A substantial portion of our revenues is derived from a small number of customers, and the loss, consolidation, or financial instability of any of ~~our limited number of~~such customers may materially decrease revenues or reduce demand for our ~~wireless~~communications infrastructure.

For the year ended December 31, ~~2015,~~2017, our site rental revenues by customer were as follows:

The loss of any one of our large customers as a result of consolidation, merger, bankruptcy, insolvency, network sharing, roaming, joint development, resale agreements by our customers, or otherwise may result in (1) a material decrease in our revenues, (2) uncollectible account receivables, (3) an impairment of our deferred site rental receivables, ~~wireless~~communications infrastructure assets, intangible assets, or (4) other adverse effects to our business. We cannot guarantee that ~~leases~~contracts with our major customers will not be terminated or that these customers will renew their ~~leases~~contracts with us. In addition, we also derive a portion of our revenues, and anticipate future growth from new entrants offering or contemplating offering wireless services. Such customers may be smaller or have less financial resources than our four largest customers, may have business models ~~which~~that may not be successful, or may require additional capital.

Consolidation among our customers will likely result in duplicate or overlapping parts of networks, for example, where they are ~~both tenants~~co-residents on a tower, which may result in the termination or non-renewal of the tenant ~~leases~~contracts and negatively impact revenues from our ~~wireless~~communications infrastructure. WeDue to the long-term nature of tenant contracts, we expect, but cannot be certain, that any termination of tenant ~~leases~~contracts as a result of this potential consolidation would be spread over multiple years. Such consolidation may result in a reduction in such customers' future network investment in the aggregate because their expansion plans may be similar. ~~Wireless carrier~~Customer consolidation could decrease the demand for our ~~wireless~~communications infrastructure, which in turn may result in a reduction in our revenues or cash flows.

In recent years, AT&T, T-Mobile and Sprint acquired Leap Wireless, MetroPCS, and Clearwire ("Acquired Networks"), respectively. During ~~2016,~~2018, we expect site rental revenues to be negatively impacted by non-renewals as a result of the decommissioning of the Acquired Networks. The Acquired Networks represented approximately ~~11%~~8% of our site rental revenues for the year ended December 31, ~~2015.~~2017. We currently expect the majority of the potential non-renewals from the decommissioning of the Acquired Networks to occur predominately ~~from 2016~~ through the end of 2018. Depending on the eventual network deployment and decommissioning plans of AT&T, T-Mobile and Sprint, the impact and timing of such non-renewals may vary from our expectations.

See note 10 to our consolidated financial ~~statements for a tabular presentation of the minimum rental cash payments due to~~

~~us by tenants pursuant to tenant agreements without consideration of tenant renewal options.~~statements.

Our ability to repay the principal under our 2012 Secured Notes on or prior to the relevant maturity date will be subject to a number of factors outside our control.

The indenture ("Secured Notes Indenture") governing our $1.0 billion aggregate principal amount of 3.849% secured notes due 2023 ("3.849% Secured Notes") and our previously outstanding $500 million aggregate principal amount of 2.381% secured notes due 2017 ~~and $1.0 billion aggregate principal amount of 3.849% secured notes due 2023~~("2.381% Secured Notes") (collectively, the "2012 Secured Notes"), requires us to repay the principal under ~~each series of~~ the ~~2012~~3.849% Secured Notes by ~~the~~their maturity date ~~such notes mature.~~in April 2023. We currently expect to distribute a substantial portion of our cash flow to our member ~~and ultimately other subsidiaries of CCIC~~ as dividends. Therefore, our ability to repay the principal under the ~~2012~~3.849% Secured Notes on or prior to ~~the~~their maturity date ~~such notes mature~~ depends upon our ability either to refinance the indebtedness under ~~such notes~~the 3.849% Secured Notes or to sell our interests in the sites for an amount that is sufficient to repay the ~~notes~~3.849% Secured Notes in full with interest. Our ability to achieve either of these goals will be affected by a number of factors, including the availability of credit for wireless communications sites, the fair market value of the sites, our equity in the sites, our financial condition, the operating history of the sites, tax laws, or general economic conditions. Since the current term of the tenant ~~leases~~contracts as of the date of this filing

will have substantially expired by

the date ~~each series of the 2012~~3.849% Secured Notes mature, our ability to sell or refinance at such date will also be affected by the degree of our success in extending existing tenant ~~leases~~contracts or obtaining new tenant ~~leases~~contracts as those remaining terms expire. In addition, neither the trustee for the ~~2012~~3.849% Secured Notes nor any of its respective affiliates or any other person is obligated to provide the funds to refinance the ~~2012~~3.849% Secured Notes.

CCL is a holding company, and therefore its ability to repay its indebtedness is dependent on cash flow generated by its subsidiaries and their ability to make distributions to CCL.

CCL is a holding company with no operations or material assets other than the direct or indirect equity interests it holds in its subsidiaries. As a result, its ability to pay principal and interest on its indebtedness is dependent on the generation of cash flow by its subsidiaries and their ability to make such cash available to CCL by dividend, debt repayment, or otherwise. The earnings and cash flow generated by CCL's subsidiaries will depend on their financial and operating performance, which will be affected by general economic, industry, financial, competitive, operating, legislative, regulatory, or other factors beyond our control. Any payments of dividends, distributions, loans, or advances to CCL by its subsidiaries could also be subject to restrictions on dividends under applicable local law in the jurisdictions in which such subsidiaries operate.

In the event that CCL does not receive distributions from its subsidiaries, or to the extent that the earnings from, or other available assets of, such subsidiaries are insufficient, CCL may be unable to make payments on its indebtedness. Furthermore, Crown Castle GS III Corp., the co-issuer of the ~~2012~~3.849% Secured Notes, has no assets, conducts no operations, and has no independent ability to service the interest and principal obligations under the ~~2012~~3.849% Secured Notes.

As a result of competition in our industry, we may find it more difficult to ~~achieve~~negotiate favorable ~~rental~~ rates on our new or renewing tenant ~~leases.~~contracts.

Our growth is dependent on our entering into new tenant ~~leases~~contracts (including amendments to ~~leases~~contracts upon modification of an existing tower installation), as well as renewing or renegotiating tenant ~~leases~~contracts when existing tenant ~~leases~~contracts terminate. Competition in our industry may make it more difficult for us to attract new customers, maintain or increase our gross margins or maintain or increase our market share. We face competition for site rental tenants and associated rental rates from various sources, including (1) other independent ~~wireless~~communications infrastructure owners or operators, including those that own, operate, or manage sites, rooftops, broadcast towers, utility poles, ~~DAS~~fiber or ~~other~~ small cells, or (2) new alternative deployment methods ~~in the wireless industry.~~for communications infrastructure.

New technologies may reduce demand for our ~~sites~~communications infrastructure or negatively impact our revenues.

Improvements in the efficiency, architecture, and design of wireless networks may reduce the demand for our ~~sites.~~communications infrastructure. For example, new technologies that may promote network sharing, joint development, wireless backhaul, or resale agreements by our customers, such as signal combining technologies or network functions virtualization, may reduce the need for our ~~wireless~~communications infrastructure. In addition, other technologies, such as ~~WiFi, DAS,~~Wi-Fi, Distributed Antenna Systems ("DAS"), femtocells, other small cells, or satellite (such as low earth orbiting) and mesh transmission systems may, in the future, serve as substitutes for or alternatives to leasing on communications infrastructure that might otherwise be anticipated or expected ~~on our wireless infrastructure~~ had such technologies not existed. In addition, new technologies that enhance the range, efficiency, and capacity of wireless equipment could reduce demand for our ~~wireless~~communications infrastructure. Any reduction in demand for our ~~wireless~~communications infrastructure resulting from the new technologies may negatively impact our revenues or otherwise have a material adverse effect on us.

If we fail to retain rights to our ~~wireless~~communications infrastructure, including the land interests under our towers, our business may be adversely affected.

The property interests on which our towers reside, including the land interests under our towers (other than the sites sub-leased under the Sprint Master Leases) consist of leaseholds and exclusive easements, as well as permits granted by governmental entities. A loss of these interests for any reason, including losses arising from the bankruptcies of a significant number of our lessors, from the default by a significant number of our lessors under their mortgage financings or from a legal challenge to our interest in the real property, may interfere with our ability to conduct our business or generate revenues. If a material number of the grantors of these rights elect not to renew their terms, our ability to conduct business or generate revenues could be adversely affected. Further, we may not be able to renew ground leases on commercially viable terms. Our ability to retain rights to the land interests on which our towers reside depends on our ability to purchase such land, including fee interests and perpetual easements, or renegotiate or extend the terms of the leases relating to such land. In some cases, other subsidiaries of CCIC have acquired certain third party land interests under certain of our sites as a result of negotiated transactions, and we have entered into leases with such affiliates. Approximately ~~14%~~15% of our ~~site rental gross margins~~sites for the year ended December 31, ~~2015 were derived from towers where the leases~~2017 are under our control for ~~the land interests under such towers had final expiration dates of~~ less than ~~ten~~10 years. If we are unable to retain rights to the property interests on which our towers reside, our business may be adversely affected.

As of December 31, ~~2015,~~2017, approximately 68% of our sites were Sprint Sites. CCIC, through its subsidiaries (including us), has the option to purchase, in 2037, all (but not less than all) of the leased orand subleased Sprint Sites (as well as other Sprint sites leased or subleased by other subsidiaries of CCIC) from Sprint for approximately $2.3 billion; CCIC has no obligation to exercise such purchase option. CCIC may not have the required available capital to exercise such ~~right to~~ purchase ~~these sites~~option at the time this option is exercisable. Even if CCIC does have available capital, it may choose not to exercise its ~~right to~~ purchase ~~such sites~~option for business or other reasons. In the event that CCIC does not exercise ~~these~~the purchase ~~rights,~~option, or is otherwise unable to acquire an interest that would allow us to continue to operate these towers after the applicable period, we will lose the cash flows derived from such towers, which may have a material adverse effect on our business. In the event that CCIC decides to exercise ~~these~~the purchase ~~rights,~~option, the benefits of the acquisition of the ~~applicable~~ sites may not exceed the costs, which could adversely affect our business.

Failure on our subsidiaries' part to cause the performance of ~~our~~their obligations as landlords under tenant ~~leases~~contracts could lead to abatement of rent or termination of tenant ~~leases.~~contracts.

The vast majority of our tenant ~~leases~~contracts are not net ~~leases.~~contracts. Accordingly, each ~~subsidiary~~ of ~~ours~~our subsidiaries that acts as a landlord is responsible for ensuring the maintenance and repair of its sites and for other obligations and liabilities associated with its sites, such as the payment of real estate taxes related to the tower and ground lease rents, the maintenance of insurance or environmental compliance and remediation. The failure of such subsidiary to cause the performance of ~~the landlord's~~their obligations as landlords under a tenant ~~lease~~contract could entitle the related lessee to an abatement of rent or, in some circumstances, could result in a termination of the tenant ~~lease.~~contract. Because our subsidiaries nor we have noany employees, ~~of our own,~~ as further discussed herein, the Manager (as defined below) is responsible for carrying out the landlord's responsibilities under the tenant ~~leases.~~contracts. An unscheduled reduction or cessation of payments due under a tenant ~~lease~~contract may result in a reduction of the amounts available to make payments on the ~~2012~~3.849% Secured Notes.

Bankruptcy proceedings involving either our subsidiaries or their lessors under the ground leases could adversely affect our ability to enforce our subsidiaries' rights under the ground leases or to remain in possession of the leased property.

Upon the bankruptcy of a lessor or a lessee under a ground lease, the debtor entity generally has the right to assume or reject the ground lease. Pursuant to Section 365(h) of the United States Bankruptcy Code ("Bankruptcy Code"), a ground lessee (i.e., a subsidiary) whose ground lease is rejected by a debtor ground lessor has the right to remain in possession of its leased premises under the rent reserved in the ~~lease~~contract for the term of the ground lease, including any renewals, but is not entitled to enforce the obligation of the ground lessor to provide any services required under the ground lease. In the event of concurrent bankruptcy proceedings involving the ground lessor and the ground lessee, the ground lease could be terminated.

Similarly, upon the bankruptcy of ~~a subsidiary~~one of ~~ours~~our subsidiaries or a third-party owner of a managed site, the debtor entity would have the right to assume or reject any related site management agreement. Because the arrangements under which we derive revenue from the managed sites would not likely constitute ~~leases~~contracts of real property for purposes of Section 365(h) of the Bankruptcy Code, the applicable subsidiary may not have the right to remain in possession of the premises or otherwise retain the benefit of the site management agreement if the site management agreement is rejected by a debtor third-party owner.

The bankruptcy of certain Sprint subsidiaries, ~~of Sprint~~ which are sublessors to one of our subsidiaries, could result in ~~our subsidiaries'~~such subsidiary's sublease interests being rejected by the bankruptcy court.

Certain of the towers leased from Sprint are located on land leased from third parties under ground leases. One of our subsidiaries, Global Signal Acquisitions II LLC ~~our subsidiary~~ ("Global Signal Acquisitions II"), subleases these sites from bankruptcy remote ~~subsidiaries of Sprint.~~Sprint subsidiaries. If one of these Sprint subsidiaries should become a debtor in a bankruptcy proceeding and is permitted to reject the underlying ground lease, Global Signal Acquisitions II could lose its interest in the applicable sites. If Global Signal Acquisitions II were to lose its interest in the applicable sites or if the applicable ground leases were to be terminated, we would lose the cash flow derived from the towers on those sites, which may have a material adverse effect on our business. We have similar bankruptcy risks with respect to sites that we operate under management agreements.

Our failure to comply with our covenants in the Sprint Master Leases, including our obligation to timely pay ground lease rent, could result in an event of default under the applicable Sprint Master Leases, which would adversely impact our business.

Subject to certain cure, arbitration, or other provisions, in the event of an uncured default under a Sprint Master Lease, Sprint may terminate the Sprint Master Lease as to the applicable sites. If we default under the Sprint Master Leases with respect to more than 20% of the Sprint Sites within any rolling five-year period, Sprint will have the right to terminate the Sprint Master Leases with respect to all Sprint Sites. If Sprint terminates Sprint Master Leases with respect to all of or a significant number of sites, we would lose all of our interests in those sites (which collectively represent approximately 68% of our sites as of December 31, ~~2015)~~2017) and our ability to make payments on the ~~2012~~3.849% Secured Notes would therefore be ~~seriously~~significantly impaired.

We have no employees of our own and hence are dependent on the Manager for the conduct of our operations. Any failure of the Manager to continue to perform in its role as manager of the sites could have a material adverse impact on our business.

~~As described herein,~~Pursuant to a management agreement among CCL, certain of its direct and indirect subsidiaries and CCUSA ("Management Agreement"), all of ~~the~~our sites ~~continue to be~~are managed by ~~the "Manager," which is CCUSA.~~CCUSA ("Manager"). The Manager continues to be responsible for causing maintenance to be carried out in a timely fashion, carrying out the landlord's responsibilities under the tenant ~~leases,~~contracts, and marketing the site spaces. Management errors may adversely affect the revenue generated by the sites. In addition, the Manager's performance continues to depend to a significant degree upon the continued contributions of key management, engineering, sales and marketing, customer support, legal, or finance personnel, some of whom may be difficult to replace. The Manager does not have employment agreements with any of its employees, and no assurance can be given that the services of such personnel will continue to be available to the Manager. Furthermore, the Manager does not maintain key man life insurance policies on its executives that would adequately compensate it for any loss of services of such executives. The loss of the services of one or more of these executives could have a material adverse effect on the Manager's ability to manage our operations.

The management of the sites requires special skills and particularized knowledge. If the Management Agreement is terminated or the Manager is for any reason unable to continue to manage the sites on our behalf, there may be substantial delays in engaging a replacement manager with the requisite skills and experience to manage the sites. There can be no assurance that a qualified replacement manager can be located or engaged in a timely fashion or on economical terms. If an insolvency proceeding were commenced with respect to the Manager, the Manager as debtor or its bankruptcy trustee might have the power to prevent us from replacing it with a new manager for the sites.

The Manager may experience conflicts of interest in the management of the sites and in the management of sites of affiliates carried out pursuant to other management agreements.

In addition to managing our operations, the Manager is currently party to, and may in the future enter into, separate management agreements with its other affiliates that own, lease, and manage towers or other wireless communications sites. These other affiliates may be engaged in the construction, acquisition, or leasing of wireless communications sites in proximity to ~~the sites owned by us.~~our sites. As a result, the Manager may engage in business activities that are in competition with our business in respect of the sites, and the Manager may experience conflicts of interest in the management of ~~the~~our sites and such other sites. Pursuant to the Management Agreement, the Manager continues to be prohibited from soliciting lessees to transfer ~~their~~ tenant ~~leases~~contracts from sites owned, leased, or managed by us to sites owned, leased or managed by our affiliates. However, there can be no assurance that the persons that control us, the Manager, or those other affiliates will allocate their management efforts in such a way as to maximize the returns with respect to our sites, as opposed to maximizing the returns with respect to other sites. The expansion and development of the Manager's business through acquisitions, increased product offerings or other strategic growth opportunities may cause disruptions in our business, which may have an adverse effect on our business operations or financial results. As a result, wethe Manager and ~~the Manager~~we may experience conflicts of interest in the management of the land sites. Pursuant to the Management Agreement, the Manager has agreed to manage the sites in the same manner as if the lessees thereunder were not affiliates.

In addition, we may, subject to certain restrictions on affiliate transactions in the ~~indenture governing the 2012~~ Secured Notes Indenture, enter into arms-length transactions with our affiliates to acquire land under our sites. There can be no assurance that the persons that control us will allocate potential opportunities in such a way as to maximize the returns with respect to our sites, as opposed to maximizing the returns for our affiliates.

New wireless technologies may not deploy or be adopted by customers as rapidly or in the manner projected.

There can be no assurances that new wireless services or technologies will be introduced or deployed as rapidly or in the manner projected by the wireless or broadcast industries. In addition, demand or ~~customer~~ adoption rates for such new technologies may be lower or slower than anticipated for numerous reasons. As a result, growth opportunities or demand for our ~~wireless~~communications infrastructure arising from such technologies may not be realized at the times or to the extent anticipated.

If radio frequency emissions from wireless handsets or equipment on our ~~wireless~~communications infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs, or revenues.

The potential connection between radio frequency emissions and certain negative health effects, including some forms of cancer, has been the subject of substantial study by the scientific community in recent years. We cannot guarantee that claims relating to radio frequency emissions will not arise in the future or that the results of such studies will not be adverse to us.

Public perception of possible health risks associated with cellular or other wireless ~~connectivity~~data services may slow or diminish the growth of wireless companies, which may in turn slow or diminish our growth. In particular, negative public perception of, and regulations regarding, these perceived health risks may slow or diminish the market acceptance of wireless services. If a connection between radio frequency emissions and possible negative health effects were established, our operations, costs or revenues may be materially and adversely affected. We currently do not maintain any significant insurance with respect to these matters.

If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.

A variety of federal, state, local, and foreign laws and regulations apply to our business. Failure to comply with applicable requirements may lead to civil or criminal penalties, or require us to assume indemnification obligations or breach contractual provisions. We cannot guarantee that existing or future laws or regulations, including federal, state and local tax laws, will not adversely affect our business (including CCIC's REIT status), increase delays or result in additional costs. We also may incur additional costs as a result of liabilities under applicable laws and regulations, such as those governing environmental and safety matters. These factors may have a material adverse effect on us.

CCIC’s failure to remain qualified to be taxed as a REIT would result in its inability to deduct dividends to stockholders when computing its taxable income, which could reduce our available cash or subject us to income taxes.

~~Effective January 1, 2014,~~ CCIC ~~commenced operating~~operates as a REIT for federal income tax purposes. As a REIT, CCIC 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 taxable income that is distributed to its stockholders. As a REIT, CCIC may still be subject to certain federal, state, local, and foreign taxes on its income and assets, including alternative minimum taxes, taxes on any undistributed income, and state, local, or foreign income, franchise, property, and transfer taxes. We are an indirect subsidiary of CCIC and, for U.S. federal income tax purposes, our assets and operations are part of the CCIC REIT. Furthermore, as a result of the deduction for dividends paid, some or all of CCIC's net operating loss carryforwards ("NOLs") related to ~~their~~its REIT status may expire without utilization.

While CCIC intends to operate so that it remains qualified as a REIT, given the highly complex nature of the rules governing REITs, the ~~ongoing~~ importance of ongoing factual determinations, ~~and~~ the possibility of future changes in circumstances, and the potential impact of future changes to laws and regulations impacting REITs, no assurance can be given by CCIC or us that CCIC will qualify as a REIT for any particular year.

We do not expect the recently enacted legislation commonly referred to as the Tax Reform Act to significantly affect us, although we cannot predict with certainty how such legislation will affect CCIC and us in the future. In addition, the present U.S. federal tax treatment of REITs is subject to change, possibly with retroactive effect, by legislative, judicial or administrative action at any time, and any such change might adversely affect CCIC's REIT status or benefits. We cannot predict the impact, if any, that such changes, if enacted, might have on our business. However, it is possible that such changes could adversely affect our business or inclusion of our assets and operations in CCIC's REIT.

If, in any taxable year, CCIC fails to qualify for taxation as a REIT and it is not entitled to relief under the ~~Internal Revenue~~ Code, ~~of 1986, as amended ("Code"),~~ then we will be subject to federal and state income tax, including for applicable years beginning before January 1, 2018, any applicable alternative minimum tax, on our taxable income at regular corporate rates.

As a REIT, CCIC needs to continually satisfy tests concerning, among other things, the sources of its income, the nature and diversification of its assets, the amounts it dividends to its stockholders, and the ownership of its capital stock in order to maintain REIT status. Compliance with these tests requires CCIC to refrain from certain activities and may hinder its ability to make certain attractive investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities, and investments in the businesses to be conducted by its taxable REIT subsidiaries ("TRSs"), and to that extent limit its opportunities and its flexibility to change its business strategy. Furthermore, acquisition opportunities in domestic or international markets may be adversely affected if CCIC needs or requires the target company to comply with some REIT requirements prior to completing any such acquisition. In addition, as a REIT, CCIC may face investor pressures not to pursue growth opportunities that are not immediately accretive.

In addition, CCIC has limited operating history as a REIT, and its senior management team has limited experience operating a REIT. Neither CCIC nor we can assure you that our past experiences will be sufficient to operate successfully as a REIT.

Available Information

CCIC maintains ~~an internet~~a website at www.crowncastle.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K (and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of ~~1934)~~1934, as amended) ("Exchange Act") are made available, free of charge, through the investor relations section of CCIC's ~~internet~~ website at http://investor.crowncastle.com or at the SEC's website at http://sec.gov as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. You may also read or copy any document we

file with the SEC at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Towers are vertical, metal structures generally ranging in height from 50 to 300 feet. Our towers are located on tracts of land ~~with an average size of approximately 15,000 square feet. These tracts of land~~that support the towers, equipment shelters and, where applicable, guy-wires to stabilize the structure. As of December 31, ~~2015,~~2017, the average number of tenants (defined as a unique license and any related amendments ~~thereto for count purposes)~~thereto) per site is approximately 2.8 ~~on our sites.~~. Substantially all of our towers can accommodate additional tenancy either as currently constructed or with appropriate modifications to the structure.

See "Item 1. Business—Overview" for information regarding our ~~wireless~~communications infrastructure portfolio and for a discussion of the location of our towers, including the percentage of our towers in the top 50 and 100 BTAs. See "Item 7. MD&A—General Overview" for information on land interests under our sites as of December 31, ~~2015.~~2017.

Item 3. Legal Proceedings

We are periodically involved in legal proceedings that arise in the ordinary course of business. Most of these proceedings arising in the ordinary course of business involve disputes with landlords, vendors, collection matters involving bankrupt customers, zoning or ~~variance~~siting matters ~~condemnation,~~ or ~~wrongful termination claims.~~condemnation. While the outcome of these matters cannot be predicted with certainty, management does not expect any pending matters to have a material adverse effect on us.

Item 4. Mine Safety Disclosures

N/A

PART II


Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our equity is not publicly traded. Our only member is GSOP, a wholly-owned indirect subsidiary of CCIC. During ~~2015~~, ~~2014, and~~ ~~2013~~,2017, we recorded an equity ~~distributions to~~distribution from GSOP of amounts due to our affiliates of ~~$231.6 million, $204.3 million, and $251.0 million, respectively. In addition, during~~ ~~2013~~$296.5 million. During 2016, we recorded ~~non-cash~~a net equity ~~contributions~~contribution from GSOP of ~~$27.0~~amounts due from our affiliates of $228.0 million, ~~primarily~~comprised of an equity contribution from GSOP of $508.5 million related to ~~our use~~the repayment of ~~NOLs from other members~~debt and an equity distribution to GSOP of ~~CCIC's federal consolidated group.~~$280.5 million of amounts due to affiliates. See notes 5 and 6 to our consolidated financial statements.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

General Overview

Overview

We own, lease, and manage approximately ~~7,700~~7,600 sites located across the United States. See "Item 1. Business" for additional information regarding our sites and ~~leases.~~ contracts.

Business Fundamentals

The following are certain highlights of our business fundamentals as of and for the year ended December 31, ~~2015:~~2017:

Potential growth resulting from wireless network expansion and new entrants caused by increasing demand for wireless data


◦	We expect wireless carriers will continue their focus on improving network quality and expanding capacity by adding additional antennas or other equipment on our ~~wireless~~communications infrastructure.

◦

We expect existing and potential new ~~wireless carrier~~customer demand for our towers will result from (1) new technologies, (2) increased usage of ~~wireless applications (including~~ mobile entertainment, mobile internet usage, and machine-to-machine ~~applications),~~applications, (3) adoption of other emerging and embedded wireless devices (including smartphones, laptops, tablets, and other devices), (4) increasing smartphone penetration, (5) wireless carrier focus on expanding both network quality and capacity orand (6) the availability of additional spectrum.


◦	Substantially all of our towers can accommodate additional tenancy, either as currently constructed or with appropriate modifications to the structure.


◦	~~Wireless~~U.S. wireless carriers continue to invest in their networks.

Organizational Structure


◦	~~Effective January 1, 2014, CCIC commenced operating as a REIT for U.S. federal income tax purposes.~~ For U.S. federal income tax purposes, CCIC operates as a REIT and, as its indirect subsidiary, our assets and operations are ~~part of~~included in the CCIC REIT. See "Item 1A. Risk Factors"and notes 2 and 8 to our consolidated financial statements.


◦	Our subsidiaries (other than Crown Castle GS III Corp.) were organized specifically to own, lease, and manage certain shared ~~wireless~~communications infrastructure, such as towers or other structures, and have no employees.


◦	Management services, including those functions reasonably necessary to maintain, market, operate, manage, or administer the sites, are performed by CCUSA. The management fee under the Management Agreement is equal to 7.5% of our "Operating Revenues," as defined under the Management Agreement.

Site rental revenues under long-term tenant ~~leases with contractual escalations~~contracts


◦	Initial terms of five to 15 years, with contractual escalations and multiple renewal periods at the option of the tenant of five to ten years each.


◦	The weighted-average remaining term (calculated by weighting the remaining term for each ~~lease~~contract by the related site rental revenue) of tenant ~~leases~~contracts was approximately six years, exclusive of renewals at the tenants' option, currently representing approximately $4.2 billion of expected future cash inflows.

Revenues predominately from large wireless carriers.


◦	Approximately ~~89%~~88% of our site rental revenues were derived from Sprint, AT&T, T-Mobile, and Verizon Wireless. See "Item 1A. Risk Factors" and note 11 to our consolidated financial statements.


◦	The average number of tenants per site was approximately 2.8.

Majority of land interests under our ~~wireless infrastructure~~towers are under long-term control

◦

~~Nearly 90%~~More than 80% and more than 50% of our ~~site rental gross margin is derived from~~ sites ~~that we own or~~are under our control for greater than 10 and 20 years, respectively. The aforementioned include sites that reside on land interests that are owned, including fee interests and perpetual ~~easements, which represent approximately one-seventh of our site rental gross margin.~~

easements.


◦	The ~~leases~~contracts for land interest under our towers had an average remaining life (calculated by weighting the remaining term for each ~~lease~~contract by its percentage of our total site rental ~~gross margin)~~revenues) of approximately 24 ~~years~~. years.


◦	Approximately ~~17%~~20% of our site rental cost of operations represents ground lease payments to ~~an affiliate of ours.~~our affiliates. Such ~~affiliate~~affiliates acquired the rights to such land interests as a result of negotiated transactions with third parties in connection with a program established by CCIC to extend the rights to the land under its portfolio of towers.

Relatively fixed tower operating costs


◦	Our operating costs tend to escalate at approximately the rate of inflation and are not typically influenced by tenant additions or non-renewals.

Minimal sustaining capital expenditure requirements


◦	Sustaining capital expenditures represented approximately 2% of ~~net~~site rental revenues.

Fixed rate debt with no short-term maturities


◦	Our debt consists of ~~the 2012 Secured Notes, which consist of $500.0 million aggregate principal amount of 2.381% secured notes due December 2017 and~~ $1.0 billion aggregate principal amount of 3.849% ~~secured notes due 2023.~~Secured Notes. See note 5 to our consolidated financial statements.

Significant cash flows from operations


◦	Net cash provided by operating activities was ~~$311.0 million~~.$357.3 million. See "Item 7. MD&A—Liquidity and Capital Resources."

Outlook Highlights

The following are certain highlights of our outlook that impact our business fundamentals described above.

We expect demand for tenant leasing to continue during ~~2016.~~2018.

During ~~2016,~~2018, we also expect that ~~site rental revenue growth~~the impact from tenant leasing will be offset by non-renewals of tenant ~~leases,~~contracts, primarily from our customers' decommissioning of the ~~former Leap Wireless, MetroPCS and Clearwire network,~~Acquired Networks, at least in part. ~~See~~ ~~"Item 1A. Risk Factors"~~ ~~for further discussion of the non-renewals.~~

Consolidated Results of Operations

The following discussion of our results of operations should be read in conjunction with "Item 1. Business," "Item 7. MD&A—Liquidity and Capital Resources" and our consolidated financial statements. The following discussion of our results of operations is based on our consolidated financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") which requires us to make estimates and judgments that affect the reported amounts. See "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 2 to our consolidated financial statements.

Comparison of Consolidated Results of Operations

The following is a comparison of our ~~2015~~2017, ~~2014~~2016 and ~~2013~~2015 consolidated results of operations:


	Years Ended December 31,									Percent Change				Years Ended December 31,									Percent Change
	2015			2014			2013			2015 vs. 2014		2014 vs. 2013		2017			2016			2015			2017 vs. 2016		2016 vs. 2015
	(In thousands of dollars)													(In thousands of dollars)
Site rental revenues	$	607,276		$	614,085		$	604,097		(1	)%	2	%	$	616,897		$	611,639		$	607,276		1	%	1	%

Operating expenses:
Costs of operations^(a)(b):	182,084			180,655			178,678			1	%	1	%	186,419			185,713			182,084			—	%	2	%
Management fee^(b)	43,709			42,686			40,561			2	%	5	%	46,946			45,433			43,709			3	%	4	%
Asset write-down charges	6,021			3,598			5,729			*		*		181			4,851			6,021			*		*
Depreciation, amortization and accretion	207,825			201,726			197,325			3	%	2	%	210,607			209,361			207,825			1	%	1	%
Total operating expenses	439,639			428,665			422,293			3	%	2	%	444,153			445,358			439,639			—	%	1	%
Operating income (loss)	167,637			185,420			181,804			(10	)%	2	%	172,744			166,281			167,637			4	%	(1	)%
Interest expense and amortization of deferred financing costs^(b)	(53,223		)	(53,223		)	(58,375		)	—	%	(9	)%	(39,874		)	(49,515		)	(53,223		)	(19	)%	(7	)%
Gain (loss) on retirement of long-term obligations	—			—			(18,103		)	*		*
Gain (loss) on retirement of debt														—			(10,273		)	—			*		*
Other income (expense)	(244		)	208			50			*		*		287			(242		)	(244		)	*		*
Income (loss) before income taxes	114,170			132,405			105,376			*		*		133,157			106,251			114,170			*		*
Benefit (provision) for income taxes	733			(402		)	348,443			*		*		614			668			733			*		*
Net income (loss)	$	114,903		$	132,003		$	453,819		*		*		$	133,771		$	106,919		$	114,903		*		*

____________________


*	Percentage is not meaningful.


(a)	Exclusive of depreciation, amortization and accretion shown separately and certain indirect costs included in the management fee.


(b)	Inclusive of related ~~parties~~parties' transactions.

~~Years~~Years Ended December 31, ~~2015~~2017 and ~~2014~~2016

Site rental revenues for ~~2015 decreased~~2017 increased by ~~$6.8~~approximately $5.3 million,, or 1%, from ~~2014. This decrease in site~~2016. Site rental revenues ~~was~~ ~~predominately due to non-renewals of tenant leases, including those related to Sprint's decommissioning of its legacy iDEN network, of approximately 5% and was partially offset~~were impacted by the following items, inclusive of straight-line ~~accounting, in no particular order:~~accounting: tenant additions across our entire portfolio, ~~renewal~~renewals of tenant ~~leases,~~contracts, escalations and ~~escalations.~~non-renewals of tenant contracts. Tenant additions were influenced by our customers' ongoing efforts to improve network quality and ~~capacity~~.capacity. See also "Item 7. MD&A—&A—General Overview."

~~Site~~Operating income for the twelve months ended December 31, 2017 increased by $6.5 million or 4%, from the same period in the prior year. The increase in operating income was predominately due to the aforementioned increase in site rental ~~gross margins~~revenues and a decrease in asset write-down charges from the twelve months ended December 31, 2016.

During September 2016, CCIC issued $700 million aggregate principal amount of 2.250% senior unsecured notes ("September 2016 Senior Notes") and used a portion of the proceeds to repay all of our previously outstanding 2.381% Secured Notes, which resulted in a loss on retirement of debt of approximately $10.3 million.

Interest expense and amortization of deferred financing costs for ~~2015~~the twelve months ended December 31, 2017 decreased by ~~$8.2~~$9.6 million,, or 2%19%, from ~~2014. The decrease~~the same period in the ~~site rental gross margins~~prior year. This decrease was related to the aforementioned repayment in September 2016 of the previously ~~mentioned~~ 1% ~~decrease in site rental revenues.~~outstanding 2.381% Secured Notes.

~~The management fee for 2015 increased by~~ ~~$1.0 million, or~~ 2%~~, from 2014, but remained approximately~~ 7% ~~of total net revenues. The management fee is equal to 7.5% of our "Operating Revenues," as defined in the Management Agreement.~~

~~Depreciation, amortization and accretion for~~ ~~2015~~ ~~increased by $6.1 million from~~ ~~2014. This increase predominately resulted from capital expenditures.~~

Benefit (provision) for income taxes ~~for~~ ~~2015~~ ~~was a benefit of~~ ~~$0.7 million~~ ~~compared~~remained consistent from 2016 to ~~a provision of~~ ~~$0.4 million~~ ~~for~~ ~~2014~~.2017. The effective tax ~~rate~~rates for ~~2015differs~~2017 and 2016 differ from the federal statutory rate predominately due to ~~the reduction of unrecognized tax benefits as a result of the lapse of the statute of limitations and~~ CCIC's REIT status (including the dividends paid deduction) and our inclusion therein. ~~The effective tax rate for~~ ~~2014~~ ~~differs from the federal statutory rate predominately due to~~ ~~CCIC's REIT status (including the dividends paid deduction) and our inclusion therein.~~ See "Item 1A. —Risk Factors" and notes 2 and 8 to our consolidated financial statements.

Net income for ~~2015~~2017 was ~~$114.9~~approximately $133.8 million,, compared to net income of ~~$132.0~~approximately $106.9 million for ~~2014~~,2016, which was predominately due to the aforementioned ~~changes~~loss on retirement of debt, decrease in ~~site rental gross margin~~interest expense and ~~depreciation,~~ amortization ~~and accretion discussed above.~~of deferred financing costs.

Years Ended December 31, ~~2014~~2016 and ~~2013~~2015

Site rental revenues for ~~2014~~2016 increased by ~~$10.0~~approximately $4.4 million,, or 2%1%, from ~~2013. This increase in site~~2015. Site rental revenues ~~was~~ ~~comprised of an approximately 1% increase due to a contract termination payment and was also~~ were impacted by the following items, inclusive of straight-line ~~accounting, in no particular order:~~accounting: tenant additions across our entire portfolio, ~~renewal~~renewals of tenant ~~leases,~~contracts, escalations and non-renewals of tenant ~~leases.~~contracts. Tenant additions were influenced by our tenants' ~~upgrading to 4G long-term evolution and their~~ ongoing efforts to improve network quality and ~~capacity~~.capacity. See also "Item 7. MD&A—&A—General ~~Overview and "Item 1A. Risk Factors~~Overview." ~~for a discussion of non-renewal of tenant leases.~~

~~Site rental gross margins for~~ ~~2014~~ ~~increased by~~ ~~$8.0 million, or~~ 2%~~, from~~ ~~2013. The increase in the site rental gross margins was related to the previously mentioned~~ 2% ~~increase in site rental revenues.~~

~~The management fee~~Operating income for the ~~year~~twelve months ended December 31, ~~2014~~ ~~increased~~2016 decreased by ~~$2.1~~$1.4 million, or 5%1%, from the ~~year ended December 31, 2013, but remained approximately~~ 7%same period in the prior year. The decrease in operating income was predominately due to increases in cost of ~~total net revenues. The~~operations, the management fee ~~is equal~~and depreciation, amortization and accretion, partially offset by a decrease in asset write-down charges.

During September 2016, CCIC issued $700 million aggregate principal amount of September 2016 Senior Notes and used a portion of the proceeds to ~~7.5%~~repay all of our ~~"Operating Revenues," as defined in the Management Agreement.~~

~~Interest expense and amortization of deferred financing costs increased $5.2 million as a result of~~ ~~the timing of the redemption of the 7.75% senior secured notes due 2023 ("7.75%~~previously outstanding 2.381% Secured ~~Notes") with a face value of $294.4 million, which did not occur until January 2013 using proceeds from the 2012 Secured~~ Notes, ~~issued in December 2012 ("January 2013 Redemption").~~

~~During 2013,~~ ~~we completed the January 2013 Redemption, utilizing $316.6 million of restricted cash~~ which resulted in a loss on retirement of ~~long-term obligations~~debt of ~~$18.1~~approximately $10.3 million.

Benefit (provision) for income taxes ~~for the year ended December 31, 2014 was a provision of $0.4 million compared~~remained consistent from 2015 to ~~a benefit of $348.4 million for the year ended December 31, 2013.~~2016. The effective tax ~~rate~~rates for ~~the year ended December 31, 2014~~ 2016 and 2015 differs from the federal statutory rate predominately due to CCIC's REIT status (including the dividends paid deduction) and our inclusion therein. ~~The effective tax rate for the year ended December 31, 2013 differs from the federal statutory rate predominately due to the de-recognition of net deferred taxes in connection with CCIC~~ ~~completing the steps necessary to qualify to operate as a REIT~~ ~~effective January 1, 2014, resulting in a non-cash income tax benefit of $391.7 million.~~ See "Item 1A. —Risk Factors" and notes 2 and 8 to our consolidated financial statements.

Net income for ~~the year ended~~ ~~December 31, 2014~~2016 was ~~$132.0~~approximately $106.9 million,, compared to net income of ~~$453.8~~approximately $114.9 million for ~~the year ended December 31, 2013,~~2015, which was predominately due to the ~~change in benefit (provision) from income taxes as discussed above.~~aforementioned loss on retirement of debt recorded for the repayment of our previously outstanding 2.381% Secured Notes.

Liquidity and Capital Resources

Overview

General. Our core business generates revenues under long-term ~~leases~~contracts (see "Item 7. MD&A—General Overview"), predominately from the largest U.S. wireless carriers. Historically, our net cash provided by operating activities (net of cash interest payments) has exceeded our capital expenditures. For the foreseeable future, we expect to continue to generate net cash provided by operating activities (exclusive of movements in working capital) that ~~exceed~~exceeds our capital expenditures. We seek to allocate the net cash provided by our operating activities in a manner that we believe drives value for our ~~member and ultimately CCIC, including (1) activities~~member.

From a cash management perspective, we currently distribute cash on hand above amounts required pursuant to ~~enhance operating results, such as capital expenditures to accommodate additional tenants and (2) distributing all of our excess cash~~the Management Agreement to our ~~member and ultimately other subsidiaries of CCIC.~~member. If any future event would occur that would leave us with a deficiency in our operating cash flow, while not required, CCIC ~~distributes a meaningful amount of its consolidated~~may contribute cash ~~flows in the form of dividends~~back to ~~its common stockholders.~~us.

~~Effective January 1, 2014,~~ CCIC ~~commenced operating~~operates as a REIT for U.S. federal income tax purposes. We are an indirect subsidiary of CCIC and for U.S. federal income tax purposes, our assets and operations are be part of the CCIC REIT. We expect to continue to pay minimal cash income taxes as a result of CCIC's REIT status and NOLs. "Item 1A. Risk Factors"and notes 2 and 8 to our consolidated financial statements.

Liquidity Position. The following is a summary of our capitalization and liquidity position as of December 31, ~~2015:~~2017:


	December 31, 2015		December 31, 2017
	(In thousands of dollars)		(In thousands of dollars)
Cash and cash equivalents	$	20,401	$	30,771
Debt	1,500,000		992,663
Total equity	2,404,348		2,576,471

Over the next 12 months:

We expect that our net cash provided by operating activities ~~(net of cash interest payments)~~ should be sufficient to cover our expected capital expenditures.

We have no debt maturities.

Long-term Strategy. We may increase our debt in nominal dollars, subject to the provisions of the 2012 Secured Notes outstanding and various other factors, such as the state of the capital markets and CCIC's targeted capital structure, including with respect to leverage ratios. From a cash management perspective, we currently distribute cash on hand above amounts required pursuant to the Management Agreement to our ~~indirect parent, CCIC.~~member. If any future event would occur that would leave us with a deficiency in our operating cash flow, while not required, CCIC may contribute cash back to us.

See note 5 to our consolidated financial statements for additional information regarding our debt.

Summary Cash Flows Information


	Years Ended December 31,									Years Ended December 31,
	2015			2014			2013			2017			2016			2015
	(In thousands of dollars)									(In thousands of dollars)
Net cash provided by (used for):
Operating activities	$	310,986		$	289,117		$	296,359		$	357,317		$	333,052		$	310,986
Investing activities	(85,216		)	(89,598		)	(86,546		)	(49,551		)	(53,409		)	(85,216		)
Financing activities	(231,600		)	(204,324		)	(178,777		)	(296,545		)	(280,494		)	(231,600		)
Net increase (decrease) in cash and cash equivalents	$	(5,830	)	$	(4,805	)	$	31,036		$	11,221		$	(851	)	$	(5,830	)


2.	~~Summary of Significant Accounting Policies~~

~~Restricted Cash~~

As of December 31, 2012, restricted cash represented the cash held in reserve by the indenture trustee or otherwise restricted pursuant to the indenture governing the previously outstanding senior secured notes issued by CCL and Crown Castle GS III Corp during 2009 ("7.75% Secured Notes") and which were redeemed in January 2013. The Company has classified the increases and decreases in restricted cash as (1) cash provided by financing activities for cash held by the indenture trustee based on consideration of the terms of the 7.75% Secured Notes, which was a critical feature of the 7.75% Secured Notes based on the indenture trustee's ability to utilize the restricted cash for payment of various expenses including debt service, although the cash flows have aspects of both financing activities and operating activities, or (2) cash provided by operating activities for the other remaining restricted cash. Restricted cash increased cash flow from operating activities by $12.1 million for the year ended December 31, 2013. Following the redemption of the 7.75% Secured Notes in January 2013, all of the remaining restricted cash was released to the Company.

~~Receivables Allowance~~

An allowance for doubtful accounts is recorded as an offset to accounts receivable. The Company uses judgment in estimating this allowance and considers historical collections, current credit status or contractual provisions. Additions to the allowance for doubtful accounts are charged to "site rental cost of operations" and deductions from the allowance are recorded when specific accounts receivable are written off as uncollectible.

~~Lease Accounting~~

~~General.~~ The Company classifies its leases at inception as either operating leases or capital leases. A lease is classified as a capital lease if at least one of the following criteria are met, subject to certain exceptions noted below: (1) the lease transfers ownership of the leased assets to the lessee, (2) there is a bargain purchase option, (3) the lease term is equal to 75% or more of the economic life of the leased assets, or (4) the present value of the minimum lease payments equals or exceeds 90% of the fair value of the leased assets.

~~S-23~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~

~~Lessee.~~ Leases for land are evaluated for capital lease treatment if at least one of the first two criteria mentioned in the immediately preceding paragraph is present relating to the leased assets. When the Company, as lessee, classifies a lease as a capital lease, it records an asset in an amount equal to the present value of the minimum lease payments under the lease at the beginning of the lease term. Applicable operating leases are recognized on a straight-line basis as discussed under "~~Costs of Operations" below.~~

~~Lessor.~~ If the Company is the lessor of leased property that is part of a larger whole (including with respect to a portion of space on a tower) and for which fair value is not objectively determinable, then such lease is accounted for as an operating lease. As applicable, operating leases are recognized on a straight-line basis as discussed under "~~Revenue Recognition~~."

~~Property and Equipment~~

Property and equipment is stated at cost, net of accumulated depreciation. Property and equipment includes land owned in fee and perpetual easements for land which have no definite life. When the Company purchases fee ownership or perpetual easements for the land previously subject to ground lease, the Company reduces the value recorded as land by the amount of any associated deferred ground lease payable or unamortized above-market leases. Depreciation is computed utilizing the straight-line method at rates based upon the estimated useful lives of the various classes of assets. Depreciation of wireless infrastructure is generally computed with a useful life equal to the shorter of 20 years or the term of the underlying ground lease (including optional renewal periods). Additions, renewals, or improvements are capitalized, while maintenance and repairs are expensed. The carrying value of property and equipment will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

Abandonments and write-offs of property and equipment are recorded to "asset write-down charges" on the Company's statement of operations and were $1.7 million, $0.7 million, and $1.2 million for the years ended December 31, 2015, 2014, and 2013, respectively.

~~Asset Retirement Obligations~~

Pursuant to its ground lease and easement agreements, the Company records obligations to perform asset retirement activities, including requirements to remove wireless infrastructure or remediate the land upon which the Company's wireless infrastructure resides. With respect to Sprint Sites, the Company does not have retirement obligations to the extent such retirement would occur beyond the period for which it has a lease term. Asset retirement obligations are included in "above-market leases and other liabilities" on the Company's balance sheet. The liability accretes as a result of the passage of time and the related accretion expense is included in "depreciation, amortization, and accretion" expense on the Company's statement of operations. The associated asset retirement costs are capitalized as an additional carrying amount of the related long-lived asset and depreciated over the useful life of such asset.

~~Goodwill~~

Goodwill represents the excess of the purchase price for an acquired business over the allocated value of the related net assets. The Company tests goodwill for impairment on an annual basis, regardless of whether adverse events or changes in circumstances have occurred. The annual test begins with goodwill and all intangible assets being allocated to applicable reporting units. The Company then performs a qualitative assessment to determine whether it is "more likely than not" that the fair value of the reporting units is less than its carrying amount. If it is concluded that it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount, it is necessary to perform the two-step goodwill impairment test. The two-step goodwill impairment test begins with a comparison of the estimated fair value of the reporting unit and the carrying value of the reporting unit. The first step, commonly referred to as a "step-one impairment test," is a screen for potential impairment while the second step measures the amount of any impairment if there is an indication from the first step that one exists. The Company's measurement of the fair value for goodwill is based on an estimate of discounted expected future cash flows of the reporting unit. The Company performed its most recent annual goodwill impairment test as of October 1, 2015, which resulted in no impairments.

~~Other Intangible Assets~~

Intangible assets are included in "site rental contracts and customer relationships, net" and "other intangible assets, net" on the Company's balance sheet and predominately consist of the estimated fair value of the following items recorded in conjunction with acquisitions: (1) site rental contracts and customer relationships or (2) below-market leases for land interests under the acquired towers classified as "other intangible assets, net." The site rental contracts and customer relationships intangible assets are comprised of (1) the current term of the existing leases, (2) the expected exercise of the renewal provisions contained within the existing leases, which automatically occur under contractual provisions, or (3) any associated relationships that are expected to generate value following the expiration of all renewal periods under existing leases.

~~S-24~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~

The useful lives of intangible assets are estimated based on the period over which the intangible asset is expected to benefit the Company, which is calculated on an individual tenant basis, considering, among other things, the contractual provisions with the tenant and gives consideration to the expected useful life of other assets to which the useful life may relate. Amortization expense for intangible assets is computed using the straight-line method over the estimated useful life of each of the intangible assets. The useful life of the site rental contracts and customer relationships intangible asset is limited by the maximum depreciable life of the tower (20 years), as a result of the interdependency of the tower and site rental contracts and customer relationships. In contrast, the site rental contracts and customer relationships are estimated to provide economic benefits for several decades because of the low rate of tenant cancellations and high rate of renewals experienced to date. Thus, while site rental contracts and customer relationships are valued based upon the fair value, which includes assumptions regarding both (1) customers' exercise of optional renewals contained in the acquired leases and (2) renewals of the acquired contracts past the contractual term including exercisable options, the site rental contracts, and customer relationships are amortized over a period not to exceed 20 years as a result of the useful life being limited by the depreciable life of the sites.

The carrying value of other intangible assets with finite useful lives will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company has a dual grouping policy for purposes of determining the unit of account for testing impairment of the site rental contracts and customer relationships intangible assets. First, the Company pools the site rental contracts and customer relationships with the related tower assets into portfolio groups for purposes of determining the unit of account for impairment testing. Second and separately, the Company evaluates the site rental contracts and customer relationships by significant tenant or by tenant grouping for individually insignificant tenants, as appropriate. If the sum of the estimated future cash flows (undiscounted) expected to result from the use or eventual disposition of an asset is less than the carrying amount of the asset, an impairment loss is recognized. Measurement of an impairment loss is based on the fair value of the asset.

~~Above-market Leases~~

Above-market leases consist of the estimated fair value of above-market leases for land interests under the Company's towers. Above-market leases for land interests are amortized to costs of operations over their respective estimated remaining lease term at the acquisition date.

~~Revenue Recognition~~

Site rental revenues are recognized on a monthly basis over the fixed, non-cancelable term of the relevant lease (generally ranging from five to 15 years), regardless of whether the payments from the tenant are received in equal monthly amounts. The Company's contracts contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the consumer price index ("CPI")). If the payment terms call for fixed escalations, up-front 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 are included in "deferred site rental receivables." Amounts billed or received prior to being earned are deferred and reflected in "deferred revenues" on the Company's balance sheet.

~~Costs of Operations~~

In excess of four-fifths of the Company's site rental cost of operations consists of ground lease expenses, and the remainder includes repairs and maintenance expenses, utilities, property taxes, or insurance.

Generally, the ground lease agreements are specific to each site and are for an initial term of five years and are renewable for pre-determined periods. The Company also enters into term easements and ground leases in which it prepays the entire term in advance. Ground lease expense is recognized on a monthly basis, regardless of whether the lease agreement payment terms require the Company to make payments annually, quarterly, monthly, or for the entire term in advance. The Company's ground leases contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the CPI). If the payment terms include fixed escalation provisions, the effect of such increases is recognized on a straight-line basis. The Company calculates the straight-line ground lease expense using a time period that equals or exceeds the remaining depreciable life of the wireless infrastructure asset. Further, when a tenant has exercisable renewal options that would compel the Company to exercise existing ground lease renewal options, the Company has straight-lined the ground lease expense over a sufficient portion of such ground lease renewals to coincide with the final termination of the tenant's renewal options. The Company's policy is to record ground lease agreements with affiliates under the same or similar economic terms as the lease agreement for the land that existed prior to the purchase of such land by the affiliate.

~~S-25~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~

The Company's non-current liability related to straight-line ground lease expense is included in "deferred ground lease payable" on the Company's balance sheet. The Company's assets related to prepaid ground leases is included in "prepaid expenses" and "long-term prepaid rent and other assets, net" on the Company's balance sheet. The Company's current liability related to accrued property taxes is included in "other accrued liabilities" on the Company's balance sheet and was $3.6 million and $1.7 million for the years ended December 31, 2015 and 2014, respectively.

~~Management Fee~~

The Company is charged a management fee by CCUSA, a wholly-owned, indirect subsidiary of CCIC, relating to management services which include those functions reasonably necessary to maintain, market, operate, manage and administer the sites. The management fee is equal to 7.5% of the Company's revenues excluding the revenues related to the accounting for leases with fixed escalators as required by the applicable accounting standards. See note 6.

~~Income Taxes~~

Effective January 1, 2014, CCIC commenced operating as a REIT for U.S. federal income tax purposes. The Company is an indirect subsidiary of CCIC and for U.S. federal income taxes purposes the Company's assets and operations are part of the CCIC REIT. As a REIT, CCIC 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 taxable income that is currently distributed to its stockholders. CCIC 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 CCIC's taxable REIT subsidiaries, (4) certain state, local, or foreign income taxes, (5) franchise taxes, (6) property taxes, and (7) transfer taxes. In addition, CCIC 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 of 1986, as amended ("Code") to maintain qualification for taxation as a REIT.

~~Fair Values~~

The Company's assets and liabilities recorded at fair value are categorized based upon a fair value hierarchy that ranks the quality and reliability of the information used to determine fair value. The three levels of the fair value hierarchy are (1) Level 1 - quoted prices (unadjusted) in active and accessible markets, (2) Level 2 - observable prices that are based on inputs not quoted in active markets but corroborated by market data, and (3) Level 3 - unobservable inputs and are not corroborated by market data. The Company evaluates fair value hierarchy level classifications quarterly, and transfers between levels are effective at the end of the quarterly period.

~~The fair value of cash and cash equivalents approximates the carrying value. There were no changes since December 31, 2014 in the Company's valuation techniques used to measure fair values.~~

~~Reporting Segments~~

~~The Company's operations consist of one operating segment.~~

~~Recently Adopted Accounting Pronouncements~~

~~No accounting pronouncements adopted during the year ended December 31, 2015 had a material impact on the Company's consolidated financial statements.~~

~~Recent Accounting Pronouncements Not Yet Adopted~~

In May 2014, the Financial Accounting Standards Board ("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 on January 1, 2018, following the FASB's July 2015 decision to defer the effective date of the standard by one year. This guidance is required to be applied, at the Company's election, either (1) retrospectively to each prior reporting period presented, or (2) with the cumulative effect being recognized at the date of initial application. The Company's site rental revenues are within the scope of lease accounting and will not be impacted by this guidance.

~~S-26~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~


3.	~~Property and Equipment~~

~~The major classes of property and equipment are as follows:~~

Estimated Useful Lives December 31,
2015 2014
Land^(a)
—
$ 1,733
$ 1,735
Towers 1-20 years
1,173,964
1,102,120
Construction in progress —
29,919
50,899
Total gross property and equipment 1,205,616
1,154,754
Less accumulated depreciation (502,411 ) (441,696 )
Total property and equipment, net $ 703,205
$ 713,058


~~(a)~~	~~Includes land owned in fee and perpetual easements.~~

~~Depreciation expense for the years ended~~ ~~December 31, 2015, 2014, and 2013~~ ~~was~~ ~~$62.3 million~~, ~~$58.4 million, and~~ ~~$55.2 million, respectively. As discussed in notes 1 and 2, the Company has certain prepaid capital leases with Sprint, which have related gross property and equipment and accumulated depreciation of~~ ~~$1.0 billion~~ ~~and~~ ~~$465.3 million, respectively, as of~~ ~~December 31, 2015~~.


4.	~~Intangible Assets and Above-market Leases~~

~~The following is a summary of the Company's intangible assets.~~

As of December 31, 2015 As of December 31, 2014
Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value
Site rental contracts and customer relationships $ 1,008,243
$ (474,141 ) $ 534,102
$ 1,008,243
$ (416,778 ) $ 591,465
Other intangible assets 33,024
(15,254 ) 17,770
34,288
(14,332 ) 19,956
Total $ 1,041,267
$ (489,395 ) $ 551,872
$ 1,042,531
$ (431,110 ) $ 611,421

~~Amortization expense related to intangible assets is classified as follows on the Company's statement of operations:~~

For Years Ended December 31,
2015 2014 2013
Depreciation, amortization and accretion $ 57,364
$ 57,363
$ 55,845
Site rental costs of operations 1,456
1,552
1,662
Total amortization expense $ 58,820
$ 58,915
$ 57,507

The estimated annual amortization expense related to intangible assets (inclusive of those recorded as an increase to "site rental costs of operations") for the years ended December 31, 2016 to 2020 is as follows:

Years Ending December 31,
2016 2017 2018 2019 2020
Estimated annual amortization $ 56,318
$ 56,312
$ 56,312
$ 56,312
$ 56,307

~~S-27~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~

See note 2 for a further discussion of above-market leases for land interests under the Company's towers recorded in connection with acquisitions. For the years ended December 31, 2015, 2014 and 2013, the Company recorded $1.4 million, $1.5 million and $1.5 million, respectively, as a decrease to "site rental cost of operations." The following is a summary of the Company's above-market leases.

As of December 31, 2015 As of December 31, 2014
Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value
Above-market leases $ 32,080
$ (15,508 ) $ 16,572
$ 32,517
$ (14,242 ) $ 18,275

~~The estimated annual amortization expense related to above-market leases for land interests under the Company's towers for the years ended~~ ~~December 31, 2016~~ ~~to 2020 is as follows:~~

Years Ending December 31,
2016 2017 2018 2019 2020
Estimated annual amortization $ 1,391
$ 1,376
$ 1,372
$ 1,363
$ 1,341


5.	~~Debt~~

In December 2012, CCL and Crown Castle GS III Corp. (a subsidiary of CCL) issued $1.5 billion aggregate principal amount of senior secured notes ("2012 Secured Notes"), which are guaranteed by certain subsidiaries of CCL, including the Company. In addition, the 2012 Secured Notes are secured on a first-priority basis by a pledge of the equity interests of certain subsidiaries of CCL, including a pledge of the equity interests of the the Company.

The 2012 Secured Notes do not contain financial maintenance covenants but they do contain restrictive covenants, subject to certain exceptions, related to the Company's ability to incur indebtedness, incur liens, enter into certain mergers or change of control transactions, sell or issue equity interests and enter into related party transactions. With respect to the restriction regarding the issuance of debt, CCL and its subsidiaries including the Company may not issue debt other than (1) certain permitted refinancings of the 2012 Secured Notes, (2) unsecured trade payables in the ordinary course of business and financing of equipment, land, or other property up to an aggregate of $100.0 million, and (3) unsecured debt or additional notes under the 2012 Secured Notes indenture provided that the Debt to Adjusted Consolidated Cash Flow Ratio (as defined in the indenture governing the 2012 Secured Notes) at the time of incurrence, and after giving effect to such incurrence, would have been no greater than 3.5 to 1. As of December 31, 2015, CCL's Debt to Adjusted Consolidated Cash Flow Ratio was ~~3.9~~ to 1, which the Company expects would currently restrict its ability to incur unsecured debt or issue additional notes. The Company is not restricted in its ability to distribute cash to affiliates or issue dividends to its parent.


6.	~~Related Party Transactions~~

In December 2012, CCL, the Company, and other subsidiaries of CCL entered into a management agreement (“Management Agreement”) with CCUSA which replaced a previous management agreement among the same parties. The Company is charged a management fee by CCUSA under the Management Agreement whereby CCUSA has agreed to employ, supervise, and pay at all times a sufficient number of capable employees as may be necessary to perform services in accordance with the operation standards defined in the Management Agreement. ~~CCUSA currently acts as the manager of the majority of the sites held by subsidiaries of CCIC.~~ The management fee is equal to 7.5% of the Company's "Operating Revenue," as defined in the Management Agreement, which are based on the Company's reported revenues adjusted to exclude certain items including revenues related to the accounting for leases with fixed escalators. The fee is compensation for those functions reasonably necessary to maintain, market, operate, manage and administer the sites, other than the operating expenses, which includes but is not limited to real estate and personal property taxes, ground lease and easement payments, and insurance premiums. In addition, in connection with its role as manager, CCUSA may make certain modifications to the Company's sites. The management fee charged from CCUSA for the years ended December 31, 2015, 2014, and 2013 totaled ~~$29.5 million~~, ~~$28.7 million, and~~ ~~$26.7 million, respectively.~~

~~In addition, CCUSA may perform installation services on the Company's towers for which the Company is not a party to any such agreement and for which no operating results are reflected herein.~~

~~S-28~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~

As part of CCIC's strategy to obtain long-term control of the land under its towers, affiliates of the Company have acquired rights to land interests under the Company's towers. These affiliates then lease the land to the Company. Under such circumstances the Company's obligation typically continues with the same or similar economic terms as the lease agreement for the land that existed prior to the purchase of such land by the affiliate. As of December 31, 2015, there are approximately 30% of the Company's sites where the land under the tower is owned by an affiliate. The Company pays ground rent expense to affiliates for land owned by affiliates that the Company has towers on. Rent expense to affiliates totaled ~~$29.3 million~~, ~~$28.0 million, and~~ ~~$26.6 million~~ ~~for the years ended December 31, 2015, 2014, and 2013, respectively.~~

The Company recorded net equity distributions of $185.8 million, $156.6 million and $452.5 million for the years ended December 31, 2015, 2014 and 2013, respectively, reflecting net distributions to its member and ultimately other subsidiaries of CCIC. Cash on-hand above the amount that is required by the Management Agreement has been and is expected to continue to be distributed to the Company's parent company, CCL. See note 7 for a discussion of the equity contribution related to income taxes.


7.	~~Income Taxes~~

~~For the year ended December 31, 2015, the benefit for income taxes of $0.8 million~~ ~~consisted of the reduction of unrecognized tax benefits as a result of the lapse of the statute of limitations partially offset by state taxes.~~ ~~For the year ended December 31, 2014, the provision for income taxes of~~ ~~$0.3 million consists of state taxes. The~~ ~~Company's effective tax rate for 2015 and 2014 differed from the federal statutory rate predominately due to CCIC's REIT status, including the dividends paid deduction (see notes 1 and 2).~~ ~~For the year ended December 31, 2013, the benefit (provision) for income taxes consisted of the following:~~

Year Ended December 31,
2013
Current:
Federal $ —
State (7,565 )
Total current (7,565 )
Deferred:
Federal 117,415
State (7,992 )
Total deferred 109,423
Total tax benefit (provision) $ 101,858

For the year ended December 31, 2013, a reconciliation between the benefit (provision) for income taxes and the amount computed by applying the federal statutory income tax rate to the loss before income taxes is as follows:

Year Ended December 31,
2013
Benefit (provision) for income taxes at statutory rate $ (44,788 )
State tax benefit (provision), net of federal (4,947 )
Tax adjustment related to the REIT conversion 151,205
Other 388
$ 101,858

~~During 2013, the Company recorded a non-cash equity contribution of~~ ~~$61.3 million, primarily related to the use by the Company of net operating losses from other members of CCIC's federal consolidated group.~~

~~As of December 31, 2015, the total amount of unrecognized tax benefits that would impact the effective tax rate, if recognized, was $1.5 million.~~

From time to time, the Company is subject to examinations by various tax authorities in jurisdictions in which the Company has business operations. The Company regularly assesses the likelihood of additional assessments in each of the tax jurisdictions resulting from these examinations. At this time, CCIC is not subject to an Internal Revenue Service examination.

~~S-29~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~


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 financial position or results of operations. ~~See note 9 for a discussion of the operating lease commitments.~~In addition, see note 1 for a discussion of the Company's option to purchase nearly all of the Company's towers at the end of their respective lease terms. CCIC has no obligation to exercise the purchase option.

~~Asset Retirement Obligations~~

Pursuant to its ground lease and easement agreements, the Company has the obligation to perform certain asset retirement activities, including requirements upon lease or easement termination to remove wireless infrastructure or remediate the land upon which its wireless infrastructure resides. Accretion expense related to liabilities for retirement obligations amounted to $1.5 million, $1.4 million, and $1.3 million for the years ended December 31, 2015, 2014, and 2013, respectively. As of December 31, 2015 and 2014, liabilities for retirement obligations amounted to $19.6 million and $18.2 million, respectively, representing the net present value of the estimated expected future cash outlay. As of December 31, 2015, the estimated undiscounted future cash outlay for asset retirement obligations was approximately $42 million. See note 2.


9.	~~Operating Leases~~

~~Tenant Leases~~

The following table is a summary of the rental cash payments owed to the Company, as a lessor, by tenants pursuant to contractual agreements in effect as of December 31, 2015. Generally, the Company's leases with its tenants provide for (1) annual escalations, (2) multiple renewal periods at the tenant's option, and (3) only limited termination rights at the applicable tenant's option through the current term. As of December 31, 2015, the weighted-average remaining term (calculated by weighting the remaining term for each lease by the related site rental revenue) of tenant leases is approximately seven years, exclusive of renewals at the tenant's option. The tenants' rental payments included in the table below are through the current terms with a maximum current term of 20 years and do not assume exercise of tenant renewal options.

Years Ending December 31,
2016 2017 2018 2019 2020 Thereafter Total
Tenant leases $ 396,704
$ 392,761
$ 391,728
$ 383,489
$ 384,255
$ 993,437
$ 2,942,374

~~Operating Leases~~

The following table is a summary of rental cash payments owed by the Company, as lessee, to landlords pursuant to contractual agreements in effect as of December 31, 2015. The Company is obligated under non-cancelable operating leases for land interests under nearly all of its sites. The majority of these operating lease agreements have (1) certain termination rights that provide for cancellation after a notice period, (2) multiple renewal options at the Company's option, and (3) annual escalations. Lease agreements may also contain provisions for a contingent payment based on revenues or the gross margin derived from the tower located on the leased land interest. Approximately 80% and approximately 45% of the Company's site rental gross margins for the year ended December 31, 2015, are derived from towers where the land interest under the tower is owned or leased by the Company with final expiration dates of greater than ten and 20 years, respectively, including renewals at the Company's option. The operating lease payments included in the table below include payments for certain renewal periods at the Company's option up to the estimated tower useful life of 20 years and an estimate of contingent payments based on revenues and gross margins derived from existing tenant leases. See also note 6.

Years Ending December 31,
2016 2017 2018 2019 2020 Thereafter Total
Operating leases $ 105,675
$ 107,705
$ 109,126
$ 110,573
$ 111,979
$ 1,394,311
$ 1,939,369

~~Rental expense from operating leases was~~ ~~$114.0 million~~, ~~$112.8 million, and~~ ~~$111.3 million~~ for the years ended December 31, 2015, 2014, and 2013, respectively. The rental expense was inclusive of contingent payments based on revenues or gross margin derived from the tower located on the leased land of ~~$17.4 million~~, ~~$18.1 million, and~~ ~~$18.2 million~~ ~~for the years ended December 31, 2015, 2014, and 2013, respectively.~~

~~S-30~~

~~GLOBAL SIGNAL ACQUISITIONS II LLC~~

~~NOTES TO FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~


~~10.~~	~~Concentration of Credit Risk~~

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents and trade receivables. The Company mitigates its risk with respect to cash and cash equivalents by maintaining such deposits at high credit quality financial institutions and monitoring the credit ratings of those institutions. See notes 2 and 6.

The Company derives the largest portion of its revenues from customers in the wireless industry. The Company also has a concentration in its volume of business with Sprint, AT&T, T-Mobile, and Verizon Wireless that accounts for a significant portion of the Company's revenues, receivables, and deferred site rental receivables. The Company mitigates its concentrations of credit risk with respect to trade receivables by actively monitoring the creditworthiness of its tenants, the use of tenant leases with contractually determinable payment terms and proactive management of past due balances. See note 1 for a discussion of the Sprint Sites.

~~Major Customers~~

~~The following table summarizes the percentage of the Company's revenues for those tenants accounting for more than 10% of the Company's revenues.~~

Years Ended December 31,
2015 2014 2013
Sprint^(a)
48 % 50 % 52 %
AT&T^(a)
20 % 20 % 19 %
T-Mobile^(a)
17 % 17 % 17 %
Verizon Wireless 11 % 10 % 9 %
Total 96 % 97 % 97 %


~~(a)~~	All periods presented are after giving effect to recent consolidation activity, including T-Mobile's acquisition of MetroPCS (completed in April 2013), Sprint's acquisition of Clearwire (completed in July 2013), and AT&T's acquisition of Leap Wireless (completed in March 2014).

~~S-31~~

~~PINNACLE TOWERS LLC~~

~~Consolidated Financial Statements~~

~~December 31, 2015, 2014 and 2013~~

~~S-32~~

~~Report of Independent Registered Public Accounting Firm~~

~~To the Board of Directors and Member of~~

~~CC Holdings GSV LLC:~~

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, cash flows and changes in member’s equity present fairly, in all material respects, the financial position of Pinnacle Towers LLC at December 31, 2015 and December 31, 2014, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~/s/ PricewaterhouseCoopers LLP~~

~~Pittsburgh, Pennsylvania~~

~~February 22, 2016~~

~~S-33~~

~~PINNACLE TOWERS LLC~~

~~CONSOLIDATED BALANCE SHEET~~

~~(In thousands of dollars)~~

December 31,
2015 2014
ASSETS
Current assets:
Receivables, net of allowance of $483 and $485, respectively $ 3,718
$ 3,517
Prepaid expenses 2,278
1,994
Deferred site rental receivables 2,103
1,948
Other current assets 537
591
Total current assets 8,636
8,050
Deferred site rental receivables 79,614
73,423
Property and equipment, net 365,319
367,623
Goodwill 627,345
627,345
Site rental contracts and customer relationships, net 535,538
586,070
Other intangible assets, net 2,940
3,419
Long-term prepaid rent and other assets, net 6,080
6,287
Total assets $ 1,625,472
$ 1,672,217

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 1,630
$ 1,689
Accrued income taxes 542
549
Deferred revenues 4,703
5,769
Other accrued liabilities 2,447
3,336
Total current liabilities 9,322
11,343
Deferred ground lease payable 7,515
7,510
Above-market leases and other liabilities 10,280
10,250
Total liabilities 27,117
29,103
Commitments and contingencies (note 8)
Member's equity:
Member's equity 1,540,422
1,540,422
Accumulated earnings (deficit) 57,933
102,692
Total member's equity 1,598,355
1,643,114
Total liabilities and equity $ 1,625,472
$ 1,672,217

~~See accompanying notes to consolidated financial statements.~~

~~S-34~~

~~PINNACLE TOWERS LLC~~

~~CONSOLIDATED STATEMENT OF OPERATIONS~~

~~(In thousands of dollars)~~

Years Ended December 31,
2015 2014 2013

Site rental revenues $ 169,200
$ 171,681
$ 173,686

Operating expenses:
Site rental cost of operations—third parties^(a)
36,914
37,577
38,980
Site rental cost of operations—related parties^(a)
3,885
3,663
3,210
Site rental cost of operations—total^(a)
40,799
41,240
42,190
Management fee 12,213
12,083
12,042
Asset write-down charges 3,329
2,286
2,728
Depreciation, amortization, and accretion 76,457
74,831
75,415
Total operating expenses 132,798
130,440
132,375
Operating income (loss) 36,402
41,241
41,311
Other income (expense) 109
31
45
Income (loss) before income taxes 36,511
41,272
41,356
Benefit (provision) for income taxes (68 ) (76 ) 207,021
Net income (loss) $ 36,443
$ 41,196
$ 248,377


~~(a)~~	~~Exclusive of depreciation, amortization and accretion shown separately~~ ~~and certain indirect costs included in the management fee.~~

~~See accompanying notes to consolidated financial statements.~~

~~S-35~~

~~PINNACLE TOWERS LLC~~

~~CONSOLIDATED STATEMENT OF CASH FLOWS~~

~~(In thousands of dollars)~~

Years Ended December 31,
2015 2014 2013
Cash flows from operating activities:
Net income (loss) $ 36,443
$ 41,196
$ 248,377
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion 76,457
74,831
75,415
Asset write-down charges 3,329
2,286
2,728
Deferred income tax benefit (provision) —
—
(208,768 )
Changes in assets and liabilities:
Increase (decrease) in accounts payable (21 ) 227
291
Increase (decrease) in deferred revenues, deferred ground lease payable, and other liabilities (2,209 ) (3,296 ) 1,959
Decrease (increase) in receivables (201 ) (614 ) (667 )
Decrease (increase) in other current assets, deferred site rental receivable, long-term prepaid rent, and other assets (6,225 ) (10,557 ) (13,506 )
Net cash provided by (used for) operating activities 107,573
104,073
105,829
Cash flows from investing activities:
Capital expenditures (26,371 ) (23,670 ) (20,678 )
Other investing activities —
—
239
Net cash provided by (used for) investing activities (26,371 ) (23,670 ) (20,439 )
Cash flows from financing activities:
Distributions to member (81,202 ) (80,403 ) (85,390 )
Net cash provided by (used for) financing activities (81,202 ) (80,403 ) (85,390 )
Net increase (decrease) in cash and cash equivalents —
—
—
Cash and cash equivalents at beginning of year —
—
—
Cash and cash equivalents at end of year $ —
$ —
$ —

~~See accompanying notes to consolidated financial statements.~~

~~S-36~~

~~PINNACLE TOWERS LLC~~

~~CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S EQUITY~~

~~(In thousands of dollars)~~

Member's Equity
Accumulated
Earnings (Deficit)
Total
Balance at December 31, 2012 $ 1,571,473
$ (42,691 ) $ 1,528,782
Equity contribution—income taxes (note 7) (9,448 ) —
(9,448 )
Distributions to member (note 6) (21,603 ) (63,787 ) (85,390 )
Net income (loss) —
248,377
248,377
Balance at December 31, 2013 $ 1,540,422
$ 141,899
$ 1,682,321
Distributions to member (note 6) —
(80,403 ) (80,403 )
Net income (loss) —
41,196
41,196
Balance at December 31, 2014 $ 1,540,422
$ 102,692
$ 1,643,114
Distributions to member (note 6) —
(81,202 ) (81,202 )
Net income (loss) —
36,443
36,443
Balance at December 31, 2015 $ 1,540,422
$ 57,933
$ 1,598,355

~~See accompanying notes to consolidated financial statements.~~

~~S-37~~

~~PINNACLE TOWERS LLC~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~


1.	~~Basis of Presentation~~

The accompanying consolidated financial statements reflect the consolidated financial position, results of operations, and cash flows of Pinnacle Towers LLC and its consolidated wholly-owned subsidiaries (collectively, the "Company"). The Company is a wholly-owned subsidiary of CC Holdings GS V LLC ("CCL"), which is an indirect, wholly-owned subsidiary of Crown Castle International Corp., a Delaware corporation ("CCIC" or "Crown Castle"). All significant inter-company accounts, transactions, and profits have been eliminated. As used herein, the term "including," and any variation thereof means "including without limitations." The use of the word "or" herein is not exclusive.

The Company is organized specifically to own, lease and manage communications towers and other structures (collectively, "towers") and to a lesser extent, interests in land under third party and related party towers in various forms ("land interests") (collectively, "wireless infrastructure" or "sites") to wireless communications companies. The Company's core business is providing access, including space or capacity, to its sites via long-term contracts in various forms, including licenses, subleases, and lease agreements (collectively, "leases"). The Company's sites are geographically dispersed across the United States ("U.S."). Management services related to communications towers and other communication sites are performed by Crown Castle USA Inc. ("CCUSA"), an affiliate of the Company, under a management agreement, as the Company has no employees.

Effective January 1, 2014, CCIC commenced operating as a real estate investment trust ("REIT") for U.S. federal income tax purposes. For U.S. federal income tax purposes, the Company's assets and operations are part of the CCIC REIT. See note 7.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and use assumptions that affect the reported amounts of assets and liabilities and the disclosure for contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.


2.	Summary of Significant Accounting Policies

Receivables Allowance

Lease Accounting

General. The Company classifies its leases at inception as either operating leases or capital leases. A lease is classified as a capital lease if at least one of the following criteria are met, subject to certain exceptions noted below: (1) the lease transfers ownership of the leased assets to the lessee, (2) there is a bargain purchase option, (3) the lease term is equal to 75% or more of the economic life of the leased assets, or (4) the present value of the minimum lease payments equals or exceeds 90% of the fair value of the leased assets.

Lessee. Leases for land are evaluated for capital lease treatment if at least one of the first two criteria mentioned in the immediately preceding paragraph is present relating to the leased assets. When the Company, as lessee, classifies a lease as a capital lease, it records an asset in an amount equal to the present value of the minimum lease payments under the lease at the beginning of the lease term. Applicable operating leases are recognized on a straight-line basis as discussed under "Costs of Operations" below.

Lessor. If the Company is the lessor of leased property that is part of a larger whole (including with respect to a portion of space on a tower) and for which fair value is not objectively determinable, then such lease is accounted for as an operating lease. As applicable, operating leases are recognized on a straight-line basis as discussed under "Revenue Recognition."

See also "Recent Accounting Pronouncements Not Yet Adopted" below for further discussion.

~~S-38~~

~~PINNACLE TOWERS~~GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO ~~CONSOLIDATED~~ FINANCIAL STATEMENTS

(Tabular dollars in thousands)

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation. Property and equipment includes land owned in fee and perpetual easements for land, which have no definite life. When the Company purchases fee ownership or perpetual easements for the land previously subject to ground lease, the Company reduces the value recorded as land by the amount of any associated deferred ground lease payable or unamortized above-market leases. Depreciation is computed utilizing the straight-line method at rates based upon the estimated useful lives of the various classes of assets. Depreciation of communications infrastructure is generally computed with a useful life equal to the shorter of 20 years or the term of the underlying ground lease (including optional renewal periods). Additions, renewals, or improvements are capitalized, while maintenance and repairs are expensed. The carrying value of property and equipment will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

Abandonments and write-offs of property and equipment are recorded to "asset write-down charges" on the Company's statement of operations and were $1.9 million and $1.7 million for the years ended December 31, 2016 and 2015, respectively.

Asset Retirement Obligations

Pursuant to its ground lease and easement agreements, the Company records obligations to perform asset retirement activities, including requirements to remove communications infrastructure or remediate the land upon which the Company's communications infrastructure resides. With respect to Sprint Sites, the Company does not have retirement obligations to the extent such retirement would occur beyond the period for which it has a contract term. Asset retirement obligations are included in "above-market leases and other liabilities" on the Company's balance sheet. The liability accretes as a result of the passage of time and the related accretion expense is included in "depreciation, amortization, and accretion" expense on the Company's statement of operations. The associated asset retirement costs are capitalized as an additional carrying amount of the related long-lived asset and depreciated over the useful life of such asset.

Goodwill

Goodwill represents the excess of the purchase price for an acquired business over the allocated value of the related net assets. The Company tests goodwill for impairment on an annual basis, regardless of whether adverse events or changes in circumstances have occurred. The annual test begins with goodwill and all intangible assets being allocated to applicable reporting units. The Company then performs a qualitative assessment to determine whether it is "more likely than not" that the fair value of the reporting units is less than its carrying amount. If it is concluded that it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount, it is necessary to perform the two-step goodwill impairment test. The two-step goodwill impairment test begins with a comparison of the estimated fair value of the reporting unit and the carrying value of the reporting unit. The first step, commonly referred to as a "step-one impairment test," is a screen for potential impairment while the second step measures the amount of any impairment if there is an indication from the first step that one exists. The Company's measurement of the fair value for goodwill is based on an estimate of discounted expected future cash flows of the reporting unit. The Company has one reporting unit for goodwill impairment testing. The Company performed its most recent annual goodwill impairment test as of October 1, 2017, which resulted in no impairments.

Other Intangible Assets

Intangible assets are included in "site rental contracts and customer relationships, net" and "other intangible assets, net" on the Company's balance sheet and predominately consist of the estimated fair value of the following items recorded in conjunction with acquisitions: (1) site rental contracts and customer relationships or (2) below-market leases for land interests under the acquired towers classified as "other intangible assets, net." The site rental contracts and customer relationships intangible assets are comprised of (1) the current term of the existing contracts, (2) the expected exercise of the renewal provisions contained within the existing contracts, which automatically occur under contractual provisions, or (3) any associated relationships that are expected to generate value following the expiration of all renewal periods under existing contracts.

GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO FINANCIAL STATEMENTS

(Tabular dollars in thousands)

relationships are valued based upon the fair value, which includes assumptions regarding both (1) customers' exercise of optional renewals contained in the acquired contracts and (2) renewals of the acquired contracts past the contractual term including exercisable options, the site rental contracts, and customer relationships are amortized over a period not to exceed 20 years as a result of the useful life being limited by the depreciable life of the sites.

Above-market Leases

Revenue Recognition

Site rental revenues are recognized on a monthly basis over the fixed, non-cancelable term of the relevant contract (generally ranging from five to 15 years), regardless of whether the payments from the tenant are received in equal monthly amounts. The Company's contracts contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the consumer price index ("CPI")). 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 are included in "deferred site rental receivables." Amounts billed or received prior to being earned are deferred and reflected in "deferred revenues" on the Company's balance sheet.

Costs of Operations

Generally, the ground lease agreements are specific to each site, are for an initial term of five years and are renewable for pre-determined periods. The Company also enters into term easements and ground leases in which it prepays the entire term in advance. Ground lease expense is recognized on a monthly basis, regardless of whether the contract agreement payment terms require the Company to make payments annually, quarterly, monthly, or for the entire term in advance. The Company's ground leases contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the CPI). If the payment terms include fixed escalation provisions, the effect of such increases is recognized on a straight-line basis. The Company calculates the straight-line ground lease expense using a time period that equals or exceeds the remaining depreciable life of the communications infrastructure asset. Further, when a tenant has exercisable renewal options that would compel the Company to exercise existing ground lease renewal options, the Company has straight-lined the ground lease expense over a sufficient portion of such ground lease renewals to coincide with the final termination of the tenant's renewal options. The Company's policy is to record ground lease agreements with affiliates under the same or similar economic terms as the contract agreement for the land that existed prior to the purchase of such land by the affiliate.

The Company's current liability related to straight-line ground lease expense is included in "other accrued liabilities" on the Company's consolidated balance sheet and was $1.6 million and $1.4 million for the years ended December 31, 2017 and 2016, respectively. The Company's non-current liability related to straight-line ground lease expense is included in "deferred ground lease payable" on the Company's balance sheet. The Company's assets related to prepaid ground leases is included in "prepaid expenses" and "long-term prepaid rent and other assets, net" on the Company's balance sheet. The Company's current liability related to accrued property taxes is included in "other accrued liabilities" on the Company's balance sheet and was $3.9 million and $3.5 million for the years ended December 31, 2017 and 2016, respectively.

GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO FINANCIAL STATEMENTS

(Tabular dollars in thousands)

Management Fee

The Company is charged a management fee by CCUSA, a wholly-owned, indirect subsidiary of CCIC, relating to management services, which include those functions reasonably necessary to maintain, market, operate, manage and administer the sites. The management fee is equal to 7.5% of the Company's revenues excluding the revenues related to the accounting for leases with fixed escalators as required by the applicable accounting standards. See note 6.

Income Taxes

CCIC operates as a REIT for U.S. federal income tax purposes. The Company is an indirect subsidiary of CCIC and for U.S. federal income taxes purposes the Company's assets and operations are part of the CCIC REIT. As a REIT, CCIC 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 taxable income that is currently distributed to its stockholders. CCIC also may be subject to certain federal, state, local, and foreign taxes on its income and assets, including (1) alternative minimum taxes (repealed effective January 1, 2018), (2) taxes on any undistributed income, (3) taxes related to the CCIC's taxable REIT subsidiaries, (4) franchise taxes, (5) property taxes, and (6) transfer taxes. In addition, CCIC 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 of 1986, as amended ("Code") to maintain qualification for taxation as a REIT.

The Company does not expect the Tax Cuts and Jobs Act, which was signed into law in December 2017, to have a significant impact on its financial statements.

Fair Values

The fair value of cash and cash equivalents approximates the carrying value. There were no changes since December 31, 2016 in the Company's valuation techniques used to measure fair values.

Reporting Segments

The Company has one operating segment.

Recently Adopted Accounting Pronouncements

No new accounting pronouncements adopted during the year ended December 31, 2017 had a material impact on the Company's financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued new guidance on the recognition, measurement, presentation and disclosure of leases. The new guidance requires lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments for all leases with a term greater than 12 months. The accounting for lessors remains largely unchanged from existing guidance. This guidance is effective for the Company as of January 1, 2019 and is required to be applied using a modified retrospective approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented. Although early adoption is permitted, the Company does not expect to early adopt the new guidance prior to January 1, 2019. The Company expects that (1) lessee arrangements will continue to be classified as operating leases under the new guidance; (2) this guidance to have a material impact on its balance sheet due to the addition of right-of-use assets and lease liabilities for all lessee arrangements with a term greater than 12 months; and (3) there will not be a material impact to its statement of operations and statement of cash flows.

GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO FINANCIAL STATEMENTS

(Tabular dollars in thousands)

performing a step-one impairment test. The guidance is effective for the Company as of January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of the guidance, including the impact on its financial statements.

In January 2017, the FASB issued new guidance, which clarifies the definition of a business in order to assist companies in evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance is effective for the Company as of January 1, 2018, and is required to be applied prospectively. Early adoption is permitted. The Company adopted this guidance effective January 1, 2018 and will apply the new guidance to prospective transactions. The adoption of this guidance will not have a material impact on the Company's financial statements.


3.	Property and Equipment

The major classes of property and equipment are as follows:



	Estimated Useful Lives	December 31,
	Estimated Useful Lives	2017			2016
Land^(a)	—	$	1,618		$	1,620
Towers	1-20 years	1,251,224			1,221,322
Construction in progress	—	7,966			7,632
Total gross property and equipment		1,260,808			1,230,574
Less accumulated depreciation		(625,673		)	(563,554		)
Total property and equipment, net		$	635,135		$	667,020


(a)	Includes land owned in fee and perpetual easements.

Depreciation expense for the years ended December 31, 2017, 2016, and 2015 was $63.3 million, $63.4 million, and $62.3 million, respectively. As discussed in notes 1 and 2, the Company has certain prepaid capital leases with Sprint, which have related gross property and equipment and accumulated depreciation of $1.0 billion and $559.7 million, respectively, as of December 31, 2017.


4.	Intangible Assets and Above-market Leases

The following is a summary of the Company's intangible assets.



	As of December 31, 2017							As of December 31, 2016
	Gross Carrying Value		Accumulated Amortization			Net Book Value		Gross Carrying Value		Accumulated Amortization			Net Book Value
Site rental contracts and customer relationships	$	1,008,243	$	(588,869	)	$	419,374	$	1,008,243	$	(531,505	)	$	476,738
Other intangible assets	31,788		(17,276		)	14,512		32,337		(16,288		)	16,049
Total	$	1,040,031	$	(606,145	)	$	433,886	$	1,040,580	$	(547,793	)	$	492,787

Amortization expense related to intangible assets is classified as follows on the Company's statement of operations:



	For Years Ended December 31,
	2017		2016		2015
Depreciation, amortization and accretion	$	57,364	$	57,364	$	57,364
Site rental costs of operations	1,308		1,375		1,456
Total amortization expense	$	58,672	$	58,739	$	58,820

GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO FINANCIAL STATEMENTS

(Tabular dollars in thousands)

The estimated annual amortization expense related to intangible assets (inclusive of those recorded as an increase to "site rental cost of operations") for the years ending December 31, 2018 to 2022 is as follows:



	Years Ending December 31,
	2018		2019		2020		2021		2022
Estimated annual amortization	$	58,635	$	58,635	$	58,631	$	58,540	$	58,486

See note 2 for a further discussion of above-market leases for land interests under the Company's towers recorded in connection with acquisitions. For the years ended December 31, 2017, 2016 and 2015, the Company recorded $1.3 million, $1.4 million and $1.4 million, respectively, as a decrease to "site rental cost of operations." The following is a summary of the Company's above-market leases.



	As of December 31, 2017							As of December 31, 2016
	Gross Carrying Value		Accumulated Amortization			Net Book Value		Gross Carrying Value		Accumulated Amortization			Net Book Value
Above-market leases	$	31,180	$	(17,631	)	$	13,549	$	31,180	$	(16,337	)	$	14,843

The estimated annual amortization expense related to above-market leases for land interests under the Company's towers for the years ending December 31, 2018 to 2022 is as follows:



	Years Ending December 31,
	2018		2019		2020		2021		2022
Estimated annual amortization	$	1,273	$	1,264	$	1,243	$	1,138	$	1,060


5.	Debt

The 2012 Secured Notes do not contain financial maintenance covenants but they do contain restrictive covenants, subject to certain exceptions, related to the Company's ability to incur indebtedness, incur liens, enter into certain mergers or change of control transactions, sell or issue equity interests and enter into related party transactions. With respect to the restriction regarding the issuance of debt, CCL and its subsidiaries including the Company may not issue debt other than (1) certain permitted refinancings of the 2012 Secured Notes, (2) unsecured trade payables in the ordinary course of business and financing of equipment, land, or other property up to an aggregate of $100.0 million, and (3) unsecured debt or additional notes under the 2012 Secured Notes indenture provided that the Debt to Adjusted Consolidated Cash Flow Ratio (as defined in the indenture governing the 2012 Secured Notes) at the time of incurrence, and after giving effect to such incurrence, would have been no greater than 3.5 to 1. As of December 31, 2017, CCL's Debt to Adjusted Consolidated Cash Flow Ratio was 2.5 to 1, and, as a result, the Company is not restricted in its ability to incur additional indebtedness. Further, the Company is not restricted in its ability to distribute cash to affiliates or issue dividends to its member.


6.	Related Party Transactions

In December 2012, CCL, the Company, and other subsidiaries of CCL entered into a management agreement (“Management Agreement”) with CCUSA, which replaced a previous management agreement among the same parties. The Company is charged a management fee by CCUSA under the Management Agreement whereby CCUSA has agreed to employ, supervise, and pay at all times a sufficient number of capable employees as may be necessary to perform services in accordance with the operation standards defined in the Management Agreement. CCUSA currently acts as the manager of the majority of the sites held by subsidiaries of CCIC. The management fee is equal to 7.5% of the Company's "Operating Revenue," as defined in the Management Agreement, which are based on the Company's reported revenues adjusted to exclude certain items including revenues related to the accounting for leases with fixed escalators. The fee is compensation for those functions reasonably necessary to maintain,

GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO FINANCIAL STATEMENTS

(Tabular dollars in thousands)

market, operate, manage and administer the sites, other than the operating expenses, which includes but is not limited to real estate and personal property taxes, ground lease and easement payments, and insurance premiums. In addition, in connection with its role as manager, CCUSA may make certain modifications to the Company's sites. The management fee charged from CCUSA for the years ended December 31, 2017, 2016, and 2015 totaled $31.4 million, $30.5 million, and $29.5 million, respectively.

In addition, CCUSA may perform installation services on the Company's towers for which the Company is not a party to any such agreement and for which no operating results are reflected herein.

As part of CCIC's strategy to obtain long-term control of the land under its towers, affiliates of the Company have acquired rights to land interests under the Company's towers. These affiliates then lease the land to the Company. Under such circumstances, the Company's obligation typically continues with the same or similar economic terms as the contract agreement for the land that existed prior to the purchase of such land by the affiliate. As of December 31, 2017, there are approximately 30% of the Company's sites where the land under the tower is owned by an affiliate. The Company pays ground rent expense to affiliates for land owned by affiliates that the Company has towers on. Rent expense to affiliates totaled $33.5 million, $31.1 million, and $29.3 million for the years ended December 31, 2017, 2016, and 2015, respectively.

The Company recorded an equity distribution of $202.8 million, $211.4 million and $185.8 million for the years ended December 31, 2017, 2016 and 2015, respectively, reflecting distributions to its member. Cash on-hand above the amount that is required by the Management Agreement has been, and is expected to continue to be, distributed to the Company's parent company, CCL. As of December 31, 2017 and 2016, the Company had no material related party assets or liabilities on its consolidated balance sheet.


7.	Income Taxes

For the years ended December 31, 2017, 2016, and 2015 the Company had benefits for income taxes of $0.5 million, $0.4 million, and $0.8 million, respectively, which consisted of the reduction of unrecognized tax benefits as a result of the lapse of the statute of limitations partially offset by state taxes. The Company's effective tax rate for the years ended December 31, 2017, 2016 and 2015 differed from the federal statutory rate predominately due to CCIC's REIT status, including the dividends paid deduction (see notes 1 and 2), and the aforementioned impacts described above.

As of December 31, 2017, there were no unrecognized tax benefits that would impact the effective tax rate, if recognized.


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 financial position or results of operations. See note 9 for a discussion of the operating lease commitments.In addition, see note 1 for a discussion of CCIC's option to purchase nearly all of the Company's towers at the end of their respective contract terms. CCIC has no obligation to exercise the purchase option.

Asset Retirement Obligations

Pursuant to its ground lease and easement agreements, the Company has the obligation to perform certain asset retirement activities, including requirements upon contract or easement termination to remove communications infrastructure or remediate the land upon which communications infrastructure resides. Accretion expense related to liabilities for retirement obligations amounted to $1.9 million, $1.7 million, and $1.5 million for the years ended December 31, 2017, 2016, and 2015, respectively. As of December 31, 2017 and 2016, liabilities for retirement obligations amounted to $22.4 million and $20.6 million, respectively, representing the net present value of the estimated expected future cash outlay. As of December 31, 2017, the estimated undiscounted future cash outlay for asset retirement obligations was approximately $49 million. See note 2.

GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO FINANCIAL STATEMENTS

(Tabular dollars in thousands)


9.	Operating Leases

Tenant Leases

The following table is a summary of the rental cash payments owed to the Company, as a lessor, by tenants pursuant to contractual agreements in effect as of December 31, 2017. Generally, the Company's leases with its tenants provide for (1) annual escalations, (2) multiple renewal periods at the tenant's option, and (3) only limited termination rights at the applicable tenant's option through the current term. As of December 31, 2017, the weighted-average remaining term (calculated by weighting the remaining term for each lease by the related site rental revenue) of tenant leases is approximately six years, exclusive of renewals at the tenant's option. The tenants' rental payments included in the table below are through the current terms with a maximum current term of 20 years and do not assume exercise of tenant renewal options.



	Years Ending December 31,
	2018		2019		2020		2021		2022		Thereafter		Total
Tenant leases	$	428,799	$	425,254	$	425,237	$	417,436	$	392,251	$	889,064	$	2,978,041

Operating Leases

The following table is a summary of rental cash payments owed by the Company, as lessee, to landlords pursuant to contractual agreements in effect as of December 31, 2017. The Company is obligated under non-cancelable operating leases for land interests under nearly all of its sites. The majority of these operating lease agreements have (1) certain termination rights that provide for cancellation after a notice period, (2) multiple renewal options at the Company's option, and (3) annual escalations. Lease agreements may also contain provisions for a contingent payment based on revenues or the gross margin derived from the tower located on the leased land interest. More than 80% and more than 50% of the Company's sites are under the Company's control for greater than 10 and 20 years, respectively, including renewals at the Company's option. The operating lease payments included in the table below include payments for certain renewal periods at the Company's option up to the estimated tower useful life of 20 years and an estimate of contingent payments based on revenues and gross margins derived from existing tenant leases. See also note 6.



	Years Ending December 31,
	2018		2019		2020		2021		2022		Thereafter		Total
Operating leases	$	112,018	$	113,384	$	114,832	$	115,258	$	112,557	$	1,394,370	$	1,962,419

Rental expense from operating leases was $120.0 million, $116.0 million, and $114.0 million for the years ended December 31, 2017, 2016, and 2015, respectively. The rental expense was inclusive of contingent payments based on revenues or gross margin derived from the tower located on the leased land of $18.9 million, $18.6 million, and $17.4 million for the years ended December 31, 2017, 2016, and 2015, respectively.


10.	Concentration of Credit Risk

The Company derives the largest portion of its revenues from customers in the wireless industry. The Company also has a concentration in its volume of business with Sprint, AT&T, T-Mobile, and Verizon Wireless that accounts for a significant portion of the Company's revenues, receivables, and deferred site rental receivables. The Company mitigates its concentrations of credit risk with respect to trade receivables by actively monitoring the creditworthiness of its tenants, the use of tenant contracts with contractually determinable payment terms and proactive management of past due balances. See note 1 for a discussion of the Sprint Sites.

GLOBAL SIGNAL ACQUISITIONS II LLC

NOTES TO FINANCIAL STATEMENTS

(Tabular dollars in thousands)

Major Customers

The following table summarizes the percentage of the Company's revenues for those tenants accounting for more than 10% of the Company's revenues.



	Years Ended December 31,
	2017		2016		2015
Sprint	47	%	48	%	48	%
AT&T	19	%	20	%	20	%
T-Mobile	19	%	18	%	17	%
Verizon Wireless	13	%	12	%	11	%
Total	98	%	98	%	96	%

PINNACLE TOWERS LLC

Consolidated Financial Statements

December 31, 2017, 2016 and 2015

Report of Independent Registered Public Accounting Firm

To theBoard of Directors and Members of

CC Holdings GS V LLC

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Pinnacle Towers LLC and its subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of operations, cash flows and changes in member’s equity for each of the three years in the period ended December 31, 2017, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Theseconsolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of theseconsolidated financial statements in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of theconsolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Pittsburgh, Pennsylvania

February 26, 2018

We have served as the Company's auditor since 2011.

PINNACLE TOWERS LLC

CONSOLIDATED BALANCE SHEET

(In thousands of dollars)



	December 31,
	2017		2016
ASSETS
Current assets:
Receivables, net of allowance of $929 and $1,127, respectively	$	1,617	$	2,619
Prepaid expenses	2,225		2,081
Deferred site rental receivables	6,210		4,705
Other current assets	318		317
Total current assets	10,370		9,722
Deferred site rental receivables	76,645		79,166
Property and equipment, net	343,426		356,784
Goodwill	627,345		627,345
Site rental contracts and customer relationships, net	435,656		486,252
Other intangible assets, net	2,374		2,661
Long-term prepaid rent and other assets, net	6,569		6,688
Total assets	$	1,502,385	$	1,568,618

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	658	$	1,832
Deferred revenues	4,578		4,279
Other accrued liabilities	2,651		3,050
Total current liabilities	7,887		9,161
Deferred ground lease payable	7,710		7,565
Above-market leases and other liabilities	10,570		10,458
Total liabilities	26,167		27,184
Commitments and contingencies (note 8)
Member's equity:
Member's equity	1,476,218		1,540,422
Accumulated earnings (deficit)	—		1,012
Total member's equity	1,476,218		1,541,434
Total liabilities and equity	$	1,502,385	$	1,568,618

See accompanying notes to consolidated financial statements.

PINNACLE TOWERS LLC

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands of dollars)



	Years Ended December 31,
	2017		2016			2015

Site rental revenues	$	175,942	$	173,896		$	169,200

Operating expenses:
Site rental cost of operations—third parties^(a)	34,681		37,129			36,914
Site rental cost of operations—related parties^(a)	4,381		4,100			3,885
Site rental cost of operations—total^(a)	39,062		41,229			40,799
Management fee—related party	13,280		12,880			12,213
Asset write-down charges	473		2,669			3,329
Depreciation, amortization, and accretion	77,659		76,640			76,457
Total operating expenses	130,474		133,418			132,798
Operating income (loss)	45,468		40,478			36,402
Other income (expense)	134		(93		)	109
Income (loss) before income taxes	45,602		40,385			36,511
Benefit (provision) for income taxes	120		219			(68		)
Net income (loss)	$	45,722	$	40,604		$	36,443


(a)	Exclusive of depreciation, amortization and accretion shown separately and certain indirect costs included in the management fee.

See accompanying notes to consolidated financial statements.

PINNACLE TOWERS LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands of dollars)



	Years Ended December 31,
	2017			2016			2015
Cash flows from operating activities:
Net income (loss)	$	45,722		$	40,604		$	36,443
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion	77,659			76,640			76,457
Asset write-down charges	473			2,669			3,329
Changes in assets and liabilities:
Increase (decrease) in accounts payable	(692		)	(205		)	(21		)
Increase (decrease) in deferred revenues, deferred ground lease payable and other liabilities	(222		)	(389		)	(2,209		)
Decrease (increase) in receivables	1,002			1,082			(201		)
Decrease (increase) in other current assets, deferred site rental receivable, long-term prepaid rent and other assets	2,451			(1,667		)	(6,225		)
Net cash provided by (used for) operating activities	126,393			118,734			107,573
Cash flows from investing activities:
Capital expenditures	(15,455		)	(21,209		)	(26,371		)
Net cash provided by (used for) investing activities	(15,455		)	(21,209		)	(26,371		)
Cash flows from financing activities:
Distributions to member	(110,938		)	(97,525		)	(81,202		)
Net cash provided by (used for) financing activities	(110,938		)	(97,525		)	(81,202		)
Net increase (decrease) in cash and cash equivalents	—			—			—
Cash and cash equivalents at beginning of year	—			—			—
Cash and cash equivalents at end of year	$	—		$	—		$	—

See accompanying notes to consolidated financial statements.

PINNACLE TOWERS LLC

CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S EQUITY

(In thousands of dollars)



	Member's Equity			Accumulated Earnings (Deficit)			Total
Balance at December 31, 2014	$	1,540,422		$	102,692		$	1,643,114
Distributions to member (note 6)	—			(81,202		)	(81,202		)
Net income (loss)	—			36,443			36,443
Balance at December 31, 2015	$	1,540,422		$	57,933		$	1,598,355
Distributions to member (note 6)	—			(97,525		)	(97,525		)
Net income (loss)	—			40,604			40,604
Balance at December 31, 2016	$	1,540,422		$	1,012		$	1,541,434
Distributions to member (note 6)	(64,204		)	(46,734		)	(110,938		)
Net income (loss)	—			45,722			45,722
Balance at December 31, 2017	$	1,476,218		$	—		$	1,476,218

See accompanying notes to consolidated financial statements.

PINNACLE TOWERS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in thousands)


1.	Basis of Presentation

The accompanying consolidated financial statements reflect the consolidated financial position, results of operations, and cash flows of Pinnacle Towers LLC and its consolidated wholly-owned subsidiaries (collectively, "Company"). The Company is a wholly-owned subsidiary of CC Holdings GS V LLC ("CCL"), which is an indirect, wholly-owned subsidiary of Crown Castle International Corp., a Delaware corporation ("CCIC" or "Crown Castle"). All significant inter-company accounts, transactions, and profits have been eliminated. As used herein, the term "including," and any variation thereof means "including without limitations." The use of the word "or" herein is not exclusive.

The Company is organized specifically to own, lease and manage towers and other structures (collectively, "towers") and to a lesser extent, interests in land under third party and related party towers in various forms ("land interests") (collectively, "communications infrastructure" or "sites") that are geographically dispersed across the United States ("U.S.") The Company's core business is providing access, including space or capacity, to its sites via long-term contracts in various forms, including licenses, subleases, and lease agreements (collectively, "contracts"). Management services related to communications towers and other communication sites are performed by Crown Castle USA Inc. ("CCUSA"), an affiliate of the Company, under a management agreement, as the Company has no employees.

For U.S. federal income tax purposes, CCIC operates as a real estate investment trust ("REIT"), and as its indirect subsidiary, the Company's assets and operations are included in the CCIC REIT. See notes 2 and 7.


2.	Summary of Significant Accounting Policies

Receivables Allowance

Lease Accounting

See also "Recent Accounting Pronouncements Not Yet Adopted" below for further discussion.

PINNACLE TOWERS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in thousands)

Property and Equipment

Abandonments and write-offs of property and equipment are recorded to "asset write-down charges" on the Company's consolidated statement of operations and were ~~$3.3~~$0.4 million, ~~$2.1~~$2.9 million, and ~~$2.2~~$3.3 million for the years ended December 31, ~~2015, 2014,~~2017, 2016, and ~~2013,~~2015, respectively.

Asset Retirement Obligations

Pursuant to its ground lease and easement agreements, the Company records obligations to perform asset retirement activities, including requirements to remove ~~wireless~~communications infrastructure or remediate the land upon which the Company's ~~wireless~~communications infrastructure resides. Asset retirement obligations are included in "above-market leases and other liabilities" on the Company's consolidated balance sheet. The liability accretes as a result of the passage of time and the related accretion expense is included in "depreciation, amortization and accretion" expense on the Company's consolidated statement of operations. The associated asset retirement costs are capitalized as an additional carrying amount of the related long-lived asset and depreciated over the useful life of such asset.

Goodwill

Goodwill represents the excess of the purchase price for an acquired business over the allocated value of the related net assets. The Company tests goodwill for impairment on an annual basis, regardless of whether adverse events or changes in circumstances have occurred. The annual test begins with goodwill and all intangible assets being allocated to applicable reporting units. The Company then performs a qualitative assessment to determine whether it is "more likely than not" that the fair value of the reporting units is less than its carrying amount. If it is concluded that it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount, it is necessary to perform the two-step goodwill impairment test. The two-step goodwill impairment test begins with a comparison of the estimated fair value of the reporting unit and the carrying value of the reporting unit. The first step, commonly referred to as a "step-one impairment test," is a screen for potential impairment while the second step measures the amount of any impairment if there is an indication from the first step that one exists. The Company's measurement of the fair value for goodwill is based on an estimate of discounted expected future cash flows of the reporting unit. The Company has one reporting unit for goodwill impairment testing. The Company performed its most recent annual test of goodwill as of October 1, ~~2015,~~2017, which resulted in no impairments.

Other Intangible Assets

Intangible assets are included in "site rental contracts and customer relationships, net" and "other intangible assets, net" on the Company's consolidated balance sheet and predominately consist of the estimated fair value of the following items recorded in conjunction with acquisitions: (1) site rental contracts and customer relationships or (2) below-market leases for land interests under the acquired towers classified as "other intangible assets, net." The site rental contracts and customer relationships intangible assets are comprised of (1) the current term of the existing ~~leases,~~contracts, (2) the expected exercise of the renewal provisions contained within the existing ~~leases,~~contracts, which automatically occur under contractual provisions, or (3) any associated relationships that are expected to generate value following the expiration of all renewal periods under existing ~~leases.~~contracts.

PINNACLE TOWERS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in thousands)

relationships are valued based upon the fair value, which includes assumptions regarding both (1) tenants' exercise of optional renewals contained in the acquired contracts and (2) renewals of the acquired ~~leases~~contracts past the contractual term including exercisable

~~S-39~~

~~PINNACLE TOWERS LLC~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~

options, the site rental contracts and customer relationships are amortized over a period not to exceed 20 years as a result of the useful life being limited by the depreciable life of the sites.

Above-market Leases

Revenue Recognition

Site rental revenues are recognized on a monthly basis over the fixed, non-cancelable term of the relevant ~~lease~~contract (generally ranging from five to 15 years), regardless of whether the payments from the tenant are received in equal monthly amounts. The Company's contracts contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the consumer price index ("CPI")). If the payment terms call for fixed escalations, ~~up-front~~upfront payments, or ~~rent free~~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 are included in "deferred site rental receivables." Amounts billed or received prior to being earned are deferred and reflected in "deferred revenues" on the Company's consolidated balance sheet.

Costs of Operations

Approximately two-thirds of the Company's site rental cost of operations consists of ground lease expenses, and the remainder includes repairs and maintenance expenses, utilities, property taxes, or insurance.

Generally, the ground lease agreements are specific to each site, ~~and~~ are for an initial term of five years and are renewable for pre-determined periods. The Company also enters into term easements and ground leases in which it prepays the entire term in advance. Ground lease expense is recognized on a monthly basis, regardless of whether the ~~lease~~contract agreement payment terms require the Company to make payments annually, quarterly, monthly, or for the entire term in advance. The Company's ground leases contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the CPI). If the payment terms include fixed escalation provisions, the effect of such increases is recognized on a straight-line basis. The Company calculates the straight-line ground lease expense using a time period that equals or exceeds the remaining depreciable life of the ~~wireless~~communications infrastructure asset. Further, when a tenant has exercisable renewal options that would compel the Company to exercise existing ground lease renewal options, the Company has straight-lined the ground lease expense over a sufficient portion of such ground lease renewals to coincide with the final termination of the tenant's renewal options. The Company's policy is to record ground lease agreements with affiliates under the same or similar economic terms as the ~~lease~~contract agreement for the land that existed prior to the purchase of such land by the affiliate.

The Company's non-current liability related to straight-line ground lease expense is included in "deferred ground lease payable" on the Company's consolidated balance sheet. The Company's assets related to prepaid ground leases is included in "prepaid expenses" and "long-term prepaid rent and other assets, net" on the Company's consolidated balance sheet. The Company's current liability related to accrued property taxes is included in "other accrued liabilities" on the Company's consolidated balance sheet and was $1.6 million and ~~$2.4~~$2.0 million for the years ended December 31, ~~2015~~2017 and ~~2014,~~2016, respectively.

PINNACLE TOWERS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in thousands)

Management Fee

~~S-40~~

~~PINNACLE TOWERS LLC~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollars in thousands)~~

management fee is equal to 7.5% of the Company's revenues excluding the revenues related to the accounting for leases with fixed escalators as required by the applicable accounting standards. See note 6.

Income Taxes

~~Effective January 1, 2014,~~ CCIC ~~commenced operating~~operates as a REIT for U.S. federal income tax purposes. The Company is an indirect subsidiary of CCIC and for U.S. federal income taxes purposes the Company's assets and operations are part of the CCIC REIT. As a REIT, CCIC 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 taxable income that is currently distributed to its stockholders. CCIC also may be subject to certain federal, state, local, and foreign taxes on its income and assets, including (1) alternative minimum taxes (repealed effective January 1, 2018), (2) taxes on any undistributed income, (3) taxes related to the CCIC's taxable REIT subsidiaries, (4) ~~certain state, local, or foreign income~~franchise taxes, (5) ~~franchise taxes, (6)~~ property taxes, and ~~(7)~~(6) transfer taxes. In addition, CCIC 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 of 1986, as amended ("Code") to maintain qualification for taxation as a REIT.

The Company does not expect the Tax Cuts and Jobs Act, which was signed into law in December 2017, to have a significant impact on its consolidated financial statements.

Reporting Segments

The Company ~~determined its operations consist of~~has one operating segment.

Recently Adopted Accounting Pronouncements

No new accounting pronouncements adopted during the year ended December 31, ~~2015~~2017 had a material impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In ~~May 2014,~~February 2016, the ~~Financial Accounting Standards Board ("FASB") released updated~~FASB issued new guidance ~~regarding~~on the recognition, measurement, presentation and disclosure of ~~revenue from contracts with customers, exclusive of those contracts within~~leases. The new guidance requires lessees to recognize a right-of-use asset and a lease ~~accounting. The core principle~~liability, initially measured at the present value 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 exchangelease payments for ~~those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contracts~~all leases 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.~~term greater than 12 months. The accounting for lessors remains largely unchanged from existing guidance. This guidance is effective for the Company onas of January 1, ~~2018, following the FASB's July 2015 decision to defer the effective date of the standard by one year. This guidance~~2019 and is required to be applied using a modified retrospective approach for all leases existing at, or entered into after, the ~~Company's election, either~~beginning of the earliest comparative period presented. Although early adoption is permitted, the Company does not expect to early adopt the new guidance prior to January 1, 2019. The Company expects that (1) ~~retrospectively~~lessee arrangements will continue to ~~each prior reporting period presented, or~~be classified as operating leases under the new guidance; (2) this guidance to have a material impact on its consolidated balance sheet due to the addition of right-of-use assets and lease liabilities for all lessee arrangements with ~~the cumulative effect being recognized at the date of initial application. The Company's site rental revenues are within the scope of lease accounting~~a term greater than 12 months; and (3) there will not be ~~impacted~~a material impact to its consolidated statement of operations and consolidated statement of cash flows.

In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment by removing the second step of the existing goodwill impairment test. As a result of the guidance, goodwill impairment, if any, will be measured during the step-one impairment test as the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Additionally, the guidance does not change the option to complete a qualitative assessment prior to performing a step-one impairment test. The guidance is effective for the Company as of January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of the guidance, including the impact on its consolidated financial statements.

In January 2017, the FASB issued new guidance, which clarifies the definition of a business in order to assist companies in evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance is effective for the Company as of January 1, 2018, and is required to be applied prospectively. Early adoption is permitted. The Company adopted this ~~guidance.~~guidance effective January 1, 2018 and will apply the new guidance to prospective transactions. The adoption of this guidance will not have a material impact on the Company's consolidated financial statements.

PINNACLE TOWERS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in thousands)


3.	Property and Equipment

The major classes of property and equipment are as follows:


	Estimated Useful Lives	December 31,						Estimated Useful Lives	December 31,
	Estimated Useful Lives	2015			2014			Estimated Useful Lives	2017			2016
Land^(a)	—	$	57,317		$	57,484		—	$	56,195		$	56,851
Towers	1-20 years	491,897			468,694			1-20 years	532,039			518,868
Construction in progress	—	20,052			22,996			—	6,196			7,917
Total gross property and equipment		569,266			549,174				594,430			583,636
Less accumulated depreciation		(203,947		)	(181,551		)		(251,004		)	(226,852		)
Total property and equipment, net		$	365,319		$	367,623			$	343,426		$	356,784



Delaware		20-4300339
(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 executive offices) (Zip Code)



		Page
	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	2
Item 1B.	Unresolved Staff Comments	78
Item 2.	Properties	8
Item 3.	Legal Proceedings	8
Item 4.	Mine Safety Disclosures	8
	PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	9
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	1817
Item 8.	Financial Statements and Supplementary Data	18
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	35
Item 9A.	Controls and Procedures	3635
Item 9B.	Other Information	3736
	PART III
Item 14.	Principal Accounting Fees and Services	3736
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	3736
Item 16.	Form 10-K Summary	38

Signatures		3839


	Years Ending December 31,														Years Ending December 31,
Contractual Obligations ^(a)	2016		2017		2018		2019		2020		Thereafter		Totals		2018		2019		2020		2021		2022		Thereafter		Totals
	(In thousands of dollars)														(In thousands of dollars)
Debt	$	—	$	500,000	$	—	$	—	$	—	$	1,000,000	$	1,500,000	$	—	$	—	$	—	$	—	$	—	$	1,000,000	$	1,000,000
Interest payments on debt	50,395		50,395		38,490		38,490		38,490		96,225		312,485		38,490		38,490		38,490		38,490		38,490		19,245		211,695
Lease obligations^(b)	132,772		134,848		136,256		137,598		137,910		1,720,616		2,400,000		138,940		140,350		141,363		141,078		138,026		1,726,965		2,426,722
Total contractual obligations	$	183,167	$	685,243	$	174,746	$	176,088	$	176,400	$	2,816,841	$	4,212,485	$	177,430	$	178,840	$	179,853	$	179,568	$	176,516	$	2,746,210	$	3,638,417




	Page
Report of ~~PricewaterhouseCoopers LLP,~~ Independent Registered Public Accounting Firm	19
Consolidated Balance Sheet as of December 31, ~~2015~~2017 and ~~2014~~2016	20
Consolidated Statement of Operations for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	21
Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	22
Consolidated Statement of Changes in Member's Equity for each of the three years in the period ended ~~2015, 2014 and 2013~~ 2017	23
Notes to Consolidated Financial Statements	24
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2017, 2016 and 2015	3940
Schedule III - Schedule of Real Estate and Accumulated Depreciation for the years ended December 31, 2017 and 2016	4041


	December 31,				December 31,
	2015		2014		2017		2016
ASSETS
Current assets:
Cash and cash equivalents	$	20,401	$	26,231	$	30,771	$	19,550
Receivables, net of allowance of $882 and $1,099, respectively	3,987		5,037
Receivables, net of allowance of $1,300 and $1,810, respectively					2,581		3,527
Prepaid expenses	24,318		22,737		24,300		24,051
Deferred site rental receivables	10,165		7,519		24,638		19,833
Other current assets	1,171		1,697		467		480
Total current assets	60,042		63,221		82,757		67,441
Deferred site rental receivables	350,407		328,635		333,164		346,507
Property and equipment, net	1,135,704		1,147,889		1,041,157		1,088,883
Goodwill	1,338,730		1,338,730		1,338,730		1,338,730
Site rental contracts and customer relationships, net	1,128,422		1,241,889		902,667		1,016,200
Other intangible assets, net	23,932		26,721		19,859		21,807
Long-term prepaid rent, deferred financing costs and other assets, net	45,780		48,978
Long-term prepaid rent and other assets, net					38,154		35,490
Total assets	$	4,083,017	$	4,196,063	$	3,756,488	$	3,915,058

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	2,691	$	2,598	$	1,801	$	3,387
Accrued income taxes	2,359		3,498
Accrued interest	8,655		8,655		8,126		8,126
Deferred revenues	12,165		15,574		11,586		11,930
Other accrued liabilities	7,775		6,747		8,828		9,856
Total current liabilities	33,645		37,072		30,341		33,299
Debt	1,500,000		1,500,000		992,663		991,279
Deferred ground lease payable	95,837		88,463		107,673		102,519
Above-market leases and other liabilities	49,187		49,483		49,340		48,716
Total liabilities	1,678,669		1,675,018		1,180,017		1,175,813
Commitments and contingencies (note 9)
Member's equity:
Member's equity	2,327,938		2,327,938		2,576,471		2,739,245
Accumulated earnings (deficit)	76,410		193,107		—		—
Total member's equity	2,404,348		2,521,045		2,576,471		2,739,245
Total liabilities and equity	$	4,083,017	$	4,196,063	$	3,756,488	$	3,915,058



x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


(a)	The following items are in addition to the obligations disclosed in the above table:


(1)	estimates of replacement costs (for tangible fixed assets such as towers), or


(2)	discounted cash flow valuation methods (for estimating identifiable intangibles such as site rental contracts and customer relationships and above-market and below-market leases).


(1)	we pool site rental contracts and customer relationships intangible assets and property and equipment into portfolio groups, and


(2)	we separately pool site rental contracts and customer relationships by significant tenant or by tenant grouping for individually insignificant ~~customers,~~tenants, as appropriate.


	As of December 31, 2015							As of December 31, 2014							As of December 31, 2017							As of December 31, 2016
	Gross Carrying Value		Accumulated Amortization			Net Book Value		Gross Carrying Value		Accumulated Amortization			Net Book Value		Gross Carrying Value		Accumulated Amortization			Net Book Value		Gross Carrying Value		Accumulated Amortization			Net Book Value
Site rental contracts and customer relationships	$	2,100,708	$	(972,286	)	$	1,128,422	$	2,100,707	$	(858,818	)	$	1,241,889	$	2,102,005	$	(1,199,338	)	$	902,667	$	2,102,005	$	(1,085,805	)	$	1,016,200
Other intangible assets	52,312		(28,380		)	23,932		53,879		(27,158		)	26,721		50,999		(31,140		)	19,859		51,595		(29,788		)	21,807
Total	$	2,153,020	$	(1,000,666	)	$	1,152,354	$	2,154,586	$	(885,976	)	$	1,268,610	$	2,153,004	$	(1,230,478	)	$	922,526	$	2,153,600	$	(1,115,593	)	$	1,038,007



	Year Ending December 31, 2013
	Principal Amount		Cash Paid^(a)		Gains (losses)^(c)
7.75% Secured Notes^(b)	$	294,362	$	312,465	$	(18,103	)


~~(b)~~	~~The redemption of the 7.75% Secured Notes was funded by the restricted cash released upon refinancing.~~


~~(c)~~	~~The losses relate to cash losses, including with respect to make whole payments.~~


	Level in Fair Value Hierarchy	December 31, 2015				December 31, 2014				Level in Fair Value Hierarchy	December 31, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value			Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	1	$	20,401	$	20,401	$	26,231	$	26,231	1	$	30,771	$	30,771	$	19,550	$	19,550

Liabilities:
Debt	2	1,500,000		1,486,600		1,500,000		1,497,750		2	992,663		1,032,530		991,279		1,013,300



	Year Ended December 31,
	2013
Current:
Federal	$	—
State	(6,741		)
Deferred:
Federal	361,082
State	(5,898		)
Total tax benefit (provision)	$	348,443



	Year Ended December 31,
	2013
Benefit (provision) for income taxes at statutory rate	$	(36,881	)
Nondeductible expenses and other	(6		)
State tax benefit (provision), net of federal	(6,140		)
Tax adjustment related to REIT conversion	391,688
Other	(218		)
	$	348,443


(a)	Audit fees principally includes audit and review of financial statements and subsidiary audits, and consents.



		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File Number	Date of Filing	Exhibit Number
3.1	Amended and Restated Certificate of Formation of CC Holdings GS V LLC	S-4	333-187970	April 17, 2013	3.1



CC HOLDINGS GS V LLC

By:	/s/ ~~Jay A. Brown~~DANIEL K. SCHLANGER
	~~Jay A. Brown~~Daniel K. Schlanger
	Senior Vice President, Chief Financial Officer
	and Treasurer
	(Principal Financial Officer)

By:	/s/ ~~Rob A. Fisher~~ROBERT S. COLLINS
	~~Rob A. Fisher~~Robert S. Collins
	Vice President and Controller
	(Principal Accounting Officer)



Name		Title

/s/ W.JAY A. B~~ENJAMIN~~ M~~ORELAND~~ROWN		President, Chief Executive Officer and Director
~~W. Benjamin Moreland~~Jay A. Brown		(Principal Executive Officer)

/s/ JDAY ANIELA K. S. B~~ROWN~~CHLANGER		Senior Vice President, Chief Financial Officer,
~~Jay A. Brown~~Daniel K. Schlanger		Treasurer and Director (Principal Financial Officer)

/s/ KENNETH J. SIMON		Senior Vice President, General Counsel and Director
Kenneth J. Simon

/s/ ROBOBERT ~~A. F~~S. C~~ISHER~~OLLINS		Vice President and Controller
~~Rob A. Fisher~~Robert S. Collins		(Principal Accounting Officer)


			Additions		Deletions									Additions		Deletions
	Balance at Beginning of Year		Charged to Operations		Credited to Operations		Written Off			Balance at End of Year		Balance at Beginning of Year		Charged to Operations		Credited to Operations		Written Off			Balance at End of Year
Allowance for Doubtful Accounts Receivable:
2017												$	1,810	$	662	$	—	$	(1,172	)	$	1,300
2016												$	882	$	1,697	$	—	$	(769	)	$	1,810
2015	$	1,099	$	284	$	—	$	(501	)	$	882	$	1,099	$	284	$	—	$	(501	)	$	882
2014	$	1,376	$	295	$	—	$	(572	)	$	1,099
2013	$	1,507	$	268	$	—	$	(399	)	$	1,376


(1)	No single site exceeds 5% of the aggregate gross amounts at which the assets were carried at the close of the period set forth in the table above.


(2)	As of December 31, ~~2015,~~2017, all of the Company's debt is secured by a pledge of the equity interests in each applicable Guarantor.


(3)	The Company has omitted this information, as it would be impracticable to compile such information on a site-by-site basis.



	2017			2016
Gross amount at beginning	$	1,917,553		$	1,875,940
Additions during period:
Acquisitions through foreclosure	—			—
Other acquisitions	—			—
Communications infrastructure construction and improvements	40,051			43,721
Purchase of land interests	—			—
Sustaining capital expenditures	9,500			9,688
Other	—			—
Total additions	49,551			53,409
Deductions during period:
Cost of real estate sold or disposed	(6,401		)	(11,796		)
Other	—			—
Total deductions:	(6,401		)	(11,796		)
Balance at end	$	1,960,703		$	1,917,553



	2015
Gross amount at beginning	$	1,800,836
Additions during period:
Acquisitions through foreclosure	—
Other acquisitions	—
Wireless infrastructure construction and improvements	76,064
Purchase of land interests	—
Sustaining capital expenditures	9,152
Other	—
Total additions	85,216
Deductions during period:
Cost of real estate sold or disposed	(10,112		)
Other	—
Total deductions:	(10,112		)
Balance at end	$	1,875,940



	2017			2016
Gross amount of accumulated depreciation at beginning	$	(828,670	)	$	(740,236	)
Additions during period:
Depreciation	(94,348		)	(93,455		)
Total additions	(94,348		)	(93,455		)
Deductions during period:
Amount for assets sold or disposed	3,472			5,021
Other	—			—
Total deductions	3,472			5,021
Balance at end	$	(919,546	)	$	(828,670	)



	2015
Gross amount of accumulated depreciation at beginning	$	(652,947	)
Additions during period:
Depreciation	(92,165		)
Total additions	(92,165		)
Deductions during period:
Amount for assets sold or disposed	4,876
Other	—
Total deductions	4,876
Balance at end	$	(740,236	)



	Page
Report of ~~PricewaterhouseCoopers LLP,~~ Independent Registered Public Accounting Firm	S-3
Balance Sheet as of December 31, ~~2015~~2017 and ~~2014~~2016	S-4
Statement of Operations for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	S-5
Statement of Cash Flows for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	S-6
Statement of Changes in Member's Equity for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	S-7
Notes to Financial Statements	S-8



	Page
Report of ~~PricewaterhouseCoopers LLP,~~ Independent Registered Public Accounting Firm	~~S-18~~S-17
Balance Sheet as of December 31, ~~2015~~2017 and ~~2014~~2016	~~S-19~~S-18
Statement of Operations for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	~~S-20~~S-19
Statement of Cash Flows for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	~~S-21~~S-20
Statement of Changes in Member's Equity for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	~~S-22~~S-21
Notes to Financial Statements	~~S-23~~S-22



	Page
Report of ~~PricewaterhouseCoopers LLP,~~ Independent Registered Public Accounting Firm	~~S-33~~S-32
Consolidated Balance Sheet as of December 31, ~~2015~~2017 and ~~2014~~2016	S-33
Consolidated Statement of Operations for each of the three years in the period ended December 31, 2017	S-34
~~Consolidated Statement of Operations for the three years ended December 31, 2015, 2014 and 2013~~	~~S-35~~
Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	~~S-36~~S-35
Consolidated Statement of Changes in Member's Equity for each of the three years in the period ended December 31, ~~2015, 2014 and 2013~~2017	~~S-37~~S-36
Notes to Consolidated Financial Statements	~~S-38~~S-37



~~Exhibit No.~~		~~Description~~

~~(a)~~	~~3.1~~	~~Certificate of Formation, as amended, of CC Holdings GS V LLC~~

~~(a)~~	~~3.2~~	~~Second Amended and Restated Limited Liability Company Agreement of CC Holdings GS V LLC~~

~~(b)~~	~~4.1~~	Indenture dated as of December 24, 2012, by and among CC Holdings GS V LLC, Crown Castle GS III Corp., each of the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2.381% Senior Secured Notes due 2017 and the 3.849% Senior Secured Notes due 2023
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~~(a)~~	~~4.2~~	Pledge and Security Agreement as of December 24, 2012, by and among CC Holdings GS V LLC, Pinnacle Towers LLC, Pinnacle Towers III LLC, Pinnacle Towers V Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2.381% Senior Secured Notes due 2017 and the 3.849% Senior Secured Notes due 2023

~~(c)~~	~~10.1~~	~~Agreement to Contribute, Lease and Sublease, dated as February 14, 2005, among Sprint Corporation, the Sprint subsidiaries named therein and Global Signal Inc.~~

~~(d)~~	~~10.2~~	Master Lease and Sublease, dated as of May 26, 2005, by and among STC One LLC, as lessor, Sprint Telephony PCS L.P., as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.

~~(d)~~	~~10.3~~	~~Master Lease and Sublease, dated as of May 26, 2005, by and among STC Two LLC, as lessor, SprintCom, Inc., as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.~~

~~(d)~~	~~10.4~~	Master Lease and Sublease, dated as of May 26, 2005, by and among STC Three LLC, as lessor, American PCS Communications, LLC, as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.

~~(d)~~	~~10.5~~	~~Master Lease and Sublease, dated as of May 26, 2005, by and among STC Four LLC, as lessor, PhillieCo, L.P., as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.~~

~~(d)~~	~~10.6~~	Master Lease and Sublease, dated as of May 26, 2005, by and among STC Five LLC, as lessor, Sprint Spectrum L.P., as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.

~~(d)~~	~~10.7~~	~~Master Lease and Sublease, dated as of May 26, 2005, by and among STC Six Company, Sprint Spectrum L.P., as Sprint Collocator, Global Signal Acquisitions II LLC, as lessee, and Global Signal Inc.~~

~~(a)~~	~~10.8~~	Management Agreement, dated as of December 24, 2012, by and among Crown Castle USA Inc., as Manager, and CC Holdings GS V LLC, Global Signal Acquisitions LLC, Global Signal Acquisitions II LLC, Pinnacle Towers LLC and the direct and indirect subsidiaries of Pinnacle Towers LLC, collectively, as Owners

~~(b)~~	~~10.9~~	Registration Rights Agreement, dated as of December 24, 2012, by and among CC Holdings GS V LLC, Crown Castle GS III Corp., each of the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC, as representatives of the initial purchasers

*	~~31.1~~	~~Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002~~

*	~~31.2~~	~~Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002~~

*	~~32.1~~	~~Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002~~

*	~~101.INS~~	~~XBRL Instance Document~~

*	~~101.SCH~~	~~XBRL Taxonomy Extension Schema Document~~

*	~~101.DEF~~	~~XBRL Taxonomy Extension Definition Linkbase Document~~

*	~~101.CAL~~	~~XBRL Taxonomy Extension Calculation Linkbase Document~~

*	~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase Document~~

*	~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~