

Acquisition and integration costs
4,068

 
4,243

Capital improvement capital expenditures
(7,539
)
 
(3,125
)
Corporate capital expenditures
(12,116
)
 
(5,951
)
AFFO(3)(4)(6)
$
332,237

 
$
255,102

Weighted average common shares outstanding — diluted(5)
333,241

 
291,378

AFFO per share(3)(6)
$
1.00

 
$
0.88


(1)    Exclusive of income from discontinued operations and related noncontrolling interest.
(2)
Adjusts the income tax provision to reflect our estimate of the cash taxes paid had we been a REIT for all periods presented, and is primarily comprised of foreign taxes. As a result income tax expense (benefit) is lower by the amount of the adjustment.
(3)
See reconciliations and definitions provided herein. See also "Definitions of Non-GAAP Measures and Other Calculations" herein for a discussion of our definitions of FFO and AFFO.
(4)
FFO and AFFO are reduced by cash paid for preferred stock dividends.
(5)
The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count.
(6)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.

35
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



FFO and AFFO for the quarter ending September 30, 2015 and the year ending December 31, 2015 are forecasted as follows:
 
Q3 2015
 
Full Year 2015
(in millions of dollars, except share and per share amounts)
Outlook
 
Outlook
Net income(1)
$90 to $123
 
$462 to $541
Real estate related depreciation, amortization and accretion
$248 to $251
 
$986 to $1,001
Asset write-down charges
$4 to $6
 
$17 to $27
Dividends on preferred stock
$(11) to $(11)
 
$(44) to $(44)
FFO(3)(4)(6)
$347 to $352
 
$1,463 to $1,478
 
 
 
 
FFO (from above)
$347 to $352
 
$1,463 to $1,478
Adjustments to increase (decrease) FFO:
 
 
 
Straight-line revenue
$(30) to $(25)
 
$(118) to $(103)
Straight-line expense
$21 to $26
 
$88 to $103
Stock-based compensation expense
$15 to $17
 
$63 to $68
Non-cash portion of tax provision
$(8) to $(3)
 
$(34) to $(19)
Non-real estate related depreciation, amortization and accretion
$3 to $5
 
$14 to $19
Amortization of non-cash interest expense
$7 to $12
 
$32 to $43
Other (income) expense
$(1) to $2
 
$0 to $2
Gains (losses) on retirement of long-term obligations
$0 to $0
 
$4 to $4
Gains (losses) on foreign currency swaps
$0 to $0
 
$(60) to $(60)
Acquisition and integration costs
$2 to $5
 
$9 to $12
Capital improvement capital expenditures
$(12) to $(10)
 
$(41) to $(36)
Corporate capital expenditures
$(19) to $(17)
 
$(55) to $(50)
AFFO(3)(4)(6)
$341 to $346
 
$1,405 to $1,420
Weighted-average common shares outstanding—diluted(2)(5)
333.7
 
333.7
AFFO per share(3)(6)
$1.02 to $1.04
 
$4.21 to $4.25

(1)
For full year 2015 Outlook, net income is exclusive of income from discontinued operations of $1.0 billion and related noncontrolling interest.
(2)
Based on 333.7 million diluted shares outstanding as of June 30, 2015.
(3)
See definitions herein. See also “Definitions of Non-GAAP Financial Measures and Other Calculations” herein for a discussion of our definitions of FFO and AFFO.
(4)
FFO and AFFO are reduced by cash paid for preferred stock dividends.
(5)
The diluted weighted average common shares outstanding assumes no conversion for preferred stock in the share count.
(6)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.





36
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


The midpoint of the Previous Second Quarter 2015 Outlook and Previous Full Year 2015 Outlook for Adjusted EBITDA adjusted to reflect CCAL as a discounted operation are reconciled as follows:

 
Q2 2015
 
Full Year 2015
(in millions)
Adjusted Previous Outlook
 
Adjusted Previous Outlook
Net income (loss)
$78 to $111
 
$367 to $446
Adjustments to increase (decrease) net income (loss):
 
 
 
Asset write-down charges
$4 to $6
 
$19 to $29
Acquisition and integration costs
$0 to $3
 
$4 to $4
Depreciation, amortization and accretion
$250 to $255
 
$996 to $1,016
Amortization of prepaid lease purchase price adjustments
$4 to $6
 
$19 to $21
Interest expense and amortization of deferred financing costs
$133 to $138
 
$531 to $546
Gains (losses) on retirement of long-term obligations
$0 to $0
 
$0 to $0
Interest income
$(2) to $0
 
$(3) to $(1)
Other income (expense)
$(1) to $2
 
$1 to $3
Benefit (provision) for income taxes
$(3) to $1
 
$(15) to $(7)
Stock-based compensation expense
$15 to $17
 
$63 to $68
Adjusted EBITDA(1)
$509
 
$2,054
(1)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.

The midpoint of the Previous Second Quarter 2015 Outlook and Previous Full Year 2015 Outlook for FFO and AFFO adjusted to reflect CCAL as a discounted operation are reconciled as follows:

 
Q2 2015
 
Full Year 2015
(in millions, except share and per share amounts)
Adjusted Previous Outlook
 
Adjusted Previous Outlook
Net income
$78 to $111
 
$367 to $446
Real estate related depreciation, amortization and accretion
$247 to $250
 
$982 to $997
Asset write-down charges
$4 to $6
 
$19 to $29
Dividends on preferred stock
$(11) to $(11)
 
$(44) to $(44)
FFO(1)(2)(5)
$339 to $344
 
$1,387 to $1,402
 
 
 
 
FFO (from above)
$339 to $344
 
$1,387 to $1,402
Adjustments to increase (decrease) FFO:
 
 
 
Straight-line revenue
$(34) to $(29)
 
$(117) to $(102)
Straight-line expense
$22 to $27
 
$86 to $101
Stock-based compensation expense
$15 to $17
 
$63 to $68
Non-cash portion of tax provision
$(9) to $(4)
 
$(30) to $(15)
Non-real estate related depreciation, amortization and accretion
$3 to $5
 
$14 to $19
Amortization of non-cash interest expense
$10 to $15
 
$30 to $41
Other (income) expense
$(1) to $2
 
$1 to $3
Acquisition and integration costs
$0 to $3
 
$4 to $4
Capital improvement capital expenditures
$(11) to $(9)
 
$(40) to $(35)
Corporate capital expenditures
$(10) to $(8)
 
$(34) to $(29)
AFFO(1)(2)(5)
$339
 
$1,399
Weighted average common shares outstanding — diluted(4)
333.9
 
333.9
AFFO per share(1)(5)
$1.02
 
$4.19
(1)
Based on diluted shares outstanding as of March 31, 2015.
(2)
See "Non-GAAP Financial Measures and Other Calculations" herein for a discussion for our definitions of FFO and AFFO.
(3)
FFO and AFFO are reduced by cash paid for preferred stock dividends.
(4)
The diluted weighted average common shares outstanding assumes no conversion of preferred stock in the share count.
(5)
The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.


37
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX




The impact of CCAL discontinued operations on our previously issued guidance for the quarter ending June 30, 2015 is as follows:

(in millions)
Midpoint as previously issued(1)
 
CCAL Impact
 
Midpoint as adjusted
Site rental revenues
$770
 
$35
 
$735
Site rental gross margin
$526
 
$27
 
$499
Adjusted EBITDA
$534
 
$25
 
$509
AFFO
$351
 
$12
 
$339
AFFO per share(2)
$1.05
 
$0.03
 
$1.02
(1)
As previously issued on April 22, 2015.
(2)
Based on diluted shares outstanding as of March 31, 2015.

The impact of CCAL discontinued operations on our previously issued guidance for the year ending December 31, 2015 is as follows:

(in millions)
Midpoint as previously issued(1)
 
CCAL Impact
 
Midpoint as adjusted
Site rental revenues
$3,075
 
$142
 
$2,933
Site rental gross margin
$2,099
 
$107
 
$1,992
Adjusted EBITDA
$2,153
 
$99
 
$2,054
AFFO
$1,458
 
$59
 
$1,399
AFFO per share(2)
$4.37
 
$0.18
 
$4.19
(1)
As previously issued on April 22, 2015.
(2)
Based on diluted shares outstanding as of March 31, 2015.


Net debt to Last Quarter Annualized Adjusted EBITDA calculation:
 
Three Months Ended June 30,
(dollars in millions)
2015
2014
Total face value of debt
$
11,135.0

$
11,568.8

Ending cash and cash equivalents
338.6

195.8

Total net debt
$
10,796.4

$
11,373.0

 
 
 
Adjusted EBITDA for the three months ended June 30,
$
520.9

$
509.5

Last quarter annualized Adjusted EBITDA
2,083.7

2,038.0

Net debt to Last Quarter Annualized Adjusted EBITDA
5.2
x
5.6
x

Cash Interest Coverage Ratio Calculation:
 
Three Months Ended June 30,
(dollars in thousands)
2015
 
2014
Adjusted EBITDA
$
520,926

 
$
509,537

Interest expense on debt obligations
122,398

 
123,930

Interest Coverage Ratio
4.3
x
 
4.1
x


38
Crown Castle International Corp.
Second Quarter 2015
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


AFFO Payout Ratio Calculation:
 
Three Months Ended June 30,
(per share)
2015
Dividend per share
$
0.82

AFFO per share
$
1.03

AFFO Payout Ratio(1)
80
%

(1)
AFFO is calculated exclusive of income from discontinued operations and related noncontrolling interest. See page 2.