filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(Amounts in millions, except par values)
| September 30, 2021 | December 31, 2020 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 357 | $ | 232 | |||||||
| Restricted cash | 180 | 144 | |||||||||
| Receivables, net | 493 | 431 | |||||||||
| Prepaid expenses | 120 | 95 | |||||||||
| Other current assets | 182 | 202 | |||||||||
| Total current assets | 1,332 | 1,104 | |||||||||
| Deferred site rental receivables | 1,516 | 1,408 | |||||||||
| Property and equipment, net of accumulated depreciation of $11,660 and $10,803, respectively | 15,174 | 15,162 | |||||||||
| Operating lease right-of-use assets | 6,659 | 6,464 | |||||||||
| Goodwill | 10,078 | 10,078 | |||||||||
| Other intangible assets, net | 4,115 | 4,433 | |||||||||
| Other assets, net | 130 | 119 | |||||||||
| Total assets | $ | 39,004 | $ | 38,768 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 231 | $ | 230 | |||||||
| Accrued interest | 141 | 199 | |||||||||
| Deferred revenues | 822 | 704 | |||||||||
| Other accrued liabilities | 376 | 378 | |||||||||
| Current maturities of debt and other obligations | 72 | 129 | |||||||||
| Current portion of operating lease liabilities | 345 | 329 | |||||||||
| Total current liabilities | 1,987 | 1,969 | |||||||||
| Debt and other long-term obligations | 20,293 | 19,151 | |||||||||
| Operating lease liabilities | 6,000 | 5,808 | |||||||||
| Other long-term liabilities | 2,208 | 2,379 | |||||||||
| Total liabilities | 30,488 | 29,307 | |||||||||
| Commitments and contingencies (note 8) | |||||||||||
| Stockholders' equity: | |||||||||||
| Common stock, $0.01 par value; 600 shares authorized; shares issued and outstanding: September 30, 2021—432 and December 31, 2020—431 | 4 | 4 | |||||||||
| Additional paid-in capital | 17,982 | 17,933 | |||||||||
| Accumulated other comprehensive income (loss) | (3) | (4) | |||||||||
| Dividends/distributions in excess of earnings | (9,467) | (8,472) | |||||||||
| Total equity | 8,516 | 9,461 | |||||||||
| Total liabilities and equity | $ | 39,004 | $ | 38,768 |
See notes to condensed consolidated financial statements.
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (Unaudited)
(Amounts in millions, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Site rental | $ | 1,451 | $ | 1,339 | $ | 4,245 | $ | 3,968 | |||||||||||||||
| Services and other | 167 | 147 | 441 | 379 | |||||||||||||||||||
| Net revenues | 1,618 | 1,486 | 4,686 | 4,347 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Costs of operations(a): | |||||||||||||||||||||||
| Site rental | 397 | 370 | 1,168 | 1,123 | |||||||||||||||||||
| Services and other | 115 | 117 | 301 | 324 | |||||||||||||||||||
| Selling, general and administrative | 167 | 154 | 500 | 493 | |||||||||||||||||||
| Asset write-down charges | — | 3 | 9 | 10 | |||||||||||||||||||
| Acquisition and integration costs | — | 2 | 1 | 9 | |||||||||||||||||||
| Depreciation, amortization and accretion | 413 | 406 | 1,229 | 1,207 | |||||||||||||||||||
| Total operating expenses | 1,092 | 1,052 | 3,208 | 3,166 | |||||||||||||||||||
| Operating income (loss) | 526 | 434 | 1,478 | 1,181 | |||||||||||||||||||
| Interest expense and amortization of deferred financing costs | (163) | (168) | (493) | (521) | |||||||||||||||||||
| Gains (losses) on retirement of long-term obligations | (1) | (95) | (145) | (95) | |||||||||||||||||||
| Interest income | — | — | 1 | 2 | |||||||||||||||||||
| Other income (expense) | (4) | (3) | (16) | (3) | |||||||||||||||||||
| Income (loss) before income taxes | 358 | 168 | 825 | 564 | |||||||||||||||||||
| Benefit (provision) for income taxes | (7) | (5) | (20) | (16) | |||||||||||||||||||
| Income (loss) from continuing operations | 351 | 163 | 805 | 548 | |||||||||||||||||||
| Discontinued operations (see note 6): | |||||||||||||||||||||||
| Net gain (loss) from disposal of discontinued operations, net of tax | — | — | (62) | — | |||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | — | — | (62) | — | |||||||||||||||||||
| Net income (loss) attributable to CCIC stockholders | 351 | 163 | 743 | 548 | |||||||||||||||||||
| Dividends/distributions on preferred stock | — | — | — | (57) | |||||||||||||||||||
| Net income (loss) attributable to CCIC common stockholders | $ | 351 | $ | 163 | $ | 743 | $ | 491 | |||||||||||||||
| Net income (loss) | $ | 351 | $ | 163 | $ | 743 | $ | 548 | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments | (1) | 2 | 1 | 1 | |||||||||||||||||||
| Total other comprehensive income (loss) | (1) | 2 | 1 | 1 | |||||||||||||||||||
| Comprehensive income (loss) attributable to CCIC stockholders | $ | 350 | $ | 165 | $ | 744 | $ | 549 | |||||||||||||||
| Net income (loss) attributable to CCIC common stockholders, per common share: | |||||||||||||||||||||||
| Income (loss) from continuing operations, basic | $ | 0.81 | $ | 0.38 | $ | 1.86 | $ | 1.17 | |||||||||||||||
| Income (loss) from discontinued operations, basic | — | — | (0.14) | — | |||||||||||||||||||
| Net income (loss) attributable to CCIC common stockholders—basic | $ | 0.81 | $ | 0.38 | $ | 1.72 | $ | 1.17 | |||||||||||||||
| Income (loss) from continuing operations, diluted | $ | 0.81 | $ | 0.38 | $ | 1.85 | $ | 1.17 | |||||||||||||||
| Income (loss) from discontinued operations, diluted | — | — | (0.14) | — | |||||||||||||||||||
| Net income (loss) attributable to CCIC common stockholders—diluted | $ | 0.81 | $ | 0.38 | $ | 1.71 | $ | 1.17 | |||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic | 432 | 427 | 432 | 420 | |||||||||||||||||||
| Diluted | 434 | 429 | 434 | 422 |
(a)Exclusive of depreciation, amortization and accretion shown separately.
See notes to condensed consolidated financial statements.
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In millions of dollars)
| Nine Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Income (loss) from continuing operations | $ | 805 | $ | 548 | |||||||
| Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used for) operating activities: | |||||||||||
| Depreciation, amortization and accretion | 1,229 | 1,207 | |||||||||
| (Gains) losses on retirement of long-term obligations | 145 | 95 | |||||||||
| Amortization of deferred financing costs and other non-cash interest, net | 9 | 4 | |||||||||
| Stock-based compensation expense | 100 | 108 | |||||||||
| Asset write-down charges | 9 | 10 | |||||||||
| Deferred income tax (benefit) provision | 4 | 2 | |||||||||
| Other non-cash adjustments, net | 18 | 4 | |||||||||
| Changes in assets and liabilities, excluding the effects of acquisitions: | |||||||||||
| Increase (decrease) in accrued interest | (59) | (46) | |||||||||
| Increase (decrease) in accounts payable | 16 | (41) | |||||||||
| Increase (decrease) in other liabilities | (57) | 58 | |||||||||
| Decrease (increase) in receivables | (62) | 141 | |||||||||
| Decrease (increase) in other assets | (102) | (20) | |||||||||
| Net cash provided by (used for) operating activities | 2,055 | 2,070 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (892) | (1,238) | |||||||||
| Payments for acquisitions, net of cash acquired | (27) | (86) | |||||||||
| Other investing activities, net | 8 | (12) | |||||||||
| Net cash provided by (used for) investing activities | (911) | (1,336) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of long-term debt | 3,985 | 3,733 | |||||||||
| Principal payments on debt and other long-term obligations | (1,057) | (80) | |||||||||
| Purchases and redemptions of long-term debt | (2,089) | (2,490) | |||||||||
| Borrowings under revolving credit facility | 580 | 2,140 | |||||||||
| Payments under revolving credit facility | (870) | (2,145) | |||||||||
| Net issuances (repayments) under commercial paper program | 380 | (80) | |||||||||
| Payments for financing costs | (43) | (38) | |||||||||
| Purchases of common stock | (69) | (75) | |||||||||
| Dividends/distributions paid on common stock | (1,738) | (1,531) | |||||||||
| Dividends/distributions paid on preferred stock | — | (85) | |||||||||
| Net cash provided by (used for) financing activities | (921) | (651) | |||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash - continuing operations | 223 | 83 | |||||||||
| Discontinued operations (see note 6): | |||||||||||
| Net cash provided by (used for) operating activities | (62) | — | |||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash - discontinued operations | (62) | — | |||||||||
| Effect of exchange rate changes | — | — | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 381 | 338 | |||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 542 | $ | 421 |
See notes to condensed consolidated financial statements.
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(Amounts in millions) (Unaudited)
| Common Stock | 6.875% Mandatory Convertible Preferred Stock | Accumulated Other Comprehensive Income (Loss) ("AOCI") | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | ($0.01 Par) | Shares | ($0.01 Par) | Additional paid-in capital | Foreign Currency Translation Adjustments | Dividends/Distributions in Excess of Earnings | Total | ||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2021 | 432 | $ | 4 | — | $ | — | $ | 17,951 | $ | (2) | $ | (9,240) | $ | 8,713 | |||||||||||||||||||||||||||||||||
| Stock-based compensation related activity, net of forfeitures | — | — | — | — | 32 | — | — | 32 | |||||||||||||||||||||||||||||||||||||||
| Purchases and retirement of common stock | — | — | — | — | (1) | — | — | (1) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss)(a) | — | — | — | — | — | (1) | — | (1) | |||||||||||||||||||||||||||||||||||||||
| Common stock dividends/distributions(b) | — | — | — | — | — | — | (578) | (578) | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 351 | 351 | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2021 | 432 | $ | 4 | — | $ | — | $ | 17,982 | $ | (3) | $ | (9,467) | $ | 8,516 |
| Common Stock | 6.875% Mandatory Convertible Preferred Stock | AOCI | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | ($0.01 Par) | Shares | ($0.01 Par) | Additional paid-in capital | Foreign Currency Translation Adjustments | Dividends/Distributions in Excess of Earnings | Total | ||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2020 | 417 | $ | 4 | 2 | $ | — | $ | 17,872 | $ | (6) | $ | (8,044) | $ | 9,826 | |||||||||||||||||||||||||||||||||
| Stock-based compensation related activity, net of forfeitures | — | — | — | — | 33 | — | — | 33 | |||||||||||||||||||||||||||||||||||||||
| Purchases and retirement of common stock | — | — | — | — | (1) | — | — | (1) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss)(a) | — | — | — | — | — | 2 | — | 2 | |||||||||||||||||||||||||||||||||||||||
| Common stock dividends/distributions(b) | — | — | — | — | — | — | (521) | (521) | |||||||||||||||||||||||||||||||||||||||
| Conversion of preferred stock to common stock | 14 | — | (2) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 163 | 163 | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2020 | 431 | $ | 4 | — | $ | — | $ | 17,904 | $ | (4) | $ | (8,402) | $ | 9,502 |
(a)See the condensed consolidated statement of operations and other comprehensive income (loss) for the components of other comprehensive income (loss).
(b)See note 7 for information regarding common and preferred stock dividends declared per share.
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(Amounts in millions) (Unaudited)
| Common Stock | 6.875% Mandatory Convertible Preferred Stock | AOCI | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | ($0.01 Par) | Shares | ($0.01 Par) | Additional paid-in capital | Foreign Currency Translation Adjustments | Dividends/Distributions in Excess of Earnings | Total | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2020 | 431 | $ | 4 | — | $ | — | $ | 17,933 | $ | (4) | $ | (8,472) | $ | 9,461 | |||||||||||||||||||||||||||||||||
| Stock-based compensation related activity, net of forfeitures | 1 | — | — | — | 118 | — | — | 118 | |||||||||||||||||||||||||||||||||||||||
| Purchases and retirement of common stock | — | — | — | — | (69) | — | — | (69) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss)(a) | — | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||||
| Common stock dividends/distributions(b) | — | — | — | — | — | — | (1,738) | (1,738) | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 743 | 743 | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2021 | 432 | $ | 4 | — | $ | — | $ | 17,982 | $ | (3) | $ | (9,467) | $ | 8,516 |
| Common Stock | 6.875% Mandatory Convertible Preferred Stock | AOCI | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | ($0.01 Par) | Shares | ($0.01 Par) | Additional paid-in capital | Foreign Currency Translation Adjustments | Dividends/Distributions in Excess of Earnings | Total | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2019 | 416 | $ | 4 | 2 | $ | — | $ | 17,855 | $ | (5) | $ | (7,365) | $ | 10,489 | |||||||||||||||||||||||||||||||||
| Stock-based compensation related activity, net of forfeitures | 1 | — | — | — | 124 | — | — | 124 | |||||||||||||||||||||||||||||||||||||||
| Purchases and retirement of common stock | — | — | — | — | (75) | — | — | (75) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss)(b) | — | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||||
| Common stock dividends/distributions(b) | — | — | — | — | — | — | (1,528) | (1,528) | |||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends/distributions(b) | — | — | — | — | — | — | (57) | (57) | |||||||||||||||||||||||||||||||||||||||
| Conversion of preferred stock to common stock | 14 | — | (2) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 548 | 548 | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2020 | 431 | $ | 4 | — | $ | — | $ | 17,904 | $ | (4) | $ | (8,402) | $ | 9,502 |
(a)See the condensed consolidated statement of operations and other comprehensive income (loss) for the components of other comprehensive income (loss).
(b)See note 7 for information regarding common and preferred stock dividends declared per share.
CROWN CASTLE INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited
(Tabular dollars in millions, except per share amounts)
**1.**General
The information contained in the following notes to the condensed consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the condensed consolidated financial statements included herein should be reviewed in conjunction with the consolidated financial statements for the fiscal year ended December 31, 2020, and related notes thereto, included in the 2020 Form 10-K filed by Crown Castle International Corp. ("CCIC") with the SEC. Capitalized terms used but not defined in these notes to the condensed consolidated financial statements have the same meaning given to them in the 2020 Form 10-K. References to the "Company" refer to CCIC and its predecessor, as applicable, and their subsidiaries, unless otherwise indicated or the context indicates otherwise. As used herein, the term "including," and any variation thereof means "including without limitation." The use of the word "or" herein is not exclusive. Unless the context suggests otherwise, references to "U.S." are to the United States of America and Puerto Rico, collectively.
The Company owns, operates and leases shared communications infrastructure that is geographically dispersed throughout the U.S., including (1) towers and other structures, such as rooftops (collectively, "towers"), and (2) fiber primarily supporting small cell networks ("small cells") and fiber solutions. The Company's towers, fiber and small cells assets are collectively referred to herein as "communications infrastructure," and the Company's customers on its communications infrastructure are referred to herein as "tenants."
The Company's core business is providing access, including space or capacity, to its shared communications infrastructure via long-term contracts in various forms, including lease, license, sublease and service agreements (collectively, "tenant contracts").
The Company's operating segments consist of (1) Towers and (2) Fiber. See note 10.
As part of the Company's effort to provide comprehensive communications infrastructure solutions, as an ancillary business, the Company also offers certain services primarily relating to its Towers segment, predominately consisting of (1) site development services primarily relating to existing or new tenant equipment installations, including: site acquisition, architectural and engineering, or zoning and permitting (collectively, "site development services") and (2) tenant equipment installation or subsequent augmentations (collectively, "installation services").
The Company operates as a REIT for U.S. federal income tax purposes. In addition, the Company has certain taxable REIT subsidiaries ("TRSs"). See note 6.
Approximately 53% of the Company's towers are leased or subleased or operated and managed under master leases, subleases, and other agreements with AT&T and T-Mobile, including agreements assumed by T-Mobile following its merger with Sprint, completed on April 1, 2020. 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 state fairly the consolidated financial position of the Company at September 30, 2021, the condensed consolidated results of operations for the three and nine months ended September 30, 2021 and 2020, and the condensed consolidated cash flows for the nine months ended September 30, 2021 and 2020. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full 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.
**2.**Summary of Significant Accounting Policies
Recently Adopted Accounting Pronouncements
No accounting pronouncements adopted during the nine months ended September 30, 2021 had a material impact on the Company's condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
No new accounting pronouncements issued but not yet adopted are expected to have a material impact on the Company's condensed consolidated financial statements.
**3.**Revenues
Site rental revenues
The Company generates site rental revenues from its core business by providing tenants with access, including space or capacity, to its shared communications infrastructure via long-term tenant contracts in various forms, including lease, license, sublease and service agreements. Providing such access over the length of the tenant contract term represents the Company’s sole performance obligation under its tenant contracts.
Site rental revenues from the Company's tenant contracts are recognized on a straight-line, ratable basis over the fixed, non-cancelable term of the relevant tenant contract, which generally ranges from five to 15 years for wireless tenants and three to 20 years for the Company's fiber solutions tenants (including from organizations with high-bandwidth and multi-location demands), regardless of whether the payments from the tenant are received in equal monthly amounts during the life of the tenant contract. Certain of the Company's tenant contracts contain (1) fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the CPI), (2) multiple renewal periods exercisable at the tenant's option and (3) only limited termination rights at the applicable tenant's option through the current term. If the payment terms call for fixed escalations, upfront payments, or rent-free periods, the revenue is recognized on a straight-line basis over the fixed, non-cancelable term of the agreement. When calculating straight-line rental revenues, the Company considers all fixed elements of tenant contractual escalation provisions, even if such escalation provisions contain a variable element in addition to a minimum. The Company's assets related to straight-line site rental revenues include current amounts of $125 million included in "Other current assets" and non-current amounts of $1.5 billion included in "Deferred site rental receivables" as of September 30, 2021. Amounts billed or received prior to being earned are deferred and reflected in "Deferred revenues" and "Other long-term liabilities." Amounts to which the Company has an unconditional right to payment, which are related to both satisfied or partially satisfied performance obligations, are recorded within "Receivables, net" on the Company's condensed consolidated balance sheet.
Services and other revenues
As part of the Company’s effort to provide comprehensive communications infrastructure solutions, as an ancillary business, the Company offers certain services primarily relating to its Towers segment, predominately consisting of (1) site development services and (2) installation services. Upon contract commencement, the Company assesses its services to tenants and identifies performance obligations for each promise to provide a distinct service.
The Company may have multiple performance obligations for site development services, which primarily include: structural analysis, zoning, permitting and construction drawings. For each of the above performance obligations, services revenues are recognized at completion of the applicable performance obligation, which represents the point at which the Company believes it has transferred goods or services to the tenant. The revenue recognized is based on an allocation of the transaction price among the performance obligations in a respective contract based on estimated standalone selling price. The volume and mix of site development services may vary among contracts and may include a combination of some or all of the above performance obligations. Payments generally are due within 45 to 60 days and generally do not contain variable-consideration provisions. The transaction price for the Company's tower installation services consists of amounts for (1) permanent improvements to the Company's towers that represent a lease component and (2) the performance of the service. Amounts under the Company's tower installation service agreements that represent a lease component are recognized as site rental revenues on a straight-line basis over the length of the associated estimated lease term. For the performance of the installation service, the Company has one performance obligation, which is satisfied at the time of the applicable installation or augmentation and recognized as services and other revenues. Since performance obligations are typically satisfied prior to
receiving payment from tenants, the unconditional right to payment is recorded within "Receivables, net" on the Company’s condensed consolidated balance sheet. The vast majority of the Company’s services generally have a duration of one year or less.
Additional information on revenues
As of January 1, 2021 and September 30, 2021, $2.8 billion and $2.7 billion of unrecognized revenue was reported in "Deferred revenues" and "Other long-term liabilities" on our condensed consolidated balance sheet, respectively. During the nine months ended September 30, 2021, approximately $455 million of the January 1, 2021 unrecognized revenue balance was recognized as revenue. During the nine months ended September 30, 2020, approximately $440 million of the January 1, 2020 unrecognized revenue balance was recognized as revenue.
The following table is a summary of the non-cancelable contracted amounts owed to the Company by tenants pursuant to tenant contracts in effect as of September 30, 2021.
| Three Months Ending December 31, | Years Ending December 31, | |||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total | ||||||||||||||||||||||||||||||||||||||
| Contracted amounts(a) | $ | 1,149 | $ | 4,472 | $ | 3,937 | $ | 3,426 | $ | 3,295 | $ | 15,576 | $ | 31,855 |
(a)Based on the nature of the contract, tenant contracts are accounted for pursuant to relevant lease accounting (ASC 842) or revenue accounting (ASC 606) guidance. Excludes amounts related to services, as those contracts generally have a duration of one year or less.
See note 10 for further information regarding the Company's operating segments.
**4.**Debt and Other Obligations
The table below sets forth the Company's debt and other obligations as of September 30, 2021.
| Original Issue Date | Final Maturity Date**(a)** | Balance as of September 30, 2021 | Balance as of December 31, 2020 | Stated Interest Rate as of September 30, 2021**(a)** | ||||||||||||||||||||||||||||
| 3.849% Secured Notes | Dec. 2012 | Apr. 2023 | $ | 998 | $ | 997 | 3.9 | % | ||||||||||||||||||||||||
| Secured Notes, Series 2009-1, Class A-2 | July 2009 | Aug. 2029 | 55 | 60 | 9.0 | % | ||||||||||||||||||||||||||
| Tower Revenue Notes, Series 2015-1 | May 2015 | May 2042 | (h) | — | 299 | N/A | ||||||||||||||||||||||||||
| Tower Revenue Notes, Series 2018-1 | July 2018 | July 2043 | (b) | 249 | 248 | 3.7 | % | |||||||||||||||||||||||||
| Tower Revenue Notes, Series 2015-2 | May 2015 | May 2045 | (b) | 696 | 695 | 3.7 | % | |||||||||||||||||||||||||
| Tower Revenue Notes, Series 2018-2 | July 2018 | July 2048 | (b) | 744 | 743 | 4.2 | % | |||||||||||||||||||||||||
| Finance leases and other obligations | Various | Various | (c) | 240 | 236 | Various | (c) | |||||||||||||||||||||||||
| Total secured debt | $ | 2,982 | $ | 3,278 | ||||||||||||||||||||||||||||
| 2016 Revolver | Jan. 2016 | June 2026 | (i) | $ | — | (d) | $ | 290 | N/A | (e) | ||||||||||||||||||||||
| 2016 Term Loan A | Jan. 2016 | June 2026 | (g)(i) | 1,230 | 2,252 | 1.2 | % | (e) | ||||||||||||||||||||||||
| Commercial Paper Notes | Sep. 2021 | (f) | Oct. 2021 | (f)(g)(h) | 665 | (f) | 285 | 0.3 | % | |||||||||||||||||||||||
| 5.250% Senior Notes | Oct. 2012 | Jan. 2023 | (g) | — | 1,646 | N/A | ||||||||||||||||||||||||||
| 3.150% Senior Notes | Jan. 2018 | July 2023 | 747 | 746 | 3.2 | % | ||||||||||||||||||||||||||
| 3.200% Senior Notes | Aug. 2017 | Sept. 2024 | 746 | 745 | 3.2 | % | ||||||||||||||||||||||||||
| 1.350% Senior Notes | June 2020 | July 2025 | 495 | 494 | 1.4 | % | ||||||||||||||||||||||||||
| 4.450% Senior Notes | Feb. 2016 | Feb. 2026 | 895 | 894 | 4.5 | % | ||||||||||||||||||||||||||
| 3.700% Senior Notes | May 2016 | June 2026 | 746 | 745 | 3.7 | % | ||||||||||||||||||||||||||
| 1.050% Senior Notes | Feb. 2021 | July 2026 | (g) | 990 | — | 1.1 | % | |||||||||||||||||||||||||
| 4.000% Senior Notes | Feb. 2017 | Mar. 2027 | 496 | 496 | 4.0 | % | ||||||||||||||||||||||||||
| 3.650% Senior Notes | Aug. 2017 | Sept. 2027 | 994 | 994 | 3.7 | % | ||||||||||||||||||||||||||
| 3.800% Senior Notes | Jan. 2018 | Feb. 2028 | 992 | 991 | 3.8 | % | ||||||||||||||||||||||||||
| 4.300% Senior Notes | Feb. 2019 | Feb. 2029 | 593 | 593 | 4.3 | % | ||||||||||||||||||||||||||
| 3.100% Senior Notes | Aug. 2019 | Nov. 2029 | 545 | 544 | 3.1 | % | ||||||||||||||||||||||||||
| 3.300% Senior Notes | Apr. 2020 | July 2030 | 738 | 737 | 3.3 | % | ||||||||||||||||||||||||||
| 2.250% Senior Notes | June 2020 | Jan. 2031 | 1,089 | 1,088 | 2.3 | % | ||||||||||||||||||||||||||
| 2.100% Senior Notes | Feb. 2021 | Apr. 2031 | (g) | 987 | — | 2.1 | % | |||||||||||||||||||||||||
| 2.500% Senior Notes | June 2021 | July 2031 | (h) | 739 | — | 2.5 | % | |||||||||||||||||||||||||
| 2.900% Senior Notes | Feb. 2021 | Apr. 2041 | (g) | 1,232 | — | 2.9 | % | |||||||||||||||||||||||||
| 4.750% Senior Notes | May 2017 | May 2047 | 344 | 344 | 4.8 | % | ||||||||||||||||||||||||||
| 5.200% Senior Notes | Feb. 2019 | Feb. 2049 | 395 | 395 | 5.2 | % | ||||||||||||||||||||||||||
| 4.000% Senior Notes | Aug. 2019 | Nov. 2049 | 345 | 345 | 4.0 | % | ||||||||||||||||||||||||||
| 4.150% Senior Notes | Apr. 2020 | July 2050 | 490 | 489 | 4.2 | % | ||||||||||||||||||||||||||
| 3.250% Senior Notes | June 2020 | Jan. 2051 | 890 | 889 | 3.3 | % | ||||||||||||||||||||||||||
| Total unsecured debt | $ | 17,383 | $ | 16,002 | ||||||||||||||||||||||||||||
| Total debt and other obligations | 20,365 | 19,280 | ||||||||||||||||||||||||||||||
| Less: current maturities and short-term debt and other current obligations | 72 | 129 | ||||||||||||||||||||||||||||||
| Non-current portion of long-term debt and other long-term obligations | $ | 20,293 | $ | 19,151 |
(a)See the 2020 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.
(b)If the respective series of Tower Revenue Notes are not paid in full on or prior to an applicable anticipated repayment date, then Excess Cash Flow (as defined in the indenture) of the issuers of such notes will be used to repay principal of the applicable series and class of the Tower Revenue Notes, and additional interest (of an additional approximately 5% per annum) will accrue on the respective Tower Revenue Notes. As of September 30, 2021, the Tower Revenue Notes have principal amounts of $250 million, $700 million and $750 million, with anticipated repayment dates in 2023, 2025 and 2028, respectively.
(c)The Company's finance leases and other obligations relate to land, fiber, vehicles, and other assets and bear interest rates ranging up to 10% and mature in periods ranging from less than one year to approximately 25 years.
(d)As of September 30, 2021, the undrawn availability under the 2016 Revolver was $5.0 billion.
(e)Both the 2016 Revolver and 2016 Term Loan A bear interest, at our option, at either (1) LIBOR plus a credit spread ranging from 0.875% to 1.750% per annum or (2) an alternate base rate plus a credit spread ranging from 0.000% to 0.750% per annum, in each case, with the applicable credit spread based on the Company's senior unsecured debt rating. The Company pays a commitment fee ranging from 0.080% to 0.300%, based on the Company's senior unsecured debt rating, per annum on the undrawn available amount under the 2016 Revolver. See note (i) for information regarding (1) potential adjustments to such percentages and (2) LIBOR transition provisions.
(f)Notes under the CP Program may be issued, repaid and re-issued from time to time, with an aggregate principal amount of Commercial Paper Notes outstanding under the CP Program at any time not to exceed $1.0 billion. The net proceeds of the Commercial Paper Notes are expected to be used for general corporate purposes. The maturities of the Commercial Paper Notes, when outstanding, may vary but may not exceed 397 days from the date of issue. The Commercial Paper Notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. As of September 30, 2021, the Company had net issuances of $665 million under the CP Program. At any point in time, the Company intends to maintain available commitments under its 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding. While any outstanding Commercial Paper Notes generally have short-term maturities, the Company classifies the outstanding issuances, when applicable, as long-term based on its ability and intent to refinance the outstanding issuances on a long-term basis.
(g)In February 2021, the Company issued $3.25 billion aggregate principal amount of senior unsecured notes ("February 2021 Senior Notes"), which consisted of (1) $1.0 billion aggregate principal amount of 1.050% senior unsecured notes due July 2026, (2) $1.0 billion aggregate principal amount of 2.100% senior unsecured notes due April 2031 and (3) $1.25 billion aggregate principal amount of 2.900% senior unsecured notes due April 2041. The Company used the net proceeds from the February 2021 Senior Notes offering to (1) redeem all of the outstanding 5.250% Senior Notes, (2) repay a portion of the outstanding Commercial Paper Notes and (3) repay a portion of outstanding borrowings under the 2016 Term Loan A.
(h)In June 2021, the Company issued $750 million aggregate principal amount of 2.500% senior unsecured notes due July 2031 ("June 2021 Senior Notes"). In June 2021, the Company used a portion of the net proceeds from the June 2021 Senior Notes offering (1) to repay outstanding Commercial Paper Notes and (2) for general corporate purposes. In July 2021, the Company used a portion of the net proceeds to repay in full the previously outstanding Tower Revenue Notes, Series 2015-1.
(i)In June 2021, the Company entered into an amendment to the Credit Facility that provided for, among other things, (1) the extension of the maturity date of the Credit Facility from June 2024 to June 2026, (2) reductions to the interest rate spread and unused commitment fee percentage upon meeting specified annual sustainability targets and increases to the interest rate spread and unused commitment fee percentage upon the failure to meet specified annual sustainability thresholds and (3) the inclusion of "hardwired" LIBOR transition provisions consistent with those published by the Alternative Reference Rate Committee. With respect to the specified annual sustainability targets, the applicable interest rate spread is subject to an upward or downward adjustment of up to 0.05% and the unused commitment fee is subject to an upward or downward revision of up to 0.01% if the Company achieves, or fails to achieve, certain specified targets.
Scheduled Principal Payments and Final Maturities
The following are the scheduled principal payments and final maturities of the total debt and other long-term obligations of the Company outstanding as of September 30, 2021, which do not consider the principal payments that will commence following the anticipated repayment dates on the Tower Revenue Notes.
| Three Months Ending December 31, | Years Ending December 31, | Unamortized Adjustments, Net | Total Debt and Other Obligations Outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total Cash Obligations | |||||||||||||||||||||||||||||||||||||||||||||||
| Scheduled principal payments and final maturities | $ | 687 | (a) | $ | 71 | $ | 1,839 | $ | 843 | $ | 636 | $ | 16,464 | $ | 20,540 | $ | (175) | $ | 20,365 |
(a)Predominately consists of outstanding indebtedness under the CP Program. Such amounts may be issued, repaid or re-issued from time to time.
Purchases and Redemptions of Long-Term Debt
The following is a summary of purchases and redemptions of long-term debt during the nine months ended September 30, 2021.
| Principal Amount | Cash Paid**(a)** | Gains (Losses)****(b) | |||||||||||||||
| 5.250% Senior Notes | $ | 1,650 | $ | 1,789 | $ | (143) | |||||||||||
| 2016 Term Loan A | — | — | (1) | ||||||||||||||
| Tower Revenue Notes - Series 2015-1 | $ | 300 | $ | 300 | $ | (1) | |||||||||||
| Total | $ | 1,950 | $ | 2,089 | $ | (145) |
(a)Exclusive of accrued interest.
(b)Inclusive of the write off of respective deferred financing costs.
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Interest expense on debt obligations | $ | 160 | $ | 167 | $ | 484 | $ | 517 | |||||||||||||||
| Amortization of deferred financing costs and adjustments on long-term debt | 6 | 6 | 19 | 17 | |||||||||||||||||||
| Capitalized interest | (3) | (5) | (10) | (13) | |||||||||||||||||||
| Total | $ | 163 | $ | 168 | $ | 493 | $ | 521 |
**5.**Fair Value Disclosures
| Level in Fair Value Hierarchy | September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 1 | $ | 357 | $ | 357 | $ | 232 | $ | 232 | ||||||||||||||||||||
| Restricted cash, current and non-current | 1 | 185 | 185 | 149 | 149 | ||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Total debt and other obligations | 2 | 20,365 | 21,521 | 19,280 | 21,302 |
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. Since December 31, 2020, there have been no changes in the Company's valuation techniques used to measure fair values.
**6.**Income Taxes
The Company operates as a REIT for U.S. federal income tax purposes. As a REIT, the Company is generally entitled to a deduction for dividends that it pays and therefore is not 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) taxes on any undistributed income, (2) taxes related to the TRSs, (3) franchise taxes, (4) property taxes, and (5) transfer taxes. In addition, the Company could under 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 of 1986, as amended, to maintain qualification for taxation as a REIT.
The Company's TRS assets and operations will continue to be subject, as applicable, to federal and state corporate income taxes or 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) are 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.
For the nine months ended September 30, 2021 and 2020, 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.
On April 26, 2021, the Company entered into an agreement in principle with the ATO to pay approximately $63 million (A$83 million) to settle the previously disclosed outstanding audit of the Australian tax consequences of the Company’s 2015 sale of Crown Castle Australia Holdings Pty Ltd ("CCAL"), formerly a 77.6% owned Australian subsidiary of the Company ("ATO Settlement"). The sale of CCAL generated approximately $1.2 billion in net proceeds to the Company, and resulted in a gain from the disposal of discontinued operations of $979 million for the year ended December 31, 2015.
The Company previously recognized the ATO Settlement as a charge within discontinued operations in its condensed consolidated statement of operations and comprehensive income (loss) for the three months ended March 31, 2021, as this
amount represented a reduction to the gain from the disposal of discontinued operations previously reported during the year ended December 31, 2015.
On June 16, 2021, the Company entered into a definitive settlement agreement with the ATO evidencing the ATO Settlement. On July 1, 2021, the Company paid approximately $62 million (A$83 million), based on the exchange rate in effect on that date, pursuant to the ATO Settlement, which is reflected within discontinued operations on the Company's consolidated statement of cash flows for the nine months ended September 30, 2021.
**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. For the three and nine months ended September 30, 2021 and 2020, 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 upon (1) the vesting of restricted stock units as determined under the treasury stock method and (2) conversion of the Company's previously outstanding 6.875% Mandatory Convertible Preferred Stock, as applicable, as determined under the if-converted method.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | 351 | $ | 163 | $ | 805 | $ | 548 | |||||||||||||||
| Dividends on preferred stock | — | — | — | (57) | |||||||||||||||||||
| Income (loss) from continuing operations attributable to CCIC common stockholders for basic and diluted computations | $ | 351 | $ | 163 | $ | 805 | $ | 491 | |||||||||||||||
| Income (loss) from discontinued operations, net of tax | $ | — | $ | — | $ | (62) | $ | — | |||||||||||||||
| Net income (loss) attributable to CCIC common stockholders | $ | 351 | $ | 163 | $ | 743 | $ | 491 | |||||||||||||||
| Weighted-average number of common shares outstanding (in millions): | |||||||||||||||||||||||
| Basic weighted-average number of common stock outstanding | 432 | 427 | 432 | 420 | |||||||||||||||||||
| Effect of assumed dilution from potential issuance of common shares relating to restricted stock units | 2 | 2 | 2 | 2 | |||||||||||||||||||
| Diluted weighted-average number of common shares outstanding | 434 | 429 | 434 | 422 | |||||||||||||||||||
| Net income (loss) attributable to CCIC common stockholders, per common share: | |||||||||||||||||||||||
| Income (loss) from continuing operations, basic | $ | 0.81 | $ | 0.38 | $ | 1.86 | $ | 1.17 | |||||||||||||||
| Income (loss) from discontinued operations, basic | — | — | (0.14) | — | |||||||||||||||||||
| Net income (loss) attributable to CCIC common stockholders—basic | $ | 0.81 | $ | 0.38 | $ | 1.72 | $ | 1.17 | |||||||||||||||
| Income (loss) from continuing operations, diluted | $ | 0.81 | $ | 0.38 | $ | 1.85 | $ | 1.17 | |||||||||||||||
| Income (loss) from discontinued operations, diluted | — | — | (0.14) | — | |||||||||||||||||||
| Net income (loss) attributable to CCIC common stockholders—diluted | $ | 0.81 | $ | 0.38 | $ | 1.71 | $ | 1.17 | |||||||||||||||
| Dividends/distributions declared per share of common stock | $ | 1.33 | $ | 1.20 | $ | 3.99 | $ | 3.60 | |||||||||||||||
| Dividends/distributions declared per share of preferred stock | $ | — | $ | — | $ | — | $ | 34.3750 |
During the nine months ended September 30, 2021, the Company granted one million restricted stock units to the Company's executives and certain other employees pursuant to its 2013 Long-Term Incentive Plan.
**8.**Commitments and Contingencies
Shareholder Litigation
As previously disclosed, securities class action suits were filed in 2020 against the Company and certain of its current officers, which suits were dismissed without prejudice in June 2021. Also in 2020, derivative lawsuits were filed in the United States District Court for the District of Delaware against the Company's then-current directors, certain of its current officers, and the Company as a nominal defendant. Each complaint alleged, among other things, breaches of fiduciary duties, waste of corporate assets, unjust enrichment, and false or misleading statements. The derivative plaintiffs sought, among other things, unspecified monetary damages, costs and expenses, restitution from the defendants, and an order requiring the Company to implement certain corporate governance reforms. As a nominal defendant, no monetary relief was sought against the Company itself. In June 2020, the derivative lawsuits were consolidated as In re Crown Castle International Corp. Derivative Litigation, C.A. No. 20-00606-MN in the United States District Court for the District of Delaware. On July 27, 2021, the plaintiffs in the consolidated case filed a notice of voluntary dismissal of the lawsuit without prejudice, and on that same day, the court entered an order effectuating that dismissal.
Durham Lawsuits
The Company has received notices of claims and has been named as one of several defendants in lawsuits stemming from an April 2019 gas leak explosion in Durham, North Carolina, which occurred near an area where the Company's subcontractors were installing fiber. The explosion resulted in two fatalities, physical injuries (some of which were serious), and property damage to surrounding buildings and businesses. Currently, the Company is unable to determine the likelihood of an outcome or estimate a range of possible losses, if any, related to these lawsuits.
New York State Department of Transportation
In 2019, the State of New York passed legislation authorizing the Department of Transportation ("NYSDOT") to enter into agreements with any fiber provider for the use and occupancy of the state right-of-way for fiber optic lines. The legislation authorizes the NYSDOT to charge a fee of up to fair market value for such use and occupancy. To date, the Company has paid fees relating to newly deployed fiber lines but has not been required to pay, and has not recognized any costs in connection with, any fees relating to previously deployed fiber lines.
The Company believes that the legislation violates both federal and state law and is evaluating its legal options regarding any use and occupancy fees that may be assessed on previously deployed fiber. Currently, the Company is unable to determine the likelihood of an outcome or reasonably estimate the amount of fees, if any, that it may be required to pay as a result of the legislation.
Other Matters
The Company is involved in various other claims, assessments, lawsuits or proceedings arising in the ordinary course of business. While there are uncertainties inherent in the ultimate outcome of such other matters and it is impossible to presently determine the ultimate costs or losses that may be incurred, if any, management believes the adverse resolution of such uncertainties and the incurrence of such costs should not have a material adverse effect on the Company's condensed 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, see note 1 for a discussion of the Company's option to purchase approximately 53% of its 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 nine months ended September 30, 2021, the following dividends/distributions were declared or paid:
| Equity Type | Declaration Date | Record Date | Payment Date | Dividends Per Share | Aggregate Payment Amount**(a)** | |||||||||||||||||||||||||||
| Common Stock | February 18, 2021 | March 15, 2021 | March 31, 2021 | $ | 1.33 | $ | 581 | |||||||||||||||||||||||||
| Common Stock | May 21, 2021 | June 14, 2021 | June 30, 2021 | $ | 1.33 | $ | 579 | |||||||||||||||||||||||||
| Common Stock | August 5, 2021 | September 15, 2021 | September 30, 2021 | $ | 1.33 | $ | 578 | |||||||||||||||||||||||||
(a)Inclusive of dividends accrued for holders of unvested restricted stock units, which will be paid when and if the restricted stock units vest.
See also note 12 for a discussion of the Company's common stock dividend declared in October 2021.
Purchases of the Company's Common Stock
For the nine months ended September 30, 2021, the Company purchased 0.4 million shares of its common stock utilizing $69 million in cash. The shares of common stock purchased relate to shares withheld in connection with the payment of withholding taxes upon vesting of restricted stock units.
2018 "At-the-Market" Stock Offering Program
The Company previously maintained an "at-the-market" stock offering program through which it had the right to issue and sell shares of its common stock having an aggregate gross sales price of up to $750 million ("2018 ATM Program"). The Company terminated its previously outstanding 2018 ATM Program in March 2021 with the entire gross sales price of $750 million remaining unsold.
2021 "At-the-Market" Stock Offering Program
In March 2021, the Company established a new "at-the-market" stock offering program through which it may issue and sell shares of its common stock having an aggregate gross sales price of up to $750 million ("2021 ATM Program"). Sales under the 2021 ATM Program may be made by means of ordinary brokers' transactions on the NYSE or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or, subject to the Company's specific instructions, at negotiated prices. The Company intends to use the net proceeds from any sales under the 2021 ATM Program for general corporate purposes, which may include (1) the funding of future acquisitions or investments or (2) the repayment or repurchase of any outstanding indebtedness. The Company has not sold any shares of common stock under the 2021 ATM Program.
**10.**Operating Segments
The Company's operating segments consist of (1) Towers and (2) Fiber. The Towers segment provides access, including space or capacity, to the Company's approximately 40,000 towers geographically dispersed throughout the U.S. The Towers segment also reflects certain ancillary services relating to the Company's towers, predominately consisting of site development services and installation services. The Fiber segment provides access, including space or capacity, to the Company's approximately 80,000 route miles of fiber primarily supporting small cell networks and fiber solutions geographically dispersed throughout the U.S.
The measurements of profit or loss used by the Company's chief operating decision maker ("CODM") to evaluate the performance of its operating segments are (1) segment site rental gross margin, (2) segment services and other gross margin and (3) segment operating profit. The Company defines segment site rental gross margin as segment site rental revenues less segment site rental cost of operations, which excludes stock-based compensation expense and prepaid lease purchase price adjustments recorded in consolidated cost of operations. The Company defines segment services and other gross margin as segment services and other revenues less segment services and other cost of operations, which excludes stock-based compensation expense recorded in consolidated cost of operations. The Company defines segment operating profit as segment site rental gross margin plus segment services and other gross margin, and segment other operating (income) expense, less
selling, general and administrative expenses attributable to the respective segment. All of these measurements of profit or loss are exclusive of depreciation, amortization and accretion, which are shown separately.
The following tables set forth the Company's segment operating results for the three and nine months ended September 30, 2021 and 2020. Costs that are directly attributable to Towers and Fiber are assigned to those respective segments. Additionally, certain costs are shared across segments and are reflected in the Company's segment measures through allocations that management believes to be reasonable. The "Other" column (1) represents amounts excluded from specific segments, such as 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, gains (losses) on foreign currency swaps, interest income, other income (expense), income (loss) from discontinued operations, and stock-based compensation expense, and (2) reconciles segment operating profit to income (loss) before income taxes, as the amounts are not utilized in assessing each segment’s performance. The "Other" total assets balance includes corporate assets such as cash and cash equivalents which have not been allocated to specific segments. There are no significant revenues resulting from transactions between the Company's operating segments.
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Towers | Fiber | Other | Consolidated Total | Towers | Fiber | Other | Consolidated Total | ||||||||||||||||||||||||||||||||||||||||
| Segment site rental revenues | $ | 972 | $ | 479 | $ | 1,451 | $ | 877 | $ | 462 | $ | 1,339 | |||||||||||||||||||||||||||||||||||
| Segment services and other revenues | 162 | 5 | 167 | 142 | 5 | 147 | |||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 1,134 | 484 | 1,618 | 1,019 | 467 | 1,486 | |||||||||||||||||||||||||||||||||||||||||
| Segment site rental cost of operations | 227 | 163 | 390 | 216 | 145 | 361 | |||||||||||||||||||||||||||||||||||||||||
| Segment services and other cost of operations | 108 | 4 | 112 | 111 | 4 | 115 | |||||||||||||||||||||||||||||||||||||||||
| Segment cost of operations(a)(b) | 335 | 167 | 502 | 327 | 149 | 476 | |||||||||||||||||||||||||||||||||||||||||
| Segment site rental gross margin | 745 | 316 | 1,061 | 661 | 317 | 978 | |||||||||||||||||||||||||||||||||||||||||
| Segment services and other gross margin | 54 | 1 | 55 | 31 | 1 | 32 | |||||||||||||||||||||||||||||||||||||||||
| Segment selling, general and administrative expenses(b) | 27 | 44 | 71 | 22 | 42 | 64 | |||||||||||||||||||||||||||||||||||||||||
| Segment operating profit (loss) | 772 | 273 | 1,045 | 670 | 276 | 946 | |||||||||||||||||||||||||||||||||||||||||
| Other selling, general and administrative expenses | $ | 69 | 69 | $ | 63 | 63 | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 33 | 33 | 33 | 33 | |||||||||||||||||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 413 | 413 | 406 | 406 | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense and amortization of deferred financing costs | 163 | 163 | 168 | 168 | |||||||||||||||||||||||||||||||||||||||||||
| Other (income) expenses to reconcile to income (loss) before income taxes(c) | 9 | 9 | 108 | 108 | |||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 358 | $ | 168 | |||||||||||||||||||||||||||||||||||||||||||
| Capital expenditures | $ | 46 | $ | 229 | $ | 8 | $ | 283 | $ | 76 | $ | 287 | $ | 14 | $ | 377 | |||||||||||||||||||||||||||||||
| Total assets (at period end) | $ | 22,239 | $ | 15,813 | $ | 952 | $ | 39,004 | $ | 22,248 | $ | 15,692 | $ | 846 | $ | 38,786 |
(a)Exclusive of depreciation, amortization and accretion shown separately.
(b)Segment cost of operations excludes (1) stock-based compensation of $6 million in each of the three months ended September 30, 2021 and 2020, respectively, and (2) prepaid lease purchase price adjustments of $4 million and $5 million for the three months ended September 30, 2021 and 2020, respectively. Selling, general and administrative expenses exclude stock-based compensation expense of $27 million in each of the three months ended September 30, 2021 and 2020.
(c)See condensed consolidated statement of operations for further information.
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Towers | Fiber | Other | Consolidated Total | Towers | Fiber | Other | Consolidated Total | ||||||||||||||||||||||||||||||||||||||||
| Segment site rental revenues | $ | 2,819 | $ | 1,426 | $ | 4,245 | $ | 2,612 | $ | 1,356 | $ | 3,968 | |||||||||||||||||||||||||||||||||||
| Segment services and other revenues | 427 | 14 | 441 | 367 | 12 | 379 | |||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 3,246 | 1,440 | 4,686 | 2,979 | 1,368 | 4,347 | |||||||||||||||||||||||||||||||||||||||||
| Segment site rental cost of operations | 659 | 485 | 1,144 | 648 | 447 | 1,095 | |||||||||||||||||||||||||||||||||||||||||
| Segment services and other cost of operations | 285 | 10 | 295 | 311 | 8 | 319 | |||||||||||||||||||||||||||||||||||||||||
| Segment cost of operations(a)(b) | 944 | 495 | 1,439 | 959 | 455 | 1,414 | |||||||||||||||||||||||||||||||||||||||||
| Segment site rental gross margin | 2,160 | 941 | 3,101 | 1,964 | 909 | 2,873 | |||||||||||||||||||||||||||||||||||||||||
| Segment services and other gross margin | 142 | 4 | 146 | 56 | 4 | 60 | |||||||||||||||||||||||||||||||||||||||||
| Segment selling, general and administrative expenses(b) | 78 | 133 | 211 | 71 | 137 | 208 | |||||||||||||||||||||||||||||||||||||||||
| Segment operating profit (loss) | 2,224 | 812 | 3,036 | 1,949 | 776 | 2,725 | |||||||||||||||||||||||||||||||||||||||||
| Other selling, general and administrative expenses | $ | 205 | 205 | $ | 198 | 198 | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 100 | 100 | 106 | 106 | |||||||||||||||||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 1,229 | 1,229 | 1,207 | 1,207 | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense and amortization of deferred financing costs | 493 | 493 | 521 | 521 | |||||||||||||||||||||||||||||||||||||||||||
| Other (income) expenses to reconcile to income (loss) before income taxes(c) | 184 | 184 | 129 | 129 | |||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 825 | $ | 564 | |||||||||||||||||||||||||||||||||||||||||||
| Capital expenditures | $ | 160 | $ | 701 | $ | 31 | $ | 892 | $ | 272 | $ | 926 | $ | 40 | $ | 1,238 |
(a)Exclusive of depreciation, amortization and accretion shown separately.
(b)Segment cost of operations excludes (1) stock-based compensation expense of $16 million and $19 million for the nine months ended September 30, 2021 and 2020, respectively, and (2) prepaid lease purchase price adjustments of $14 million in each of the nine months ended September 30, 2021 and 2020. Selling, general and administrative expenses exclude stock-based compensation expense of $84 million and $87 million for the nine months ended September 30, 2021 and 2020, respectively.
(c)See condensed consolidated statement of operations for further information.
**11.**Supplemental Cash Flow Information
The following table is a summary of the Company's supplemental cash flow information:
| Nine Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash payments related to operating lease liabilities(a) | $ | 414 | $ | 405 | |||||||
| Interest paid | 542 | 564 | |||||||||
| Income taxes paid | 17 | 13 | |||||||||
| Supplemental disclosure of non-cash operating, investing and financing activities: | |||||||||||
| New ROU assets obtained in exchange for operating lease liabilities | 456 | 445 | |||||||||
| Increase (decrease) in accounts payable for purchases of property and equipment | (13) | 30 | |||||||||
| Purchase of property and equipment under finance leases and installment purchases | 22 | 23 |
(a)Excludes the Company's contingent payments pursuant to operating leases, which are recorded as expense in the period such contingencies are resolved.
The reconciliation of cash, cash equivalents, and restricted cash reported within various lines on the condensed consolidated balance sheet to amounts reported in the condensed consolidated statement of cash flows is shown below.
| September 30, 2021 | December 31, 2020 | ||||||||||
| Cash and cash equivalents | $ | 357 | $ | 232 | |||||||
| Restricted cash, current | 180 | 144 | |||||||||
| Restricted cash reported within other assets, net | 5 | 5 | |||||||||
| Cash, cash equivalents and restricted cash | $ | 542 | $ | 381 |
**12.**Subsequent Events
Common Stock Dividend
On October 18, 2021, the Company's board of directors declared a quarterly cash dividend of $1.47 per common share. The quarterly dividend will be payable on December 31, 2021 to common stockholders of record as of December 15, 2021.
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