Acquisitions

12 Months Ended

Dec. 31, 2019

Acquisitions

Acquisitions

Acquisitions

2017 FiberNet Acquisition

On November 1, 2016, the Company announced that it had entered into a definitive agreement to acquire FPL FiberNet Holdings, LLC and certain other subsidiaries of NextEra Energy, Inc. (collectively, "FiberNet") for approximately $1.5 billion in cash, subject to certain limited adjustments ("FiberNet Acquisition"). FiberNet is a fiber services provider in Florida and Texas that, as of the agreement date, owned or had rights to approximately 11,500 route miles of fiber installed or under construction, inclusive of approximately 6,000 route miles in top metro markets. On January 17, 2017, the Company closed the FiberNet Acquisition, which was financed using proceeds from its November 2016 issuance of 11.4 million shares of common stock, which generated net proceeds of $1.0 billion and borrowings under the 2016 Revolver (see note 9).

The final purchase price allocation for the FiberNet Acquisition is shown below.

Final Purchase Price Allocation
Current assets	$	52
Property and equipment	438
Goodwill(a)	778
Other intangible assets, net(b)	327
Other non-current assets	2
Current liabilities	(41		)
Other non-current liabilities	(35		)
Net assets acquired(c)	$	1,521

(a) The final purchase price allocation for the FiberNet Acquisition resulted in the recognition of goodwill based on:

• the Company's expectation to leverage the FiberNet fiber footprint to support new small cells and fiber solutions,

• the complementary nature of the FiberNet fiber to the Company's existing fiber assets and its location in top metro markets where the Company expects to see wireless carrier network investments,

• the Company's belief that the acquired fiber assets are well-positioned to benefit from the continued growth trends in the demand for data, and

• other intangibles not qualified for separate recognition, including the assembled workforce.

(b) Predominantly comprised of site rental contracts and tenant relationships.

(c) The vast majority of the assets have been included in the Company's REIT. As such, no deferred taxes were recorded in connection with the FiberNet Acquisition.

2017 Wilcon Acquisition

On April 17, 2017, the Company announced that it had entered into a definitive agreement to acquire Wilcon Holdings LLC ("Wilcon") from Pamlico Holdings and other unit holders of Wilcon for approximately $600 million in cash, subject to certain limited adjustments ("Wilcon Acquisition"). Wilcon is a fiber services provider that owns approximately 1,900 route miles of fiber, primarily in Los Angeles and San Diego. On June 26, 2017, the Company closed the Wilcon Acquisition, which was financed using proceeds from the May 2017 Common Stock Offering (as defined in note 12) and the 4.750% Senior Notes (as defined in note 9) offering.

The final purchase price of approximately $600 million was primarily comprised of other intangible assets (predominantly comprised of site rental contracts and tenant relationships) of approximately $140 million, property and equipment of approximately $150 million, goodwill of approximately $360 million, offset by deferred revenues of approximately $40 million.

The final purchase price allocation for the Wilcon Acquisition resulted in the recognition of goodwill based on (1) the Company's expectation to leverage the Wilcon fiber footprint to support new small cells and fiber solutions, (2) the complementary nature of the Wilcon fiber to the Company's existing fiber assets and its location primarily in Los Angeles and San Diego, where the Company expects to see wireless carrier network investments, (3) the Company's belief that the acquired fiber assets are well positioned to benefit from the continued growth trends in the demand for data, and (4) other intangibles not qualified for separate recognition, including the assembled workforce.

2017 Lightower Acquisition

On July 18, 2017, the Company announced that it had entered into a definitive agreement to acquire LTS Group Holdings LLC ("Lightower") from Berkshire Partners, Pamlico Capital and other investors for approximately $7.1 billion in cash, subject to certain limited adjustments ("Lightower Acquisition"). Lightower owns or has rights to approximately 32,000 route miles of fiber located primarily in top metro markets in the Northeast, including Boston, New York and Philadelphia. On November 1, 2017, the Company closed the Lightower Acquisition, which was financed using (1) cash on hand, including proceeds from the July 2017 Equity Offerings (as defined in note 12) and the August 2017 Senior Notes (as defined in note 9) offering, and (2) borrowings under the 2016 Revolver.

The final purchase price allocation for the Lightower Acquisition is shown below.

Final Purchase Price Allocation
Current assets	$	99
Property and equipment	2,194
Goodwill(a)	3,171
Other intangible assets, net(b)	2,177
Other non-current assets	27
Current liabilities	(176		)
Other non-current liabilities	(342		)
Net assets acquired(c)	$	7,150

(a) The final purchase price allocation for the Lightower Acquisition resulted in the recognition of goodwill based on:

• the Company's expectation to leverage the Lightower fiber footprint to support new small cells and fiber solutions,

• the complementary nature of the Lightower fiber to the Company's existing fiber assets and its location where the Company expects to see wireless carrier network investments,

• the Company's belief that the acquired fiber assets are well-positioned to benefit from the continued growth trends in the demand for data, and

• other intangibles not qualified for separate recognition, including the assembled workforce.

(b) Predominantly comprised of site rental contracts and tenant relationships.

(c) The vast majority of the assets have been included in the Company's REIT. As such, no deferred taxes were recorded in connection with the Lightower Acquisition.

Actual and Pro Forma Financial Information

Net revenues and net income (loss) attributable to acquisitions completed during the year ended December 31, 2017 are included in the Company's consolidated statements of operations and comprehensive income (loss), since the respective date each acquisition was completed. For the year ended December 31, 2017, the FiberNet Acquisition, Wilcon Acquisition and Lightower Acquisition (collectively, "2017 Acquisitions") resulted in an increase to consolidated net revenues of $314 million.

The unaudited pro forma financial results for the year ended December 31, 2017 combine the historical results of the Company, along with the historical results of the 2017 Acquisitions. The following table presents the unaudited pro forma consolidated results of operations of the Company as if each acquisition was completed as of January 1, 2016. The unaudited pro forma amounts are presented for illustrative purposes only and are not necessarily indicative of future consolidated results of operations. The table below also gives effect to the Historical Adjustments as discussed in note 2.

	Twelve Months Ended December 31, 2017
	(As Restated)
Net revenues	$	4,949
Income (loss) before income taxes	$	462		(b)(c)
Benefit (provision) for income taxes	$	(29	)	(a)
Net income (loss)	$	433		(b)(c)
Basic net income (loss) attributable to CCIC common stockholders, per common share	$	0.68		(c)(d)
Diluted net income (loss) attributable to CCIC common stockholders, per common share	$	0.67		(c)(d)

(a) For the year ended December 31, 2017, amounts are inclusive of pro forma adjustments to the benefit (provision) for income tax as a result of the Company's REIT status. The vast majority of the assets and related income from the FiberNet Acquisition, the Wilcon Acquisition, and the Lightower Acquisition are included in the Company's REIT. The remaining assets are included in the Company's TRS. For purposes of the unaudited pro forma financial results, an adjustment has been made to reflect the additional tax impact of the income related to the TRS assets.

(b) For the year ended December 31, 2017, amounts are inclusive of pro forma adjustments to depreciation and amortization of $247 million, related to property and equipment and intangibles recorded as a result of the 2017 Acquisitions.

(c) Pro forma amounts include the impact of the interest expense and common stock share issuances associated with the related debt and equity financings for the 2017 Acquisitions (see above and notes 9 and 12).

(d)

Pro forma amounts include the impact of the preferred stock dividends related to the Mandatory Convertible Preferred Stock Offering (as defined in note 12) for the Lightower Acquisition (see above and note 12).