CrownCastle 10Q 063014

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
 
FORM 10-Q
____________________________________
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period              to             

Commission File Number 001-16441
____________________________________
CROWN CASTLE INTERNATIONAL
CORP.
(Exact name of registrant as specified in its charter)
 
Delaware
76-0470458
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
1220 Augusta Drive, Suite 600, Houston, Texas 77057-2261
(Address of principal executives office) (Zip Code)
(713) 570-3000
(Registrant's telephone number, including area code)
____________________________________
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 
Large accelerated filer
x
 
Accelerated filer
o
 
 
Non-accelerated filer
o
 
Smaller reporting company
o
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  o    No  x

Number of shares of common stock outstanding at August 4, 2014: 333,860,230
 



CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES

INDEX

 
 
 
Page
 
ITEM 1.
 
 
 
 
 
 
 
 
 
 
 
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
 

Cautionary Language Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q ("Form 10-Q") contains forward-looking statements that are based on our management's expectations as of the filing date of this report with the SEC. Statements that are not historical facts are hereby identified as forward-looking statements. In addition, words such as "estimate," "anticipate," "project," "plan," "intend," "believe," "expect," "likely," "predicted," any variations of these words and similar expressions are intended to identify forward-looking statements. Such statements include plans, projections and estimates contained in "Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Part I—Item 3. Quantitative and Qualitative Disclosures About Market Risk" herein. Such forward-looking statements include (1) expectations regarding anticipated growth in the wireless communication industry, carriers' investments in their networks, new tenant additions, non-renewals of customer contracts, including the impact of Sprint decommissioning its iDEN network, customer consolidation or ownership changes, or demand for our wireless infrastructure, (2) availability and adequacy of cash flows and liquidity for, or plans regarding, future discretionary investments including capital expenditures, (3) potential benefits of our discretionary investments, (4) anticipated growth in our future revenues, margins, Adjusted EBITDA, and operating cash flows, (5) expectations regarding our capital structure and the credit markets, our availability and cost of capital, or our ability to service our debt and comply with debt covenants and the benefits of any future refinancings, (6) expectations for sustaining capital expenditures, (7) the potential advantages, benefits or impact of, or opportunities created by, our real estate investment trust ("REIT") status, (8) our intention to pursue certain steps and corporate actions in connection with our REIT conversion, including our future inclusion of REIT-related ownership limitations and transfer restrictions related to our capital stock and (9) our dividend policy, including the timing, amount or growth of any dividends.
Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including prevailing market conditions, risk factors described in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 ("2013 Form 10-K") and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. As used herein, the term "including," and any variation of thereof, means "including without limitation." The use of the word "or" herein is not exclusive.

1


PART I—FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of dollars, except share amounts)
 
June 30,
2014
 
December 31,
2013
 
(Unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
227,479

 
$
223,394

Restricted cash
155,725

 
183,526

Receivables, net
304,015

 
249,925

Prepaid expenses
150,873

 
132,003

Deferred income tax assets
33,379

 
26,714

Other current assets
76,275

 
77,121

Total current assets
947,746

 
892,683

Deferred site rental receivables
1,180,646

 
1,078,995

Property and equipment, net of accumulated depreciation of $5,125,715 and $4,732,956, respectively
8,888,426

 
8,947,677

Goodwill
4,939,755

 
4,916,426

Other intangible assets, net
3,922,063

 
4,057,865

Deferred income tax assets
13,283

 
19,008

Long-term prepaid rent, deferred financing costs and other assets, net
780,140

 
682,254

Total assets
$
20,672,059

 
$
20,594,908

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
132,529

 
$
145,390

Accrued interest
66,848

 
65,582

Deferred revenues
320,134

 
260,114

Other accrued liabilities
170,743

 
181,715

Current maturities of debt and other obligations
105,624

 
103,586

Total current liabilities
795,878

 
756,387

Debt and other long-term obligations
11,464,627

 
11,490,914

Deferred income tax liabilities
54,123

 
56,513

Deferred credits and other liabilities
1,477,995

 
1,349,919

Total liabilities
13,792,623

 
13,653,733

Commitments and contingencies (note 8)

 

CCIC stockholders' equity:
 
 
 
Common stock, $.01 par value; 600,000,000 shares authorized; shares issued and outstanding: June 30, 2014—333,861,080 and December 31, 2013—334,070,016
3,339

 
3,341

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

 
98

Additional paid-in capital
9,488,414

 
9,482,769

Accumulated other comprehensive income (loss)
26,205

 
(23,612
)
Dividends/distributions in excess of earnings
(2,656,718
)
 
(2,535,879
)
Total CCIC stockholders' equity
6,861,338

 
6,926,717

Noncontrolling interest
18,098

 
14,458

Total equity
6,879,436

 
6,941,175

Total liabilities and equity
$
20,672,059

 
$
20,594,908

 
See notes to condensed consolidated financial statements.

2


CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (Unaudited)
(In thousands of dollars, except per share amounts)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net revenues:
 
 
 
 
 
 
 
Site rental
$
746,340

 
$
616,849

 
$
1,493,502

 
$
1,232,264

Network services and other
170,005

 
118,079

 
298,793

 
242,724

Net revenues
916,345

 
734,928

 
1,792,295

 
1,474,988

Operating expenses:
 
 
 
 
 
 
 
Costs of operations(a):
 
 
 
 
 
 
 
Site rental
236,991

 
179,015

 
465,067

 
356,621

Network services and other
103,447

 
70,199

 
176,321

 
147,576

General and administrative
69,153

 
54,790

 
134,002

 
113,035

Asset write-down charges
3,136

 
3,097

 
5,869

 
6,812

Acquisition and integration costs
19,197

 
7,215

 
24,856

 
8,817

Depreciation, amortization and accretion
254,235

 
190,651

 
504,426

 
377,110

Total operating expenses
686,159

 
504,967

 
1,310,541

 
1,009,971

Operating income (loss)
230,186

 
229,961

 
481,754

 
465,017

Interest expense and amortization of deferred financing costs
(144,534
)
 
(140,256
)
 
(290,934
)
 
(304,625
)
Gains (losses) on retirement of long-term obligations
(44,629
)
 
(577
)
 
(44,629
)
 
(36,486
)
Interest income
189

 
328

 
362

 
625

Other income (expense)
(6,063
)
 
507

 
(8,799
)
 
(122
)
Income (loss) before income taxes
35,149

 
89,963

 
137,754

 
124,409

Benefit (provision) for income taxes
208

 
(36,587
)
 
396

 
(54,295
)
Net income (loss)
35,357

 
53,376

 
138,150

 
70,114

Less: net income (loss) attributable to the noncontrolling interest
1,348

 
1,017

 
2,644

 
2,293

Net income (loss) attributable to CCIC stockholders
34,009

 
52,359

 
135,506

 
67,821

Dividends on preferred stock
(10,997
)
 

 
(21,994
)
 

Net income (loss) attributable to CCIC common stockholders
$
23,012

 
$
52,359

 
$
113,512

 
$
67,821

Net income (loss)
$
35,357

 
$
53,376

 
$
138,150

 
$
70,114

Other comprehensive income (loss):
 
 
 
 
 
 
 
Interest rate swaps, net of taxes of $0, $5,685, $0, and $11,376, respectively:
 
 
 
 
 
 
 
Amounts reclassified into "interest expense and amortization deferred financing costs", net of taxes (see note 4)
16,162

 
10,557

 
32,344

 
21,127

Foreign currency translation adjustments
6,332

 
(37,827
)
 
18,469

 
(38,218
)
Total other comprehensive income (loss)
22,494

 
(27,270
)
 
50,813

 
(17,091
)
Comprehensive income (loss)
57,851

 
26,106

 
188,963

 
53,023

Less: Comprehensive income (loss) attributable to the noncontrolling interest
1,696

 
(798
)
 
3,640

 
902

Comprehensive income (loss) attributable to CCIC stockholders
$
56,155

 
$
26,904

 
$
185,323

 
$
52,121

Net income (loss) attributable to CCIC common stockholders, per common share:
 
 
 
 
 
 
 
Basic
$
0.07

 
$
0.18

 
$
0.34

 
$
0.23

Diluted
$
0.07

 
$
0.18

 
$
0.34

 
$
0.23

Weighted-average common shares outstanding (in thousands):
 
 
 
 
 
 
 
Basic
332,344
 
291,225

 
332,189
 
291,164
Diluted
333,081
 
292,706

 
333,034
 
292,570
 
 
 
 
 
 
 
 
Dividends/distributions declared per common share
$
0.35

 
$

 
$
0.70

 
$

________________
(a)
Exclusive of depreciation, amortization and accretion shown separately.

See notes to condensed consolidated financial statements.

3


CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands of dollars)
 
Six Months Ended
June 30,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Net income (loss)
$
138,150

 
$
70,114

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
 
 
 
Depreciation, amortization and accretion
504,426

 
377,110

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

 
36,486

Amortization of deferred financing costs and other non-cash interest
41,485

 
57,471

Stock-based compensation expense
27,373

 
19,472

Asset write-down charges
5,869

 
6,812

Deferred income tax benefit (provision)
(4,885
)
 
50,143

Other adjustments
(1,328
)
 
1,291

Changes in assets and liabilities, excluding the effects of acquisitions:
 
 
 
Increase (decrease) in accrued interest
1,266

 
34,563

Increase (decrease) in accounts payable
(19,907
)
 
2,727

Increase (decrease) in deferred revenues, deferred ground lease payables, other accrued liabilities and
     other liabilities
189,789

 
45,362

Decrease (increase) in receivables
(53,563
)
 
(11,647
)
Decrease (increase) in prepaid expenses, deferred site rental receivables, long-term prepaid rent,
     restricted cash and other assets
(109,628
)
 
(129,877
)
Net cash provided by (used for) operating activities
763,676

 
560,027

Cash flows from investing activities:
 
 
 
Payments for acquisitions of businesses, net of cash acquired
(90,442
)
 
(27,280
)
Capital expenditures
(309,740
)
 
(254,820
)
Other investing activities, net
2,378

 
6,644

Net cash provided by (used for) investing activities
(397,804
)
 
(275,456
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of long-term debt
845,750

 
30,941

Principal payments on debt and other long-term obligations
(55,385
)
 
(51,085
)
Purchases and redemptions of long-term debt
(836,899
)
 
(675,480
)
Purchases of capital stock
(21,730
)
 
(98,867
)
Borrowings under revolving credit facility
494,000

 
48,000

Payments under revolving credit facility
(534,000
)
 
(255,000
)
Payments for financing costs
(15,834
)
 
(5,654
)
Net (increase) decrease in restricted cash
24,386

 
411,048

Dividends/distributions paid on common stock
(233,684
)
 

Dividends paid on preferred stock
(22,360
)
 

Net cash provided by (used for) financing activities
(355,756
)
 
(596,097
)
Effect of exchange rate changes on cash
(6,031
)
 
(2,952
)
Net increase (decrease) in cash and cash equivalents
4,085

 
(314,478
)
Cash and cash equivalents at beginning of period
223,394

 
441,364

Cash and cash equivalents at end of period
$
227,479

 
$
126,886


See notes to condensed consolidated financial statements.

4


CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(In thousands of dollars, except share amounts) (Unaudited)

 
CCIC Stockholders
 
 
 
 
 
Common Stock
 
4.50% Mandatory Convertible Preferred Stock
 
 
 
AOCI
 
 
 
 
 
 
 
Shares
 
($.01 Par)
 
Shares
 
($.01 Par)
 
Additional
Paid-In
Capital
 
Foreign Currency Translation Adjustments
 
Derivative Instruments, net of tax
 
Dividends/Distributions in Excess of Earnings
 
Noncontrolling
Interest
 
Total
Balance, April 1, 2014
333,795,981

 
$
3,338

 
9,775,000

 
$
98

 
$
9,473,311

 
$
69,750

 
$
(65,691
)
 
$
(2,562,541
)
 
$
16,402

 
$
6,934,667

Stock-based compensation related activity, net of forfeitures
68,299

 
1

 

 

 
15,416

 

 

 

 

 
15,417

Purchases and retirement of capital stock
(3,200
)
 

 

 

 
(313
)
 

 

 

 

 
(313
)
Other comprehensive income (loss)(a)

 

 

 

 


 
5,984

 
16,162

 

 
348

 
22,494

Common stock dividends/distributions

 

 

 

 

 

 

 
(117,189
)
 

 
(117,189
)
Preferred stock dividends

 

 

 

 

 

 

 
(10,997
)
 

 
(10,997
)
Net income (loss)

 

 

 

 

 

 

 
34,009

 
1,348

 
35,357

Balance, June 30, 2014
333,861,080

 
$
3,339

 
9,775,000

 
$
98

 
$
9,488,414

 
$
75,734

 
$
(49,529
)
 
$
(2,656,718
)
 
$
18,098

 
$
6,879,436

___________________________
(a)
See the condensed statement of operations and other comprehensive income (loss) for the components of "other comprehensive income (loss)" and note 4 with respect to the reclassification adjustment.

 
CCIC Stockholders
 
 
 
 
 
 
 
Common Stock
 
4.50% Mandatory Convertible Preferred Stock
 
 
 
AOCI
 
 
 
 
 
 
 
Shares
 
($.01 Par)
 
Shares
 
($.01 Par)
 
Additional
Paid-In
Capital
 
Foreign Currency Translation Adjustments
 
Derivative Instruments, net of tax
 
Dividends/Distributions in Excess of Earnings
 
Noncontrolling
Interest
 
Total
Balance, April 1, 2013
293,771,206

 
$
2,938

 

 
$

 
$
5,610,039

 
$
101,310

 
$
(153,346
)
 
$
(2,610,528
)
 
$
14,218

 
$
2,964,631

Stock-based compensation related activity, net of forfeitures
(6,032
)
 

 

 

 
9,443

 

 

 

 

 
9,443

Purchases and retirement of capital stock
(1,079,712
)
 
(11
)
 

 

 
(75,277
)
 

 

 

 

 
(75,288
)
Other comprehensive income (loss)(a)

 

 

 

 

 
(36,012
)
 
10,557

 

 
(1,815
)
 
(27,270
)
Net income (loss)

 

 

 

 

 

 

 
52,359

 
1,017

 
53,376

Balance, June 30, 2013
292,685,462

 
$
2,927

 

 
$

 
$
5,544,205

 
$
65,298

 
$
(142,789
)
 
$
(2,558,169
)
 
$
13,420

 
$
2,924,892

___________________________
(a)
See the condensed statement of operations and other comprehensive income (loss) for the components of "other comprehensive income (loss)" and note 4 with respect to the reclassification adjustment.

See notes to condensed consolidated financial statements.


5


CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(In thousands of dollars, except share amounts) (Unaudited)

 
CCIC Stockholders
 
 
 
 
 
Common Stock
 
4.50% Mandatory Convertible Preferred Stock
 
 
 
AOCI
 
 
 
 
 
 
 
Shares
 
($.01 Par)
 
Shares
 
($.01 Par)
 
Additional
Paid-In
Capital
 
Foreign Currency Translation Adjustments
 
Derivative Instruments, net of tax
 
Dividends/Distributions in Excess of Earnings
 
Noncontrolling
Interest
 
Total
Balance, January 1, 2014
334,070,016

 
$
3,341

 
9,775,000

 
$
98

 
$
9,482,769

 
$
58,261

 
$
(81,873
)
 
$
(2,535,879
)
 
$
14,458

 
$
6,941,175

Stock-based compensation related activity, net of forfeitures
82,330

 
1

 

 

 
27,372

 

 

 

 

 
27,373

Purchases and retirement of capital stock
(291,266
)
 
(3
)
 

 

 
(21,727
)
 

 

 

 

 
(21,730
)
Other comprehensive income (loss)(a)

 

 

 

 

 
17,473

 
32,344

 

 
996

 
50,813

Common stock dividends/distributions

 

 

 

 

 

 

 
(234,351
)
 

 
(234,351
)
Preferred stock dividends

 

 

 

 

 

 

 
(21,994
)
 

 
(21,994
)
Net income (loss)

 

 

 

 

 

 

 
135,506

 
2,644

 
138,150

Balance, June 30, 2014
333,861,080

 
$
3,339

 
9,775,000

 
$
98

 
$
9,488,414

 
$
75,734

 
$
(49,529
)
 
$
(2,656,718
)
 
$
18,098

 
$
6,879,436

___________________________
(a)
See the condensed statement of operations and other comprehensive income (loss) for the components of "other comprehensive income (loss)" and note 4 with respect to the reclassification adjustment.

 
CCIC Stockholders
 
 
 
 
 
 
 
Common Stock
 
4.50% Mandatory Convertible Preferred Stock
 
 
 
AOCI
 
 
 
 
 
 
 
Shares
 
($.01 Par)
 
Shares
 
($.01 Par)
 
Additional
Paid-In
Capital
 
Foreign Currency Translation Adjustments
 
Derivative Instruments, net of tax
 
Dividends/Distributions in Excess of Earnings
 
Noncontrolling
Interest
 
Total
Balance, January 1, 2013
293,164,786

 
$
2,932

 

 
$

 
$
5,623,595

 
$
102,125

 
$
(163,916
)
 
$
(2,625,990
)
 
$
12,518

 
$
2,951,264

Stock-based compensation related activity, net of forfeitures
941,947

 
9

 

 

 
19,463

 

 

 

 

 
19,472

Purchases and retirement of capital stock
(1,421,271
)
 
(14
)
 

 

 
(98,853
)
 

 

 

 

 
(98,867
)
Other comprehensive income (loss)(a)

 

 

 

 

 
(36,827
)
 
21,127

 

 
(1,391
)
 
(17,091
)
Net income (loss)

 

 

 

 

 

 

 
67,821

 
2,293

 
70,114

Balance, June 30, 2013
292,685,462

 
$
2,927

 

 

 
$
5,544,205

 
$
65,298

 
$
(142,789
)
 
$
(2,558,169
)
 
$
13,420

 
$
2,924,892

___________________________
(a)
See the condensed statement of operations and other comprehensive income (loss) for the components of "other comprehensive income (loss)" and note 4 with respect to the reclassification adjustment.

See notes to condensed consolidated financial statements.

6


CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited
(Tabular dollars in thousands, except per share amounts)

1.
General
The information contained in the following notes to the consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the consolidated financial statements included herein should be reviewed in conjunction with the consolidated financial statements for the fiscal year ended December 31, 2013, and related notes thereto, included in the 2013 Form 10-K filed by Crown Castle International Corp. ("CCIC") with the SEC. All references to the "Company" include CCIC and its subsidiary companies unless otherwise indicated or the context indicates otherwise.
The Company owns, operates and leases shared wireless infrastructure, including: (1) towers, (2) DAS, a type of small cell network, and (3) third party land interests. The Company conducts operations through subsidiaries of CCOC, including (1) certain subsidiaries which operate wireless infrastructure portfolios in the United States, including Puerto Rico ("U.S." or "CCUSA") and (2) a 77.6% owned subsidiary that operates towers in Australia (referred to as "CCAL"). The Company's core business is providing access, including space or capacity, to (1) its towers, and, to a lesser extent, to (2) its small cells, and (3) third party land interests to wireless communications companies via long-term contracts in various forms, including licenses, subleases and lease agreements.
As part of CCUSA's effort to provide comprehensive wireless infrastructure solutions, it offers certain network services relating to its wireless infrastructure, consisting of (1) customer equipment installation or subsequent augmentations (collectively, "installation services") and (2) the following additional site development services relating to existing or new antenna installations on its wireless infrastructure: site acquisition, architectural and engineering, zoning or permitting, other construction, or network development related services.
Effective January 1, 2014, the Company commenced operating as a REIT for U.S. federal income tax purposes. In addition, the Company has certain taxable REIT subsidiaries ("TRSs"). See note 5.
Approximately 54% of the Company's towers are leased or subleased or operated and managed under master leases, subleases, and other agreements with Sprint, T-Mobile, and AT&T. The Company has the option to purchase these towers at the end of their respective lease terms. The Company has no obligation to exercise such purchase options.
Basis of Presentation
The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to fairly state the consolidated financial position of the Company at June 30, 2014, and the consolidated results of operations and the consolidated cash flows for the six months ended June 30, 2014 and 2013. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the entire year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


7

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)


2.
Summary of Significant Accounting Policies
The significant accounting policies used in the preparation of the Company's condensed consolidated financial statements are disclosed in the 2013 Form 10-K.
Recently Adopted Accounting Pronouncements
No accounting pronouncements adopted during the six months ended June 30, 2014 had a material impact on the Company's consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In May 2014, FASB released updated guidance regarding the recognition of revenue from contracts with customers, exclusive of those contracts within lease accounting. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  To achieve that core principle, an entity should apply the following steps: (1) identify the contracts with the customer; (2) identify the performance obligations in the contract; (3) determine the contract price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.  This guidance is effective for the Company as of January 1, 2017.  This guidance is required to be applied (1) retrospectively to each prior reporting period presented, or (2) with the cumulative effect being recognized at the date of initial application. The Company is evaluating the guidance including the impact on its consolidated financial statements.

3.
Acquisitions
AT&T Acquisition
During October 2013, the Company entered into a definitive agreement with AT&T to acquire, for $4.827 billion in cash at closing, exclusive rights to towers which, as of June 30, 2014, comprised approximately 23% of the Company's towers ("AT&T Acquisition"). On December 16, 2013, the Company closed on the acquisition. The Company utilized net proceeds from the October Equity Financings and additional borrowings under the 2012 Revolver and Term Loans to finance the AT&T Acquisition, as well as cash on hand.
The preliminary purchase price allocation related to the AT&T Acquisition is not finalized as of June 30, 2014 and is based upon preliminary valuation which is subject to change as the Company obtains additional information, including information regarding fixed assets, intangible assets and certain liabilities. The preliminary purchase price allocation for the AT&T Acquisition, as of June 30, 2014, is shown below.
Current assets
$
20,428

 
Property and equipment
1,918,534

(a) 
Goodwill
1,768,535

 
Other intangible assets, net
1,280,071

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

50,094

(a) 
Current liabilities
(12,929
)
 
Deferred credits and other liabilities
(198,134
)
(b) 
Net assets acquired
$
4,826,599

(c) 
    
(a)
The principal changes in the preliminary purchase price allocation for the AT&T Acquisition between December 31, 2013 and June 30, 2014 relate to (1) a $46.8 million increase to long-term prepaid rent, deferred financing costs and other assets, net and (2) a corresponding $46.8 million decrease to property and equipment, net. The effect of the change in the preliminary price allocation on the Company's statement of operations and comprehensive income (loss) is immaterial to the periods presented.
(b)
Inclusive of above-market leases for land interests under the Company's towers.
(c)
No deferred taxes were recorded as a result of the Company's REIT election. See note 5.

8

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)


Unaudited Pro Forma Operating Results
The unaudited pro forma condensed consolidated results of operations combine the historical results of the Company, along with the historical results of the AT&T Acquisition for the period presented below. The following table presents the unaudited pro forma condensed consolidated results of operations of the Company for the period presented as if the AT&T Acquisition was completed as of January 1, 2012. The unaudited pro forma amounts are presented for illustrative purposes only and are not necessarily indicative of future consolidated results of operations.
 
Six Months Ended June 30, 2013
 
Net revenues
$
1,682,955

(a) 
Net income (loss)
$
56,687

(b)(c) 
Basic net income (loss) attributable to CCIC common stockholders
$
0.10

(d) 
Diluted net income (loss) attributable to CCIC common stockholders
$
0.10

(d) 
    
(a)
Amounts are inclusive of pro forma adjustments to increase net revenues of $110.3 million that the Company expects to recognize from AT&T under AT&T's contracted lease of space on the towers acquired in the AT&T Acquisition.
(b)
Amounts are inclusive of pro forma adjustments to increase depreciation and amortization of $110.4 million related to property and equipment and intangibles recorded as a result of the AT&T Acquisition.
(c)
The pro forma adjustments reflect the federal statutory rate and an estimated state rate. No adjustment was made with respect to the Company's REIT election. See note 5.
(d)
Pro forma amounts include the impact of the interest expense associated with the related debt financing as well as the impact of the common stock and preferred stock offerings completed in October 2013.


9

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)


4.
Debt and Other Obligations
 
Original
Issue Date
 
Contractual
Maturity
Date (d)
 
Outstanding
Balance as of
June 30, 2014
 
Outstanding
Balance as of
December 31, 2013
 
Stated Interest
Rate as of
June 30, 2014(a)(d)
Bank debt - variable rate:
 
 
 
 
 
 
 
 
 
2012 Revolver
Jan. 2012
 
Nov. 2018/Jan. 2019
 
$
334,000

(b) 
$
374,000

 
1.9
%
Tranche A Term Loans
Jan. 2012
 
Nov. 2018/Jan. 2019
 
654,219

 
662,500

 
1.9
%
Tranche B Term Loans
Jan. 2012
 
Jan. 2019/Jan. 2021
(e) 
2,849,829

(e) 
2,864,150

 
3.0
%
Total bank debt
 
 
 
 
3,838,048

 
3,900,650

 
 
Securitized debt - fixed rate:
 
 
 
 
 
 
 
 
 
January 2010 Tower Revenue Notes
Jan. 2010
 
2035 - 2040
(c) 
1,600,000

(f) 
1,900,000

 
6.0
%
August 2010 Tower Revenue Notes
Aug. 2010
 
2035 - 2040
(c) 
1,550,000

 
1,550,000

 
4.5
%
2009 Securitized Notes
July 2009
 
2019/2029
 
170,340

 
179,792

 
7.4
%
WCP Securitized Notes
Jan. 2010
 
Nov. 2040
(c) 
274,088

 
286,171

 
5.6
%
Total securitized debt
 
 
 
 
3,594,428

 
3,915,963

 
 
Bonds - fixed rate:
 
 
 
 
 
 
 
 
 
7.125% Senior Notes
Oct. 2009
 
Nov. 2019
 

(f) 
498,332

 
N/A

5.25% Senior Notes
Oct. 2012
 
Jan. 2023
 
1,649,970

 
1,649,970

 
5.3
%
2012 Secured Notes
Dec. 2012
 
Dec. 2017/Apr. 2023
 
1,500,000

 
1,500,000

 
3.4
%
4.875% Senior Notes
Apr. 2014
 
Apr. 2022
 
845,841

(f) 

 
4.9
%
Total bonds
 
 
 
 
3,995,811

 
3,648,302

 
 
Other:
 
 
 
 
 
 
 
 
 
Capital leases and other obligations
Various
 
Various
 
141,964

 
129,585

 
Various

Total debt and other obligations
 
 
 
 
11,570,251

 
11,594,500

 
 
Less: current maturities and short-term debt and other current obligations
 
 
 
 
105,624

 
103,586

 
 
Non-current portion of long-term debt and other long-term obligations
 
 
 
 
$
11,464,627

 
$
11,490,914

 
 
________________
(a)
Represents the weighted-average stated interest rate.
(b)
As of June 30, 2014, the undrawn availability under the $1.5 billion 2012 Revolver is $1.2 billion.
(c)
If the respective series of such debt is not paid in full on or prior to an applicable 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 additional interest (of an additional approximately 5% per annum) will accrue on the respective series. See the 2013 Form 10-K for additional information regarding these provisions.
(d)
See the 2013 Form 10-K, including note 7, for additional information regarding the maturity and principal amortization provisions and interest rates relating to the Company's indebtedness.
(e)
During January 2014, the Company amended its senior credit facility (as amended, "2012 Credit Facility") by extending the maturity date on a portion of the Tranche B Term Loans, including Incremental Tranche B Term Loans, to January 2021. As of June 30, 2014, the Company's Tranche B Term Loans, including the Incremental Tranche B Term Loans and the Incremental Tranche B-2 Term Loans, consist of $2.3 billion aggregate principal amount due January 2021 and $568.4 million aggregate principal amount due January 2019.
(f)
In April 2014, the Company issued $850.0 million of senior notes due in April 2022 ("4.875% Senior Notes"). The 4.875% Senior Notes are general obligations of CCIC and rank equally with all existing and future senior debt of CCIC. The net proceeds from the offering were approximately $839 million, after the deduction of associated fees. The Company utilized the net proceeds from the 4.875% Senior Notes offering (1) to repay $300.0 million of the January 2010 Tower Revenue Notes with an anticipated repayment date of January 2015 and (2) to redeem all of the previously outstanding 7.125% Senior Notes (collectively, "2014 Refinancings").


10

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)


Contractual Maturities
The following are the scheduled contractual maturities of the total debt and other long-term obligations outstanding as of June 30, 2014. These maturities reflect contractual maturity dates and do not consider the principal payments that will commence following the anticipated repayment dates on the Tower Revenue Notes and the rapid amortization date on the WCP Securitized Notes.
 
Six Months Ending
December 31,
 
Years Ending December 31,
 
 
 
 
 
Unamortized Adjustments, Net
 
Total Debt and Other Obligations Outstanding
 
2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total Cash Obligations
 
 
Scheduled contractual maturities
$
52,048

 
$
102,038

 
$
116,788

 
$
614,705

 
$
958,929

 
$
9,724,299

 
$
11,568,807

 
$
1,444

 
$
11,570,251

Purchases and Redemptions of Long-Term Debt
The following is a summary of purchases and redemptions of long-term debt during the six months ended June 30, 2014.
 
Six Months Ended June 30, 2014
 
Principal Amount
 
Cash Paid(a)
 
Gains (Losses)(b)
January 2010 Tower Revenue Notes
$
300,000

 
$
302,990

 
$
(3,740
)
7.125% Senior Notes
500,000

 
533,909

 
(40,889
)
Total
$
800,000

 
$
836,899

 
$
(44,629
)
    
(a)
Exclusive of accrued interest.
(b)
The losses predominantly relate to cash losses, including make whole payments and are inclusive of $7.7 million related to the write off of deferred financing costs and discounts.
Interest Expense and Amortization of Deferred Financing Costs
The components of interest expense and amortization of deferred financing costs are as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Interest expense on debt obligations
$
123,930

 
$
119,705

 
$
249,449

 
$
247,154

Amortization of deferred financing costs
5,521

 
5,013

 
11,162

 
14,060

Amortization of adjustments on long-term debt
(896
)
 
(965
)
 
(1,851
)
 
10,471

Amortization of interest rate swaps(a)
16,162

 
16,242

 
32,344

 
32,504

Other, net of capitalized interest
(183
)
 
261

 
(170
)
 
436

Total
$
144,534

 
$
140,256

 
$
290,934

 
$
304,625

    
(a)
Amounts reclassified from accumulated other comprehensive income (loss).

5.
Income Taxes
Effective January 1, 2014, the Company commenced operating as a REIT for U.S. federal income tax purposes. As a REIT, the Company will generally be entitled to a deduction for dividends that it pays and therefore will not be subject to U.S. federal corporate income tax on its net taxable income that is currently distributed to its stockholders. The Company also may be subject to certain federal, state, local, and foreign taxes on its income and assets, including (1) alternative minimum taxes, (2) taxes on any undistributed income, (3) taxes related to the TRSs, (4) certain state, local, or foreign income taxes, (5) franchise taxes, (6) property taxes, and (7) transfer taxes. In addition, the Company could in certain circumstances be required to pay an excise or penalty tax, which could be significant in amount, in order to utilize one or more relief provisions under the Internal Revenue Code 1986, as amended ("Code") to maintain qualification for taxation as a REIT. The Company's small cells will initially be conducted through one or more TRSs. The Company has submitted a private letter ruling request with the Internal Revenue Service ("IRS") regarding whether certain components of its small cells and the related rents qualify as REIT real property and could be included in our REIT. If any of the small cell assets and operations are included in the REIT in the future, the Company would expect to de-recognize substantially all of its previously recorded U.S. federal and state net deferred tax liabilities related to such small cell assets and operations. Additionally, the Company will include in TRSs its tower operations in Australia and will include

11

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)


certain other assets and operations in TRSs. Those TRS assets and operations would continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which such assets and operations are located. The Company's foreign assets and operations (including its tower operations in Puerto Rico and Australia) most likely will be subject to foreign income taxes in the jurisdictions in which such assets and operations are located, regardless of whether they are included in a TRS or not. The Company will be subject to a federal corporate level tax rate (currently 35%) on the gain recognized from the sale of assets occurring within a specified period (generally 10 years) after the REIT conversion up to the amount of the built in gain that existed on January 1, 2014, which is based upon the fair market value of those assets in excess of our tax basis on January 1, 2014.  This gain can be offset by any remaining federal net operating loss carryforwards.
For the six months ended June 30, 2014, the Company's effective tax rate differed from the federal statutory rate predominately due to the Company's REIT status, including the dividends paid deduction. The income tax provision for the six months ended June 30, 2014 primarily related to the TRS. For the six months ended June 30, 2013, the Company's effective tax rate differed from the federal statutory rate predominately due to state taxes of $14.3 million.

6.
Fair Value Disclosures
 
Level in Fair Value Hierarchy
 
June 30, 2014
 
December 31, 2013
 
 
Carrying
 Amount
 
Fair
Value
 
Carrying
 Amount
 
Fair
Value
Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
1
 
$
227,479

 
$
227,479

 
$
223,394

 
$
223,394

Restricted cash, current and non-current
1
 
160,725

 
160,725

 
188,526

 
188,526

Liabilities:
 
 
 
 
 
 
 
 
 
Long-term debt and other obligations
2
 
11,570,251

 
12,068,355

 
11,594,500

 
11,892,587

The fair value of cash and cash equivalents and restricted cash approximate the carrying value. The Company determines the fair value of its debt securities based on indicative, non-binding quotes from brokers. Quotes from brokers require judgment and are based on the brokers' interpretation of market information, including implied credit spreads for similar borrowings on recent trades or bid/ask prices or quotes from active markets if available. There were no changes since December 31, 2013 in the Company's valuation techniques used to measure fair values.

7.
Per Share Information
Basic net income (loss) attributable to CCIC common stockholders, per common share, excludes dilution and is computed by dividing net income (loss) attributable to CCIC common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) attributable to CCIC common stockholders, per common share is computed by dividing net income (loss) attributable to CCIC common stockholders by the weighted-average number of common shares outstanding during the period plus any potential dilutive common share equivalents, including shares issuable (1) upon the vesting of restricted stock awards and restricted stock units as determined under the treasury stock method and (2) upon conversion of the Company's 4.50% Mandatory Convertible Preferred Stock as determined under the if-converted method. The Company's restricted stock awards are considered participating securities and may be included in the computation pursuant to the two-class method. However, the Company does not present the two-class method when there is no difference between the per share amount under the two-class method and the treasury stock method.

12

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)


 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net income (loss) attributable to CCIC stockholders
$
34,009

 
$
52,359

 
$
135,506

 
$
67,821

Dividends on preferred stock
(10,997
)
 

 
(21,994
)
 

Net income (loss) attributable to CCIC common stockholders
$
23,012

 
$
52,359

 
$
113,512

 
$
67,821

Weighted-average number of common shares outstanding (in thousands):
 
 
 
 
 
 
 
Basic weighted-average number of common stock outstanding
332,344

 
291,225

 
332,189

 
291,164

Effect of assumed dilution from potential common shares relating to restricted stock units and restricted stock awards
737

 
1,481

 
845

 
1,406

Diluted weighted-average number of common shares outstanding
333,081

 
292,706

 
333,034

 
292,570

Net income (loss) attributable to CCIC common stockholders, per common share:
 
 
 
 
 
 
 
Basic
$
0.07

 
$
0.18

 
$
0.34

 
$
0.23

Diluted
$
0.07

 
$
0.18

 
$
0.34

 
$
0.23

During the six months ended June 30, 2014, the Company issued 1.0 million restricted stock units. For the three and six months ended June 30, 2014, 13.1 million common share equivalents related to the 4.50% Mandatory Convertible Preferred Stock were excluded from the dilutive common shares because the impact of such conversion would be anti-dilutive.

8.
Commitments and Contingencies
The Company is involved in various claims, lawsuits or proceedings arising in the ordinary course of business. While there are uncertainties inherent in the ultimate outcome of such matters and it is impossible to presently determine the ultimate costs or losses that may be incurred, if any, management believes the resolution of such uncertainties and the incurrence of such costs should not have a material adverse effect on the Company's consolidated financial position or results of operations. Additionally, the Company and certain of its subsidiaries are contingently liable for commitments or performance guarantees arising in the ordinary course of business, including certain letters of credit or surety bonds. In addition, the Company has the option to purchase approximately 54% of the Company's towers at the end of their respective lease terms. The Company has no obligation to exercise such purchase options.

9.
Equity
Declaration and Payment of Dividends
During the six months ended June 30, 2014, the Company declared or paid the following dividends:
Equity Type
 
Declaration Date
 
Payment Date
 
Record Date
 
Dividends Per Share
 
Aggregate
Payment
Amount
(In millions)
 
Common Stock
 
February 20, 2014
 
March 31, 2014
 
March 20, 2014
 
$
0.35

 
$
117.2

(a) 
Common Stock
 
May 30, 2014
 
June 30, 2014
 
June 20, 2014
 
$
0.35

 
$
117.2

(a) 
4.50% Mandatory Convertible Preferred Stock
 
December 31, 2013
 
February 3, 2014
 
January 14, 2014
 
$
1.1625

 
$
11.4

 
4.50% Mandatory Convertible Preferred Stock
 
March 25, 2014
 
May 1, 2014
 
April 15, 2014
 
$
1.1250

 
$
11.0

 
4.50% Mandatory Convertible Preferred Stock
 
June 25, 2014
 
August 1, 2014
 
July 15, 2014
 
$
1.1250

 
$
11.0

(b) 
        
(a)
Inclusive of dividends accrued for holders of unvested restricted stock units.
(b)
Represents amount paid on August 1, 2014 based on holders of record on July 15, 2014.
Purchases of the Company's Common Stock
For the six months ended June 30, 2014, the Company purchased 0.3 million shares of its common stock utilizing $21.7 million in cash.

13

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)



10.
Operating Segments
The Company's reportable operating segments are (1) CCUSA, primarily consisting of the Company's U.S. operations and (2) CCAL, the Company's Australian operations. Financial results for the Company are reported to management and the board of directors in this manner.
The measurement of profit or loss currently used by management to evaluate the results of operations for the Company and its operating segments is earnings before interest, taxes, depreciation, amortization and accretion, as adjusted ("Adjusted EBITDA"). The Company defines Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, gains (losses) on retirement of long-term obligations, net gain (loss) on interest rate swaps, impairment of available-for-sale securities, interest income, other income (expense), benefit (provision) for income taxes, cumulative effect of change in accounting principle, income (loss) from discontinued operations and stock-based compensation expense. Adjusted EBITDA is not intended as an alternative measure of operating results or cash flow from operations (as determined in accordance with GAAP), and the Company's measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. There are no significant revenues resulting from transactions between the Company's operating segments. Inter-company borrowings and related interest between segments are eliminated to reconcile segment results and assets to the consolidated basis.
 
Three Months Ended June 30, 2014
 
Three Months Ended June 30, 2013
 
CCUSA
 
CCAL
 
Eliminations
 
Consolidated
Total
 
CCUSA
 
CCAL
 
Eliminations
 
Consolidated
Total
Net revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Site rental
$
710,783

 
$
35,557

 
$

 
$
746,340

 
$
583,584

 
$
33,265

 
$

 
$
616,849

Network services and other
167,459

 
2,546

 

 
170,005

 
113,057

 
5,022

 

 
118,079

Net revenues
878,242

 
38,103

 

 
916,345

 
696,641

 
38,287

 

 
734,928

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs of operations(a):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Site rental
227,032

 
9,959

 

 
236,991

 
169,234

 
9,781

 

 
179,015

Network services and other
101,901

 
1,546

 

 
103,447

 
66,035

 
4,164

 

 
70,199

General and administrative
63,318

 
5,835

 

 
69,153

 
49,225

 
5,565

 

 
54,790

Asset write-down charges
3,105

 
31

 

 
3,136

 
3,008

 
89

 

 
3,097

Acquisition and integration costs
19,125

 
72

 

 
19,197

 
7,030

 
185

 

 
7,215

Depreciation, amortization and accretion
246,583

 
7,652

 

 
254,235

 
183,304

 
7,347

 

 
190,651

Total operating expenses
661,064

 
25,095

 

 
686,159

 
477,836

 
27,131

 

 
504,967

Operating income (loss)
217,178

 
13,008

 

 
230,186

 
218,805

 
11,156

 

 
229,961

Interest expense and amortization of deferred financing costs
(144,534
)
 
(3,930
)
 
3,930

 
(144,534
)
 
(140,256
)
 
(4,316
)
 
4,316

 
(140,256
)
Gains (losses) on retirement of long-term obligations
(44,629
)
 

 

 
(44,629
)
 
(577
)
 

 

 
(577
)
Interest income
108

 
81

 

 
189

 
246

 
82

 

 
328

Other income (expense)
(1,990
)
 
(143
)
 
(3,930
)
 
(6,063
)
 
4,808

 
15

 
(4,316
)
 
507

Benefit (provision) for income taxes
3,101

 
(2,893
)
 

 
208

 
(34,304
)
 
(2,283
)
 

 
(36,587
)
Net income (loss)
29,234

 
6,123

 

 
35,357

 
48,722

 
4,654

 

 
53,376

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

 
1,348

 

 
1,348

 

 
1,017

 

 
1,017

Net income (loss) attributable to CCIC stockholders
$
29,234

 
$
4,775

 
$

 
$
34,009

 
$
48,722

 
$
3,637

 
$

 
$
52,359

Capital expenditures
$
160,460

 
$
6,337

 
$

 
$
166,797

 
$
134,513

 
$
3,954

 
$

 
$
138,467

________________
(a)
Exclusive of depreciation, amortization and accretion shown separately.


14

CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in thousands, except per share amounts)


 
Six Months Ended June 30, 2014
 
Six Months Ended June 30, 2013
 
CCUSA
 
CCAL
 
Eliminations
 
Consolidated
Total
 
CCUSA
 
CCAL
 
Eliminations
 
Consolidated
Total
Net revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Site rental
$
1,425,575

 
$
67,927

 
$

 
$
1,493,502

 
$
1,164,851

 
$
67,413

 
$

 
$
1,232,264

Network services and other
294,430

 
4,363

 

 
298,793

 
230,918

 
11,806

 

 
242,724

Net revenues
1,720,005

 
72,290

 

 
1,792,295

 
1,395,769

 
79,219

 

 
1,474,988

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs of operations(a):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Site rental
445,676

 
19,391

 

 
465,067

 
336,826

 
19,795

 

 
356,621

Network services and other
173,701

 
2,620

 

 
176,321

 
137,884

 
9,692

 

 
147,576

General and administrative
121,959

 
12,043

 

 
134,002

 
101,786

 
11,249

 

 
113,035

Asset write-down charges
5,741

 
128

 

 
5,869

 
6,611

 
201

 

 
6,812

Acquisition and integration costs
24,784

 
72

 

 
24,856

 
8,631

 
186

 

 
8,817

Depreciation, amortization and accretion
491,759

 
12,667

 

 
504,426

 
362,430

 
14,680

 

 
377,110

Total operating expenses
1,263,620

 
46,921

 

 
1,310,541

 
954,168

 
55,803

 

 
1,009,971

Operating income (loss)
456,385

 
25,369

 

 
481,754

 
441,601

 
23,416

 

 
465,017

Interest expense and amortization of deferred financing costs
(290,934
)
 
(7,613
)
 
7,613

 
(290,934
)
 
(304,625
)
 
(8,762
)
 
8,762

 
(304,625
)
Gains (losses) on retirement of long-term obligations
(44,629
)
 

 

 
(44,629
)
 
(36,486
)
 

 

 
(36,486
)
Interest income
222

 
140

 

 
362

 
449

 
176

 

 
625

Other income (expense)
(1,043
)
 
(143
)
 
(7,613
)
 
(8,799
)
 
8,628

 
12

 
(8,762
)
 
(122
)
Benefit (provision) for income taxes
6,141

 
(5,745
)
 

 
396

 
(49,917
)
 
(4,378
)
 

 
(54,295
)
Net income (loss)
126,142

 
12,008

 
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