CROWN CASTLE INTERNATIONAL CORP - FORM 8-K - EX-99.2 - October 30, 2014

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Exhibit 99.2















Supplemental Information Package
and Non-GAAP Reconciliations
Third Quarter • September 30, 2014




The Foundation for a Wireless World.
CrownCastle.com

Crown Castle International Corp.
Third Quarter 2014



TABLE OF CONTENTS
 
Page
Company Overview
 
Profile and Strategy
Historical Dividend and AFFO per Share
Portfolio Footprint
Corporate Information
Research Coverage
Historical Common Stock Data
Portfolio and Financial Highlights
Outlook - 4Q14, Full Year 2014 and Full Year 2015
Financials & Metrics
 
Consolidated Balance Sheet
Consolidated Statement of Operations
Segment Operating Results
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 fourth quarter of 2014, full year 2014 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.
Third Quarter 2014
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 and to substantially all of the Australian population. Crown Castle owns, operates and manages approximately 40,000 and 1,800 towers in the US and Australia, respectively.
Our core business is providing access, including space or capacity, to our towers, and to a lesser extent, to our small cells and third party land interests via long-term contracts in various forms, including license, sublease and lease agreements (collectively, "contracts"). Our wireless infrastructure can accommodate multiple customers ("co-location") 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, excluding our operations in Australia. 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.

STRATEGY 
Our strategy is to create long-term stockholder value via a combination of (1) returning a meaningful portion of our capital to our common stockholders in the form of dividends, (2) growing organic cash flows generated from our leading portfolio of wireless infrastructure and (3) allocating capital available after payment of dividends efficiently to enhance organic cash flows. We measure "long-term stockholder value" as the combined payment of dividends to common stockholders and growth in our per share results. The key elements of our strategy are to:

•
Return capital to stockholders in the form of dividends. As a REIT, we are required to distribute at least 90% of our REIT taxable income, after the utilization of our net operating loss carryforwards. We have determined that distributing a meaningful portion of our cash from operations even in advance of exhausting our net operating loss carryforwards, 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 organic growth. We believe this decision reflects the high-quality, long-term contractual cash flow nature of our business translated into stable capital returns to stockholders.

•
Grow organic cash flows from our wireless infrastructure. We seek to maximize the site rental cash flows derived from our wireless infrastructure by co-locating additional tenants on our wireless infrastructure through long-term contracts 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 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 communications 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.

•
Allocate capital efficiently to enhance organic cash flows. We seek to allocate our capital available after payment of dividends, including the net cash provided by our operating activities as well as external financing sources, in a manner that will increase long-term stockholder value on a risk-adjusted basis. Our historical capital allocation mix have included the following (in no particular order):
▪
purchase shares of our common stock from time to time;
▪
acquire or construct wireless infrastructure;

2


▪
acquire land interests under our 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 communications 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 organic 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. To the extent we raise external financing, through debt, equity or equity-related issuances, to fund investment opportunities, our financing strategy emphasizes matching our long-term investments with cost-effective, long-term capital.



3
Crown Castle International Corp.
Third Quarter 2014
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


HISTORICAL DIVIDEND AND AFFO PER SHARE (1)

GLOBAL FOOTPRINT
U.S. FOOTPRINT
 
AUSTRALIAN 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.
Third Quarter 2014
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
BB
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
14
President and Chief Executive Officer
Jay A. Brown
41
15
Senior Vice President, Chief Financial Officer and Treasurer
James D. Young
53
8
Senior Vice President and Chief Operating Officer
E. Blake Hawk
64
15
Executive Vice President and General Counsel
Patrick Slowey
57
14
Senior Vice President and Chief Commercial Officer
Philip M. Kelley
41
17
Senior Vice President-Corporate Development and Strategy

BOARD OF DIRECTORS
Name
Position
Committees
Age
Years as Director
J. Landis Martin
Chairman
NCG(1) 
68
17
P. Robert Bartolo
Director
Audit
42
<1
Cindy Christy
Director
NCG(1), Strategy
48
7
Ari Q. Fitzgerald
Director
Compensation, Strategy
51
12
Robert E. Garrison II
Director
Audit, Compensation
72
9
Dale N. Hatfield
Director
NCG(1), Strategy
76
13
Lee W. Hogan
Director
Audit, Compensation, Strategy
70
13
Edward C. Hutcheson
Director
Strategy
69
18
John P. Kelly
Director
Strategy
56
14
Robert F. McKenzie
Director
Audit, Strategy
70
19
W. Benjamin Moreland
Director
 
51
8

(1)
Nominating & Corporate Governance Committee


5
Crown Castle International Corp.
Third Quarter 2014
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

RESEARCH COVERAGE
Equity Research
Bank of America
David Barden
(646) 855-1320
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
Jonathan Chaplin
(212) 921-9876
Nomura
Adam Ilkowitz
(212) 298-4121
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
Christopher Wimmer
(212) 553-2947
Standard & Poor’s
Catherine Cosentino
(212) 438-7828

HISTORICAL COMMON STOCK DATA
 
Three Months Ended
(in millions, except per share data)
9/30/14
6/30/14
3/31/14
12/31/13
9/30/13
High price(1)
$
81.00

$
77.95

$
76.54

$
77.22

$
78.00

Low price(1)
$
72.53

$
71.29

$
68.44

$
69.87

$
66.73

Period end closing price(2)
$
80.53

$
73.93

$
73.10

$
72.42

$
72.02

Dividends paid per common share
$
0.35

$
0.35

$
0.35

$
—

$
—

Volume weighted average price for the period(1)
$
77.09

$
74.23

$
72.26

$
73.25

$
70.67

Common shares outstanding - diluted, at period end
333

333

333

334

293

Market value of outstanding common shares, at period end(3)
$
26,886

$
24,685

$
24,400

$
24,193

$
21,078


(1)
Based on the sales price, adjusted for 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) basic 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.
Third Quarter 2014
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

SUMMARY PORTFOLIO HIGHLIGHTS
(as of September 30, 2014)
U.S.
Australia
Number of towers(1)
39,644

1,769

Average number of tenants per tower
2.3

2.3

Remaining contracted customer receivables ($ in billions)(2)
$
21

$
1

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

10

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

Not Applicable

Percent of ground leased / owned (by site rental gross margin)
66% / 34%

87% / 13%

Weighted average maturity of ground leases (years)(4)
31

18


SUMMARY FINANCIAL HIGHLIGHTS
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(dollars in thousands, except per share amounts)
2014
 
2013
 
2014
 
2013
Operating Data:
 
 
 
 
 
 
 
Net revenues
 
 
 
 
 
 
 
Site rental
$
751,893

 
$
620,766

 
$
2,245,395

 
$
1,853,030

Network services and other
178,132

 
128,211

 
476,925

 
370,935

Net revenues
$
930,025

 
$
748,977

 
$
2,722,320

 
$
2,223,965

 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
Site rental
$
510,783

 
$
438,800

 
$
1,539,218

 
$
1,314,443

Network services and other
75,109

 
46,213

 
197,581

 
141,361

Total gross margin
$
585,892

 
$
485,013

 
$
1,736,799

 
$
1,455,804

 
 
 
 
 
 
 
 
Net income (loss) attributable to CCIC common stockholders
$
95,940

 
$
45,836

 
$
209,452

 
$
113,657

Net income (loss) attributable to CCIC common stockholders per share - diluted
$
0.29

 
$
0.16

 
$
0.63

 
$
0.39

 
 
 
 
 
 
 
 
Non-GAAP Data(5):
 
 
 
 
 
 
 
Adjusted EBITDA
$
532,955

 
$
440,557

 
$
1,590,568

 
$
1,325,745

FFO(6)
351,211

 
242,436

 
964,496

 
686,862

AFFO
350,418

 
271,319

 
1,049,687

 
806,768

AFFO per share
$
1.05

 
$
0.93

 
$
3.15

 
$
2.76

 
 
 
 
 
 
 
 
Summary Cash Flow Data:
 
 
 
 
 
 
 
Net cash provided by (used for) operating activities
$
428,554

 
$
278,839

 
$
1,192,230

 
$
838,866

Net cash provided by (used for) investing activities(7)
(292,879
)
 
(157,556
)
 
(690,683
)
 
(433,012
)
Net cash provided by (used for) financing activities
123,277

 
28,901

 
(479,033
)
 
(624,998
)

(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 Terms" in the Appendix for a discussion of the definition of FFO and AFFO.
(6)
Calculated to present the periods shown in a manner which is consistent with our commencement of operations as a REIT on January 1, 2014.
(7)
Includes net cash used for acquisitions of approximately $89 million and $28 million for the three months ended September 30, 2014 and 2013, respectively, and $180 million and $55 million for the nine months ended September 30, 2014 and 2013, respectively.




7
Crown Castle International Corp.
Third Quarter 2014
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

SUMMARY FINANCIAL HIGHLIGHTS (CONTINUED)
 
 
Three Months Ended September 30,
(dollars in thousands, except per share amounts)
 
2014
 
2013
Other Data:
 
 
 
 
Net debt to last quarter annualized adjusted EBITDA
 
5.3x

 
6.0x

Dividend per common share
 
$
0.35

 
$
—

AFFO payout ratio(2)
 
33
%
 
—

 
 
 
 
 
(dollars in thousands)
 
September 30, 2014
 
December 31, 2013
Balance Sheet Data (at period end):
 
 
 
 
Cash and cash equivalents
 
$
238,550

 
$
223,394

Property and equipment, net
 
8,870,817

 
8,947,677

Total assets
 
20,784,860

 
20,594,908

Total debt and other long-term obligations
 
11,573,678

 
11,594,500

Total CCIC stockholders' equity
 
6,844,974

 
6,926,717


OUTLOOK FOR FOURTH QUARTER 2014, FULL YEAR 2014 AND FULL YEAR 2015
(dollars in millions, except per share amounts)
Fourth Quarter 2014
Full Year 2014
Full Year 2015
Site rental revenues
$755 to $760
$3,001 to $3,006
$3,047 to $3,067
Site rental cost of operations
$234 to $239
$940 to $945
$964 to $979
Site rental gross margin
$519 to $524
$2,058 to $2,063
$2,073 to $2,093
Adjusted EBITDA(2)
$538 to $543
$2,128 to $2,133
$2,126 to $2,146
Interest expense and amortization of deferred financing costs(1)
$138 to $143
$571 to $576
$521 to $536
FFO(2)
$353 to $358
$1,317 to $1,322
$1,429 to $1,449
AFFO(2)
$346 to $351
$1,396 to $1,401
$1,437 to $1,457
AFFO per share(2)(3)
$1.04 to $1.05
$4.19 to $4.20
$4.31 to $4.37
Net income (loss)
$97 to $130
$342 to $375
$428 to $512
Net income (loss) per share - diluted(3)
$0.29 to $0.39
$1.03 to $1.13
$1.28 to $1.54
Net income (loss) attributable to CCIC common stockholders
$84 to $121
$300 to $337
$382 to $474
Net income (loss) attributable to CCIC common stockholders per share - diluted(3)
$0.25 to $0.36
$0.90 to $1.01
$1.15 to $1.42

(1)
See the reconciliation of "components of interest expense and amortization of deferred financing costs" in the Appendix.
(2)
See reconciliations and definitions provided herein.
(3)
Based on 333.2 million diluted shares outstanding as of September 30, 2014.

8
Crown Castle International Corp.
Third Quarter 2014
COMPANY
OVERVIEW
 FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

OUTLOOK FOR FULL YEARS 2014 AND 2015 SITE RENTAL REVENUE GROWTH
(dollars in millions)
Full Year 2013
Midpoint of Full Year 2014 Outlook
Midpoint of Full Year 2015 Outlook
Reported GAAP site rental revenues
$
2,504

$
3,004

$
3,057

Site rental straight-line revenues
(219
)
(196
)
(137
)
Other - Non-recurring
 –

(5
)
 –

Site Rental Revenues, as Adjusted(1)
$
2,285

$
2,803

$
2,921

Cash adjustments:
 
 
 
FX and other
 
10

8

New tower acquisitions and builds
 
(379
)
(5
)
Organic Site Rental Revenues(2)(3)
 
2,434

2,924

Year-Over-Year Revenue Growth
 
 
 
Reported GAAP site rental revenues
 
19.9
%
1.8
%
Site Rental Revenues, as Adjusted
 
22.6
%
4.2
%
Organic Site Rental Revenues(4)
 
6.5
%
4.3
%
OUTLOOK FOR ORGANIC SITE RENTAL REVENUE GROWTH
 
Midpoint of Full Year 2014 Outlook
Midpoint of Full Year 2015 Outlook
New leasing activity
5.5
 %
5.1
 %
Escalators
3.6
 %
3.3
 %
Organic Site Rental Revenue Growth, before non-renewals
9.1
 %
8.5
 %
Non-renewals
(2.6
)%
(4.2
)%
Organic Site Rental Revenue Growth(4)
6.5
 %
4.3
 %
OUTLOOK FOR FULL YEARS 2014 AND 2015 SITE RENTAL GROSS MARGIN GROWTH
(dollars in millions)
Full Year 2013
Midpoint of Full Year 2014 Outlook
Midpoint of Full Year 2015 Outlook
Reported GAAP site rental gross margin
$
1,779

$
2,061

$
2,083

Straight line revenues and expenses, net
(138
)
(91
)
(42
)
Other - Non-recurring
 –

(5
)
 –

Site Rental Gross Margin, as Adjusted(1)
$
1,640

$
1,964

$
2,041

Cash adjustments:
 
 
 
FX and other
 
7

6

New tower acquisitions and builds
 
(220
)
(3
)
Organic Site Rental Gross Margin(2)(3)
 
$
1,751

$
2,044

Year-Over-Year Gross Margin Growth
 
 
 
Reported GAAP site rental gross margin
 
15.9
%
1.1
%
Site Rental Gross Margin, as Adjusted
 
19.7
%
3.9
%
Organic Site Rental Gross Margin(5)
 
6.8
%
4.1
%
Year-Over-Year Incremental Margin
 

 
Reported GAAP site rental gross margin
 
56.5
%
42.1
%
Site Rental Gross Margin, as Adjusted
 
62.5
%
65.5
%
Organic Site Rental Gross Margin(6)
 
74.7
%
66.2
%

(1)
Includes amortization of prepaid rent.
(2)
Includes Site Rental Revenues, as Adjusted, from the construction of new small cell nodes.
(3)
See definitions provided herein.
(4)
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.
(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.

9
Crown Castle International Corp.
Third Quarter 2014
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


CONSOLIDATED BALANCE SHEET (Unaudited)
(dollars in thousands, except share amounts)
September 30,
2014
 
December 31,
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
238,550

 
$
223,394

Restricted cash
137,824

 
183,526

Receivables, net
311,798

 
249,925

Prepaid expenses
154,240

 
132,003

Deferred income tax assets
40,201

 
26,714

Other current assets
96,182

 
77,121

Total current assets
978,795

 
892,683

Deferred site rental receivables
1,220,050

 
1,078,995

Property and equipment, net
8,870,817

 
8,947,677

Goodwill
5,091,800

 
4,916,426

Other intangible assets, net
3,795,426

 
4,057,865

Deferred income tax assets
10,855

 
19,008

Long-term prepaid rent, deferred financing costs and other assets, net
817,117

 
682,254

Total assets
$
20,784,860

 
$
20,594,908

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
175,110

 
$
145,390

Accrued interest
68,044

 
65,582

Deferred revenues
327,265

 
260,114

Other accrued liabilities
168,475

 
181,715

Current maturities of debt and other obligations
106,673

 
103,586

Total current liabilities
845,567

 
756,387

Debt and other long-term obligations
11,467,005

 
11,490,914

Deferred income tax liabilities
57,118

 
56,513

Deferred credits and other liabilities
1,552,425

 
1,349,919

Total liabilities
13,922,115

 
13,653,733

Commitments and contingencies

 

CCIC stockholders' equity:
 
 
 
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: September 30, 2014—333,859,447 and December 31, 2013—334,070,016
3,339

 
3,341

4.50% Mandatory Convertible Preferred Stock, Series A, $.01 par value; 20,000,000 shares authorized; shares issued and outstanding: September 30, 2014 and December 31, 2013—9,775,000; aggregate liquidation value: September 30, 2014 and December 31, 2013—$977,500
98

 
98

Additional paid-in capital
9,500,490

 
9,482,769

Accumulated other comprehensive income (loss)
19,006

 
(23,612
)
Dividends/distributions in excess of earnings
(2,677,959
)
 
(2,535,879
)
Total CCIC stockholders' equity
6,844,974

 
6,926,717

Noncontrolling interest
17,771

 
14,458

Total equity
6,862,745

 
6,941,175

Total liabilities and equity
$
20,784,860

 
$
20,594,908




10
Crown Castle International Corp.
Third Quarter 2014
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(dollars in thousands, except share and per share amounts)
2014
 
2013
 
2014
 
2013
Net revenues:
 
 
 
 
 
 
 
Site rental
$
751,893

 
$
620,766

 
$
2,245,395

 
$
1,853,030

Network services and other
178,132

 
128,211

 
476,925

 
370,935

Net revenues
930,025

 
748,977

 
2,722,320

 
2,223,965

Operating expenses:
 
 
 
 
 
 
 
Costs of operations (exclusive of depreciation, amortization and accretion):
 
 
 
 
 
 
 
Site rental
241,110

 
181,966

 
706,177

 
538,587

Network services and other
103,023

 
81,998

 
279,344

 
229,574

General and administrative
71,395

 
58,504

 
205,397

 
171,539

Asset write-down charges
5,275

 
3,893

 
11,144

 
10,705

Acquisition and integration costs
4,068

 
4,369

 
28,924

 
13,186

Depreciation, amortization and accretion
254,862

 
195,408

 
759,288

 
572,518

Total operating expenses
679,733

 
526,138

 
1,990,274

 
1,536,109

Operating income (loss)
250,292

 
222,839

 
732,046

 
687,856

Interest expense and amortization of deferred financing costs
(141,287
)
 
(142,016
)
 
(432,221
)
 
(446,641
)
Gains (losses) on retirement of long-term obligations
—

 
(1
)
 
(44,629
)
 
(36,487
)
Interest income
192

 
236

 
554

 
861

Other income (expense)
(678
)
 
(631
)
 
(9,477
)
 
(753
)
Income (loss) before income taxes
108,519

 
80,427

 
246,273

 
204,836

Benefit (provision) for income taxes
(482
)
 
(33,959
)
 
(86
)
 
(88,254
)
Net income (loss)
108,037

 
46,468

 
246,187

 
116,582

Less: net income (loss) attributable to the noncontrolling interest
1,100

 
632

 
3,744

 
2,925

Net income (loss) attributable to CCIC stockholders
106,937

 
45,836

 
242,443

 
113,657

Dividends on preferred stock
(10,997
)
 
—

 
(32,991
)
 
—

Net income (loss) attributable to CCIC common stockholders
$
95,940

 
$
45,836

 
$
209,452

 
$
113,657

 
 
 
 
 
 
 
 
Net income (loss) attributable to CCIC common stockholders, per common share:
 
 
 
 
 
 
 
Basic
$
0.29

 
$
0.16

 
$
0.63

 
$
0.39

Diluted
$
0.29

 
$
0.16

 
$
0.63

 
$
0.39

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding (in thousands):
 
 
 
 
 
 
 
Basic
332,413

 
290,372

 
332,264

 
290,900

Diluted
333,241

 
291,378

 
333,020

 
292,043

(1)
Exclusive of depreciation, amortization and accretion shown separately


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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

SEGMENT OPERATING RESULTS
 
Three Months Ended September 30, 2014
(dollars in thousands)
CCUSA
 
CCAL
 
Consolidated Total
Net Revenues
 
 
 
 
 
Site rental
$
717,623

 
$
34,270

 
$
751,893

Services
175,260

 
2,872

 
178,132

Total net revenues
892,883

 
37,142

 
930,025

 
 
 
 
 
 
Operating expenses(1)
 
 
 
 
 
Site rental
230,599

 
10,511

 
241,110

Services
101,814

 
1,209

 
103,023

Total operating expenses
332,413

 
11,720

 
344,133

 
 
 
 
 
 
General and administrative
65,212

 
6,183

 
71,395

 
 
 
 
 
 
Adjusted EBITDA
$
513,604

 
$
19,351

 
$
532,955

FFO AND AFFO RECONCILIATIONS
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(dollars in thousands, except share and per share amounts)
2014
 
2013
 
2014
 
2013
Net income
$
108,037

 
$
46,468

 
$
246,187

 
$
116,582

Real estate related depreciation, amortization and accretion
249,994

 
192,707

 
743,898

 
562,501

Asset write-down charges
5,275

 
3,893

 
11,144

 
10,705

Adjustment for noncontrolling interest(2)
(1,100
)
 
(632
)
 
(3,744
)
 
(2,925
)
Dividends on preferred stock
(10,997
)
 
—

 
(32,991
)
 
—

FFO(3)
$
351,211

 
$
242,436

 
$
964,496

 
$
686,862

Weighted average common shares outstanding — diluted
333,241

 
291,378

 
333,020

 
292,043

FFO per share(3)
$
1.05

 
$
0.83

 
$
2.90

 
$
2.35

 
 
 
 
 
 
 
 
FFO (from above)
$
351,211

 
$
242,436

 
$
964,496

 
$
686,862

Adjustments to increase (decrease) FFO:
 
 
 
 
 
 
 
Straight-line revenue
(46,752
)
 
(53,294
)
 
(149,692
)
 
(169,612
)
Straight-line expense
24,954

 
20,604

 
78,750

 
61,883

Stock-based compensation expense
13,470

 
10,178

 
44,620

 
29,885

Non-cash portion of tax provision(4)
(2,628
)
 
32,510

 
(7,513
)
 
83,318

Non-real estate related depreciation, amortization and accretion
4,868

 
2,701

 
15,389

 
10,017

Amortization of non-cash interest expense
19,837

 
20,771

 
61,322

 
78,242

Other (income) expense
678

 
631

 
9,477

 
753

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

 
1

 
44,629

 
36,487

Acquisition and integration costs
4,068

 
4,369

 
28,924

 
13,186

Adjustment for noncontrolling interest(2)
1,100

 
632

 
3,744

 
2,925

Capital improvement capital expenditures
(7,911
)
 
(3,741
)
 
(16,240
)
 
(9,454
)
Corporate capital expenditures
(12,474
)
 
(6,478
)
 
(28,216
)
 
(17,724
)
AFFO(3)
$
350,418

 
$
271,319

 
$
1,049,687

 
$
806,768

Weighted average common shares outstanding — diluted
333,241

 
291,378

 
333,020

 
292,043

AFFO per share(3)
$
1.05

 
$
0.93

 
$
3.15

 
$
2.76


(1)    Exclusive of depreciation, amortization and accretion.
(2)
Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs.
(3)
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.
(4)
Adjusts the income tax provision for 2013 to reflect our estimate of the cash taxes had we been a REIT, which predominately relates to foreign taxes paid. As a result, income tax expense (benefit) is lower by the amount of the adjustment.

12
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COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 
Nine Months Ended September 30,
(dollars in thousands)
2014
 
2013
Cash flows from operating activities:
 
 
 
Net income (loss)
$
246,187

 
$
116,582

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
 
 
 
Depreciation, amortization and accretion
759,288

 
572,518

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

 
36,487

Amortization of deferred financing costs and other non-cash interest
61,322

 
78,241

Stock-based compensation expense
39,497

 
29,334

Asset write-down charges
11,144

 
10,705

Deferred income tax benefit (provision)
(7,512
)
 
80,999

Other adjustments, net
(2,088
)
 
2,167

Changes in assets and liabilities, excluding the effects of acquisitions:
 
 
 
Increase (decrease) in liabilities
282,619

 
147,721

Decrease (increase) in assets
(242,856
)
 
(235,888
)
Net cash provided by (used for) operating activities
1,192,230

 
838,866

Cash flows from investing activities:
 
 
 
Payments for acquisition of businesses, net of cash acquired
(179,918
)
 
(55,131
)
Capital expenditures
(513,552
)
 
(385,482
)
Other investing activities, net
2,787

 
7,601

Net cash provided by (used for) investing activities
(690,683
)
 
(433,012
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of long-term debt
845,750

 
830,941

Principal payments on debt and other long-term obligations
(86,197
)
 
(77,986
)
Purchases and redemptions of long-term debt
(836,899
)
 
(675,481
)
Purchases of capital stock
(21,778
)
 
(99,217
)
Borrowings under revolving credit facility
567,000

 
94,000

Payments under revolving credit facility
(587,000
)
 
(1,092,000
)
Payments for financing costs
(15,899
)
 
(20,753
)
Net decrease (increase) in restricted cash
39,882

 
415,498

Dividends/distributions paid on common stock
(350,535
)
 
—

Dividends paid on preferred stock
(33,357
)
 
—

Net cash provided by (used for) financing activities
(479,033
)
 
(624,998
)
Effect of exchange rate changes on cash
(7,358
)
 
(3,571
)
Net increase (decrease) in cash and cash equivalents
15,156

 
(222,715
)
Cash and cash equivalents at beginning of period
223,394

 
441,364

Cash and cash equivalents at end of period
$
238,550

 
$
218,649

Supplemental disclosure of cash flow information:
 
 
 
Interest paid
368,437

 
356,421

Income taxes paid
15,353

 
12,769



13
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COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SITE RENTAL REVENUE GROWTH
 
Three Months Ended September 30,
(dollars in millions)
2014
 
2013
Beginning towers as of September 30, 2013
31,619

 
 
Net tower additions/(dispositions)
9,795

 
 
Ending towers as of September 30, 2014
41,414

 
 
 
 
 
 
Reported GAAP site rental revenues
$
752

 
$
621

Site rental straight-line revenues
(47
)
 
(53
)
Site Rental Revenues, as Adjusted(1)
$
705

 
$
567

Cash adjustments:
 
 
 
FX and other
0

 
 
New tower acquisitions and builds
(98
)
 
 
Organic Site Rental Revenues(2)(3)
$
607

 
 
Year-Over-Year Revenue Growth
 
 
 
Reported GAAP site rental revenues
21.1
%
 
 
Site Rental Revenues, as Adjusted
24.3
%
 
 
Organic Site Rental Revenues(4)
7.0
%
 
 

ORGANIC SITE RENTAL REVENUE GROWTH
 
Three Months Ended September 30,
 
2014
New leasing activity
6.3%
Escalators
3.7%
Organic Site Rental Revenue growth, before non-renewals
10.0%
Non-renewals
(3.0)%
Organic Site Rental Revenue Growth(4)
7.0%

(1)
Includes amortization of prepaid rent; see the table “Summary of Prepaid Rent Activity” on page 16 for further details.
(2)
Includes Site Rental Revenues, as Adjusted from the construction of new small cell nodes.
(3)
See definitions provided herein.
(4)
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.

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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SITE RENTAL GROSS MARGIN GROWTH
 
Three Months Ended September 30,
(dollars in millions)
2014
 
2013
Reported GAAP site rental gross margin
$
511

 
$
439

Straight line revenues and expenses, net
(22
)
 
(33
)
Site rental gross margin, as adjusted
$
489

 
$
406

Cash adjustments:
 
 
 
FX and other
(0)

 
 
New tower acquisitions and builds
(56
)
 
 
Organic Site Rental Gross Margin(1)(2)
$
432

 
 
Year-Over-Year Gross Margin Growth
 
 
 
Reported GAAP site rental gross margin
16.4
%
 
 
Site Rental Gross Margin, as Adjusted
20.4
%
 
 
Organic Site Rental Gross Margin(3)
6.5
%
 
 
Year-Over-Year Incremental Margin
 
 
 
Reported GAAP site rental gross margin
54.9
%
 
 
Site Rental Gross Margin, as Adjusted
60.2
%
 
 
Organic Site Rental Gross Margin(4)
66.7
%
 
 

(1)
Includes Site Rental Revenues, as Adjusted, from the construction of new small cell nodes.
(2)
See definitions provided herein.
(3)
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.
(4)
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.


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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


SUMMARY OF SITE RENTAL STRAIGHT-LINE REVENUES AND EXPENSES(1)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(dollars in thousands)
2014
 
2013
 
2014
 
2013
Total site rental straight-line revenue
$
46,752

 
$
53,294

 
$
149,692

 
$
169,612

Total site rental straight-line expenses
24,954

 
20,604

 
78,750

 
61,883


SUMMARY OF PREPAID RENT ACTIVITY(2)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(dollars in thousands)
2014
 
2013
 
2014
 
2013
Prepaid rent received
$
81,240

 
$
63,940

 
$
233,070

 
$
153,630

Amortization of prepaid rent
(27,541
)
 
(17,105
)
 
(69,055
)
 
(47,057
)

SUMMARY OF CAPITAL EXPENDITURES
 
Three Months Ended September 30,
(dollars in thousands)
2014
 
2013
Discretionary:
 
 
 
Purchases of land interests
$
16,460

 
$
17,632

Wireless infrastructure construction and improvements
166,967

 
102,811

Sustaining
20,385

 
10,219

Total
$
203,812

 
$
130,662


(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.

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APPENDIX


PROJECTED REVENUE FROM EXISTING CUSTOMER CONTRACTS(1)
 
Remaining three months
Years Ended December 31,
(dollars in millions)
2014
2015
2016
2017
2018
Site rental revenue (GAAP)
$
750

$
2,967

$
2,976

$
3,000

$
3,024

Site rental straight-line revenue
(45
)
(128
)
(51
)
16

69

Site Rental Revenues, as Adjusted
$
705

$
2,839

$
2,925

$
3,016

$
3,093


PROJECTED GROUND LEASE EXPENSE FROM EXISTING GROUND LEASES(2)
 
Remaining three months
Years Ended December 31,
(as of September 30, 2014; dollars in millions)
2014
2015
2016
2017
2018
Ground lease expense (GAAP)
$
169

$
677

$
683

$
690

$
697

Site rental straight-line expense
(24
)
(90
)
(77
)
(65
)
(55
)
Ground Lease Expense, as Adjusted
$
144

$
588

$
606

$
625

$
642


ANNUALIZED CASH SITE RENTAL REVENUE AT TIME OF RENEWAL(3)
 
Remaining three months
Years Ended December 31,
(as of September 30, 2014; dollars in millions)
2014
2015
2016
2017
2018
AT&T
$
3

$
27

$
46

$
21

$
40

Sprint(4)
5

27

43

40

39

T-Mobile
2

13

33

25

33

Verizon
2

11

12

16

18

Optus
—

2

—

—

—

VHA
—

1

7

10

2

Telstra
—

2

4

2

1

All Others Combined
10

46

38

29

31

Total
$
23

$
129

$
184

$
143

$
164


(1)
Based on existing contracts as of September 30, 2014. 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. Assumes a US dollar to Australian dollar exchange rate of 0.93 US dollar to 1.0 Australian dollar.
(2)
Based on existing ground leases as of September 30, 2014. CPI-linked leases are assumed to escalate at 3% per annum. Assumes a US dollar to Australian dollar exchange rate of 0.93 US dollar to 1.0 Australian dollar.
(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."


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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
$35-$45
$60-$70
$25-$35
$20-$30
$35-$45
$175-$225

TOTAL SITE RENTAL REVENUES FROM LEAP, METROPCS AND CLEARWIRE BY LEASE MATURITY(1)
(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,
2013
2012
2011
2010
2009
1.7%
2.2%
1.9%
2.0%
2.6%



CUSTOMER OVERVIEW
(as of September 30, 2014)
Percentage of Q3 2014 LQA Site
Rental Revenues
Weighted Average Current
Term Remaining(3)
Long-Term Credit Rating
(S&P / Moody’s)
AT&T
29
%
8

A- / A3
T-Mobile
23
%
7

BB
Sprint
21
%
6

BB- / Ba3
Verizon
15
%
9

BBB+ / Baa1
Optus Communications
1
%
15

A+ / Aa3
VHA
1
%
5

A- / A3(4)
Telstra
1
%
12

A / A2
All Others Combined
8
%
4

N/A
Total / Weighted Average
100
%
7



(1)
Figures are approximate and based on run-rate site rental revenues as of September 30, 2014.
(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)
Weighted by site rental revenue contributions; excludes renewals at the customers' option.
(4)
Vodafone Hutchison Australia ("VHA") is a joint venture between Vodafone Group Plc and Hutchison Telecommunications Australia, a subsidiary of Hutchison Whompoa; Vodafone Group Plc and Hutchison Whompoa each are rated A- and A3 by S&P and Moody's, respectively, as of September 30, 2014.

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ASSET PORTFOLIO OVERVIEW
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APPENDIX

SUMMARY OF TOWER PORTFOLIO BY VINTAGE
(as of September 30, 2014; 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.

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CAPITALIZATION OVERVIEW
APPENDIX


PORTFOLIO OVERVIEW(1)
(as of September 30, 2014; 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.


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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


DISTRIBUTION OF TOWER TENANCY (as of September 30, 2014)
PERCENTAGE OF TOWERS BY TENANTS PER TOWER(1)
U.S. PORTFOLIO
AUSTRALIA PORTFOLIO
Average: 2.3
Average: 2.3
 
 
GEOGRAPHIC TOWER DISTRIBUTION (as of September 30, 2014)(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.

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Crown Castle International Corp.
Third Quarter 2014
COMPANY
OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


U.S. GROUND INTEREST OVERVIEW
(as of September 30, 2014;
dollars in millions)
LQA Site Rental Revenue
Percentage of U.S. LQA Site Rental Revenue
LQA Site Rental Gross Margin
Percentage of U.S. LQA Site Rental Gross Margin
Number of U.S. Towers(1)
Percentage of U.S. Towers
Weighted Average Term Remaining (by years)(2)
Less than 10 years
$
342

13
%
$
192

11
%
5,816

15
%
 
10 to 20 years
545

21
%
296

16
%
10,322

26
%
 
Greater 20 years
1,054

40
%
685

38
%
15,609

39
%
 
Total leased
$
1,941

74
%
$
1,173

65
%
31,747

80
%
31

 
 
 
 
 
 
 
 
Owned
683

26
%
629

35
%
7,897

20
%
 
Total / Average
$
2,624

100
%
$
1,802

100
%
39,644

100
%
 


AUSTRALIA GROUND INTEREST OVERVIEW
(as of September 30, 2014;
dollars in millions)
LQA Site Rental Revenue
Percentage of Australia LQA Site Rental Revenue
LQA Site Rental
Gross Margin
Percentage of Australia LQA Site Rental Gross Margin
Number of Australia Towers(1)
Percentage of Australia Towers
Weighted Average Term Remaining (by years)(2)
Less than 10 years
$
42

32
%
$
28

28
%
561

32
%
 
10 to 20 years
42

32
%
32

32
%
547

31
%
 
Greater 20 years
35

27
%
27

27
%
520

29
%
 
Total leased
$
119

90
%
$
87

87
%
1,628

92
%
18

 
 
 
 
 
 
 
 
Owned
13

10
%
13

13
%
141

8
%
 
Total / Average
$
132

100
%
$
100

100
%
1,769

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.

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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


U.S. GROUND INTEREST ACTIVITY
(dollars in millions)
Three Months Ended September 30, 2014
Nine Months Ended September 30, 2014
Ground Extensions Under Crown Castle Towers:
 
 
  Number of ground leases extended
453

1,152
  Average number of years extended
32
28
Percentage increase in consolidated cash ground lease expense due to extension activities(1)
0.1
%
0.4
%
 
 
 
Ground Purchases Under Crown Castle Towers:
 
 
  Number of ground leases purchased
143

394
  Land lease purchases (including capital expenditures, acquisitions and capital leases)
$
29

$
91

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

1
%

AUSTRALIA GROUND INTEREST ACTIVITY
(dollars in millions)
Three Months Ended September 30, 2014
Nine Months Ended September 30, 2014
Ground Extensions Under Crown Castle Towers:
 
 
  Number of ground leases extended
51

81

  Average number of years extended
13

14

Percentage increase in consolidated cash ground lease expense due to extension activities(1)
Not Meaningful

Not Meaningful

 
 
 
Ground Purchases Under Crown Castle Towers:
 
 
  Number of ground leases purchased
2

8

  Land lease purchases (including capital expenditures, acquisitions and capital leases)
$
1

$
5

Percentage of consolidated site rental gross margin from towers residing on land purchased
Not Meaningful

Not Meaningful


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)
14
6
7%
8

(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.



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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



CAPITALIZATION OVERVIEW
(dollars in millions)
Face Value as Reported 9/30/14
Fixed vs. Floating
Secured vs. Unsecured
Interest Rate(1)
Net Debt to LQA EBITDA(2)
Maturity
Cash
$
239

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

Fixed
Secured
5.98%
 
Various(8)
Senior Secured Tower Revenue Notes, Series 2010-4-2010-6(3)
1,550

Fixed
Secured
4.48%
 
Various(8)
2012 Secured Notes(4)
1,500

Fixed
Secured
3.36%
 
2017/2023
Senior Secured Notes, Series 2009-1(5)
166

Fixed
Secured
7.41%
 
Various(8)
WCP Secured Wireless Site Contracts Revenue Notes, Series 2010-1(6)
264

Fixed
Secured
5.67%
 
2040
Subtotal
$
5,079

 
 
4.78%
2.4x
 
Revolving Credit Facility(7)
354

Floating
Secured
1.91%
 
2018/2019
Term Loan A
650

Floating
Secured
1.90%
 
2018/2019
Term Loan B
2,843

Floating
Secured
3.00%
 
2019/2021(9)
Total CCOC Facility Debt
$
3,847

 
 
2.71%
1.8x
 
4.875% Senior Notes
850

Fixed
Unsecured
4.88%
 
2022
5.250% Senior Notes
1,650

Fixed
Unsecured
5.25%
 
2023
Capital Leases & Other Debt
147

Various
Various
Various
 
Various
Total HoldCo and other Debt
$
2,647

 
 
5.12%
1.2x
 
Total Net Debt
$
11,335

 
 
4.16%
5.3x
 
Preferred Stock, at liquidation value
978

 
 
 
 
 
Market Capitalization(10)
26,886

 
 
 
 
 
Firm Value(11)
$
39,198

 
 
 
 
 

(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, and 2010-3 and Senior Secured Tower Revenue Notes, 2010-4, 2010-5, and 2010-6 (“2010 Tower Revenue Notes”) are not paid in full on or prior to 2015, 2017 and 2020, 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 additional interest (of an additional approximately 5% per annum) will accrue on the respective 2010 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, 2010-4, 2010-5, and 2010-6 consist of three series of notes with principal amounts of $250 million, $300 million and $1.0 billion, having anticipated repayment dates in 2015, 2017 and 2020, 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 $96 million of principal as of September 30, 2014 that amortizes through 2019, and $70 million of principal as of September 30, 2014 that amortizes during the period beginning in 2019 and ending in 2029.
(6)
The anticipated repayment date is 2015 for each class of the WCP Secured Wireless Site Contracts Revenue Notes, Series 2010-1 ("WCP Securitized Notes"). If the WCP Securitized Notes are not repaid in full by their anticipated repayment dates, the applicable interest rate increases by an additional approximately 5% per annum. If the WCP Securitized Notes are not repaid in full by their rapid amortization date of 2017, monthly principal payments commence using the excess cash flows of the issuers of the WCP Securitized Notes.
(7)
As of September 30, 2014, the undrawn availability under the $1.5 billion Revolving Credit Facility is $1.1 billion.
(8)
Notes are prepayable at par if voluntarily repaid six months or less prior to maturity; earlier prepayment may require additional consideration.
(9)
As of September 30, 2014, approximately $570 million of the Term Loan B have 101 soft call until the next call date.
(10)
Market capitalization calculated based on $80.53 closing price and 333.9 million shares outstanding as of September 30, 2014.
(11)
Represents the sum of net debt, preferred stock (at liquidation value) and market capitalization.

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Third Quarter 2014
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.

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OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



LIQUIDITY OVERVIEW
(dollars in thousands)
September 30, 2014
Cash and cash equivalents(1)
$
238,550

Undrawn revolving credit facility availability(2)
1,146,000

Restricted cash
142,824

Debt and other long-term obligations
11,573,678

Total equity
6,862,745


(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").

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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 September 30, 2014
Maintenance Financial Covenants(2)
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
 
4.2x
2012 Credit Facility
CCOC
Consolidated Interest Coverage Ratio
≥ 2.50x
 
6.0x
 
 
 
 
 
 
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
 
 5.6x
5.25% Senior Notes
CCIC
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 7.00x
 
 5.6x
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
 
4.2x
 
 
 
 
 
 
Financial covenants restricting ability to incur additional debt
4.875% Senior Notes
CCIC
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 7.00x
 
 5.6x
5.25% Senior Notes
CCIC
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 7.00x
 
 5.6x
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
(3) 
4.2x
2012 Credit Facility
CCOC
Holdings Leverage Ratio
≤ 7.00x
(4) 
 5.6x
2012 Credit Facility
CCOC
Consolidated Interest Coverage Ratio
≥ 2.50x
 
6.0x
2012 Secured Notes
CC Holdings GS V LLC and Crown Castle GS III Corp.
Debt to Adjusted Consolidated Cash Flow Ratio
≤ 3.50x
 
3.9x
 
 
 
 
 
 
Financial covenants restricting ability to make investments
2012 Credit Facility
CCOC
Total Net Leverage Ratio
≤ 5.50x
 
4.2x

(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.

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Third Quarter 2014
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 September 30, 2014
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) 
4.3x
WCP Securitized Notes
Certain WCP Subsidiaries
Debt Service Coverage Ratio
> 1.30x
(2) 
1.4x
2009 Securitized Notes
Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries
Debt Service Coverage Ratio
> 1.30x
(2) 
4.5x
 
 
 
 
 
 
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) 
4.3x
WCP Securitized Notes
Certain WCP Subsidiaries
Debt Service Coverage Ratio
≥ 1.50x
(3) 
1.4x
2009 Securitized Notes
Pinnacle Towers Acquisition Holdings LLC and its Subsidiaries
Debt Service Coverage Ratio
≥ 2.34x
(3) 
4.5x

(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, WCP Securitized 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, 1.15x or 1.15x, in each case as described under the indentures for the 2010 Tower Revenue Notes, WCP Securitized Notes, or 2009 Securitized Notes, respectively.
(3)
Rating Agency Confirmation (as defined in the respective debt agreement) is also required.

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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


INTEREST RATE SENSITIVITY(1)
 
Remaining three months,
Years Ended December 31,
(as of September 30, 2014; dollars in millions)
2014
2015
2016
Fixed Rate Debt:
 
 
 
Face Value of Principal Outstanding(2)
$
7,570

$
7,537

$
7,518

Current Interest Payment Obligations(3)
93

369

368

Effect of 0.125% Change in Interest Rates(4)
—

1

2

Floating Rate Debt:
 
 
 
Face Value of Principal Outstanding(2)
$
3,835

$
3,790

$
3,728

Current Interest Payment Obligations(5)
26

107

136

Effect of 0.125% Change in Interest Rates(6)
—

2

2


(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 September 30, 2014. 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.



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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.
During the first quarter of 2014, Crown Castle updated its definitions of FFO and AFFO. The updated definitions of FFO and AFFO are intended to reflect the recurring nature of Crown Castle's site rental business and assist in comparing Crown Castle’s performance with the performance of its public tower company peers. Under the updated calculation of AFFO, Crown Castle reflects the benefit of prepaid rent from customers over the weighted-average life of customer contracts rather than in the period in which the prepaid rent was received. The updates to the definition of FFO were primarily made to present the periods shown in a manner which is consistent with our commencement of operations as a REIT on January 1, 2014. These measures are not intended to replace financial performance measures determined in accordance with GAAP. Unless otherwise noted, FFO and AFFO as set forth in this Supplement are presented based on the updated definitions. Crown Castle has provided reconciliations of the updated definitions of FFO and AFFO to the prior definitions on pages 35-37 of this Supplement.
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, 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.

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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



DEFINITIONS (continued)

FFO, as previously defined. Crown Castle defines FFO, as previously defined, as FFO plus non cash portion of tax provision, less asset write-down charges and non controlling interests.
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, 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, as previously defined. Crown Castle defines AFFO, as previously defined, as AFFO plus prepaid rent received less amortization of prepaid rent.
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.
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.

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FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



Adjusted EBITDA for the three and nine months ended September 30, 2014 and 2013 is computed as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(dollars in thousands)
2014
 
2013
 
2014

2013
Net income (loss)
$
108,037

 
$
46,468

 
$
246,187

 
$
116,582

Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
 
 
Asset write-down charges
5,275

 
3,893

 
11,144

 
10,705

Acquisition and integration costs
4,068

 
4,369

 
28,924

 
13,186

Depreciation, amortization and accretion
254,862

 
195,408

 
759,288

 
572,518

Amortization of prepaid lease purchase price adjustments
4,988

 
3,870

 
14,546

 
11,595

Interest expense and amortization of deferred financing costs(1)
141,287

 
142,016

 
432,221

 
446,641

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

 
1

 
44,629

 
36,487

Interest income
(192
)
 
(236
)
 
(554
)
 
(861
)
Other income (expense)
678

 
631

 
9,477

 
753

Benefit (provision) for income taxes
482

 
33,959

 
86

 
88,254

Stock-based compensation expense
13,470

 
10,178

 
44,620

 
29,885

Adjusted EBITDA(2)
$
532,955

 
$
440,557

 
$
1,590,568

 
$
1,325,745


Adjusted EBITDA for the three months and years ended December 31, 2013 and 2012 is computed as follows:
 
Three Months Ended December 31,
 
Years Ended December 31,
(dollars in thousands)
2013
 
2012
 
2013
 
2012
Net income (loss)
$
(22,680
)
 
$
(9,644
)
 
$
93,901

 
$
200,888

Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
 
 
Asset write-down charges
4,158

 
7,298

 
14,863

 
15,548

Acquisition and integration costs
12,820

 
6,186

 
26,005

 
18,298

Depreciation, amortization and accretion
201,697

 
175,843

 
774,215

 
622,592

Amortization of prepaid lease purchase price adjustments
3,878

 
3,866

 
15,473

 
14,166

Interest expense and amortization of deferred financing costs(1)
142,989

 
173,683

 
589,630

 
601,044

Gains (losses) on retirement of long-term obligations
641

 
117,388

 
37,127

 
131,974

Interest income
(494
)
 
(3,529
)
 
(1,355
)
 
(4,556
)
Other income (expense)
3,117

 
1,433

 
3,872

 
5,392

Benefit (provision) for income taxes
110,374

 
(70,623
)
 
198,628

 
(100,061
)
Stock-based compensation expense
11,904

 
12,018

 
41,788

 
47,382

Adjusted EBITDA(2)
$
468,404

 
$
413,919

 
$
1,794,147


$
1,552,667


(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 Adjusted EBITDA definition which are not applicable for the periods shown.














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ASSET PORTFOLIO OVERVIEW
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APPENDIX



Adjusted EBITDA for the three months ended September 30, 2014 is computed as follows:
 
Three Months Ended September 30, 2014
(dollars in thousands)
CCUSA
 
CCAL
 
Eliminations
 
Consolidated
Total
Net income (loss)
$
103,017

 
$
5,020

 
$
—

 
$
108,037

Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
 
 
Asset write-down charges
4,932

 
343

 
—

 
5,275

Acquisition and integration costs
4,068

 
—

 
—

 
4,068

Depreciation, amortization and accretion
247,206

 
7,656

 
—

 
254,862

Amortization of prepaid lease purchase price adjustments
4,988

 
—

 
—

 
4,988

Interest expense and amortization of deferred financing costs(1)
141,287

 
3,862

 
(3,862
)
 
141,287

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

 
—

 
—

 
—

Interest income
(107
)
 
(85
)
 
—

 
(192
)
Other income (expense)
(3,168
)
 
(16
)
 
3,862

 
678

Benefit (provision) for income taxes
(1,977
)
 
2,459

 
—

 
482

Stock-based compensation expense
13,358

 
112

 
—

 
13,470

Adjusted EBITDA(2)
$
513,604

 
$
19,351

 
$
—

 
$
532,955


Adjusted EBITDA for the quarter ending December 31, 2014 and the year ending December 31, 2014 is forecasted as follows:
 
Q4 2014
 
Full Year 2014
 
Full Year 2015
(dollars in millions)
Outlook
 
Outlook
 
Outlook
Net income (loss)
$97 to $130
 
$342 to $375
 
$428 to $512
Adjustments to increase (decrease) net income (loss):
 
 
 
 
 
Asset write-down charges
$4 to $6
 
$15 to $17
 
$16 to $26
Acquisition and integration costs
$2 to $6
 
$31 to $35
 
$0 to $0
Depreciation, amortization and accretion
$252 to $257
 
$1,011 to $1,016
 
$1,007 to $1,027
Amortization of prepaid lease purchase price adjustments
$4 to $6
 
$18 to $20
 
$19 to $21
Interest expense and amortization of deferred financing costs(1)
$138 to $143
 
$571 to $576
 
$521 to $536
Gains (losses) on retirement of long-term obligations
$0 to $0
 
$45 to $45
 
$0 to $0
Interest income
$(1) to $1
 
$(2) to $0
 
$(2) to $0
Other income (expense)
$(1) to $1
 
$9 to $11
 
$1 to $3
Benefit (provision) for income taxes
$1 to $5
 
$1 to $5
 
$7 to $15
Stock-based compensation expense
$14 to $16
 
$59 to $61
 
$65 to $70
Adjusted EBITDA(2)
$538 to $543
 
$2,128 to $2,133
 
$2,126 to $2,146

(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 Adjusted EBITDA definition which are not applicable for the periods shown.


33
Crown Castle International Corp.
Third Quarter 2014
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



The components of interest expense and amortization of deferred financing costs for the quarters ending September 30, 2014 and 2013 are as follows:
 
Three Months Ended September 30,
(dollars in thousands)
2014
 
2013
Interest expense on debt obligations
$
121,450


$
121,246

Amortization of deferred financing costs
5,516

 
5,366

Amortization of adjustments on long-term debt
(892
)
 
(971
)
Amortization of interest rate swaps(1)
15,551

 
16,222

Other, net
(338
)
 
153

Interest expense and amortization of deferred financing costs
$
141,287

 
$
142,016



The components of interest expense and amortization of deferred financing costs for the quarter ending December 31, 2014 and the year ending December 31, 2014 are forecasted as follows:
 
Q4 2014
 
Full Year 2014
 
Full Year 2015
(dollars in millions)
Outlook
 
Outlook
 
Outlook
Interest expense on debt obligations
$121 to $123
 
$492 to $494
 
$488 to $498
Amortization of deferred financing costs
$6 to $7
 
$22 to $23
 
$21 to $23
Amortization of adjustments on long-term debt
$(1) to $0
 
$(4) to $(3)
 
$(4) to $(2)
Amortization of interest rate swaps (1)
$14 to $16
 
$62 to $64
 
$16 to $21
Other, net
$0 to $0
 
$(1) to $(1)
 
$(2) to $0
Interest expense and amortization of deferred financing costs
$138 to $143
 
$571 to $576
 
$521 to $536

(1)
Relates to the amortization of interest rate swaps; the swaps were cash settled in prior periods.



34
Crown Castle International Corp.
Third Quarter 2014
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



FFO and AFFO for the three and nine months ended September 30, 2014 and 2013 are computed as follows:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(dollars in thousands, except share and per share amounts)
2014
 
2013
 
2014
 
2013
Net income
$
108,037

 
$
46,468

 
$
246,187

 
$
116,582

Real estate related depreciation, amortization and accretion
249,994

 
192,707

 
743,898

 
562,501

Asset write-down charges
5,275

 
3,893

 
11,144

 
10,705

Adjustment for noncontrolling interest(1)
(1,100
)
 
(632
)
 
(3,744
)
 
(2,925
)
Dividends on preferred stock
(10,997
)
 
—

 
(32,991
)
 
—

FFO(3)
$
351,211

 
$
242,436

 
$
964,496

 
$
686,862

 
 
 
 
 
 
 
 
FFO (from above)
$
351,211

 
$
242,436

 
$
964,496

 
$
686,862

Adjustments to increase (decrease) FFO:
 
 
 
 
 
 
 
Straight-line revenue
(46,752
)
 
(53,294
)
 
(149,692
)
 
(169,612
)
Straight-line expense
24,954

 
20,604

 
78,750

 
61,883

Stock-based compensation expense
13,470

 
10,178

 
44,620

 
29,885

Non-cash portion of tax provision(4)
(2,628
)
 
32,510

 
(7,513
)
 
83,318

Non-real estate related depreciation, amortization and accretion
4,868

 
2,701

 
15,389

 
10,017

Amortization of non-cash interest expense
19,837

 
20,771

 
61,322

 
78,242

Other (income) expense
678

 
631

 
9,477

 
753

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

 
1

 
44,629

 
36,487

Acquisition and integration costs
4,068

 
4,369

 
28,924

 
13,186

Adjustment for noncontrolling interest(1)
1,100

 
632

 
3,744

 
2,925

Capital improvement capital expenditures
(7,911
)
 
(3,741
)
 
(16,240
)
 
(9,454
)
Corporate capital expenditures
(12,474
)
 
(6,478
)
 
(28,216
)
 
(17,724
)
AFFO(2)
$
350,418

 
$
271,319

 
$
1,049,687

 
$
806,768

Weighted average common shares outstanding — diluted
333,241

 
291,378

 
333,020

 
292,043

AFFO per share(2)
$
1.05

 
$
0.93

 
$
3.15

 
$
2.76

 
 
 
 
 
 
 
 
AFFO (from above)
$
350,418

 
$
271,319

 
$
1,049,687

 
$
806,768

Prepaid rent received
81,240

 
63,940

 
233,070

 
153,630

Amortization of prepaid rent
(27,541
)
 
(17,105
)
 
(69,055
)
 
(47,057
)
AFFO, as previously defined(2)
$
404,116

 
$
318,154

 
$
1,213,702

 
$
913,340


(1)
Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs.
(2)
See definitions herein. See also “Definitions of Non-GAAP Financial Measures and Other Calculations” herein for a discussion of the definitions of FFO and AFFO.
(3)
FFO, as previously defined, for Q3 and year to date 2014 was $344.4 million and $949.6 million respectively, which is exclusive of the net impact from the update of the definition of $(6.8) million and $(14.9) million, respectively, which amount includes the adjustment for non-cash portion of tax provision and excludes the adjustments for asset write-down charges and noncontrolling interests. FFO, as previously defined, for Q3 and year to date 2013 was previously reported as $271.7 million and $762.4 million, respectively, which is exclusive of the net impact from the update of the definition of $29.3 million and $75.5 million, respectively, which amount includes the adjustment for non-cash portion of tax provision and excludes the adjustments for asset write down charges and noncontrolling interests.
(4)
Adjusts the income tax provision for 2013 to reflect our estimate of the cash taxes had we been a REIT, which predominately relates to foreign taxes paid. As a result, income tax expense (benefit) is lower by the amount of the adjustment.



35
Crown Castle International Corp.
Third Quarter 2014
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX


FFO and AFFO for the years ended December 31, 2013 and 2012 are computed as follows:
 
Years Ended December 31,
(in thousands of dollars, except share and per share amounts)
2013
 
2012
Net income
$
93,901

 
$
200,888

Real estate related depreciation, amortization and accretion
761,070

 
601,372

Asset write-down charges
14,863

 
15,548

Adjustment for noncontrolling interest(1)
(3,790
)
 
(12,304
)
Dividends on preferred stock
—

 
(2,481
)
FFO(3)
$
866,043

 
$
803,023

 
 
 
 
FFO (from above)
$
866,043

 
$
803,023

Adjustments to increase (decrease) FFO:
 
 
 
Straight-line revenue
(218,631
)
 
(251,327
)
Straight-line expense
80,953

 
54,069

Stock-based compensation expense
41,788

 
47,382

Non-cash portion of tax provision(2)
191,729

 
(106,742
)
Non-real estate related depreciation, amortization and accretion
13,145

 
21,220

Amortization of non-cash interest expense
99,244

 
109,337

Other (income) expense
3,872

 
5,392

Gains (losses) on retirement of long-term obligations
37,127

 
131,974

Net gain (loss) on interest rate swaps
—

 
—

Acquisition and integration costs
26,005

 
18,298

Adjustment for noncontrolling interest(1)
3,790

 
12,304

Capital improvement capital expenditures
(19,312
)
 
(21,647
)
Corporate capital expenditures
(28,409
)
 
(15,459
)
AFFO(3)
$
1,097,347

 
$
807,823

Weighted average common shares outstanding — diluted
299,293

 
291,270

AFFO per share(3)
$
3.67

 
$
2.77

 
 
 
 
AFFO (from above)
$
1,097,347

 
$
807,823

Prepaid rent received
241,451

 
117,419

Amortization of prepaid rent
(66,728
)
 
(41,592
)
Dividends on preferred stock
—

 
2,481

AFFO, as previously defined(3)
$
1,272,070

 
$
886,131


(1)
Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs.
(2)
Adjusts the income tax provision to reflect our estimate of the cash taxes had we been a REIT, which predominately relates to foreign taxes paid. 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 Terms" herein for a discussion of the definitions of FFO and AFFO.

36
Crown Castle International Corp.
Third Quarter 2014
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



FFO and AFFO for the three months ended December 31, 2013 and 2012 are computed as follows:
 
Three Months Ended December 31,
(in thousands of dollars, except share and per share amounts)
2013
 
2012
Net income
$
(22,681
)
 
$
(9,644
)
Real estate related depreciation, amortization and accretion
198,569

 
170,484

Asset write-down charges
4,158

 
7,299

Adjustment for noncontrolling interest(1)
(866
)
 
(9,861
)
FFO(3)
$
179,181

 
$
158,278

 
 
 
 
FFO (from above)
$
179,181

 
$
158,278

Adjustments to increase (decrease) FFO:
 
 
 
Straight-line revenue
(49,019
)
 
(62,595
)
Straight-line expense
19,071

 
16,087

Stock-based compensation expense
11,904

 
12,018

Non-cash portion of tax provision(2)
108,411

 
(72,538
)
Non-real estate related depreciation, amortization and accretion
3,128

 
5,359

Amortization of non-cash interest expense
21,003

 
35,690

Other (income) expense
3,117

 
1,433

Gains (losses) on retirement of long-term obligations
641

 
117,388

Acquisition and integration costs
12,820

 
6,186

Adjustment for noncontrolling interest(1)
866

 
9,861

Capital improvement capital expenditures
(9,858
)
 
(10,928
)
Corporate capital expenditures
(10,685
)
 
(7,174
)
AFFO(3)
$
290,579

 
$
209,064

Weighted average common shares outstanding — diluted
319,634

 
292,470

AFFO per share(3)
$
0.91

 
$
0.71

 
 
 
 
AFFO (from above)
$
290,579

 
$
209,064

Prepaid rent received
87,822

 
46,548

Amortization of prepaid rent
(19,671
)
 
(12,582
)
AFFO, as previously defined(3)
$
358,730

 
$
243,031


(1)
Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs.
(2)
Adjusts the income tax provision to reflect our estimate of the cash taxes had we been a REIT, which predominately relates to foreign taxes paid. 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 Terms" herein for a discussion of the definitions of FFO and AFFO.



37
Crown Castle International Corp.
Third Quarter 2014
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



FFO and AFFO for the quarter ending December 31, 2014 and the years ending December 31, 2014 and December 31, 2015 are forecasted as follows:
 
Q4 2014
 
Full Year 2014
 
Full Year 2015
(in millions of dollars, except share and per share amounts)
Outlook
 
Outlook
 
Outlook
Net income
$97 to $130
 
$342 to $375
 
$428 to $512
Real estate related depreciation, amortization and accretion
$248 to $251
 
$992 to $995
 
$990 to $1,005
Asset write-down charges
$4 to $6
 
$15 to $17
 
$16 to $26
Adjustment for noncontrolling interest(1)
$(2) to $2
 
$(6) to $(2)
 
$(6) to $2
Dividends on preferred stock
$(11) to $(11)
 
$(44) to $(44)
 
$(44) to $(44)
FFO(3)
$353 to $358
 
$1,317 to $1,322
 
$1,429 to $1,449
 
 
 
 
 
 
FFO (from above)
$353 to $358
 
$1,317 to $1,322
 
$1,429 to $1,449
Adjustments to increase (decrease) FFO:
 
 
 
 
 
Straight-line revenue
$(49) to $(44)
 
$(198) to $(193)
 
$(144) to $(129)
Straight-line expense
$23 to $28
 
$102 to $107
 
$87 to $102
Stock-based compensation expense
$14 to $16
 
$59 to $61
 
$65 to $70
Non-cash portion of tax provision
$(2) to $3
 
$(10) to $(5)
 
$(5) to $10
Non-real estate related depreciation, amortization and accretion
$4 to $6
 
$19 to $21
 
$17 to $22
Amortization of non-cash interest expense
$19 to $23
 
$79 to $83
 
$31 to $42
Other (income) expense
$(1) to $1
 
$9 to $11
 
$1 to $3
Gains (losses) on retirement of long-term obligations
$0 to $0
 
$45 to $45
 
$0 to $0
Acquisition and integration costs
$2 to $6
 
$31 to $35
 
$0 to $0
Adjustment for noncontrolling interest(1)
$2 to $(2)
 
$6 to $2
 
$6 to $(2)
Capital improvement capital expenditures
$(15) to $(13)
 
$(32) to $(30)
 
$(38) to $(33)
Corporate capital expenditures
$(18) to $(16)
 
$(47) to $(45)
 
$(47) to $(42)
AFFO(3)
$346 to $351
 
$1,396 to $1,401
 
$1,437 to $1,457
Weighted-average common shares outstanding—diluted(2)
333.2
 
333.2
 
333.2
AFFO per share(3)
$1.04 to $1.05
 
$4.19 to $4.20
 
$4.31 to $4.37

(1)
Inclusive of the noncontrolling interest related to real estate related depreciation, amortization and accretion and asset write-downs.
(2)
Based on 333.2 million diluted shares outstanding as of September 30, 2014.
(3)
See definitions herein. See also “Definitions of Non-GAAP Financial Measures and Other Calculations” herein for a discussion of the definitions of FFO and AFFO.





38
Crown Castle International Corp.
Third Quarter 2014
COMPANY OVERVIEW
FINANCIALS & METRICS
ASSET PORTFOLIO OVERVIEW
CAPITALIZATION OVERVIEW
APPENDIX



Net Debt to Last Quarter Annualized EBITDA calculation:
 
Nine Months Ended September 30,
(dollars in millions)
2014
2013
Total face value of debt
$
11,573.1

$
10,768.5

Ending cash and cash equivalents
238.6

218.6

Total Net Debt
$
11,334.5

$
10,549.9

 
 
 
Adjusted EBITDA for the three months ended September 30,
$
533.0

$
440.6

Last quarter annualized adjusted EBITDA
2,131.8

1,762.2

Net Debt to Last Quarter Annualized Adjusted EBITDA
5.3x

6.0x


Cash Interest Coverage Ratio Calculation:
 
Three Months Ended September 30,
(dollars in thousands)
2014
 
2013
Adjusted EBITDA
$
532,955

 
$
440,557

Interest expense on debt obligations
121,450

 
121,246

Interest Coverage Ratio
4.4x

 
3.6x




AFFO Payout Ratio Calculation:
 
Three Months Ended September 30,
(per share)
2014
Dividend per share
$
0.35

AFFO per share
$
1.05

AFFO Payout Ratio
33
%


39

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