|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
76-0470458
|
||
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
||
|
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
CCI
|
New York Stock Exchange
|
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value
|
CCI.PRA
|
New York Stock Exchange
|
|
|
|
|
Page
|
|
|||
ITEM 1.
|
|
||
|
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
ITEM 2.
|
|
||
ITEM 3.
|
|
||
ITEM 4.
|
|
||
|
|||
ITEM 1.
|
LEGAL PROCEEDINGS
|
|
|
ITEM 1A.
|
|
||
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
|
ITEM 6.
|
|
||
EXHIBIT INDEX
|
|
||
SIGNATURES
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
310
|
|
|
$
|
196
|
|
Restricted cash
|
157
|
|
|
137
|
|
||
Receivables, net
|
495
|
|
|
596
|
|
||
Prepaid expenses
|
107
|
|
|
107
|
|
||
Other current assets
|
178
|
|
|
168
|
|
||
Total current assets
|
1,247
|
|
|
1,204
|
|
||
Deferred site rental receivables
|
1,428
|
|
|
1,424
|
|
||
Property and equipment, net of accumulated depreciation of $9,953 and $9,668, respectively
|
14,815
|
|
|
14,666
|
|
||
Operating lease right-of-use assets
|
6,198
|
|
|
6,133
|
|
||
Goodwill
|
10,078
|
|
|
10,078
|
|
||
Other intangible assets, net
|
4,734
|
|
|
4,836
|
|
||
Other assets, net
|
116
|
|
|
116
|
|
||
Total assets
|
$
|
38,616
|
|
|
$
|
38,457
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
296
|
|
|
$
|
334
|
|
Accrued interest
|
119
|
|
|
169
|
|
||
Deferred revenues
|
741
|
|
|
657
|
|
||
Other accrued liabilities
|
264
|
|
|
361
|
|
||
Current maturities of debt and other obligations
|
949
|
|
|
100
|
|
||
Current portion of operating lease liabilities
|
300
|
|
|
299
|
|
||
Total current liabilities
|
2,669
|
|
|
1,920
|
|
||
Debt and other long-term obligations
|
17,746
|
|
|
18,021
|
|
||
Operating lease liabilities
|
5,567
|
|
|
5,511
|
|
||
Other long-term liabilities
|
2,513
|
|
|
2,516
|
|
||
Total liabilities
|
28,495
|
|
|
27,968
|
|
||
Commitments and contingencies (note 9)
|
|
|
|
||||
CCIC stockholders' equity:
|
|
|
|
||||
Common stock, $0.01 par value; 600 shares authorized; shares issued and outstanding: March 31, 2020—417 and December 31, 2019—416
|
4
|
|
|
4
|
|
||
6.875% Mandatory Convertible Preferred Stock, Series A, $0.01 par value; 20 shares authorized; shares issued and outstanding: March 31, 2020—2 and December 31, 2019—2; aggregate liquidation value: March 31, 2020—$1,650 and December 31, 2019—$1,650
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
17,835
|
|
|
17,855
|
|
||
Accumulated other comprehensive income (loss)
|
(6
|
)
|
|
(5
|
)
|
||
Dividends/distributions in excess of earnings
|
(7,712
|
)
|
|
(7,365
|
)
|
||
Total equity
|
10,121
|
|
|
10,489
|
|
||
Total liabilities and equity
|
$
|
38,616
|
|
|
$
|
38,457
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
(As Restated)
|
||||
Net revenues:
|
|
|
|
||||
Site rental
|
$
|
1,310
|
|
|
$
|
1,242
|
|
Services and other
|
111
|
|
|
166
|
|
||
Net revenues
|
1,421
|
|
|
1,408
|
|
||
Operating expenses:
|
|
|
|
||||
Costs of operations(a):
|
|
|
|
||||
Site rental
|
375
|
|
|
361
|
|
||
Services and other
|
99
|
|
|
124
|
|
||
Selling, general and administrative
|
175
|
|
|
152
|
|
||
Asset write-down charges
|
4
|
|
|
6
|
|
||
Acquisition and integration costs
|
5
|
|
|
4
|
|
||
Depreciation, amortization and accretion
|
399
|
|
|
394
|
|
||
Total operating expenses
|
1,057
|
|
|
1,041
|
|
||
Operating income (loss)
|
364
|
|
|
367
|
|
||
Interest expense and amortization of deferred financing costs
|
(175
|
)
|
|
(168
|
)
|
||
Gains (losses) on retirement of long-term obligations
|
—
|
|
|
(1
|
)
|
||
Interest income
|
1
|
|
|
2
|
|
||
Other income (expense)
|
—
|
|
|
(1
|
)
|
||
Income (loss) before income taxes
|
190
|
|
|
199
|
|
||
Benefit (provision) for income taxes
|
(5
|
)
|
|
(6
|
)
|
||
Net income (loss) attributable to CCIC stockholders
|
185
|
|
|
193
|
|
||
Dividends/distributions on preferred stock
|
(28
|
)
|
|
(28
|
)
|
||
Net income (loss) attributable to CCIC common stockholders
|
$
|
157
|
|
|
$
|
165
|
|
Net income (loss)
|
$
|
185
|
|
|
$
|
193
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Foreign currency translation adjustments
|
(1
|
)
|
|
—
|
|
||
Total other comprehensive income (loss)
|
(1
|
)
|
|
—
|
|
||
Comprehensive income (loss) attributable to CCIC stockholders
|
$
|
184
|
|
|
$
|
193
|
|
Net income (loss) attributable to CCIC common stockholders, per common share:
|
|
|
|
||||
Net income (loss) attributable to CCIC common stockholders—basic
|
$
|
0.38
|
|
|
$
|
0.40
|
|
Net income (loss) attributable to CCIC common stockholders—diluted
|
$
|
0.38
|
|
|
$
|
0.40
|
|
Weighted-average common shares outstanding:
|
|
|
|
||||
Basic
|
416
|
|
415
|
|
|||
Diluted
|
418
|
|
417
|
|
(a)
|
Exclusive of depreciation, amortization and accretion shown separately.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
(As Restated)
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
185
|
|
|
$
|
193
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
|
|
|
|
||||
Depreciation, amortization and accretion
|
399
|
|
|
394
|
|
||
(Gains) losses on retirement of long-term obligations
|
—
|
|
|
1
|
|
||
Amortization of deferred financing costs and other non-cash interest
|
1
|
|
|
1
|
|
||
Stock-based compensation expense
|
37
|
|
|
29
|
|
||
Asset write-down charges
|
4
|
|
|
6
|
|
||
Deferred income tax (benefit) provision
|
1
|
|
|
1
|
|
||
Other non-cash adjustments, net
|
—
|
|
|
2
|
|
||
Changes in assets and liabilities, excluding the effects of acquisitions:
|
|
|
|
||||
Increase (decrease) in accrued interest
|
(50
|
)
|
|
(41
|
)
|
||
Increase (decrease) in accounts payable
|
(20
|
)
|
|
(5
|
)
|
||
Increase (decrease) in other liabilities
|
2
|
|
|
(7
|
)
|
||
Decrease (increase) in receivables
|
102
|
|
|
(43
|
)
|
||
Decrease (increase) in other assets
|
(8
|
)
|
|
(19
|
)
|
||
Net cash provided by (used for) operating activities
|
653
|
|
|
512
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(447
|
)
|
|
(480
|
)
|
||
Payments for acquisitions, net of cash acquired
|
(13
|
)
|
|
(10
|
)
|
||
Other investing activities, net
|
(8
|
)
|
|
1
|
|
||
Net cash provided by (used for) investing activities
|
(468
|
)
|
|
(489
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
—
|
|
|
996
|
|
||
Principal payments on debt and other long-term obligations
|
(26
|
)
|
|
(25
|
)
|
||
Purchases and redemptions of long-term debt
|
—
|
|
|
(12
|
)
|
||
Borrowings under revolving credit facility
|
1,340
|
|
|
710
|
|
||
Payments under revolving credit facility
|
(595
|
)
|
|
(1,140
|
)
|
||
Net issuances (repayments) under commercial paper program
|
(155
|
)
|
|
—
|
|
||
Payments for financing costs
|
—
|
|
|
(10
|
)
|
||
Purchases of common stock
|
(73
|
)
|
|
(42
|
)
|
||
Dividends/distributions paid on common stock
|
(513
|
)
|
|
(477
|
)
|
||
Dividends/distributions paid on preferred stock
|
(28
|
)
|
|
(28
|
)
|
||
Net cash provided by (used for) financing activities
|
(50
|
)
|
|
(28
|
)
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
135
|
|
|
(5
|
)
|
||
Effect of exchange rate changes
|
(1
|
)
|
|
—
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
338
|
|
|
413
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
472
|
|
|
$
|
408
|
|
|
Common Stock
|
|
6.875% Mandatory Convertible Preferred Stock
|
|
|
|
Accumulated Other Comprehensive Income (Loss) ("AOCI")
|
|
|
|
|
||||||||||||||||||
|
Shares
|
|
($0.01 Par)
|
|
Shares
|
|
($0.01 Par)
|
|
Additional
paid-in
capital
|
|
Foreign Currency Translation Adjustments
|
|
Dividends/Distributions in Excess of Earnings
|
|
Total
|
||||||||||||||
Balance, December 31, 2019
|
416
|
|
|
$
|
4
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
17,855
|
|
|
$
|
(5
|
)
|
|
$
|
(7,365
|
)
|
|
$
|
10,489
|
|
Stock-based compensation related activity, net of forfeitures
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
||||||
Other comprehensive income (loss)(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Common stock dividends/distributions(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(504
|
)
|
|
(504
|
)
|
||||||
Preferred stock dividends/distributions(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
(28
|
)
|
||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|
185
|
|
||||||
Balance, March 31, 2020
|
417
|
|
|
$
|
4
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
17,835
|
|
|
$
|
(6
|
)
|
|
$
|
(7,712
|
)
|
|
$
|
10,121
|
|
|
Common Stock
|
|
6.875% Mandatory Convertible Preferred Stock
|
|
|
|
AOCI
|
|
|
|
|
||||||||||||||||||
|
Shares
|
|
($0.01 Par)
|
|
Shares
|
|
($0.01 Par)
|
|
Additional
paid-in capital |
|
Foreign Currency Translation Adjustments
|
|
Dividends/Distributions in Excess of Earnings
|
|
Total
|
||||||||||||||
Balance, December 31, 2018 (As Restated)
|
415
|
|
|
$
|
4
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
17,767
|
|
|
$
|
(5
|
)
|
|
$
|
(6,195
|
)
|
|
$
|
11,571
|
|
Stock-based compensation related activity, net of forfeitures
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||||
Purchases and retirement of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
||||||
Net proceeds from issuance of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock dividends/distributions(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(472
|
)
|
|
(472
|
)
|
||||||
Preferred stock dividends/distributions(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
(28
|
)
|
||||||
Net income (loss) (As Restated)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
193
|
|
||||||
Balance, March 31, 2019 (As Restated)
|
416
|
|
|
$
|
4
|
|
|
2
|
|
|
$
|
—
|
|
|
$
|
17,770
|
|
|
$
|
(5
|
)
|
|
$
|
(6,502
|
)
|
|
$
|
11,267
|
|
(a)
|
See the condensed consolidated statement of operations and other comprehensive income (loss) for the components of other comprehensive income (loss).
|
(b)
|
See note 8 for information regarding common and preferred stock dividends declared per share.
|
1.
|
General
|
2.
|
Restatement of Previously Issued Condensed Consolidated Financial Statements
|
|
March 31, 2019
|
||||||||||||||
|
As Reported
|
|
Restatement Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Property and equipment, net
|
$
|
13,883
|
|
|
$
|
—
|
|
|
$
|
(23
|
)
|
|
$
|
13,860
|
|
Total assets
|
37,778
|
|
|
—
|
|
|
(23
|
)
|
|
37,755
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|||||||
Deferred revenues
|
502
|
|
|
96
|
|
|
—
|
|
|
598
|
|
||||
Total current liabilities
|
1,565
|
|
|
96
|
|
|
—
|
|
|
1,661
|
|
||||
Other long-term liabilities
|
2,009
|
|
|
360
|
|
|
—
|
|
|
2,369
|
|
||||
Total liabilities
|
26,032
|
|
|
456
|
|
|
—
|
|
|
26,488
|
|
||||
CCIC stockholders' equity:
|
|
|
|
|
|
|
|
|
|||||||
Dividends/distributions in excess of earnings
|
(6,022
|
)
|
|
(456
|
)
|
|
(23
|
)
|
|
(6,501
|
)
|
||||
Total equity
|
11,746
|
|
|
(456
|
)
|
|
(23
|
)
|
|
11,267
|
|
||||
Total liabilities and equity
|
$
|
37,778
|
|
|
$
|
—
|
|
|
$
|
(23
|
)
|
|
$
|
37,755
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
|
As Reported
|
|
Restatement Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
Site rental
|
$
|
1,219
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
1,242
|
|
Services and other
|
207
|
|
|
(40
|
)
|
|
(1
|
)
|
|
166
|
|
||||
Net revenues
|
1,426
|
|
|
(17
|
)
|
|
(1
|
)
|
|
1,408
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Costs of operations(a):
|
|
|
|
|
|
|
|
|
|||||||
Services and other
|
125
|
|
|
—
|
|
|
(1
|
)
|
|
124
|
|
||||
Total operating expenses
|
1,042
|
|
|
—
|
|
|
(1
|
)
|
|
1,041
|
|
||||
Operating income (loss)
|
384
|
|
|
(17
|
)
|
|
—
|
|
|
367
|
|
||||
Income (loss) before income taxes
|
216
|
|
|
(17
|
)
|
|
—
|
|
|
199
|
|
||||
Net income (loss) attributable to CCIC stockholders
|
210
|
|
|
(17
|
)
|
|
—
|
|
|
193
|
|
||||
Net income (loss) attributable to CCIC common stockholders
|
$
|
182
|
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
165
|
|
Net income (loss)
|
$
|
210
|
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
193
|
|
Comprehensive income (loss) attributable to CCIC stockholders
|
$
|
210
|
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
193
|
|
Net income (loss) attributable to CCIC common stockholders, per common share:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to CCIC common stockholders - basic
|
$
|
0.44
|
|
|
$
|
(0.04
|
)
|
|
$
|
—
|
|
|
$
|
0.40
|
|
Net income (loss) attributable to CCIC common stockholders - diluted
|
$
|
0.44
|
|
|
$
|
(0.04
|
)
|
|
$
|
—
|
|
|
$
|
0.40
|
|
(a)
|
Exclusive of depreciation, amortization and accretion shown separately.
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
|
As Reported
|
|
Restatement Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
210
|
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
193
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
|
|
|
|
|
|
|
|
|
|||||||
Increase (decrease) in other liabilities
|
(24
|
)
|
|
17
|
|
|
—
|
|
|
(7
|
)
|
||||
Net cash provided by (used for) operating activities
|
512
|
|
|
—
|
|
|
—
|
|
|
512
|
|
||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Cash, cash equivalents, and restricted cash at beginning of period
|
413
|
|
|
—
|
|
|
—
|
|
|
413
|
|
||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
408
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
408
|
|
3.
|
Summary of Significant Accounting Policies
|
4.
|
Revenues
|
|
|
Nine Months Ending December 31,
|
|
Years Ending December 31,
|
|
|
|
|
||||||||||||||||||||
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Contracted amounts(a)
|
|
$
|
3,257
|
|
|
$
|
4,071
|
|
|
$
|
3,842
|
|
|
$
|
3,213
|
|
|
$
|
2,489
|
|
|
$
|
7,219
|
|
|
$
|
24,091
|
|
(a)
|
Based on the nature of the contract, tenant contracts are accounted for pursuant to relevant lease accounting (ASC 842) or revenue accounting (ASC 606) guidance. Excludes amounts related to services, as those contracts generally have a duration of one year or less.
|
5.
|
Debt and Other Obligations
|
|
Original
Issue Date
|
|
Final
Maturity
Date(a)
|
|
Balance as of
March 31, 2020
|
|
Balance as of
December 31, 2019
|
|
Stated Interest
Rate as of
March 31, 2020(a)
|
|
|||||
3.849% Secured Notes
|
Dec. 2012
|
|
Apr. 2023
|
|
$
|
996
|
|
|
$
|
995
|
|
|
3.9
|
%
|
|
Secured Notes, Series 2009-1, Class A-2
|
July 2009
|
|
Aug. 2029
|
|
66
|
|
|
67
|
|
|
9.0
|
%
|
|
||
Tower Revenue Notes, Series 2015-1
|
May 2015
|
|
May 2042
|
(b)
|
299
|
|
|
298
|
|
|
3.2
|
%
|
|
||
Tower Revenue Notes, Series 2018-1
|
July 2018
|
|
July 2043
|
(b)
|
248
|
|
|
248
|
|
|
3.7
|
%
|
|
||
Tower Revenue Notes, Series 2015-2
|
May 2015
|
|
May 2045
|
(b)
|
695
|
|
|
694
|
|
|
3.7
|
%
|
|
||
Tower Revenue Notes, Series 2018-2
|
July 2018
|
|
July 2048
|
(b)
|
742
|
|
|
742
|
|
|
4.2
|
%
|
|
||
Finance leases and other obligations
|
Various
|
|
Various
|
(c)
|
221
|
|
|
227
|
|
|
Various
|
|
|||
Total secured debt
|
|
|
|
|
$
|
3,267
|
|
|
$
|
3,271
|
|
|
|
|
|
2016 Revolver
|
Jan. 2016
|
|
June 2024
|
|
$
|
1,270
|
|
(d)
|
$
|
525
|
|
|
2.1
|
%
|
(e)
|
2016 Term Loan A
|
Jan. 2016
|
|
June 2024
|
|
2,295
|
|
|
2,310
|
|
|
2.1
|
%
|
(e)
|
||
Commercial Paper Notes
|
N/A
|
(f)
|
N/A
|
(f)
|
—
|
|
(f)
|
155
|
|
|
N/A
|
|
|||
3.400% Senior Notes
|
Feb./May 2016
|
|
Feb. 2021
|
|
850
|
|
|
850
|
|
|
3.4
|
%
|
|
||
2.250% Senior Notes
|
Sept. 2016
|
|
Sept. 2021
|
|
698
|
|
|
698
|
|
|
2.3
|
%
|
|
||
4.875% Senior Notes
|
Apr. 2014
|
|
Apr. 2022
|
|
846
|
|
|
846
|
|
|
4.9
|
%
|
|
||
5.250% Senior Notes
|
Oct. 2012
|
|
Jan. 2023
|
|
1,644
|
|
|
1,644
|
|
|
5.3
|
%
|
|
||
3.150% Senior Notes
|
Jan. 2018
|
|
July 2023
|
|
744
|
|
|
744
|
|
|
3.2
|
%
|
|
||
3.200% Senior Notes
|
Aug. 2017
|
|
Sept. 2024
|
|
745
|
|
|
744
|
|
|
3.2
|
%
|
|
||
4.450% Senior Notes
|
Feb. 2016
|
|
Feb. 2026
|
|
893
|
|
|
893
|
|
|
4.5
|
%
|
|
||
3.700% Senior Notes
|
May 2016
|
|
June 2026
|
|
745
|
|
|
744
|
|
|
3.7
|
%
|
|
||
4.000% Senior Notes
|
Feb. 2017
|
|
Mar. 2027
|
|
495
|
|
|
495
|
|
|
4.0
|
%
|
|
||
3.650% Senior Notes
|
Aug. 2017
|
|
Sept. 2027
|
|
993
|
|
|
993
|
|
|
3.7
|
%
|
|
||
3.800% Senior Notes
|
Jan. 2018
|
|
Feb. 2028
|
|
990
|
|
|
990
|
|
|
3.8
|
%
|
|
||
4.300% Senior Notes
|
Feb. 2019
|
|
Feb. 2029
|
|
592
|
|
|
592
|
|
|
4.3
|
%
|
|
||
3.100% Senior Notes
|
Aug. 2019
|
|
Nov. 2029
|
|
544
|
|
|
543
|
|
|
3.1
|
%
|
|
||
4.750% Senior Notes
|
May 2017
|
|
May 2047
|
|
344
|
|
|
344
|
|
|
4.8
|
%
|
|
||
5.200% Senior Notes
|
Feb. 2019
|
|
Feb. 2049
|
|
395
|
|
|
395
|
|
|
5.2
|
%
|
|
||
4.000% Senior Notes
|
Aug. 2019
|
|
Nov. 2049
|
|
345
|
|
|
345
|
|
|
4.0
|
%
|
|
||
Total unsecured debt
|
|
|
|
|
$
|
15,428
|
|
|
$
|
14,850
|
|
|
|
|
|
Total debt and other obligations
|
|
|
|
|
18,695
|
|
|
18,121
|
|
|
|
|
|||
Less: current maturities and short-term debt and other current obligations
|
|
949
|
|
|
100
|
|
|
|
|
||||||
Non-current portion of long-term debt and other long-term obligations
|
|
$
|
17,746
|
|
|
$
|
18,021
|
|
|
|
|
(a)
|
See the 2019 Form 10-K, including note 9, for additional information regarding the maturity and principal amortization provisions and interest rates relating to the Company's indebtedness.
|
(b)
|
If the respective series of Tower Revenue Notes are not paid in full on or prior to an applicable anticipated repayment date, then Excess Cash Flow (as defined in the indenture) of the issuers of such notes will be used to repay principal of the applicable series and class of the Tower Revenue Notes, and additional interest (of an additional approximately 5% per annum) will accrue on the respective Tower Revenue Notes. As of March 31, 2020, the Tower Revenue Notes have principal amounts of $300 million, $250 million, $700 million and $750 million, with anticipated repayment dates in 2022, 2023, 2025 and 2028, respectively.
|
(c)
|
The Company's finance leases and other obligations relate to land, fiber, vehicles, and other assets and bear interest rates ranging up to 10% and mature in periods ranging from less than one year to approximately 30 years.
|
(d)
|
As of March 31, 2020, the undrawn availability under the 2016 Revolver was $3.7 billion.
|
(e)
|
Both the 2016 Revolver and 2016 Term Loan A bear interest, at our option, at either (1) LIBOR plus a credit spread ranging from 0.875% to 1.750% per annum or (2) an alternate base rate plus a credit spread ranging from 0.000% to 0.750% per annum, in each case, with the applicable credit spread based on the Company's senior unsecured debt rating. The Company pays a commitment fee ranging from 0.125% to 0.350%, based on the Company's senior unsecured debt rating, per annum on the undrawn available amount under the 2016 Revolver.
|
(f)
|
Notes under the CP Program may be issued, repaid and re-issued from time to time, with an aggregate principal amount of Commercial Paper Notes outstanding under the CP Program at any time not to exceed $1.0 billion. The net proceeds of the Commercial Paper Notes are expected to be used for general corporate purposes. The maturities of the 2019 Commercial Paper Notes, when outstanding, may vary but may not exceed 397 days from the date of issue. The Commercial Paper Notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. As of March 31, 2020, there were no outstanding Commercial Paper Notes. At any point in time, the Company intends to maintain available commitments under its 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding. While any outstanding commercial paper issuances generally have short-term maturities, the Company classifies the outstanding issuances, when applicable, as long-term based on its ability and intent to refinance the outstanding issuances on a long-term basis.
|
|
Nine Months Ending
December 31,
|
|
Years Ending December 31,
|
|
|
|
|
|
Unamortized Adjustments, Net
|
|
Total Debt and Other Obligations Outstanding
|
||||||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total Cash Obligations
|
|
|
||||||||||||||||||||
Scheduled principal payments and
final maturities
|
$
|
76
|
|
|
$
|
1,675
|
|
|
$
|
1,000
|
|
|
$
|
3,604
|
|
|
$
|
3,917
|
|
|
$
|
8,532
|
|
|
$
|
18,804
|
|
|
$
|
(109
|
)
|
|
$
|
18,695
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Interest expense on debt obligations
|
$
|
174
|
|
|
$
|
167
|
|
Amortization of deferred financing costs and adjustments on long-term debt
|
5
|
|
|
5
|
|
||
Other, net of capitalized interest
|
(4
|
)
|
|
(4
|
)
|
||
Total
|
$
|
175
|
|
|
$
|
168
|
|
6.
|
Fair Value Disclosures
|
|
Level in Fair Value Hierarchy
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
1
|
|
$
|
310
|
|
|
$
|
310
|
|
|
$
|
196
|
|
|
$
|
196
|
|
Restricted cash, current and non-current
|
1
|
|
162
|
|
|
162
|
|
|
142
|
|
|
142
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Total debt and other obligations
|
2
|
|
18,695
|
|
|
19,175
|
|
|
18,121
|
|
|
19,170
|
|
7.
|
Income Taxes
|
8.
|
Per Share Information
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
(As Restated)
|
||||
Net income (loss) attributable to CCIC stockholders
|
$
|
185
|
|
|
$
|
193
|
|
Dividends on preferred stock
|
(28
|
)
|
|
(28
|
)
|
||
Net income (loss) attributable to CCIC common stockholders for basic and diluted computations
|
$
|
157
|
|
|
$
|
165
|
|
|
|
|
|
||||
Weighted-average number of common shares outstanding (in millions):
|
|
|
|
||||
Basic weighted-average number of common stock outstanding
|
416
|
|
|
415
|
|
||
Effect of assumed dilution from potential issuance of common shares relating to restricted stock units
|
2
|
|
|
2
|
|
||
Diluted weighted-average number of common shares outstanding
|
418
|
|
|
417
|
|
||
|
|
|
|
||||
Net income (loss) attributable to CCIC common stockholders, per common share:
|
|
|
|
||||
Basic
|
$
|
0.38
|
|
|
$
|
0.40
|
|
Diluted
|
$
|
0.38
|
|
|
$
|
0.40
|
|
|
|
|
|
||||
Dividends/distributions declared per share of common stock
|
$
|
1.20
|
|
|
$
|
1.125
|
|
Dividends/distributions declared per share of preferred stock
|
$
|
17.1875
|
|
|
$
|
17.1875
|
|
9.
|
Commitments and Contingencies
|
10.
|
Equity
|
Equity Type
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Dividends Per Share
|
|
Aggregate
Payment
Amount
|
|
||||
Common Stock
|
|
February 20, 2020
|
|
March 13, 2020
|
|
March 31, 2020
|
|
$
|
1.20
|
|
|
$
|
504
|
|
(a)
|
6.875% Mandatory Convertible Preferred Stock
|
|
December 9, 2019
|
|
January 15, 2020
|
|
February 3, 2020
|
|
$
|
17.1875
|
|
|
$
|
28
|
|
|
6.875% Mandatory Convertible Preferred Stock
|
|
March 12, 2020
|
|
April 15, 2020
|
|
May 1, 2020
|
|
$
|
17.1875
|
|
|
$
|
28
|
|
|
(a)
|
Inclusive of dividends accrued for holders of unvested restricted stock units, which will be paid when and if the restricted stock units vest.
|
11.
|
Operating Segments
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019 (As Restated)
|
||||||||||||||||||||||||||||
|
Towers
|
|
Fiber
|
|
Other
|
|
Consolidated
Total
|
|
Towers
|
|
Fiber
|
|
Other
|
|
Consolidated
Total
|
||||||||||||||||
Segment site rental revenues
|
$
|
867
|
|
|
$
|
443
|
|
|
|
|
$
|
1,310
|
|
|
$
|
828
|
|
|
$
|
414
|
|
|
|
|
$
|
1,242
|
|
||||
Segment services and other revenues
|
108
|
|
|
3
|
|
|
|
|
111
|
|
|
162
|
|
|
4
|
|
|
|
|
166
|
|
||||||||||
Segment revenues
|
975
|
|
|
446
|
|
|
|
|
1,421
|
|
|
990
|
|
|
418
|
|
|
|
|
1,408
|
|
||||||||||
Segment site rental cost of operations
|
214
|
|
|
152
|
|
|
|
|
366
|
|
|
211
|
|
|
140
|
|
|
|
|
351
|
|
||||||||||
Segment services and other cost of operations
|
95
|
|
|
2
|
|
|
|
|
97
|
|
|
120
|
|
|
3
|
|
|
|
|
123
|
|
||||||||||
Segment cost of operations(a)(b)
|
309
|
|
|
154
|
|
|
|
|
463
|
|
|
331
|
|
|
143
|
|
|
|
|
474
|
|
||||||||||
Segment site rental gross margin
|
653
|
|
|
291
|
|
|
|
|
944
|
|
|
617
|
|
|
274
|
|
|
|
|
891
|
|
||||||||||
Segment services and other gross margin
|
13
|
|
|
1
|
|
|
|
|
14
|
|
|
42
|
|
|
1
|
|
|
|
|
43
|
|
||||||||||
Segment selling, general and administrative expenses(b)
|
24
|
|
|
51
|
|
|
|
|
75
|
|
|
26
|
|
|
48
|
|
|
|
|
74
|
|
||||||||||
Segment operating profit (loss)
|
642
|
|
|
241
|
|
|
|
|
883
|
|
|
633
|
|
|
227
|
|
|
|
|
860
|
|
||||||||||
Other selling, general and administrative expenses
|
|
|
|
|
$
|
70
|
|
|
70
|
|
|
|
|
|
|
$
|
55
|
|
|
55
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
36
|
|
|
36
|
|
|
|
|
|
|
29
|
|
|
29
|
|
||||||||||||
Depreciation, amortization and accretion
|
|
|
|
|
399
|
|
|
399
|
|
|
|
|
|
|
394
|
|
|
394
|
|
||||||||||||
Interest expense and amortization of deferred financing costs
|
|
|
|
|
175
|
|
|
175
|
|
|
|
|
|
|
168
|
|
|
168
|
|
||||||||||||
Other (income) expenses to reconcile to income (loss) before income taxes(c)
|
|
|
|
|
13
|
|
|
13
|
|
|
|
|
|
|
15
|
|
|
15
|
|
||||||||||||
Income (loss) before income taxes
|
|
|
|
|
|
|
$
|
190
|
|
|
|
|
|
|
|
|
$
|
199
|
|
||||||||||||
Capital expenditures
|
$
|
105
|
|
|
$
|
328
|
|
|
$
|
14
|
|
|
$
|
447
|
|
|
$
|
119
|
|
|
$
|
355
|
|
|
$
|
6
|
|
|
$
|
480
|
|
Total assets (at period end)
|
$
|
22,234
|
|
|
$
|
15,520
|
|
|
$
|
862
|
|
|
$
|
38,616
|
|
|
$
|
22,091
|
|
|
$
|
14,930
|
|
|
$
|
734
|
|
|
$
|
37,755
|
|
(a)
|
Exclusive of depreciation, amortization and accretion shown separately.
|
(b)
|
Segment cost of operations excludes (1) stock-based compensation of $6 million for both of the three months ended March 31, 2020 and 2019, and (2) prepaid lease purchase price adjustments of $5 million for both of the three months ended March 31, 2020 and 2019. Selling, general and administrative expenses exclude stock-based compensation expense of $30 million and $23 million for the three months ended March 31, 2020 and 2019, respectively.
|
(c)
|
See condensed consolidated statement of operations for further information.
|
12.
|
Supplemental Cash Flow Information
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash payments related to operating lease liabilities(a)
|
$
|
135
|
|
|
$
|
145
|
|
Interest paid
|
223
|
|
|
208
|
|
||
Income taxes paid
|
1
|
|
|
—
|
|
||
Supplemental disclosure of non-cash operating, investing and financing activities:
|
|
|
|
||||
New ROU assets obtained in exchange for operating lease liabilities
|
133
|
|
|
36
|
|
||
Increase (decrease) in accounts payable for purchases of property and equipment
|
(18
|
)
|
|
2
|
|
||
Purchase of property and equipment under finance leases and installment purchases
|
5
|
|
|
9
|
|
(a)
|
Excludes the Company's contingent payment pursuant to operating leases, which are recorded as expense in the period such contingencies are resolved.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Cash and cash equivalents
|
$
|
310
|
|
|
$
|
196
|
|
Restricted cash, current
|
157
|
|
|
137
|
|
||
Restricted cash reported within other assets, net
|
5
|
|
|
5
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
472
|
|
|
$
|
338
|
|
13.
|
Subsequent Events
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Grow cash flows from our existing communications infrastructure. We are focused on maximizing the recurring site rental cash flows generated from providing our tenants with long-term access to our shared infrastructure assets, which we believe is the core driver of value for our stockholders. Tenant additions or modifications of existing tenant equipment (collectively, "tenant additions") enable our tenants to expand coverage and capacity in order to meet increasing demand for data while generating high incremental returns for our business. We believe our product offerings of towers and small cells provide a comprehensive solution to our wireless tenants' growing network needs through our shared communications infrastructure model, which is an efficient and cost-effective way to serve our tenants. Additionally, we believe our ability to share our fiber assets across multiple tenants to deploy both small cells and offer fiber solutions allows us to generate cash flows and increase stockholder return.
|
•
|
Return cash generated by operating activities to common stockholders in the form of dividends. We believe that distributing a meaningful portion of our cash generated by operating activities appropriately provides common stockholders with increased certainty for a portion of expected long-term stockholder value while still allowing us to retain sufficient flexibility to invest in our business and deliver growth. We believe this decision reflects the translation of the high-quality, long-term contractual cash flows of our business into stable capital returns to common stockholders.
|
•
|
Invest capital efficiently to grow cash flows and long-term dividends per share. In addition to adding tenants to existing communications infrastructure, we seek to invest our available capital, including the net cash generated by our operating activities and external financing sources, in a manner that will increase long-term stockholder value on a risk-adjusted basis. These investments include constructing and acquiring new communications infrastructure that we expect will generate future cash flow growth and attractive long-term returns by adding tenants to those assets over time. Our historical investments have included the following (in no particular order):
|
◦
|
construction of towers, fiber and small cells;
|
◦
|
acquisitions of towers, fiber and small cells;
|
◦
|
acquisitions of land interests (which primarily relate to land assets under towers);
|
◦
|
improvements and structural enhancements to our existing communications infrastructure;
|
◦
|
purchases of shares of our common stock from time to time; and
|
◦
|
purchases, repayments or redemptions of our debt.
|
•
|
We operate as a REIT for U.S. federal income tax purposes
|
◦
|
As a REIT, we are generally entitled to a deduction for dividends that we pay and therefore are not subject to U.S. federal corporate income tax on our taxable income that is distributed to our stockholders.
|
◦
|
To remain qualified and taxed as a REIT, we will generally be required to annually distribute to our stockholders at least 90% of our REIT taxable income, after the utilization of our NOLs (determined without regard to the dividends paid deduction and excluding net capital gain).
|
◦
|
See note 7 to our condensed consolidated financial statements for further discussion of our REIT status.
|
•
|
Potential growth resulting from the increasing demand for data
|
◦
|
We expect existing and potential new tenant demand for our communications infrastructure will result from (1) new technologies, (2) increased usage of mobile entertainment, mobile internet, and machine-to-machine applications, (3) adoption of other emerging and embedded wireless devices (including smartphones, laptops, tablets, wearables and other devices), (4) increasing smartphone penetration, (5) wireless carrier focus on expanding both network quality and capacity, including the use of both towers and small cells, (6) the adoption of other bandwidth-intensive applications (such as cloud services and video communications) and (7) the availability of additional spectrum.
|
◦
|
We expect U.S. wireless carriers will continue to focus on improving network quality and expanding capacity (including through 5G initiatives) by utilizing a combination of towers and small cells. We believe our product offerings of towers and small cells provide a comprehensive solution to our wireless tenants' growing communications infrastructure needs.
|
◦
|
We expect organizations will continue to increase the usage of high-bandwidth applications that will require the utilization of more fiber infrastructure and fiber solutions, such as those we provide.
|
◦
|
Within our Fiber segment, we are able to generate growth and returns for our stockholders by deploying our fiber for both small cells and fiber solutions tenants.
|
◦
|
Tenant additions on our existing communications infrastructure are achieved at a low incremental operating cost, delivering high incremental returns.
|
•
|
Substantially all of our communications infrastructure can accommodate additional tenancy, either as currently constructed or with appropriate modifications.
|
•
|
Investing capital efficiently to grow long-term dividends per share (see also "Item 2. MD&A—General Overview—Strategy")
|
◦
|
Discretionary capital expenditures of $426 million for the three months ended March 31, 2020, predominately resulting from the construction of new communications infrastructure and improvements to existing communications infrastructure in order to support additional tenants.
|
◦
|
We expect to continue to construct and acquire new communications infrastructure based on our tenants' needs and generate attractive long-term returns by adding additional tenants over time.
|
•
|
Site rental revenues under long-term tenant contracts
|
◦
|
Initial terms of five to 15 years for site rental revenues derived from wireless tenants, with contractual escalations and multiple renewal periods, at the option of the tenant, of five to 10 years each.
|
◦
|
Initial terms that generally vary between three to 20 years for site rental revenues derived from our fiber solutions tenants (including from organizations with high-bandwidth and multi-location demands).
|
◦
|
Weighted-average remaining term of approximately five years, exclusive of renewals exercisable at the tenants' option, currently representing approximately $24 billion of expected future cash inflows.
|
•
|
Majority of our revenues from large wireless carriers
|
◦
|
74% of our site rental revenues were derived from T-Mobile, AT&T, Verizon Wireless and Sprint for the three months ended March 31, 2020.
|
▪
|
On April 1, 2020, T-Mobile and Sprint announced the completion of their previously disclosed merger. For additional information, see "Item 1A. Risk Factors" in the 2019 Form 10-K.
|
•
|
Majority of land interests under our towers under long-term control
|
◦
|
Approximately 90% of our Towers site rental gross margin and approximately 80% of our Towers site rental gross margin is derived from towers that reside on land that we own or control for greater than 10 and 20 years, respectively. The aforementioned percentages include towers that reside on land interests that are owned, including through fee interests and perpetual easements, which represent approximately 40% of our Towers site rental gross margin.
|
•
|
Majority of our fiber assets are located in major metropolitan areas and are on public rights-of-way.
|
•
|
Minimal sustaining capital expenditure requirements
|
◦
|
Sustaining capital expenditures represented approximately 1% of net revenues.
|
•
|
Debt portfolio with long-dated maturities extended over multiple years, with the vast majority of such debt having a fixed rate (see "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt)
|
◦
|
As of March 31, 2020, after giving effect to our April 2020 Senior Notes issuance and the application of the net proceeds therefrom, our outstanding debt has a weighted-average interest rate of 3.7% and weighted-average maturity of approximately seven years (assuming anticipated repayment dates on our Tower Revenue Notes). See note 13 to our condensed consolidated financial statements.
|
◦
|
88% of our debt has fixed rate coupons, after giving effect to our April 2020 Senior Notes issuance (see note 13 to our condensed consolidated financial statements).
|
◦
|
Our debt service coverage and leverage ratios are within their respective financial maintenance covenants.
|
•
|
During 2020, we have completed the following financing transactions (see note 13 to our condensed consolidated financial statements)
|
◦
|
In April 2020, we issued $1.25 billion aggregate principal amount of senior unsecured notes ("April 2020 Senior Notes"), which consisted of (1) $750 million aggregate principal amount of 3.300% senior unsecured notes due July 2030 and (2) $500 million aggregate principal amount of 4.150% senior unsecured notes due July 2050. We used the net proceeds of the April 2020 Senior Notes offering to repay outstanding borrowings under the 2016 Revolver.
|
•
|
Significant cash flows from operations
|
◦
|
Net cash provided by operating activities was $653 million for the three months ended March 31, 2020.
|
◦
|
In addition to the positive impact of contractual escalators, we expect to grow our core business of providing access to our communications infrastructure as a result of future anticipated additional demand for our communications infrastructure.
|
•
|
Returning cash flows provided by operations to stockholders in the form of dividends
|
◦
|
During March 2020, we paid a common stock dividend of $1.20 per share, totaling approximately $513 million.
|
◦
|
We currently expect our common stock dividends over the next 12 months to be a cumulative amount of at least $4.80 per share, or an aggregate amount of approximately $2.0 billion.
|
◦
|
Over time, we expect to increase our dividend per share generally commensurate with our realized growth in cash flows. Any future common stock dividends are subject to declaration by our board of directors. See note 10 to our condensed consolidated financial statements for further information regarding our common stock and dividends.
|
◦
|
During February 2020, we paid a preferred stock dividend of $17.1875 per share, totaling approximately $28 million. We currently expect our preferred stock dividends, prior to the mandatory conversion of our 6.875% Mandatory Convertible Preferred Stock in August 2020, to be a cumulative amount of $17.1875 per share, or an aggregate amount of approximately $28 million. Any future preferred stock dividends are subject to declaration by our board directors.
|
•
|
We expect that, when compared to full year 2019, our full year 2020 site rental revenue growth will be positively impacted by higher tenant additions, as large wireless carriers and fiber solutions tenants attempt to meet the increasing demand for data.
|
•
|
We expect to continue to invest a meaningful amount of our available capital in the form of discretionary capital expenditures for 2020, as we continue to construct new small cells and fiber as a result of the anticipated returns on such discretionary investments. We also expect sustaining capital expenditures to remain approximately 2% of net revenues for full year 2020.
|
(In millions of dollars)
|
Three Months Ended March 31,
|
|
|
|
|
||
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|
|
|
(As Restated)
|
|
|
|
|
|
Site rental revenues:
|
|
|
|
|
|
|
|
Towers site rental revenues
|
$867
|
|
$828
|
|
+$39
|
|
+5%
|
Fiber site rental revenues
|
$443
|
|
$414
|
|
+$29
|
|
+7%
|
Total site rental revenues
|
$1,310
|
|
$1,242
|
|
+$68
|
|
+5%
|
Segment site rental gross margin:
|
|
|
|
|
|
|
|
Towers site rental gross margin(a)
|
$653
|
|
$617
|
|
+$36
|
|
+6%
|
Fiber site rental gross margin(a)
|
$291
|
|
$274
|
|
+$17
|
|
+6%
|
Services and other gross margin:
|
|
|
|
|
|
|
|
Towers services and other gross margin(a)
|
$13
|
|
$42
|
|
$(29)
|
|
(69)%
|
Fiber services and other gross margin(a)
|
$1
|
|
$1
|
|
—
|
|
—%
|
Segment operating profit:
|
|
|
|
|
|
|
|
Towers operating profit(a)
|
$642
|
|
$633
|
|
+$9
|
|
+1%
|
Fiber operating profit(a)
|
$241
|
|
$227
|
|
+$14
|
|
+6%
|
Net income attributable to CCIC stockholders
|
$185
|
|
$193
|
|
$(8)
|
|
(4)%
|
Adjusted EBITDA(b)
|
$814
|
|
$804
|
|
+$10
|
|
+1%
|
(a)
|
See note 11 to our condensed consolidated financial statements for further discussion of our definitions of segment site rental gross margin, segment services and other gross margin and segment operating profit.
|
(b)
|
See reconciliation of this non-GAAP financial measure to net income (loss) and definition included in "Item 2. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures."
|
(a)
|
As restated.
|
(b)
|
Includes amortization of up-front payments received from long-term tenant contracts and other deferred credits (commonly referred to as prepaid rent).
|
(c)
|
The components in this chart may not sum to the total due to rounding.
|
(a)
|
Inclusive of $5 million included within "Other assets, net" on our condensed consolidated balance sheet.
|
(b)
|
Availability at any point in time is subject to certain restrictions based on the maintenance of financial covenants contained in the 2016 Credit Facility. See the 2019 Form 10-K. At any point in time, we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of outstanding Commercial Paper Notes.
|
(c)
|
See "Item 2. MD&A—General Overview—Overview" and note 5 to our condensed consolidated financial statements for further information regarding the CP Program.
|
•
|
Our liquidity sources may include (1) cash on hand, (2) net cash generated by our operating activities, (3) undrawn availability under our 2016 Revolver, (4) issuances under our CP Program, and (5) issuances of equity pursuant to our 2018 ATM Program. Our liquidity uses over the next 12 months are expected to include (1) debt service obligations of $949 million (principal payments), (2) cumulative common stock dividend payments expected to be at least $4.80 per share, or an aggregate amount of approximately $2.0 billion (see "Item 2. MD&A—Business Fundamentals and Results"), (3) prior to the automatic conversion of our 6.875% Convertible Preferred Stock in August 2020, dividend payments related to such preferred stock of approximately $28 million and (4) capital expenditures. Additionally, amounts available under the CP Program may be repaid and re-issued from time to time. During the next 12 months, while our liquidity uses are expected to exceed our net cash provided by operating activities, we expect that our liquidity sources described above should be sufficient to cover our expected uses. Historically, from time to time, we have accessed the capital markets to issue debt and equity.
|
•
|
See "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a tabular presentation of our debt maturities and a discussion of anticipated repayment dates.
|
|
Three Months Ended March 31,
|
||||||||||
(In millions of dollars)
|
2020
|
|
2019
|
|
Change
|
||||||
|
|
|
(As Restated)
|
|
|
||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash:
|
|
|
|
|
|
||||||
Operating activities
|
$
|
653
|
|
|
$
|
512
|
|
|
$
|
141
|
|
Investing activities
|
(468
|
)
|
|
(489
|
)
|
|
21
|
|
|||
Financing activities
|
(50
|
)
|
|
(28
|
)
|
|
(22
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
135
|
|
|
(5
|
)
|
|
140
|
|
|||
Effect of exchange rate changes on cash
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
$
|
134
|
|
|
$
|
(5
|
)
|
|
$
|
139
|
|
•
|
Discretionary capital expenditures are made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They primarily consist of expansion or development of communications infrastructure (including capital expenditures related to (1) enhancing communications infrastructure in order to add new tenants for the first time or support subsequent tenant equipment augmentations or (2) modifying the structure of a communications infrastructure asset to accommodate additional tenants) and construction of new communications infrastructure. Discretionary capital expenditures also include purchases of land interests (which primarily relates to land assets under towers as we seek to manage our interests in the land beneath our towers), certain technology-related investments necessary to support and scale future customer demand for our communications infrastructure, and other capital projects. The expansion or development of existing communications infrastructure to accommodate new leasing typically varies based on, among other factors: (1) the type of communications infrastructure, (2) the scope, volume, and mix of work performed on the communications infrastructure, (3) existing capacity prior to installation, or (4) changes in structural engineering regulations and standards. Currently, construction of new communications infrastructure is predominately comprised of the construction of small cells and fiber. Our decisions regarding discretionary capital expenditures are influenced by the availability and cost of capital and expected returns on alternative uses of cash, such as payments of dividends and investments.
|
•
|
Integration capital expenditures consist of those capital expenditures made as a result of integrating acquired companies into our business.
|
•
|
Sustaining capital expenditures consist of those capital expenditures not otherwise categorized as discretionary or integration capital expenditures, such as (1) maintenance capital expenditures on our communications infrastructure assets that enable our tenants' ongoing quiet enjoyment of the communications infrastructure and (2) ordinary corporate capital expenditures.
|
|
For the Three Months Ended
|
||||||||||||||||||||||||
(In millions of dollars)
|
March 31, 2020
|
|
March 31, 2019(a)
|
||||||||||||||||||||||
|
Towers
|
Fiber
|
Other
|
Total
|
|
Towers
|
Fiber
|
Other
|
Total
|
||||||||||||||||
Discretionary:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases of land interests
|
$
|
13
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13
|
|
|
$
|
15
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15
|
|
Communications infrastructure improvements and other capital projects(b)
|
87
|
|
319
|
|
7
|
|
413
|
|
|
98
|
|
344
|
|
—
|
|
442
|
|
||||||||
Sustaining
|
5
|
|
9
|
|
7
|
|
21
|
|
|
6
|
|
11
|
|
4
|
|
21
|
|
||||||||
Integration
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
2
|
|
2
|
|
||||||||
Total
|
$
|
105
|
|
$
|
328
|
|
$
|
14
|
|
$
|
447
|
|
|
119
|
|
355
|
|
6
|
|
480
|
|
(a)
|
As restated.
|
(b)
|
Towers segment includes $42 million and $41 million of capital expenditures incurred during the three months ended March 31, 2020 and 2019, respectively, in connection with tenant installations and upgrades on our towers.
|
(In millions of dollars)
|
Three Months Ended March 31,
|
||||||
2020
|
|
2019
|
|||||
|
|
(As Restated)
|
|||||
Net income (loss)
|
$
|
185
|
|
|
$
|
193
|
|
Adjustments to increase (decrease) net income (loss):
|
|
|
|
||||
Asset write-down charges
|
4
|
|
|
6
|
|
||
Acquisition and integration costs
|
5
|
|
|
4
|
|
||
Depreciation, amortization and accretion
|
399
|
|
|
394
|
|
||
Amortization of prepaid lease purchase price adjustments
|
5
|
|
|
5
|
|
||
Interest expense and amortization of deferred financing costs
|
175
|
|
|
168
|
|
||
(Gains) losses on retirement of long-term obligations
|
—
|
|
|
1
|
|
||
Interest income
|
(1
|
)
|
|
(2
|
)
|
||
Other (income) expense
|
—
|
|
|
1
|
|
||
(Benefit) provision for income taxes
|
5
|
|
|
6
|
|
||
Stock-based compensation expense
|
36
|
|
|
29
|
|
||
Adjusted EBITDA(a)(b)
|
$
|
814
|
|
|
$
|
804
|
|
(a)
|
The components in this table may not sum to the total due to rounding.
|
(b)
|
The above reconciliation excludes the items included in our Adjusted EBITDA definition which are not applicable to the periods shown.
|
•
|
it is the primary measure used by our management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of our operations;
|
•
|
although specific definitions may vary, it is widely used by investors or other interested parties in evaluation of the communications infrastructure sector and other REITs to measure financial performance without regard to items such as depreciation, amortization and accretion, which can vary depending upon accounting methods and the book value of assets;
|
•
|
we believe it helps investors and other interested parties meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results; and
|
•
|
it is similar to the measure of current financial performance generally used in our debt covenant calculations.
|
•
|
as a performance goal in employee annual incentive compensation;
|
•
|
as a measurement of financial performance because it assists us in comparing our financial performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our operating results;
|
•
|
in presentations to our board of directors to enable it to have the same measurement of financial performance used by management;
|
•
|
for planning purposes, including preparation of our annual operating budget;
|
•
|
as a valuation measure in strategic analyses in connection with the purchase and sale of assets;
|
•
|
in determining self-imposed limits on our debt levels, including the evaluation of our leverage ratio and interest coverage ratio; and
|
•
|
with respect to compliance with our debt covenants, which require us to maintain certain financial ratios that incorporate concepts such as, or similar to, Adjusted EBITDA.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
the potential refinancing of our existing debt ($18.7 billion outstanding at March 31, 2020 and $18.1 billion at December 31, 2019);
|
•
|
our $2.3 billion and $3.0 billion of floating rate debt at March 31, 2020 and December 31, 2019, respectively, which represented approximately 12% and 17% of our total debt, as of March 31, 2020 and December 31, 2019, respectively; and
|
•
|
potential future borrowings of incremental debt, including borrowings under our 2016 Credit Facility and issuances under the CP Program.
|
|
Future Principal Payments and Interest Rates by the Debt Instruments' Contractual Year of Maturity
|
||||||||||||||||||||||||||||||
(In millions of dollars)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
|
Fair Value(a)
|
||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate(b)
|
$
|
32
|
|
|
$
|
1,587
|
|
|
$
|
883
|
|
|
$
|
3,428
|
|
|
$
|
774
|
|
|
$
|
9,782
|
|
|
$
|
16,486
|
|
|
$
|
16,846
|
|
Average interest rate(b)(c)(d)
|
4.3
|
%
|
|
2.9
|
%
|
|
5.2
|
%
|
|
4.2
|
%
|
|
3.3
|
%
|
|
5.0
|
%
|
|
4.5
|
%
|
|
|
|||||||||
Variable rate(e)
|
$
|
44
|
|
|
$
|
88
|
|
|
$
|
117
|
|
|
$
|
176
|
|
|
$
|
1,917
|
|
|
$
|
—
|
|
|
$
|
2,342
|
|
|
$
|
2,342
|
|
Average interest rate(e)
|
1.5
|
%
|
|
1.4
|
%
|
|
1.4
|
%
|
|
1.5
|
%
|
|
1.6
|
%
|
|
—
|
%
|
|
1.6
|
%
|
|
|
(a)
|
The fair value of our debt is based on indicative quotes (that is, non-binding quotes) from brokers that require judgment to interpret market information, including implied credit spreads for similar borrowings on recent trades or bid/ask offers. These fair values are not necessarily indicative of the amount which could be realized in a current market exchange.
|
(b)
|
The impact of principal payments that will commence following the anticipated repayment dates is not considered. The Tower Revenue Notes have principal amounts of $300 million, $250 million, $700 million and $750 million, with anticipated repayment dates in 2022, 2023, 2025 and 2028, respectively.
|
(c)
|
The average interest rate represents the weighted-average stated coupon rate (see footnote (d)).
|
(d)
|
If the Tower Revenue Notes are not repaid in full by the applicable anticipated repayment dates, the applicable interest rate increases by approximately 5% per annum and monthly principal payments commence using the Excess Cash Flow (as defined in the indenture governing the applicable Tower Revenue Notes) of the issuers of the Tower Revenue Notes. The Tower Revenue Notes are presented based on their contractual maturity dates ranging from 2042 to 2048 and include the impact of an assumed 5% increase in interest rate that would occur following the anticipated repayment dates but exclude the impact of monthly principal payments that would commence using Excess Cash Flow of the issuers of the Tower Revenue Notes. The full year 2019 Excess Cash Flow of the issuers of the Tower Revenue Notes was approximately $764 million. We currently expect to refinance these notes on or prior to the respective anticipated repayment dates.
|
(e)
|
Consists of our 2016 Term Loan A and 2016 Revolver borrowings, each of which matures in 2024.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
|
|
(In thousands)
|
|
|
|
|
|
|
|||||
January 1 - January 31 2020
|
|
1
|
|
|
$
|
141.24
|
|
|
—
|
|
|
—
|
|
February 1 - February 29, 2020
|
|
439
|
|
|
166.18
|
|
|
—
|
|
|
—
|
|
|
March 1 - March 31, 2020
|
|
1
|
|
|
150.54
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
441
|
|
|
$
|
166.06
|
|
|
—
|
|
|
—
|
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Date of Filing
|
|
Exhibit Number
|
3.1
|
|
|
8-K
|
|
001-16441
|
|
July 26, 2017
|
|
3.1
|
|
3.2
|
|
|
8-K
|
|
001-16441
|
|
July 26, 2017
|
|
3.2
|
|
3.3
|
|
|
10-K
|
|
001-16441
|
|
February 25, 2019
|
|
3.3
|
|
4.1
|
|
|
8-K
|
|
001-16441
|
|
April 3, 2020
|
|
4.1
|
|
10.1
|
|
|
|
8-K
|
|
001-16441
|
|
February 21, 2020
|
|
10.1
|
31.1*
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31.2*
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
32.1†
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
101*
|
|
The following financial statements from Crown Castle International Corp.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheet, (ii) Condensed Consolidated Statement of Operations and Comprehensive Income (Loss), (iii) Condensed Consolidated Statement of Cash Flows, (iv) Condensed Consolidated Statement of Equity, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags
|
|
—
|
|
—
|
|
—
|
|
—
|
104*
|
|
The cover page from Crown Castle International Corp.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline XBRL
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
CROWN CASTLE INTERNATIONAL CORP.
|
||
|
|
|
|
|
Date:
|
May 1, 2020
|
|
By:
|
/s/ DANIEL K. SCHLANGER
|
|
|
|
|
Daniel K. Schlanger
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 1, 2020
|
|
By:
|
/s/ ROBERT S. COLLINS
|
|
|
|
|
Robert S. Collins
|
|
|
|
|
Vice President and Controller
|
|
|
|
|
(Principal Accounting Officer)
|
1.
|
I have reviewed this report on Form 10-Q of Crown Castle International Corp. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Jay A. Brown
|
|
|
Jay A. Brown
President and Chief Executive Officer
|
|
1.
|
I have reviewed this report on Form 10-Q of Crown Castle International Corp. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Daniel K. Schlanger
|
|
|
Daniel K. Schlanger
Executive Vice President and Chief Financial Officer
|
|
1)
|
the Report complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of March 31, 2020 (the last date of the period covered by the Report).
|
|
/s/ Jay A. Brown
|
|
|
Jay A. Brown
President and Chief Executive Officer
|
|
|
May 1, 2020
|
|
|
|
|
|
/s/ Daniel K. Schlanger
|
|
|
Daniel K. Schlanger
Executive Vice President and Chief Financial Officer
|
|
|
May 1, 2020
|
|