Delaware | 001-16441 | 76-0470458 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | IRS Employer Identification No.) |
1220 Augusta Drive Suite 600 Houston, Texas 77057 | ||
(Address of principal executive offices) (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Statement of Revenues and Certain Expenses of Tower Sites (a component of AT&T Inc.) for the year ended December 31, 2012, with independent auditors report thereon. |
99.2 | Unaudited Statement of Revenues and Certain Expenses of Tower Sites (a component of AT&T Inc.) for the nine months ended September 30, 2013. |
99.3 | Unaudited Pro Forma Condensed Combined Balance Sheet of Crown Castle as of September 30, 2013 and Unaudited Pro Forma Condensed Combined Statement of Operations of Crown Castle for the year ended December 31, 2012 and the nine months ended September 30, 2013. |
99.4 | Unaudited Pro Forma Statement of Estimated Taxable Operating Results and Cash to be Made Available by Operations for the year ended December 31, 2012. |
Exhibit No. | Description | ||
23.1 | Consent of Ernst & Young LLP, Independent Auditors. | ||
99.1 | Statement of Revenues and Certain Expenses of Tower Sites (a component of AT&T Inc.) for the year ended December 31, 2012, with independent auditors report thereon. | ||
99.2 | Unaudited Statement of Revenues and Certain Expenses of Tower Sites (a component of AT&T Inc.) for the nine months ended September 30, 2013. | ||
99.3 | Unaudited Pro Forma Condensed Combined Balance Sheet of Crown Castle as of September 30, 2013 and Unaudited Pro Forma Condensed Combined Statement of Operations of Crown Castle for the year ended December 31, 2012 and the nine months ended September 30, 2013. | ||
99.4 | Unaudited Pro Forma Statement of Estimated Taxable Operating Results and Cash to be Made Available by Operations for the year ended December 31, 2012. |
(1) | Registration Statement (Form S-8 No. 333-67379) |
(2) | Registration Statement (Form S-8 No. 333-101008) |
(3) | Registration Statement (Form S-8 No. 333-118659) |
(4) | Registration Statement (Form S-8 No. 333-163843) |
(5) | Registration Statement (Form S-8 No. 333-181715) |
(6) | Registration Statement (Form S-8 No. 333-188801) |
(7) | Registration Statement (Form S-3 No. 333-106728) |
(8) | Registration Statement (Form S-3 ASR No. 333-140452) |
(9) | Registration Statement (Form S-3 ASR No. 333-180526) |
Page(s) | ||
Report of Independent Auditors | 1 | |
Statement of Revenues and Certain Expenses | 2 | |
Notes to Statement of Revenues and Certain Expenses | 3-5 |
Revenues | |||
Lease revenues | $ | 154,757 | |
Other service revenues | 10,836 | ||
Total revenues | 165,593 | ||
Certain operating expenses | |||
Lease expense | 155,282 | ||
Selling, general and administrative | 12,094 | ||
Property taxes | 18,059 | ||
Total certain operating expenses | 185,435 | ||
Certain expenses in excess of revenues | $ | 19,842 |
Customer A | 26.1% |
Customer B | 22.4% |
Customer C | 17.1% |
Years Ending December 31 | |||
(Dollars in Thousands) | |||
2013 | $ | 158,907 | |
2014 | 140,470 | ||
2015 | 112,572 | ||
2016 | 80,137 | ||
2017 | 50,126 | ||
Thereafter | 23,678 | ||
$ | 565,890 |
Years Ending December 31 | |||
(Dollars in Thousands) | |||
2013 | $ | 142,252 | |
2014 | 142,918 | ||
2015 | 143,145 | ||
2016 | 142,678 | ||
2017 | 140,543 | ||
Thereafter | 1,272,866 | ||
$ | 1,984,402 |
Page(s) | ||
Unaudited Statement of Revenues and Certain Expenses | 1 | |
Notes to Unaudited Statement of Revenues and Certain Expenses | 2-3 |
Revenues | |||
Lease revenues | $ | 126,372 | |
Other service revenues | 5,285 | ||
Total revenues | 131,657 | ||
Certain operating expenses | |||
Lease expense | 118,209 | ||
Selling, general and administrative | 10,163 | ||
Property taxes | 13,305 | ||
Total certain operating expenses | 141,677 | ||
Certain expenses in excess of revenues | $ | 10,020 |
Customer A | 35.4% |
Customer B | 30.6% |
Customer C | 18.4% |
Historical(A) | Adjustments for the Transactions(B) | Pro Forma | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 218,649 | $ | (42,026 | ) | (B1) | |||||
(1,244 | ) | (B2) | $ | 175,379 | |||||||
Restricted cash | 157,699 | — | 157,699 | ||||||||
Receivables, net | 236,211 | — | 236,211 | ||||||||
Prepaid expenses | 117,866 | 20,428 | (B2) | 138,294 | |||||||
Deferred income tax assets | 189,878 | — | 189,878 | ||||||||
Other current assets | 79,500 | — | 79,500 | ||||||||
Total current assets | 999,803 | (22,842 | ) | 976,961 | |||||||
Deferred site rental receivables, net | 1,031,966 | — | 1,031,966 | ||||||||
Property and equipment, net of accumulated depreciation | 6,904,346 | 1,965,375 | (B2) | 8,869,721 | |||||||
Goodwill | 3,140,308 | 1,768,535 | (B2) | 4,908,843 | |||||||
Other intangible assets, net | 2,821,812 | 1,280,071 | (B2) | 4,101,883 | |||||||
Deferred income tax assets | 21,311 | — | 21,311 | ||||||||
Long-term prepaid rent, deferred financing costs and other assets, net | 648,026 | 7,026 | (B1) | ||||||||
3,253 | (B2) | 658,305 | |||||||||
Total assets | $ | 15,567,572 | $ | 5,001,418 | $ | 20,568,990 | |||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 119,689 | $ | — | $ | 119,689 | |||||
Accrued interest | 64,571 | — | 64,571 | ||||||||
Deferred revenues | 248,807 | — | 248,807 | ||||||||
Other accrued liabilities | 131,273 | 23,874 | (B2) | 155,147 | |||||||
Current maturities of debt and other obligations | 115,378 | 10,000 | (B1) | 125,378 | |||||||
Total current liabilities | 679,718 | 33,874 | 713,592 | ||||||||
Debt and other long-term obligations | 10,660,076 | 855,000 | (B1) | 11,515,076 | |||||||
Deferred income tax liabilities | 153,967 | — | 153,967 | ||||||||
Below-market tenant leases, deferred ground lease payable and other liabilities | 1,076,521 | 198,133 | (B2) | 1,274,654 | |||||||
Total liabilities | 12,570,282 | 1,087,007 | 13,657,289 | ||||||||
Commitments and contingencies | |||||||||||
CCIC stockholders' equity: | |||||||||||
Common stock, $.01 par value; 600,000,000 shares authorized | 2,927 | 414 | (B3) | 3,341 | |||||||
4.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share; 20,000,000 shares authorized | — | 98 | (B3) | 98 | |||||||
Additional paid-in capital | 5,553,717 | 3,926,088 | (B3) | 9,479,805 | |||||||
Accumulated other comprehensive income (loss) | (61,339 | ) | — | (61,339 | ) | ||||||
Accumulated deficit | (2,512,333 | ) | (12,189 | ) | (B2) | (2,524,522 | ) | ||||
Total CCIC stockholders' equity | 2,982,972 | 3,914,411 | 6,897,383 | ||||||||
Noncontrolling interest | 14,318 | — | 14,318 | ||||||||
Total equity | 2,997,290 | 3,914,411 | 6,911,701 | ||||||||
Total liabilities and equity | $ | 15,567,572 | $ | 5,001,418 | $ | 20,568,990 |
Historical Year Ended(C) | Adjustments for the Transactions(D) | Pro Forma Year Ended | ||||||||||
Net revenues: | ||||||||||||
Site rental | $ | 2,124,190 | $ | 396,340 | (D1) | $ | 2,520,530 | |||||
Network services and other | 308,490 | 10,836 | (D1) | 319,326 | ||||||||
Net revenues | 2,432,680 | 407,176 | 2,839,856 | |||||||||
Operating expenses: | ||||||||||||
Cost of operations(1): | ||||||||||||
Site rental | 539,239 | 192,240 | (D1) | 731,479 | ||||||||
Network services and other | 189,750 | 5,151 | (D1) | 194,901 | ||||||||
General administrative | 212,572 | 12,094 | (D1) | 224,666 | ||||||||
Asset write-down charges | 15,548 | — | 15,548 | |||||||||
Acquisition and integration costs | 18,298 | — | 18,298 | |||||||||
Depreciation, amortization and accretion | 622,592 | 227,997 | (D2) | 850,589 | ||||||||
Total operating expenses | 1,597,999 | 437,482 | 2,035,481 | |||||||||
Operating income (loss) | 834,681 | (30,305 | ) | 804,376 | ||||||||
Interest expense and amortization of deferred financing costs | (601,044 | ) | (25,211 | ) | (D3) | (626,255 | ) | |||||
Gains (losses) on retirement of long-term obligations | (131,974 | ) | — | (131,974 | ) | |||||||
Interest income | 4,556 | — | 4,556 | |||||||||
Other income (expense) | (5,392 | ) | — | (5,392 | ) | |||||||
Income (loss) before income taxes | 100,827 | (55,516 | ) | 45,311 | ||||||||
Benefit (provision) for income taxes | 100,061 | 22,206 | (D4) | 122,267 | ||||||||
Net income (loss) | 200,888 | (33,310 | ) | 167,578 | ||||||||
Less: Net income (loss) attributable to the noncontrolling interest | 12,304 | — | 12,304 | |||||||||
Net income (loss) attributable to CCIC stockholders | 188,584 | (33,310 | ) | 155,274 | ||||||||
Dividends on preferred stock | (2,629 | ) | (43,988 | ) | (D5) | (46,617 | ) | |||||
Net income (loss) attributable to CCIC stockholders after deduction of dividends on preferred stock | $ | 185,955 | $ | (77,298 | ) | $ | 108,657 | |||||
Net income (loss) | $ | 200,888 | $ | (33,310 | ) | $ | 167,578 | |||||
Other comprehensive income (loss): | ||||||||||||
Interest rate swaps, net of taxes: | ||||||||||||
Amounts reclassified into "interest expense and amortization of deferred financing costs," net of taxes | 48,124 | — | 48,124 | |||||||||
Foreign currency translation adjustments | 6,308 | — | 6,308 | |||||||||
Total other comprehensive income (loss) | 54,432 | — | 54,432 | |||||||||
Comprehensive income (loss) | 255,320 | (33,310 | ) | 222,010 | ||||||||
Less: Comprehensive income (loss) attributable to the noncontrolling interest | 11,531 | — | 11,531 | |||||||||
Comprehensive income (loss) attributable to CCIC stockholders | $ | 243,789 | $ | (33,310 | ) | $ | 210,479 | |||||
Net income (loss) attributable to CCIC common stockholders, per common share: | ||||||||||||
Basic | $ | 0.64 | N/M | $ | 0.33 | (D6) | ||||||
Diluted | $ | 0.64 | N/M | $ | 0.33 | (D6) | ||||||
Weighted-average common shares outstanding (in thousands): | ||||||||||||
Basic | 289,285 | 41,400 | (D6) | 330,685 | ||||||||
Diluted | 291,270 | 41,400 | (D6) | 332,670 |
(1) | Exclusive of depreciation, amortization and accretion shown separately. |
Historical Nine Months Ended (E) | Adjustments for the Transactions(F) | Pro Forma Nine Months Ended | ||||||||||
Net revenues: | ||||||||||||
Site rental | $ | 1,853,030 | $ | 306,666 | (F1) | $ | 2,159,696 | |||||
Network services and other | 370,935 | 5,285 | (F1) | 376,220 | ||||||||
Net revenues | 2,223,965 | 311,951 | 2,535,916 | |||||||||
Operating expenses: | ||||||||||||
Cost of operations(1): | ||||||||||||
Site rental | 538,587 | 147,518 | (F1) | 686,105 | ||||||||
Network services and other | 229,574 | 3,400 | (F1) | 232,974 | ||||||||
General administrative | 171,539 | 10,163 | (F1) | 181,702 | ||||||||
Asset write-down charges | 10,705 | — | 10,705 | |||||||||
Acquisition and integration costs | 13,186 | — | 13,186 | |||||||||
Depreciation, amortization and accretion | 572,518 | 170,998 | (F2) | 743,516 | ||||||||
Total operating expenses | 1,536,109 | 332,079 | 1,868,188 | |||||||||
Operating income (loss) | 687,856 | (20,128 | ) | 667,728 | ||||||||
Interest expense and amortization of deferred financing costs | (446,641 | ) | (18,908 | ) | (F3) | (465,549 | ) | |||||
Gains (losses) on retirement of long-term obligations | (36,487 | ) | — | (36,487 | ) | |||||||
Interest income | 861 | — | 861 | |||||||||
Other income (expense) | (753 | ) | — | (753 | ) | |||||||
Income (loss) before income taxes | 204,836 | (39,036 | ) | 165,800 | ||||||||
Benefit (provision) for income taxes | (88,254 | ) | 15,614 | (F4) | (72,640 | ) | ||||||
Net income (loss) | 116,582 | (23,422 | ) | 93,160 | ||||||||
Less: Net income (loss) attributable to the noncontrolling interest | 2,925 | — | 2,925 | |||||||||
Net income (loss) attributable to CCIC stockholders | 113,657 | (23,422 | ) | 90,235 | ||||||||
Dividends on preferred stock | — | (32,991 | ) | (F5) | (32,991 | ) | ||||||
Net income (loss) attributable to CCIC stockholders after deduction of dividends on preferred stock | $ | 113,657 | $ | (56,413 | ) | $ | 57,244 | |||||
Net income (loss) | $ | 116,582 | $ | (23,422 | ) | $ | 93,160 | |||||
Other comprehensive income (loss): | ||||||||||||
Interest rate swaps, net of taxes: | ||||||||||||
Amounts reclassified into "interest expense and amortization of deferred financing costs," net of taxes | 31,671 | — | 31,671 | |||||||||
Foreign currency translation adjustments | (32,344 | ) | — | (32,344 | ) | |||||||
Total other comprehensive income (loss) | (673 | ) | — | (673 | ) | |||||||
Comprehensive income (loss) | 115,909 | (23,422 | ) | 92,487 | ||||||||
Less: Comprehensive income (loss) attributable to the noncontrolling interest | 1,800 | — | 1,800 | |||||||||
Comprehensive income (loss) attributable to CCIC stockholders | $ | 114,109 | $ | (23,422 | ) | $ | 90,687 | |||||
Net income (loss) attributable to CCIC common stockholders, per common share: | ||||||||||||
Basic | $ | 0.39 | N/M | $ | 0.17 | (F6) | ||||||
Diluted | $ | 0.39 | N/M | $ | 0.17 | (F6) | ||||||
Weighted-average common shares outstanding (in thousands): | ||||||||||||
Basic | 290,900 | 41,400 | (F6) | 332,300 | ||||||||
Diluted | 292,043 | 41,400 | (F6) | 333,443 |
(1) | Exclusive of depreciation, amortization and accretion shown separately. |
A. | Reflects Crown Castle's condensed consolidated balance sheet as of September 30, 2013 derived from Crown Castle's unaudited condensed consolidated financial statements included in Crown Castle's Form 10-Q for the nine months ended September 30, 2013, filed on November 8, 2013. |
B1. | The table below reflects the total purchase price and funding sources for the AT&T Transaction. |
Prepaid lease and acquisition payment | $ | 4,827,700 | ||
Prorated expenses and revenues adjustment | (1,100 | ) | ||
Total purchase price | $ | 4,826,600 | ||
Cash on hand | $ | 42,026 | ||
Common Stock Offering, net of fees and expenses (see B3) | 2,977,000 | |||
Mandatory Convertible Preferred Stock Offering, net of fees and expenses (see B3) | 949,600 | |||
CCOC Revolving Credit Facility Drawdown, net of repayment (see B3) | 165,000 | |||
Incremental Tranche B Term Loans, net of fees and expenses (see B3)(1) | 493,612 | |||
Incremental Tranche A Term Loans, net of fees and expenses (see B3)(1) | 199,362 | |||
Total sources of funds | $ | 4,826,600 |
(1) | Inclusive of aggregate fees and expenses of approximately $7.0 million recorded as deferred financing costs. |
B2. | The table below reflects the preliminary purchase price allocation for the AT&T Transaction. |
Balance Sheet Caption | Amount | |||
Prepaid expenses | $ | 23,681 | ||
Property and equipment | 1,965,375 | |||
Goodwill | 1,768,535 | |||
Other intangible assets | 1,280,071 | |||
Other accrued liabilities | (12,929 | ) | ||
Below-market leases, deferred ground lease payable and other liabilities(1) | (198,133 | ) | ||
Net assets acquired | $ | 4,826,600 |
(1) | Predominately consists of above-market ground leases. |
B3. | Equity Financings |
C. | Reflects Crown Castle's condensed consolidated statement of operations for the year ended December 31, 2012, derived from Crown Castle's audited financial statements included in its Form 10-K filed on February 12, 2013. |
D. | Reflects the Transactions as set forth below |
D1. | Reflects full year 2012 revenues and certain expenses of Tower Sites (a component of AT&T Inc.) as adjusted for the items footnoted below. These amounts were derived from the audited Statement of Revenues and Certain Expenses of Tower Sites (a component of AT&T Inc.) for the year ended December 31, 2012 included elsewhere herein. |
Year Ended December 31, 2012 | |||||||||||
As Reported | Adjustments | As Adjusted | |||||||||
Revenues: | |||||||||||
Lease revenues | $ | 154,757 | $ | 241,583 | (i) | $ | 396,340 | ||||
Service revenues | 10,836 | — | 10,836 | ||||||||
165,593 | 241,583 | 407,176 | |||||||||
Certain expenses: | |||||||||||
Lease expense(v) | 155,282 | 19,785 | (ii) | 175,067 | |||||||
Property taxes | 18,059 | (886 | ) | (iii) | 17,173 | ||||||
Network services and other expenses | — | 5,151 | (iv) | 5,151 | |||||||
173,341 | 24,050 | 197,391 | |||||||||
Selling, general & administrative expenses | 12,094 | — | 12,094 | ||||||||
Total certain expenses | 185,435 | 24,050 | 209,485 | ||||||||
Revenues (less than) in excess of expenses | $ | (19,842 | ) | $ | 217,533 | $ | 197,691 |
(i) | Represents the combination of both (1) the annual rent of $220.6 million Crown Castle expects to recognize from AT&T under AT&T's contracted lease of space on the Sites at an initial monthly rate of $1,900 per Site and (2) an increase in straight-line revenues from the AT&T lease and other third party leases of approximately $21.0 million. |
(ii) | Represents (1) an adjustment of $26.3 million to straight-line expense for ground leases with contractual fixed escalations relating to the Sites, (2) the net impact of the amortization of above-market and below-market ground leases, (3) the inclusion of site insurance expenses, partially offset by reclassifications discussed below under (iv). |
(iii) | Represents an adjustment of real and personal property taxes to reflect the fixed annual amount per tower of $1,769 that Crown Castle has agreed to pay to AT&T for real and personal property taxes. |
(iv) | Represents an adjustment to reclassify certain network services and other expenses from lease expense to network services and other expenses consistent with the manner in which Crown Castle reports such expenses. |
(v) | Includes tower operating expenses such as repairs and maintenance, utilities and site insurance expenses. |
D2. | Reflects depreciation, amortization and accretion on the Sites based on the estimated tangible and customer-related intangible assets of the Sites. For purposes of computing pro forma depreciation expense, a useful life equal to the shorter of 20 years or the term of the underlying ground lease including optional renewal periods was utilized, resulting in an average useful life of approximately 15 years. The fair value adjustment to identifiable intangible assets for the customer-related intangible is being amortized over an estimated useful life of 20 years. |
Amount | Annual Depreciation Expense | ||||||
Property and equipment | $ | 1,911,875 | $ | 171,797 | |||
Intangible assets | 1,124,000 | 56,200 | |||||
Total | $ | 227,997 |
D3. | Reflects the increased annual interest expense and amortization of deferred financing costs from the aggregate borrowings of $865 million discussed under the heading "Debt Financing" in Note B3. |
D4. | Benefit (provision) for income taxes reflects the aggregate pro forma tax effect of the AT&T Transaction using the federal and state statutory rates. As discussed in Note B2, no adjustment was made to reflect the impact of Crown Castle operating as a REIT as of January 1, 2014. |
D5. | Reflects dividends on the 4.50% Mandatory Convertible Preferred Stock discussed in Note B3. |
D6. | The following is a summary of the pro forma adjustment to the weighted-average common shares outstanding and net income (loss) attributable to CCIC common stockholders. |
Year Ended December 31, 2012 | ||||||||||
Historical Year Ended | Adjustments | Pro Forma Year End | ||||||||
Weighted-average common shares outstanding (in thousands): | ||||||||||
Basic weighted-average common shares outstanding | 289,285 | 41,400 | 330,685 | |||||||
Effect of assumed dilution from potential common shares relating to stock options and restricted stock awards | 1,985 | — | 1,985 | |||||||
Diluted weighted-average common shares outstanding | 291,270 | 41,400 | 332,670 | |||||||
Net income (loss) attributable to CCIC stockholders, per common share: | ||||||||||
Basic | $ | 0.64 | $ | 0.33 | ||||||
Diluted | $ | 0.64 | $ | 0.33 |
E. | Reflects Crown Castle's unaudited condensed consolidated statement of operations for the nine months ended September 30, 2013, derived from Crown Castle's unaudited condensed consolidated financial statements included in Crown Castle's Form 10-Q filed on November 8, 2013. |
F. | Reflects the Transactions as set forth below |
F1. | Reflects revenues and certain expenses of Tower Sites (a component of AT&T Inc.) as adjusted for the items footnoted below for the nine months ended September 30, 2013. These amounts were derived from the unaudited statement of revenues and certain expenses of Tower Sites (a component of AT&T Inc.) for the nine months ended September 30, 2013 included elsewhere herein. |
Nine Months Ended September 30, 2013 | |||||||||||
As Reported | Adjustments | As Adjusted | |||||||||
Revenues: | |||||||||||
Lease revenue | $ | 126,372 | $ | 180,294 | (i) | $ | 306,666 | ||||
Service revenue | 5,285 | — | 5,285 | ||||||||
131,657 | 180,294 | 311,951 | |||||||||
Certain expenses: | |||||||||||
Lease expense(v) | 118,209 | 16,429 | (ii) | 134,638 | |||||||
Property taxes | 13,305 | (425 | ) | (iii) | 12,880 | ||||||
Network services and other expenses | — | 3,400 | (iv) | 3,400 | |||||||
131,514 | 19,404 | 150,918 | |||||||||
Selling, general & administrative expenses | 10,163 | — | 10,163 | ||||||||
Total certain expenses | 141,677 | 19,404 | 161,081 | ||||||||
Revenues (less than) in excess of expenses | $ | (10,020 | ) | $ | 160,890 | $ | 150,870 |
(i) | Represents the combination of both (1) the nine month rent of $165.4 million Crown Castle expects to recognize from AT&T under AT&T's contracted lease of space on the Sites at an initial monthly rate of $1,900 per Site and (2) a increase to straight-line revenue from the AT&T lease and other third party leases totaling $14.9 million. |
(ii) | Represents (1) an adjustment of $20.8 million to straight-line expense for ground leases with contractual fixed escalations relating to the Sites, (2) the net decrease of the amortization of above-market and below-market ground leases, (3) the inclusion of site insurance expenses, partially offset by reclassifications discussed below under (iv). |
(iii) | Represents an adjustment of real and personal property taxes to reflect the fixed annual amount per tower of $1,769 that Crown Castle has agreed to pay to AT&T for real and personal property taxes. |
(iv) | Represents an adjustment to reclassify certain network services and other expenses from site rental lease expense to network services and other expenses consistent with the manner in which Crown Castle reports such expenses. |
(v) | Includes tower operating expenses such as repairs and maintenance, utilities and site insurance expenses. |
F2. | Reflects depreciation, amortization and accretion on estimated tangible and customer-related intangible assets of the Sites. For purposes of computing pro forma depreciation expense, a useful life equal to the shorter of 20 years or the term of the underlying ground lease including optional renewal periods was utilized, resulting in an average useful life of approximately 15 years. The fair value adjustment to identifiable intangible assets for the customer-related intangible is being amortized over an estimated useful life of 20 years. |
Amount | Nine Month Depreciation Expense | ||||||
Property and equipment | $ | 1,911,875 | $ | 128,848 | |||
Intangible assets | 1,124,000 | 42,150 | |||||
Total | $ | 170,998 |
F3. | Reflects the increased interest expense and amortization of deferred financing costs from the aggregate borrowings of $865 million discussed under the heading "Debt Financing" in Note B3. |
F4. | Benefit (provision) for income taxes reflects the aggregate pro forma tax effect of the AT&T Transaction using the federal and state statutory rates. As discussed in Note B2, no adjustment was made to reflect the impact of Crown Castle operating as a REIT as of January 1, 2014. |
F5. | Reflects dividends on the 4.50% Mandatory Convertible Preferred Stock discussed in Note B3. |
F6. | The following is a summary of the pro forma adjustment to the weighted-average common shares outstanding and net income (loss) attributable to CCIC common stockholders. |
Year Ended September 30, 2013 | ||||||||||
Historical Nine Months Ended | Adjustments | Pro forma Nine Months Ended | ||||||||
Weighted-average common shares outstanding (in thousands): | ||||||||||
Basic weighted-average common shares outstanding | 290,900 | 41,400 | 332,300 | |||||||
Effect of assumed dilution from potential common shares relating to restricted stock awards | 1,143 | — | 1,143 | |||||||
Diluted weighted-average common shares outstanding | 292,043 | 41,400 | 333,443 | |||||||
Net income (loss) attributable to CCIC stockholders, per common share: | ||||||||||
Basic | $ | 0.39 | $ | 0.17 | ||||||
Diluted | $ | 0.39 | $ | 0.17 |
Pro Forma | ||||
Net income (loss) | $ | 167,578 | ||
Net book depreciation in excess of tax depreciation | 118,738 | |||
Net book amortization in excess of tax amortization | 181,032 | |||
Book income not recognized for tax | (314,036 | ) | ||
Book expense not deducted for tax | 9,226 | |||
Tax income not recognized for book | 122,261 | |||
Tax expense not deducted for book | (218,924 | ) | ||
Estimated taxable income (loss) | 65,875 | |||
Adjustments: | ||||
Depreciation | 580,883 | |||
Amortization | 230,077 | |||
Net book depreciation in excess of tax depreciation | (118,738 | ) | ||
Net book amortization in excess of tax amortization | (181,032 | ) | ||
Estimated cash to be made available from operations | $ | 577,065 |