SBA Communications Corporation (Nasdaq:SBAC) ("SBA" or the
"Company") today reported results for the quarter ended September
30, 2017.
Highlights of the third quarter
include:
- Increased Full Year Outlook
- Net income of $49.2 million or $0.41 per
share
- AFFO per share growth of 14% over the year earlier
period
- Repurchased 3.5 million shares from July 1 through
October 30, 2017
“The third quarter was another solid one for
SBA,” commented Jeffrey A. Stoops, President and Chief Executive
Officer. “Our customers were active across all of our markets
and we executed well, once again posting industry-leading tower
cash flow and adjusted EBITDA margins. Growth in site leasing
revenue, tower cash flow, adjusted EBITDA and AFFO and a reduction
in shares outstanding produced material year-over-year growth in
AFFO per share. We continue to focus on steady balance sheet
management and opportunistic capital allocation, with a number of
successes in these areas since our last report. We remain solidly
on track to achieve our goal of producing at least $10 of AFFO per
share in 2020. With FirstNet, 600 Mhz, 2.5 Ghz, and other
deployments by our customers still ahead in the U.S. and material
network investment expected from our customers in our international
markets, we remain very optimistic about the future and our ability
to create additional shareholder value through consistent and
material growth in AFFO per share.”
Operating Results
The table below details select financial results
for the three months ended September 30, 2017 and comparisons to
the prior year period.
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% Change |
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Q3 2017 |
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Q3 2016 |
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$ Change |
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% Change |
|
excluding FX (1) |
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Consolidated |
|
($ in millions, except per share
amounts) |
Site leasing
revenue |
|
$ |
408.5 |
|
$ |
388.2 |
|
|
$ |
20.3 |
|
|
5.2 |
% |
|
|
4.9 |
% |
Site development
revenue |
|
|
25.4 |
|
|
23.2 |
|
|
|
2.2 |
|
|
9.5 |
% |
|
|
9.5 |
% |
Tower cash flow
(1) |
|
|
321.5 |
|
|
302.8 |
|
|
|
18.7 |
|
|
6.2 |
% |
|
|
5.9 |
% |
Net income (loss) |
|
|
49.2 |
|
|
(15.4 |
) |
|
|
64.6 |
|
|
419.5 |
% |
|
|
298.5 |
% |
Earnings per share -
diluted |
|
|
0.41 |
|
|
(0.12 |
) |
|
|
0.53 |
|
|
441.7 |
% |
|
|
308.3 |
% |
Adjusted EBITDA
(1) |
|
|
303.1 |
|
|
283.2 |
|
|
|
19.9 |
|
|
7.0 |
% |
|
|
6.7 |
% |
AFFO (1) |
|
|
211.3 |
|
|
191.5 |
|
|
|
19.8 |
|
|
10.3 |
% |
|
|
9.9 |
% |
AFFO per share (1) |
|
|
1.75 |
|
|
1.53 |
|
|
|
0.22 |
|
|
14.4 |
% |
|
|
13.7 |
% |
(1) Non-GAAP metrics, please see the
reconciliations and other disclosures under “Non-GAAP Financial
Measures” later in this press release.
Total revenues in the third quarter of 2017 were
$433.9 million compared to $411.3 million in the year earlier
period, an increase of 5.5%. Site leasing revenue in the quarter of
$408.5 million was comprised of domestic site leasing revenue of
$328.4 million and international site leasing revenue of $80.1
million. Domestic cash site leasing revenue was $327.9 million in
the third quarter of 2017 compared to $316.8 million in the year
earlier period, an increase of 3.5%. International cash site
leasing revenue was $76.3 million in the third quarter of 2017
compared to $64.0 million in the year earlier period, an increase
of 19.2%.
Site leasing operating profit was $318.2
million, an increase of 5.4% over the year earlier period. Site
leasing contributed 98.7% of the Company’s total operating profit
in the third quarter of 2017. Domestic site leasing segment
operating profit was $263.2 million, an increase of 3.7% over the
year earlier period. International site leasing segment operating
profit was $55.0 million, an increase of 14.5% over the year
earlier period.
Tower Cash Flow for the third quarter of 2017 of
$321.5 million was comprised of Domestic Tower Cash Flow of $269.4
million and International Tower Cash Flow of $52.1 million.
Domestic Tower Cash Flow for the quarter increased 4.1% over the
prior year period and International Tower Cash Flow increased 18.6%
over the prior year period. Tower Cash Flow Margin was 79.5% for
the third quarter of 2017 and 2016.
Net Cash Interest Expense was $78.9 million in
the third quarter of 2017 compared to $80.3 million in the third
quarter of 2016.
Net income for the third quarter of 2017 was
$49.2 million, or $0.41 per share, and included a $18.4 million
gain on the currency related remeasurement of a U.S. dollar
denominated intercompany loan with a Brazilian subsidiary, while
net loss for the third quarter of 2016 was $15.4 million, or
$(0.12) per share, and included a $3.2 million loss on the currency
related remeasurement of a U.S. dollar denominated intercompany
loan with a Brazilian subsidiary.
Adjusted EBITDA for the quarter was $303.1
million, a 7.0% increase over the prior year period. Adjusted
EBITDA Margin was 70.6% in the third quarter of 2017 compared to
70.1% in the third quarter of 2016.
AFFO for the quarter was $211.3 million, a 10.3%
increase over the prior year period. AFFO per share for the third
quarter of 2017 was $1.75, a 14.4% increase over the third quarter
of 2016.
Investing Activities
During the third quarter of 2017, SBA purchased
118 communication sites and the rights to manage 2 additional
communication sites for total consideration of $47.9 million. SBA
also built 134 towers during the third quarter of 2017. As of
September 30, 2017, SBA owned or operated 26,764 communication
sites, 15,949 of which are located in the United States and its
territories, and 10,815 of which are located internationally. In
addition, the Company spent $14.8 million to purchase land and
easements and to extend lease terms. Total cash capital
expenditures for the third quarter of 2017 were $115.7 million,
consisting of $9.1 million of non-discretionary cash capital
expenditures (tower maintenance and general corporate) and $106.6
million of discretionary cash capital expenditures (new tower
builds, tower augmentations, acquisitions, and purchasing land and
easements).
Subsequent to the third quarter of 2017, the
Company acquired 35 communication sites for an aggregate
consideration of $24.4 million in cash. In addition, the Company
has agreed to purchase 1,275 communication sites, 1,228 of which
are located in international markets in which the Company currently
operates, for an aggregate amount of $332.2 million. The Company
anticipates that these acquisitions will be consummated by the end
of the first quarter of 2018.
Financing Activities and Liquidity
SBA ended the third quarter with $9.1 billion of
total debt, $7.2 billion of total secured debt, $170.1 million of
cash and cash equivalents, short-term restricted cash, and
short-term investments, and $8.9 billion of Net Debt. SBA’s
Net Debt and Net Secured Debt to Annualized Adjusted EBITDA
Leverage Ratios were 7.3x and 5.8x, respectively.
As of the date of this press release, SBA had no
amount outstanding under its $1.0 billion Revolving Credit
Facility.
During the third quarter of 2017, the Company
repurchased 2.7 million shares of its Class A common stock for
$383.9 million, at an average price per share of $141.17.
Subsequent to September 30, 2017, the Company repurchased 0.8
million shares of its Class A common stock for $111.1 million, at
an average price per share of $147.19. As of the date of this press
release, the Company had $350.0 million of authorization remaining
under its current stock repurchase plan.
On October 13, 2017, the Company issued $750.0
million of unsecured senior notes due October 1, 2022 (the “2017
Senior Notes”). The 2017 Senior Notes accrue interest at a rate of
4.0% per annum. Interest on the 2017 Senior Notes is due
semi-annually on April 1 and October 1 of each year, beginning on
April 1, 2018. Net proceeds from this offering were used to repay
$460.0 million outstanding under the Revolving Credit Facility and
for general corporate purposes.
Outlook
The Company is updating its full year 2017
Outlook for anticipated results. The Outlook provided is based on a
number of assumptions that the Company believes are reasonable at
the time of this press release. Information regarding
potential risks that could cause the actual results to differ from
these forward-looking statements is set forth below and in the
Company’s filings with the Securities and Exchange Commission.
The Company’s full year 2017 Outlook assumes the
acquisitions of only those communication sites under contract at
the time of this press release. The Company may spend
additional capital in 2017 on acquiring revenue producing assets
not yet identified or under contract, the impact of which is not
reflected in the 2017 guidance. The Outlook does not contemplate
any new financings or any additional repurchases of the Company’s
stock during 2017 other than those financings and repurchases
completed as of the date of this press release.
The Company’s Outlook assumes an average foreign
currency exchange rate of 3.25 Brazilian Reais to 1.0 U.S. Dollar
and 1.28 Canadian Dollars to 1.0 U.S. Dollar for the fourth quarter
of 2017.
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|
(in millions,
except per share amounts) |
Full Year 2017 |
|
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|
|
|
Site leasing revenue
(1) |
$ |
1,613.0 |
to |
$ |
1,623.0 |
Site development
revenue |
$ |
95.0 |
to |
$ |
105.0 |
Total revenues |
$ |
1,708.0 |
to |
$ |
1,728.0 |
Tower Cash Flow
(2) |
$ |
1,271.0 |
to |
$ |
1,281.0 |
Adjusted EBITDA
(2) |
$ |
1,195.0 |
to |
$ |
1,205.0 |
Net cash interest
expense (3) |
$ |
310.0 |
to |
$ |
315.0 |
Non-discretionary cash
capital expenditures (4) |
$ |
32.5 |
to |
$ |
37.5 |
AFFO (2) |
$ |
825.5 |
to |
$ |
849.5 |
AFFO per share
(2) (5) |
$ |
6.82 |
to |
$ |
7.01 |
Discretionary cash
capital expenditures (6) |
$ |
395.0 |
to |
$ |
415.0 |
(1) The Company’s Outlook for site leasing
revenue includes revenue associated with pass through reimbursable
expenses.(2) See the reconciliation of this non-GAAP
financial measure presented below under “Non-GAAP Financial
Measures.”(3) Net cash interest expense is defined as
interest expense less interest income. Net cash interest expense
does not include amortization of deferred financing fees or
non-cash interest expense. (4) Consists of tower
maintenance and general corporate capital expenditures. Includes
$1.0 million of estimated capital expenditures associated with
hurricanes Harvey, Irma, and Maria.(5) Outlook for AFFO per
share is calculated by dividing the Company’s outlook for AFFO by
an assumed weighted average number of diluted common shares of
121.1 million. Our Outlook does not include the impact of any
additional repurchases of the Company’s stock during 2017 other
than those repurchases completed or agreed to as of the date of
this press release.(6) Consists of new tower builds, tower
augmentations, communication site acquisitions and ground lease
purchases. Does not include expenditures for acquisitions of
revenue producing assets not under contract at the date of this
press release.
Conference Call Information
SBA Communications Corporation will host a
conference call on Monday, October 30, 2017 at 5:00 PM (ET) to
discuss the quarterly results. The call may be accessed as
follows:
When: |
|
|
Monday, October 30,
2017 at 5:00 PM (ET) |
Dial-in Number: |
|
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(800) 230-1951 |
Conference Name: |
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SBA third quarter
results |
Replay Available: |
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October 30, 2017 at
8:00 PM (ET) through November 13, 2017 at 11:59 PM (ET) |
Replay Number: |
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(800) 475-6701 |
Access Code: |
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431482 |
Internet Access: |
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www.sbasite.com |
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Information Concerning Forward-Looking
Statements
This press release includes forward-looking
statements, including statements regarding the Company’s
expectations or beliefs regarding (i) the Company’s long term goal
of producing AFFO of $10 or more per share in 2020 and its progress
toward achieving that goal, (ii) future domestic and international
customer demand and the timing and impact of spectrum deployments
and network investment, (iii) the Company’s intentions for future
capital allocation, (iv) the Company’s financial and operational
guidance for the full year 2017, (v) timing of closing for
currently pending acquisitions, (vi) the Company’s expectations
regarding additional capital spending in 2017, and (vii) the
Company’s expectations regarding foreign exchange rates and their
impact on the Company’s financial and operational guidance.
Furthermore, the Company’s 2017 outlook assumes that the Company’s
business is currently operated in a manner that complies with the
REIT rules and that the Company is able to qualify and to remain
qualified as a REIT and the timing of such qualification. These
forward-looking statements may be affected by the risks and
uncertainties in the Company’s business. This information is
qualified in its entirety by cautionary statements and risk factor
disclosures contained in the Company’s Securities and Exchange
Commission filings, including the Company’s annual report on Form
10-K filed with the Commission on March 1, 2017.
The Company wishes to caution readers that
certain important factors may have affected and could in the future
affect the Company’s actual results and could cause the Company’s
actual results for subsequent periods to differ materially from
those expressed in any forward-looking statement made by or on
behalf of the Company. With respect to the Company’s expectations
regarding all of these statements, including its financial and
operational guidance, such risk factors include, but are not
limited to: (1) the ability and willingness of wireless service
providers to maintain or increase their capital expenditures; (2)
the Company’s ability to identify and acquire sites at prices and
upon terms that will allow the portfolio growth to be accretive;
(3) the Company’s ability to accurately identify any risks
associated with its acquired sites, to effectively integrate such
sites into its business and to achieve the anticipated financial
results; (4) the Company’s ability to secure and retain as many
site leasing tenants as planned at anticipated lease rates; (5) the
impact of continued consolidation among wireless service providers
on the Company’s leasing revenue; (6) the Company’s ability to
successfully manage the risks associated with international
operations, including risks associated with foreign currency
exchange rates; (7) the Company’s ability to secure and deliver
anticipated services business at contemplated margins; (8) the
Company’s ability to maintain expenses and cash capital
expenditures at appropriate levels for its business while seeking
to attain its investment goals; (9) the Company’s ability to
acquire land underneath towers on terms that are accretive; (10)
the Company’s ability to realize economies of scale from its tower
portfolio; (11) the economic climate for the wireless
communications industry in general and the wireless communications
infrastructure providers in particular in the United States,
Brazil, and internationally; (12) the continued dependence on
towers and outsourced site development services by the wireless
carriers; (13) the Company’s ability to protect its rights to land
under its towers; (14) the Company’s ability to obtain future
financing at commercially reasonable rates or at all; and (15) the
Company’s ability to qualify for treatment as a REIT for U.S.
federal income tax purposes and to comply with and conduct its
business in accordance with such rules. With respect to the
Company’s plan for new builds, these factors also include zoning
and regulatory approvals, weather, availability of labor and
supplies and other factors beyond the Company’s control that could
affect the Company’s ability to build additional towers in 2017.
With respect to its expectations regarding the ability to close
pending acquisitions, these factors also include satisfactorily
completing due diligence, the amount and quality of due diligence
that the Company is able to complete prior to closing of any
acquisition and its ability to accurately anticipate the future
performance of the acquired towers, the ability to receive required
regulatory approval, the ability and willingness of each party to
fulfill their respective closing conditions and their contractual
obligations and the availability of cash on hand or borrowing
capacity under the Revolving Credit Facility to fund the
consideration. With respect to repurchases under the Company’s
stock repurchase program, the amount of shares repurchased, if any,
and the timing of such repurchases will depend on, among other
things, the trading price of the Company’s common stock, which may
be positively or negatively impacted by the repurchase program,
market and business conditions, the availability of stock, the
Company’s financial performance or determinations following the
date of this announcement in order to use the Company’s funds for
other purposes.
This press release contains non-GAAP financial
measures. Reconciliation of each of these non-GAAP financial
measures and the other Regulation G information is presented below
under “Non-GAAP Financial Measures.”
This press release will be available on our
website at www.sbasite.com.
About SBA Communications Corporation
SBA Communications Corporation is a first choice
provider and leading owner and operator of wireless communications
infrastructure in North, Central, and South America. By “Building
Better Wireless,” SBA generates revenue from two primary businesses
– site leasing and site development services. The primary focus of
the Company is the leasing of antenna space on its multi-tenant
communication sites to a variety of wireless service providers
under long-term lease contracts. For more information please visit:
www.sbasite.com.
Contacts
Mark DeRussy, CFACapital Markets561-226-9531
Lynne HopkinsMedia Relations561-226-9431
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(unaudited) (in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
For the nine months |
|
|
ended September 30, |
|
ended September 30, |
|
|
2017 |
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2016 |
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2017 |
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|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Site
leasing |
|
$ |
408,538 |
|
|
$ |
388,168 |
|
|
$ |
1,209,089 |
|
|
$ |
1,144,461 |
|
Site
development |
|
|
25,407 |
|
|
|
23,151 |
|
|
|
75,513 |
|
|
|
72,159 |
|
Total
revenues |
|
|
433,945 |
|
|
|
411,319 |
|
|
|
1,284,602 |
|
|
|
1,216,620 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues (exclusive of depreciation, accretion, |
|
|
|
|
|
|
|
|
|
|
|
|
and
amortization shown below): |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
site leasing |
|
|
90,351 |
|
|
|
86,354 |
|
|
|
269,070 |
|
|
|
255,609 |
|
Cost of
site development |
|
|
21,117 |
|
|
|
19,114 |
|
|
|
62,713 |
|
|
|
59,021 |
|
Selling, general, and
administrative (1)(2) |
|
|
32,559 |
|
|
|
32,255 |
|
|
|
100,177 |
|
|
|
110,326 |
|
Acquisition related
adjustments and expenses |
|
|
1,583 |
|
|
|
2,970 |
|
|
|
6,857 |
|
|
|
8,974 |
|
Asset impairment and
decommission costs |
|
|
9,417 |
|
|
|
2,305 |
|
|
|
25,908 |
|
|
|
23,180 |
|
Depreciation,
accretion, and amortization |
|
|
161,907 |
|
|
|
160,111 |
|
|
|
480,457 |
|
|
|
479,635 |
|
Total
operating expenses |
|
|
316,934 |
|
|
|
303,109 |
|
|
|
945,182 |
|
|
|
936,745 |
|
Operating
income |
|
|
117,011 |
|
|
|
108,210 |
|
|
|
339,420 |
|
|
|
279,875 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
2,505 |
|
|
|
3,101 |
|
|
|
8,648 |
|
|
|
7,704 |
|
Interest
expense |
|
|
(81,357 |
) |
|
|
(83,426 |
) |
|
|
(237,415 |
) |
|
|
(250,913 |
) |
Non-cash
interest expense |
|
|
(725 |
) |
|
|
(585 |
) |
|
|
(2,146 |
) |
|
|
(1,500 |
) |
Amortization of deferred financing fees |
|
|
(4,957 |
) |
|
|
(5,445 |
) |
|
|
(16,603 |
) |
|
|
(16,035 |
) |
Loss from
extinguishment of debt, net |
|
|
— |
|
|
|
(34,512 |
) |
|
|
(1,961 |
) |
|
|
(34,512 |
) |
Other
income (expense), net |
|
|
20,062 |
|
|
|
(1,139 |
) |
|
|
16,218 |
|
|
|
92,137 |
|
Total
other expense |
|
|
(64,472 |
) |
|
|
(122,006 |
) |
|
|
(233,259 |
) |
|
|
(203,119 |
) |
Income
(loss) before provision for income taxes |
|
|
52,539 |
|
|
|
(13,796 |
) |
|
|
106,161 |
|
|
|
76,756 |
|
Provision for income
taxes |
|
|
(3,378 |
) |
|
|
(1,574 |
) |
|
|
(10,167 |
) |
|
|
(5,780 |
) |
Net income (loss) |
|
$ |
49,161 |
|
|
$ |
(15,370 |
) |
|
$ |
95,994 |
|
|
$ |
70,976 |
|
Net income (loss) per
common share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.41 |
|
|
$ |
(0.12 |
) |
|
$ |
0.80 |
|
|
$ |
0.57 |
|
Diluted |
|
$ |
0.41 |
|
|
$ |
(0.12 |
) |
|
$ |
0.79 |
|
|
$ |
0.56 |
|
Weighted average number
of common shares |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
119,746 |
|
|
|
124,604 |
|
|
|
120,745 |
|
|
|
125,041 |
|
Diluted |
|
|
121,026 |
|
|
|
124,604 |
|
|
|
121,727 |
|
|
|
125,761 |
|
(1) Includes non-cash compensation of
$9,213 and $7,970 for the three months ended September 30, 2017 and
2016, respectively, and $28,069 and $24,440 for the nine months
ended September 30, 2017 and 2016, respectively.(2) Includes
the impact of the $16,498 Oi reserve for the nine months ended
September 30, 2016.
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands, except par values) |
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
2017 |
|
|
2016 |
|
ASSETS |
|
(unaudited) |
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
139,711 |
|
|
$ |
146,109 |
|
Restricted cash |
|
|
30,168 |
|
|
|
36,786 |
|
Accounts
receivable, net |
|
|
87,417 |
|
|
|
78,344 |
|
Costs and
estimated earnings in excess of billings on uncompleted
contracts |
|
|
12,508 |
|
|
|
11,127 |
|
Prepaid
and other current assets |
|
|
54,262 |
|
|
|
52,205 |
|
Total
current assets |
|
|
324,066 |
|
|
|
324,571 |
|
Property and equipment,
net |
|
|
2,777,339 |
|
|
|
2,792,076 |
|
Intangible assets,
net |
|
|
3,550,710 |
|
|
|
3,656,924 |
|
Other assets |
|
|
648,355 |
|
|
|
587,374 |
|
Total
assets |
|
$ |
7,300,470 |
|
|
$ |
7,360,945 |
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT |
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
32,429 |
|
|
$ |
28,320 |
|
Accrued
expenses |
|
|
85,052 |
|
|
|
61,129 |
|
Current
maturities of long-term debt |
|
|
773,289 |
|
|
|
627,157 |
|
Deferred
revenue |
|
|
101,168 |
|
|
|
101,098 |
|
Accrued
interest |
|
|
19,668 |
|
|
|
44,503 |
|
Other
current liabilities |
|
|
11,109 |
|
|
|
11,240 |
|
Total
current liabilities |
|
|
1,022,715 |
|
|
|
873,447 |
|
Long-term
liabilities: |
|
|
|
|
|
|
Long-term
debt, net |
|
|
8,185,512 |
|
|
|
8,148,426 |
|
Other
long-term liabilities |
|
|
350,041 |
|
|
|
334,993 |
|
Total
long-term liabilities |
|
|
8,535,553 |
|
|
|
8,483,419 |
|
Shareholders'
deficit: |
|
|
|
|
|
|
Prefer.
stock-par value $.01, 30,000 shares authorized, no shares issued or
outst. |
|
|
— |
|
|
|
— |
|
Common
stock - Class A, par value $.01, 400,000 shares authorized,
118,428 |
|
|
|
|
|
|
and
121,004 shares issued and outstanding at September 30, 2017 |
|
|
|
|
|
|
and
December 31, 2016, respectively |
|
|
1,184 |
|
|
|
1,210 |
|
Additional paid-in capital |
|
|
2,148,273 |
|
|
|
2,010,520 |
|
Accumulated deficit |
|
|
(4,064,805 |
) |
|
|
(3,637,467 |
) |
Accumulated other comprehensive loss |
|
|
(342,450 |
) |
|
|
(370,184 |
) |
Total
shareholders' deficit |
|
|
(2,257,798 |
) |
|
|
(1,995,921 |
) |
Total
liabilities and shareholders' deficit |
|
$ |
7,300,470 |
|
|
$ |
7,360,945 |
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS |
(unaudited) (in thousands) |
|
|
|
|
|
|
|
|
|
For the three months |
|
|
ended September 30, |
|
|
2017 |
|
|
2016 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net
income (loss) |
|
$ |
49,161 |
|
|
$ |
(15,370 |
) |
Adjust.
to reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation, accretion, and amortization |
|
|
161,907 |
|
|
|
160,111 |
|
Non-cash
asset impairment and decommission costs |
|
|
8,597 |
|
|
|
1,298 |
|
Non-cash
compensation expense |
|
|
9,423 |
|
|
|
8,076 |
|
Amortization of deferred financing fees |
|
|
4,957 |
|
|
|
5,445 |
|
(Gain)
loss on remeasurement of U.S. denominated intercompany loan |
|
|
(18,407 |
) |
|
|
3,168 |
|
Provision
for doubtful accounts |
|
|
486 |
|
|
|
3,012 |
|
Loss from
extinguishment of debt, net |
|
|
— |
|
|
|
34,512 |
|
Other
non-cash items reflected in the Statements of Operations |
|
|
(1,017 |
) |
|
|
(2,770 |
) |
Changes
in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
Accounts
receivable and costs and estimated earnings in excess of
billings |
|
|
|
|
|
|
on
uncompleted contracts, net |
|
|
(10,871 |
) |
|
|
(12,413 |
) |
Prepaid
expenses and other assets |
|
|
(7,093 |
) |
|
|
(5,132 |
) |
Accounts
payable and accrued expenses |
|
|
4,265 |
|
|
|
1,047 |
|
Accrued
interest |
|
|
(22,375 |
) |
|
|
(16,901 |
) |
Other
liabilities |
|
|
8,240 |
|
|
|
8,413 |
|
Net cash
provided by operating activities |
|
|
187,273 |
|
|
|
172,496 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Acquisitions |
|
|
(78,826 |
) |
|
|
(42,698 |
) |
Capital
expenditures |
|
|
(36,875 |
) |
|
|
(33,659 |
) |
Other
investing activities |
|
|
(6,573 |
) |
|
|
5,571 |
|
Net cash
used in investing activities |
|
|
(122,274 |
) |
|
|
(70,786 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Net
borrowings (repayments) under Revolving Credit Facility |
|
|
280,000 |
|
|
|
120,000 |
|
Repayment
of Tower Securities |
|
|
— |
|
|
|
(550,000 |
) |
Proceeds
from issuance of Tower Securities, net of fees |
|
|
— |
|
|
|
690,584 |
|
Repurchase and retirement of common stock, inclusive of fees |
|
|
(378,932 |
) |
|
|
(52,320 |
) |
Proceeds
from 2016 Senior Notes, net of fees and original issue
discount |
|
|
— |
|
|
|
1,078,387 |
|
Payment
for the redemption of 5.75% Senior Notes |
|
|
— |
|
|
|
(825,795 |
) |
Other
financing activities |
|
|
5,440 |
|
|
|
(3,022 |
) |
Net cash
(used in) provided by financing activities |
|
|
(93,492 |
) |
|
|
457,834 |
|
Effect of
exchange rate changes on cash, cash equivalents, and restricted
cash |
|
|
3,762 |
|
|
|
(1,249 |
) |
NET CHANGE IN CASH,
CASH EQUIVALENTS, AND RESTRICTED CASH |
|
|
(24,731 |
) |
|
|
558,295 |
|
CASH, CASH EQUIVALENTS,
AND RESTRICTED CASH: |
|
|
|
|
|
|
Beginning
of period |
|
|
197,193 |
|
|
|
162,636 |
|
End of
period |
|
$ |
172,462 |
|
|
$ |
720,931 |
|
|
|
|
|
|
|
|
|
|
Selected Capital Expenditure Detail
|
|
|
|
|
|
|
|
|
For the three |
|
For the nine |
|
|
months ended |
|
months ended |
|
|
September 30, 2017 |
|
September 30, 2017 |
|
|
|
|
|
|
|
|
|
(in thousands) |
Construction and
related costs on new builds |
|
$ |
16,851 |
|
$ |
49,650 |
Augmentation and tower
upgrades |
|
|
10,942 |
|
|
31,704 |
Non-discretionary
capital expenditures: |
|
|
|
|
|
|
Tower
maintenance |
|
|
8,056 |
|
|
21,752 |
General
corporate |
|
|
1,026 |
|
|
3,204 |
Total
non-discretionary capital expenditures |
|
|
9,082 |
|
|
24,956 |
Total
capital expenditures |
|
$ |
36,875 |
|
$ |
106,310 |
|
|
|
|
|
|
|
Communication Site Portfolio Summary
|
|
|
|
|
|
|
|
|
Domestic |
|
International |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sites owned at June 30,
2017 |
|
15,947 |
|
|
10,615 |
|
|
26,562 |
|
Sites acquired during
the third quarter |
|
35 |
|
|
83 |
|
|
118 |
|
Sites built during the
third quarter |
|
15 |
|
|
119 |
|
|
134 |
|
Sites
reclassified/decommissioned during the third quarter |
|
(48 |
) |
|
(2 |
) |
|
(50 |
) |
Sites
owned at September 30, 2017 |
|
15,949 |
|
|
10,815 |
|
|
26,764 |
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Profit and Segment Operating
Profit Margin
Domestic site leasing and International site
leasing are the two segments within our site leasing
business. Segment operating profit is a key business metric
and one of our two measures of segment profitability. The
calculation of Segment operating profit for each of our segments is
set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Site Leasing |
|
Int'l Site Leasing |
|
Site Development |
|
|
For the three months |
|
For the three months |
|
For the three months |
|
|
ended September 30, |
|
ended September 30, |
|
ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Segment revenue |
|
$ |
328,395 |
|
|
$ |
319,109 |
|
|
$ |
80,143 |
|
|
$ |
69,059 |
|
|
$ |
25,407 |
|
|
$ |
23,151 |
|
Segment cost of
revenues (excluding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation, accretion, and amort.) |
|
|
(65,226 |
) |
|
|
(65,353 |
) |
|
|
(25,125 |
) |
|
|
(21,001 |
) |
|
|
(21,117 |
) |
|
|
(19,114 |
) |
Segment
operating profit |
|
$ |
263,169 |
|
|
$ |
253,756 |
|
|
$ |
55,018 |
|
|
$ |
48,058 |
|
|
$ |
4,290 |
|
|
$ |
4,037 |
|
Segment
operating profit margin |
|
|
80.1 |
% |
|
|
79.5 |
% |
|
|
68.6 |
% |
|
|
69.6 |
% |
|
|
16.9 |
% |
|
|
17.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
The press release contains non-GAAP financial
measures including (i) Cash Site Leasing Revenue; (ii) Tower Cash
Flow and Tower Cash Flow Margin; (iii) Adjusted EBITDA, Annualized
Adjusted EBITDA, and Adjusted EBITDA Margin; (iv) Net Debt, Net
Secured Debt, Leverage Ratio, and Secured Leverage Ratio
(collectively, our “Non-GAAP Debt Measures”); (v) Funds from
Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), and
AFFO per share; and (vi) certain financial metrics after
eliminating the impact of changes in foreign currency exchange
rates (collectively, our “Constant Currency
Measures”).
We have included these non-GAAP financial measures because we
believe that they provide investors additional tools in
understanding our financial performance and condition.
Specifically, we believe that:
(1) Cash Site Leasing Revenue and Tower
Cash Flow are useful indicators of the performance of our site
leasing operations;
(2) Adjusted EBITDA is useful to investors
or other interested parties in evaluating our financial
performance. Adjusted EBITDA is the primary measure used by
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. Management believes that Adjusted EBITDA helps
investors or other interested parties meaningfully evaluate and
compare the results of our operations (1) from period to period and
(2) to our competitors, by excluding 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. Management also believes Adjusted
EBITDA is frequently used by investors or other interested parties
in the evaluation of REITs. In addition, Adjusted EBITDA is similar
to the measure of current financial performance generally used in
our debt covenant calculations. Adjusted EBITDA should be
considered only as a supplement to net income computed in
accordance with GAAP as a measure of our performance;
(3) FFO, AFFO and AFFO per share, which
are metrics used by our public company peers in the communication
site industry, provide investors useful indicators of the financial
performance of our business and permit investors an additional tool
to evaluate the performance of our business against those of our
two principal competitors. FFO, AFFO, and AFFO per share are also
used to address questions we receive from analysts and investors
who routinely assess our operating performance on the basis of
these performance measures, which are considered industry
standards. We believe that FFO helps investors or other interested
parties meaningfully evaluate financial performance by excluding
the impact of our asset base (primarily depreciation, amortization
and accretion). We believe that AFFO and AFFO per share help
investors or other interested parties meaningfully evaluate our
financial performance as they include (1) the impact of our capital
structure (primarily interest expense on our outstanding debt) and
(2) sustaining capital expenditures and exclude the impact of our
(1) asset base (primarily depreciation, amortization and accretion)
and (2) certain non-cash items, including straight-lined revenues
and expenses related to fixed escalations and rent free periods and
the non-cash portion of our reported tax provision. GAAP requires
rental revenues and expenses related to leases that contain
specified rental increases over the life of the lease to be
recognized evenly over the life of the lease. In accordance with
GAAP, if payment terms call for fixed escalations, or rent free
periods, the revenue or expense is recognized on a straight-lined
basis over the fixed, non-cancelable term of the contract. We only
use AFFO as a performance measure. AFFO should be considered only
as a supplement to net income computed in accordance with GAAP as a
measure of our performance and should not be considered as an
alternative to cash flows from operations or as residual cash flow
available for discretionary investment. We believe our definition
of FFO is consistent with how that term is defined by the National
Association of Real Estate Investment Trusts (“NAREIT”) and that
our definition and use of AFFO and AFFO per share is consistent
with those reported by the other communication site companies;
(4) Our Non-GAAP Debt Measures provide
investors a more complete understanding of our net debt and
leverage position as they include the full principal amount of our
debt which will be due at maturity and, to the extent that such
measures are calculated on Net Debt are net of our cash and cash
equivalents, short-term restricted cash, and short-term
investments; and
(5) Our Constant Currency Measures provide
management and investors the ability to evaluate the performance of
the business without the impact of foreign currency exchange rate
fluctuations.
In addition, Tower Cash Flow, Adjusted EBITDA,
and our Non-GAAP Debt Measures are components of the calculations
used by our lenders to determine compliance with certain covenants
under our Senior Credit Agreement and indentures relating to our
2014 Senior Notes, 2016 Senior Notes, and 2017 Senior Notes.
These non-GAAP financial measures are not intended to be an
alternative to any of the financial measures provided in our
results of operations or our balance sheet as determined in
accordance with GAAP.
Financial Metrics after Eliminating the Impact
of Changes In Foreign Currency Exchange Rates
We eliminate the impact of changes in foreign
currency exchange rates for each of the following financial metrics
by dividing the current period’s financial results by the average
monthly exchange rates of the prior year period. The table
below provides the reconciliation of the reported growth rate
year-over-year of each of the following measures to the growth rate
after eliminating the impact of changes in foreign currency
exchange rates to such measure: (1) total site leasing revenue,
total cash site leasing revenue, and International cash site
leasing revenue, (2) total site leasing segment operating profit
and International site leasing segment operating profit, (3) total
Tower Cash Flow and International Tower Cash Flow, (4) Net income,
(5) diluted earnings per share, (6) Adjusted EBITDA, and (7) AFFO
and AFFO per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth |
|
|
Third quarter |
|
|
|
excluding |
|
|
2017 year |
|
Foreign |
|
foreign |
|
|
over year |
|
currency |
|
currency |
|
|
growth rate |
|
impact |
|
impact |
|
|
|
|
|
|
|
Total site leasing
revenue |
|
5.2 |
% |
|
0.3 |
% |
|
4.9 |
% |
Total cash site leasing
revenue |
|
6.1 |
% |
|
0.4 |
% |
|
5.7 |
% |
Int'l cash site leasing
revenue |
|
19.2 |
% |
|
2.3 |
% |
|
16.9 |
% |
Total site leasing
segment operating profit |
|
5.4 |
% |
|
0.3 |
% |
|
5.1 |
% |
Int'l site leasing
segment operating profit |
|
14.5 |
% |
|
2.1 |
% |
|
12.4 |
% |
Total site leasing
tower cash flow |
|
6.2 |
% |
|
0.3 |
% |
|
5.9 |
% |
Int'l site leasing
tower cash flow |
|
18.6 |
% |
|
2.1 |
% |
|
16.5 |
% |
Net income |
|
419.5 |
% |
|
121.0 |
% |
|
298.5 |
% |
Earnings per share -
diluted |
|
441.7 |
% |
|
133.4 |
% |
|
308.3 |
% |
Adjusted EBITDA |
|
7.0 |
% |
|
0.3 |
% |
|
6.7 |
% |
AFFO |
|
10.3 |
% |
|
0.4 |
% |
|
9.9 |
% |
AFFO per share |
|
14.4 |
% |
|
0.7 |
% |
|
13.7 |
% |
|
|
|
|
|
|
|
|
|
|
Cash Site Leasing Revenue, Tower Cash Flow, and
Tower Cash Flow Margin
The tables below set forth the reconciliation of
Cash Site Leasing Revenue and Tower Cash Flow to their most
comparable GAAP measurement and Tower Cash Flow Margin, which is
calculated by dividing Tower Cash Flow by Cash Site Leasing
Revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Site Leasing |
|
Int'l Site Leasing |
|
Total Site Leasing |
|
|
For the three months |
|
For the three months |
|
For the three months |
|
|
ended September 30, |
|
ended September 30, |
|
ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Site leasing
revenue |
|
$ |
328,395 |
|
|
$ |
319,109 |
|
|
$ |
80,143 |
|
|
$ |
69,059 |
|
|
$ |
408,538 |
|
|
$ |
388,168 |
|
Non-cash straight-line
leasing revenue |
|
|
(503 |
) |
|
|
(2,280 |
) |
|
|
(3,873 |
) |
|
|
(5,054 |
) |
|
|
(4,376 |
) |
|
|
(7,334 |
) |
Cash site
leasing revenue |
|
|
327,892 |
|
|
|
316,829 |
|
|
|
76,270 |
|
|
|
64,005 |
|
|
|
404,162 |
|
|
|
380,834 |
|
Site leasing cost of
revenues (excluding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation, accretion, and amortization) |
|
|
(65,226 |
) |
|
|
(65,353 |
) |
|
|
(25,125 |
) |
|
|
(21,001 |
) |
|
|
(90,351 |
) |
|
|
(86,354 |
) |
Non-cash straight-line
ground lease expense |
|
|
6,774 |
|
|
|
7,420 |
|
|
|
924 |
|
|
|
903 |
|
|
|
7,698 |
|
|
|
8,323 |
|
Tower
Cash Flow |
|
$ |
269,440 |
|
|
$ |
258,896 |
|
|
$ |
52,069 |
|
|
$ |
43,907 |
|
|
$ |
321,509 |
|
|
$ |
302,803 |
|
Tower
Cash Flow Margin |
|
|
82.2 |
% |
|
|
81.7 |
% |
|
|
68.3 |
% |
|
|
68.6 |
% |
|
|
79.5 |
% |
|
|
79.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted Tower Cash Flow for Full Year
2017
The table below sets forth the reconciliation of
forecasted Tower Cash Flow set forth in the Outlook section to its
most comparable GAAP measurement for the full year 2017:
|
|
|
|
|
|
|
Full Year 2017 |
|
|
|
|
|
|
|
(in millions) |
Site leasing
revenue |
$ |
1,613.0 |
|
to |
$ |
1,623.0 |
|
Non-cash straight-line
leasing revenue |
|
(16.5 |
) |
to |
|
(11.5 |
) |
Cash site
leasing revenue |
|
1,596.5 |
|
to |
|
1,611.5 |
|
Site leasing cost of
revenues (excluding |
|
|
|
|
|
depreciation, accretion, and amortization) |
|
(353.5 |
) |
to |
|
(363.5 |
) |
Non-cash straight-line
ground lease expense |
|
28.0 |
|
to |
|
33.0 |
|
Tower
Cash Flow |
$ |
1,271.0 |
|
to |
$ |
1,281.0 |
|
Adjusted EBITDA, Annualized Adjusted EBITDA, and
Adjusted EBITDA Margin
The table below sets forth the reconciliation of
Adjusted EBITDA to its most comparable GAAP measurement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
|
|
|
ended September 30, |
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Net income
(loss) |
|
$ |
49,161 |
|
|
$ |
(15,370 |
) |
Non-cash straight-line leasing revenue |
|
|
(4,376 |
) |
|
|
(7,334 |
) |
Non-cash straight-line ground lease expense |
|
|
7,698 |
|
|
|
8,323 |
|
Non-cash compensation |
|
|
9,423 |
|
|
|
8,076 |
|
Loss from extinguishment of debt, net |
|
|
— |
|
|
|
34,512 |
|
Other (income) expense |
|
|
(20,062 |
) |
|
|
1,139 |
|
Acquisition related adjustments and expenses |
|
|
1,583 |
|
|
|
2,970 |
|
Asset impairment and decommission costs |
|
|
9,417 |
|
|
|
2,305 |
|
Interest income |
|
|
(2,505 |
) |
|
|
(3,101 |
) |
Total interest expense (1) |
|
|
87,039 |
|
|
|
89,456 |
|
Depreciation, accretion, and amortization |
|
|
161,907 |
|
|
|
160,111 |
|
Provision for taxes (2) |
|
|
3,835 |
|
|
|
2,123 |
|
Adjusted EBITDA |
|
$ |
303,120 |
|
|
$ |
283,210 |
|
Annualized Adjusted EBITDA (3) |
|
$ |
1,212,480 |
|
|
$ |
1,132,840 |
|
|
|
|
|
|
|
|
|
|
(1) Total interest expense includes
interest expense, non-cash interest expense, and amortization of
deferred financing fees.(2) For the three months ended
September 30, 2017 and 2016, these amounts included $457 and $549,
respectively, of franchise and gross receipts taxes reflected in
the Statements of Operations in selling, general and administrative
expenses.(3) Annualized Adjusted EBITDA is calculated as
Adjusted EBITDA for the most recent quarter multiplied by four.
The calculation of Adjusted EBITDA Margin is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
|
|
|
ended September 30, |
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Total revenues |
|
|
|
|
$ |
433,945 |
|
|
$ |
411,319 |
|
Non-cash straight-line
leasing revenue |
|
|
|
|
|
(4,376 |
) |
|
|
(7,334 |
) |
Total
revenues minus non-cash straight-line leasing revenue |
|
|
|
|
$ |
429,569 |
|
|
$ |
403,985 |
|
Adjusted
EBITDA |
|
|
|
|
$ |
303,120 |
|
|
$ |
283,210 |
|
Adjusted
EBITDA Margin |
|
|
|
|
|
70.6 |
% |
|
|
70.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted Adjusted EBITDA for Full Year
2017
The table below sets forth the reconciliation of
the forecasted Adjusted EBITDA set forth in the Outlook section to
its most comparable GAAP measurement for the full year 2017:
|
|
|
|
|
|
|
Full Year 2017 |
|
|
|
|
|
|
|
(in millions) |
Net income |
$ |
94.5 |
|
to |
$ |
129.5 |
|
Non-cash
straight-line leasing revenue |
|
(16.5 |
) |
to |
|
(11.5 |
) |
Non-cash
straight-line ground lease expense |
|
28.0 |
|
to |
|
33.0 |
|
Non-cash
compensation |
|
39.0 |
|
to |
|
34.0 |
|
Loss from
extinguishment of debt, net |
|
2.0 |
|
to |
|
2.0 |
|
Other
(income) expense |
|
(8.0 |
) |
to |
|
(13.0 |
) |
Acquisition related adjustments and expenses |
|
12.0 |
|
to |
|
8.0 |
|
Asset
impairment and decommission costs |
|
36.0 |
|
to |
|
32.0 |
|
Interest
income |
|
(12.0 |
) |
to |
|
(10.0 |
) |
Total
interest expense (1) |
|
352.0 |
|
to |
|
345.0 |
|
Depreciation, accretion, and amortization |
|
650.0 |
|
to |
|
640.0 |
|
Provision
for taxes (2) |
|
18.0 |
|
to |
|
16.0 |
|
Adjusted
EBITDA |
$ |
1,195.0 |
|
to |
$ |
1,205.0 |
|
|
|
|
|
|
|
|
|
(1) Total interest expense includes
interest expense, non-cash interest expense, and amortization of
deferred financing fees.(2) Includes projections for
franchise taxes and gross receipts taxes which will be reflected in
the Statement of Operations in Selling, general, and administrative
expenses.
Funds from Operations (“FFO”) and Adjusted Funds
from Operations (“AFFO”)
The tables below set forth the reconciliations
of FFO and AFFO to their most comparable GAAP measurement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
|
|
|
ended September 30, |
(in
thousands, except per share amounts) |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
49,161 |
|
|
$ |
(15,370 |
) |
Real estate
related depreciation, amortization, and accretion |
|
|
160,995 |
|
|
|
158,863 |
|
Adjustments
for unconsolidated joint ventures |
|
|
260 |
|
|
|
— |
|
FFO |
|
$ |
210,416 |
|
|
$ |
143,493 |
|
Adjustments
to FFO: |
|
|
|
|
|
|
Non-cash straight-line leasing revenue |
|
|
(4,376 |
) |
|
|
(7,334 |
) |
Non-cash straight-line ground lease expense |
|
|
7,698 |
|
|
|
8,323 |
|
Non-cash compensation |
|
|
9,423 |
|
|
|
8,076 |
|
Adjustment for non-cash portion of tax provision |
|
|
(620 |
) |
|
|
(1,163 |
) |
Non-real estate related depreciation, amortization, and
accretion |
|
|
912 |
|
|
|
1,248 |
|
Amortization of deferred financing costs and debt
discounts |
|
|
5,682 |
|
|
|
6,030 |
|
Loss from extinguishment of debt, net |
|
|
— |
|
|
|
34,512 |
|
Other (income) expense |
|
|
(20,062 |
) |
|
|
1,139 |
|
Acquisition related adjustments and expenses |
|
|
1,583 |
|
|
|
2,970 |
|
Asset impairment and decommission costs |
|
|
9,417 |
|
|
|
2,305 |
|
Non-discretionary cash capital expenditures |
|
|
(9,082 |
) |
|
|
(8,059 |
) |
Adjustments for unconsolidated joint ventures |
|
|
260 |
|
|
|
— |
|
AFFO |
|
$ |
211,251 |
|
|
$ |
191,540 |
|
Weighted
average number of common shares (1) |
|
|
121,026 |
|
|
|
125,381 |
|
AFFO per
share |
|
$ |
1.75 |
|
|
$ |
1.53 |
|
|
|
|
|
|
|
|
|
|
(1) For purposes of the AFFO per
share calculation, the basic weighted average number of common
shares has been adjusted to include the dilutive effect of stock
options and restricted stock units.
Forecasted AFFO for the Full Year 2017
The table below sets forth the reconciliation of
the forecasted AFFO and AFFO per share set forth in the Outlook
section to its most comparable GAAP measurement for the full year
2017:
|
|
|
|
|
|
(in millions,
except per share amounts) |
Full Year 2017 |
|
|
|
|
|
|
Net income |
$ |
94.5 |
|
to |
$ |
129.5 |
|
Real estate related
depreciation, amortization, and accretion |
|
642.0 |
|
to |
|
634.0 |
|
Adjustments for
unconsolidated joint ventures |
|
0.5 |
|
to |
|
1.5 |
|
FFO |
$ |
737.0 |
|
to |
$ |
765.0 |
|
Adjustments to
FFO: |
|
|
|
|
|
Non-cash
straight-line leasing revenue |
|
(16.5 |
) |
to |
|
(11.5 |
) |
Non-cash
straight-line ground lease expense |
|
28.0 |
|
to |
|
33.0 |
|
Non-cash
compensation |
|
39.0 |
|
to |
|
34.0 |
|
Non-real
estate related depreciation, amortization, and accretion |
|
8.0 |
|
to |
|
6.0 |
|
Amort. of
deferred financing costs and debt discounts |
|
25.0 |
|
to |
|
25.0 |
|
Loss from
extinguishment of debt, net |
|
2.0 |
|
to |
|
2.0 |
|
Other
(income) expense |
|
(8.0 |
) |
to |
|
(13.0 |
) |
Acquisition related adjustments and expenses |
|
12.0 |
|
to |
|
8.0 |
|
Asset
impairment and decommission costs |
|
36.0 |
|
to |
|
32.0 |
|
Non-discretionary cash capital expenditures |
|
(37.5 |
) |
to |
|
(32.5 |
) |
Adjustments for unconsolidated joint ventures |
|
0.5 |
|
to |
|
1.5 |
|
AFFO |
$ |
825.5 |
|
to |
$ |
849.5 |
|
Weighted average number
of common shares (1) |
|
121.1 |
|
|
|
121.1 |
|
AFFO per share |
$ |
6.82 |
|
to |
$ |
7.01 |
|
|
|
|
|
|
|
|
|
(1) Our assumption for weighted average
number of common shares does not contemplate any additional
repurchases of the Company’s stock during 2017 other than those
repurchases completed as of the date of this press release.
Net Debt, Net Secured Debt, Leverage Ratio, and
Secured Leverage Ratio
Net Debt is calculated using the notional
principal amount of outstanding debt. Under GAAP policies, the
notional principal amount of the Company's outstanding debt is not
necessarily reflected on the face of the Company's financial
statements.
The Net Debt and Leverage calculations are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
2013-1C
Tower Securities |
|
$ |
425,000 |
|
2013-2C
Tower Securities |
|
|
575,000 |
|
2013-1D
Tower Securities |
|
|
330,000 |
|
2014-1C
Tower Securities |
|
|
920,000 |
|
2014-2C
Tower Securities |
|
|
620,000 |
|
2015-1C
Tower Securities |
|
|
500,000 |
|
2016-1C
Tower Securities |
|
|
700,000 |
|
2017-1C
Tower Securities |
|
|
760,000 |
|
Revolving
Credit Facility |
|
|
430,000 |
|
2014 Term
Loan |
|
|
1,451,250 |
|
2015 Term
Loan |
|
|
488,750 |
|
Total secured debt |
|
|
7,200,000 |
|
2014
Senior Notes |
|
|
750,000 |
|
2016
Senior Notes |
|
|
1,100,000 |
|
Total unsecured debt |
|
|
1,850,000 |
|
Total debt |
|
$ |
9,050,000 |
|
|
|
|
|
Leverage
Ratio |
|
|
|
Total
debt |
|
$ |
9,050,000 |
|
Less: Cash
and cash equivalents, short-term restricted cash and short-term
investments |
|
|
(170,111 |
) |
Net debt |
|
$ |
8,879,889 |
|
Divided
by: Annualized Adjusted EBITDA |
|
$ |
1,212,480 |
|
Leverage
Ratio |
|
|
7.3x |
|
|
|
|
|
Secured
Leverage Ratio |
|
|
|
Total
secured debt |
|
$ |
7,200,000 |
|
Less: Cash
and cash equivalents, short-term restricted cash and short-term
investments |
|
|
(170,111 |
) |
Net Secured Debt |
|
$ |
7,029,889 |
|
Divided
by: Annualized Adjusted EBITDA |
|
$ |
1,212,480 |
|
Secured
Leverage Ratio |
|
|
5.8x |
|
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