HOUSTON, Oct. 18, 2023 (GLOBE NEWSWIRE) -- Crown Castle Inc. (NYSE: CCI) ("Crown Castle") today reported results for the third quarter ended September 30, 2023 and issued its full year 2024 outlook, as reflected in the table below.
Full Year 2024 | Full Year 2023 | ||||||
(dollars in millions, except per share amounts) | Current Outlook Midpoint(a) | Midpoint Growth Rate Compared to Previous Year Outlook | Current Outlook Midpoint(a) | Midpoint Growth Rate Compared to Previous Year Actual | |||
Site rental revenues | $6,370 | (2)% | $6,511 | 4% | |||
Net income (loss) | $1,253 | (15)% | $1,469 | (12)% | |||
Net income (loss) per share—diluted | $2.88 | (15)% | $3.38 | (12)% | |||
Adjusted EBITDA(b) | $4,163 | (6)% | $4,422 | 2% | |||
AFFO(b) | $3,005 | (8)% | $3,279 | 2% | |||
AFFO per share(b) | $6.91 | (8)% | $7.54 | 2% |
(a) As issued on October 18, 2023.
(b) See "Non-GAAP Measures and Other Information" for further information and reconciliation of non-GAAP financial measures to net income (loss), including on a per share basis.
"Our third quarter results continue to demonstrate the resiliency of our business, allowing us to keep our full year 2023 outlook consistent with expectations of 5% tower organic revenue growth and delivering on 10,000 small cell nodes," stated Jay Brown, Crown Castle's Chief Executive Officer. "Based on our customers' continued investments to meet increasing data demand, we expect full year 2024 organic growth excluding the impact of Sprint Cancellations of 4.5% from towers, 13% from small cells, based on plans to deliver approximately 14,000 small cell nodes, and 3% from fiber solutions to generate consolidated organic revenue growth of 5%. To achieve this growth, we plan to deploy discretionary capital, net of prepaid rent additions of $430 million, totaling approximately $1.2 billion which we expect to fund without issuing equity in 2024. As we work through discrete headwinds in 2024 and 2025, the strong underlying growth across our business gives us confidence in our ability to grow our dividend beyond 2025 and maintain our current annualized dividend of $6.26 per share. We expect the low-point of AFFO to occur during the first half of 2024, with growth expected in the second half of the year and beyond."
"We continue to focus on our strategy to deliver the highest risk-adjusted returns for our shareholders and have established a comprehensive portfolio of towers, small cells and fiber, providing unique exposure to growth throughout the entire wireless upgrade cycle. We believe our ability to capture the rising growth in small cell demand while continuing to generate solid tower growth results from the portfolio of assets and core capabilities we have established as the largest operator of shared communications infrastructure in the United States."
RESULTS FOR THE QUARTER
The table below sets forth select financial results for the quarters ended September 30, 2023 and September 30, 2022.
(dollars in millions, except per share amounts) | Q3 2023 | Q3 2022 | Change | % Change | |||
Site rental revenues | $1,577 | $1,568 | $9 | 1% | |||
Net income (loss) | $265 | $419 | $(154) | (37)% | |||
Net income (loss) per share—diluted | $0.61 | $0.97 | $(0.36) | (37)% | |||
Adjusted EBITDA(a) | $1,047 | $1,077 | $(30) | (3)% | |||
AFFO(a) | $767 | $804 | $(37) | (5)% | |||
AFFO per share(a) | $1.77 | $1.85 | $(0.08) | (4)% |
(a) See "Non-GAAP Measures and Other Information" for further information and reconciliation of non-GAAP financial measures to net income (loss), including on a per share basis.
HIGHLIGHTS FROM THE QUARTER
"With third quarter results in line with expectations, we remain on track with our full year 2023 outlook and are seeing the benefits of our comprehensive offering of domestic shared infrastructure assets in our full year 2024 outlook, highlighted by projected consolidated organic revenue growth of 5%, excluding the impact of payments for Sprint Cancellations," stated Dan Schlanger, Crown Castle's Chief Financial Officer. "The strong organic growth across each of our businesses is expected to contribute approximately $220 million to 2024 Adjusted EBITDA compared to 2023. However, this growth is expected to be more than offset by a combined $240 million reduction to our straight-lined revenues and amortization of prepaid rent and an additional $165 million reduction related to 2023 payments from Sprint Cancellations not recurring in 2024."
"Since achieving an investment grade credit rating in 2015, we have intentionally strengthened our balance sheet to mitigate risk by extending our weighted average debt maturity from 5 years to 8 years, decreasing the percentage of secured debt from 47% to 7% and increasing the percentage of fixed rate debt from 68% to 86%. Further, we ended the third quarter with approximately $5 billion of available liquidity under our revolving credit facility and only $750 million of debt maturities occurring through 2024."
MANAGEMENT CHANGES
Additionally, Crown Castle announced today that Mr. Schlanger, Executive Vice President and Chief Financial Officer, will depart the company effective March 31, 2024. "Dan has been a valuable member of our executive leadership team and has made significant contributions over his seven years with the company," said Mr. Brown. "Dan has been integral to our strategy and the growth of our business, built a strong finance organization, and improved our balance sheet with long-dated maturities. I wish him well in his next endeavors." Crown Castle will begin a search for Mr. Schlanger's replacement. The search will include both internal and external candidates.
OUTLOOK
This Outlook section contains forward-looking statements, and actual results may differ materially. Information regarding potential risks which could cause actual results to differ from the forward-looking statements herein is set forth below and in Crown Castle's filings with the SEC.
Restructuring Plan Update
The following table sets forth Crown Castle's current full year 2023 and 2024 Outlook. Changes to the full year 2023 Outlook from the previous full year 2023 Outlook are limited to net income, which has been updated to reflect expected charges related to the restructuring plan announced in July 2023, and a $100 million reduction to expected discretionary capital expenditures in Towers.
(in millions, except per share amounts) | Current Full Year 2023(a) | Current Full Year 2023 Outlook Midpoint(a) | Full Year 2024 Outlook(a) | Full Year 2024 Outlook Midpoint(a) | ||||||||
Site rental billings(b) | $5,631 to $5,671 | $5,651 | $5,740 to $5,780 | $5,760 | ||||||||
Amortization of prepaid rent | $570 to $580 | $575 | $410 to $435 | $423 | ||||||||
Straight-lined revenues | $264 to $284 | $274 | $175 to $200 | $187 | ||||||||
Site rental revenues | $6,488 to $6,533 | $6,511 | $6,347 to $6,392 | $6,370 | ||||||||
Site rental costs of operations(c) | $1,633 to $1,678 | $1,656 | $1,686 to $1,731 | $1,709 | ||||||||
Services and other gross margin | $120 to $150 | $135 | $65 to $95 | $80 | ||||||||
Net income (loss) | $1,429 to $1,509 | $1,469 | $1,213 to $1,293 | $1,253 | ||||||||
Net income (loss) per share—diluted | $3.29 to $3.47 | $3.38 | $2.79 to $2.97 | $2.88 | ||||||||
Adjusted EBITDA(d) | $4,399 to $4,444 | $4,422 | $4,138 to $4,188 | $4,163 | ||||||||
Depreciation, amortization and accretion | $1,712 to $1,807 | $1,760 | $1,680 to $1,775 | $1,728 | ||||||||
Interest expense and amortization of deferred financing costs, net(e) | $834 to $869 | $852 | $933 to $978 | $956 | ||||||||
FFO(d) | $3,183 to $3,218 | $3,201 | $2,951 to $2,996 | $2,974 | ||||||||
AFFO(d) | $3,261 to $3,296 | $3,279 | $2,980 to $3,030 | $3,005 | ||||||||
AFFO per share(d) | $7.50 to $7.58 | $7.54 | $6.85 to $6.97 | $6.91 |
(a) As issued on October 18, 2023.
(b) See "Non-GAAP Measures and Other Information" for our definition of site rental billings.
(c) Exclusive of depreciation, amortization and accretion.
(d) See "Non-GAAP Measures and Other Information" for further information and reconciliation of non-GAAP financial measures to net income (loss), including on a per share basis.
(e) See "Non-GAAP Measures and Other Information" for the reconciliation of "Outlook for Components of Interest Expense."
Outlook for Discretionary Capital Expenditures and Prepaid Rent Additions
Additional information is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of our website.
CONFERENCE CALL DETAILS
Crown Castle has scheduled a conference call for Thursday, October 19, 2023, at 10:30 a.m. Eastern time to discuss its third quarter 2023 results. A listen only live audio webcast of the conference call, along with supplemental materials for the call, can be accessed on the Crown Castle website at https://investor.crowncastle.com. Participants may join the conference call by dialing 833-816-1115 (Toll Free) or 412-317-0694 (International) at least 30 minutes prior to the start time. All dial-in participants should ask to join the Crown Castle call.
A replay of the webcast will be available on the Investor page of Crown Castle's website until end of day, Saturday, October 19, 2024.
ABOUT CROWN CASTLE
Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 85,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. This nationwide portfolio of communications infrastructure connects cities and communities to essential data, technology and wireless service - bringing information, ideas and innovations to the people and businesses that need them. For more information on Crown Castle, please visit www.crowncastle.com.
Non-GAAP Measures and Other Information
This press release includes presentations of Adjusted EBITDA, Adjusted Funds from Operations ("AFFO"), including per share amounts, Funds from Operations ("FFO"), including per share amounts, Organic Contribution to Site Rental Billings, including as Adjusted for Impact of Sprint Cancellations, and Net Debt, which are non-GAAP financial measures. These non-GAAP financial measures are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")).
Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies, including other companies in the communications infrastructure sector or other real estate investment trusts ("REITs").
In addition to the non-GAAP financial measures used herein, we also provide segment site rental gross margin, segment services and other gross margin and segment operating profit, which are key measures used by management to evaluate our operating segments. These segment measures are provided pursuant to GAAP requirements related to segment reporting. In addition, we provide the components of certain GAAP measures, such as site rental revenues and capital expenditures.
Our non-GAAP financial measures are presented as additional information because management believes these measures are useful indicators of the financial performance of our business. Among other things, management believes that:
Non-GAAP Financial Measures
Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, net, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, net (income) loss from discontinued operations, (gain) loss on sale of discontinued operations, cumulative effect of a change in accounting principle and stock-based compensation expense, net.
AFFO. We define AFFO as FFO before straight-lined revenues, straight-lined expenses, stock-based compensation expense, net, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, acquisition and integration costs, restructuring charges (credits), net (income) loss from discontinued operations, (gain) loss on sale of discontinued operations, cumulative effect of a change in accounting principle and adjustments for noncontrolling interests, less sustaining capital expenditures.
AFFO per share. We define AFFO per share as AFFO divided by diluted weighted-average common shares outstanding.
FFO. We define FFO as net income (loss) plus real estate related depreciation, amortization and accretion and asset write-down charges, less noncontrolling interest and cash paid for preferred stock dividends (in periods where applicable), and is a measure of funds from operations attributable to common stockholders.
FFO per share. We define FFO per share as FFO divided by diluted weighted-average common shares outstanding.
Organic Contribution to Site Rental Billings. We define Organic Contribution to Site Rental Billings as the sum of the change in site rental revenues related to core leasing activity, escalators and payments for Sprint Cancellations, less non-renewals of tenant contracts and non-renewals associated with Sprint Cancellations. Additionally, Organic Contribution to Site Rental Billings as Adjusted for Impact of Sprint Cancellations reflects Organic Contribution to Site Rental Billings less payments for Sprint Cancellations, plus non-renewals associated with Sprint Cancellations.
Net Debt. We define Net Debt as (1) debt and other long-term obligations and (2) current maturities of debt and other obligations, excluding unamortized adjustments, net; less cash, cash equivalents and restricted cash.
Segment Measures
Segment site rental gross margin. We define segment site rental gross margin as segment site rental revenues less segment site rental costs of operations, excluding stock-based compensation expense, net and amortization of prepaid lease purchase price adjustments recorded in consolidated site rental costs of operations.
Segment services and other gross margin. We define segment services and other gross margin as segment services and other revenues less segment services and other costs of operations, excluding stock-based compensation expense, net recorded in consolidated services and other costs of operations.
Segment operating profit. We define segment operating profit as segment site rental gross margin plus segment services and other gross margin, less segment selling, general and administrative expenses.
All of these measurements of profit or loss are exclusive of depreciation, amortization and accretion, which are shown separately. Additionally, certain costs are shared across segments and are reflected in our segment measures through allocations that management believes to be reasonable.
Other Definitions
Site rental billings. We define site rental billings as site rental revenues exclusive of the impacts from (1) straight-lined revenues, (2) amortization of prepaid rent in accordance with GAAP and (3) contribution from recent acquisitions until the one-year anniversary of such acquisitions.
Core leasing activity. We define core leasing activity as site rental revenues growth from tenant additions across our entire portfolio and renewals or extensions of tenant contracts, exclusive of (1) the impacts from both straight-lined revenues and amortization of prepaid rent in accordance with GAAP and (2) payments for Sprint Cancellations, where applicable.
Non-renewals. We define non-renewals of tenant contracts as the reduction in site rental revenues as a result of tenant churn, terminations and, in limited circumstances, reductions of existing lease rates, exclusive of non-renewals associated with Sprint Cancellations, where applicable.
Discretionary capital expenditures. We define discretionary capital expenditures as those capital expenditures made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They primarily consist of expansion or development of communications infrastructure (including capital expenditures related to (1) enhancing communications infrastructure in order to add new tenants for the first time or support subsequent tenant equipment augmentations or (2) modifying the structure of a communications infrastructure asset to accommodate additional tenants) and construction of new communications infrastructure. Discretionary capital expenditures also include purchases of land interests (which primarily relates to land assets under towers as we seek to manage our interests in the land beneath our towers), certain technology-related investments necessary to support and scale future customer demand for our communications infrastructure, and other capital projects.
Sustaining capital expenditures. We define sustaining capital expenditures as those capital expenditures not otherwise categorized as discretionary capital expenditures, such as (1) maintenance capital expenditures on our communications infrastructure assets that enable our tenants' ongoing quiet enjoyment of the communications infrastructure and (2) ordinary corporate capital expenditures.
Sprint Cancellations. We define Sprint Cancellations as lease cancellations related to the previously disclosed T-Mobile US, Inc. and Sprint network consolidation as described in our press release dated April 19, 2023.
Reconciliation of Historical Adjusted EBITDA:
For the Three Months Ended | For the Nine Months Ended | For the Twelve Months Ended | |||||||||||||||||
(in millions; totals may not sum due to rounding) | September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | December 31, 2022 | ||||||||||||||
Net income (loss) | $ | 265 | $ | 419 | $ | 1,139 | $ | 1,261 | (a) | $ | 1,675 | ||||||||
Adjustments to increase (decrease) net income (loss): | |||||||||||||||||||
Asset write-down charges | 8 | 3 | 30 | 26 | 34 | ||||||||||||||
Acquisition and integration costs | — | — | 1 | 1 | 2 | ||||||||||||||
Depreciation, amortization and accretion | 439 | 430 | 1,315 | 1,276 | 1,707 | ||||||||||||||
Restructuring charges | 72 | — | 72 | — | — | ||||||||||||||
Amortization of prepaid lease purchase price adjustments | 4 | 4 | 12 | 12 | 16 | ||||||||||||||
Interest expense and amortization of deferred financing costs, net(a) | 217 | 177 | 627 | 506 | 699 | ||||||||||||||
(Gains) losses on retirement of long-term obligations | — | 2 | — | 28 | 28 | ||||||||||||||
Interest income | (3 | ) | (1 | ) | (10 | ) | (1 | ) | (3 | ) | |||||||||
Other (income) expense | — | 2 | 4 | 5 | 10 | ||||||||||||||
(Benefit) provision for income taxes | 7 | 3 | 21 | 14 | 16 | ||||||||||||||
Stock-based compensation expense, net | 36 | 38 | 126 | 121 | 156 | ||||||||||||||
Adjusted EBITDA(b)(c) | $ | 1,047 | $ | 1,077 | $ | 3,339 | $ | 3,249 | $ | 4,340 |
Reconciliation of Current Outlook for Adjusted EBITDA:
Full Year 2023 | Full Year 2024 | ||||||||||||||
(in millions; totals may not sum due to rounding) | Outlook(e) | Outlook(e) | |||||||||||||
Net income (loss) | $1,429 | to | $1,509 | $1,213 | to | $1,293 | |||||||||
Adjustments to increase (decrease) net income (loss): | |||||||||||||||
Asset write-down charges | $26 | to | $36 | $42 | to | $52 | |||||||||
Acquisition and integration costs | $0 | to | $8 | $0 | to | $6 | |||||||||
Depreciation, amortization and accretion | $1,712 | to | $1,807 | $1,680 | to | $1,775 | |||||||||
Restructuring charges | $102 | to | $122 | $0 | to | $0 | |||||||||
Amortization of prepaid lease purchase price adjustments | $15 | to | $17 | $15 | to | $17 | |||||||||
Interest expense and amortization of deferred financing costs, net(d) | $834 | to | $869 | $933 | to | $978 | |||||||||
(Gains) losses on retirement of long-term obligations | $0 | to | $0 | $0 | to | $0 | |||||||||
Interest income | $(14) | to | $(13) | $(12) | to | $(11) | |||||||||
Other (income) expense | $2 | to | $7 | $0 | to | $9 | |||||||||
(Benefit) provision for income taxes | $16 | to | $24 | $20 | to | $28 | |||||||||
Stock-based compensation expense, net | $165 | to | $169 | $142 | to | $146 | |||||||||
Adjusted EBITDA(b)(c) | $4,399 | to | $4,444 | $4,138 | to | $4,188 |
(a) See the reconciliation of "Components of Interest Expense" for a discussion of non-cash interest expense.
(b) See discussion and our definition of Adjusted EBITDA in this "Non-GAAP Measures and Other Information."
(c) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
(d) See the reconciliation of "Outlook for Components of Interest Expense" for a discussion of non-cash interest expense.
(e) As issued on October 18, 2023.
Reconciliation of Historical FFO and AFFO:
For the Three Months Ended | For the Nine Months Ended | For the Twelve Months Ended | |||||||||||||||||
(in millions; totals may not sum due to rounding) | September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | December 31, 2022 | ||||||||||||||
Net income (loss) | $ | 265 | $ | 419 | $ | 1,139 | $ | 1,261 | $ | 1,675 | |||||||||
Real estate related depreciation, amortization and accretion | 425 | 416 | 1,266 | 1,236 | 1,653 | ||||||||||||||
Asset write-down charges | 8 | 3 | 30 | 26 | 34 | ||||||||||||||
FFO(a)(b) | $ | 698 | $ | 838 | $ | 2,435 | $ | 2,523 | $ | 3,362 | |||||||||
Weighted-average common shares outstanding—diluted | 434 | 434 | 434 | 434 | 434 | ||||||||||||||
FFO (from above) | $ | 698 | $ | 838 | $ | 2,435 | $ | 2,523 | $ | 3,362 | |||||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||||||
Straight-lined revenues | (59 | ) | (90 | ) | (222 | ) | (325 | ) | (410 | ) | |||||||||
Straight-lined expenses | 18 | 18 | 56 | 56 | 73 | ||||||||||||||
Stock-based compensation expense, net | 36 | 38 | 126 | 121 | 156 | ||||||||||||||
Non-cash portion of tax provision | 4 | 2 | 8 | 4 | 6 | ||||||||||||||
Non-real estate related depreciation, amortization and accretion | 14 | 14 | 49 | 40 | 54 | ||||||||||||||
Amortization of non-cash interest expense | 3 | 3 | 11 | 10 | 14 | ||||||||||||||
Other (income) expense | — | 2 | 4 | 5 | 10 | ||||||||||||||
(Gains) losses on retirement of long-term obligations | — | 2 | — | 28 | 28 | ||||||||||||||
Acquisition and integration costs | — | — | 1 | 1 | 2 | ||||||||||||||
Restructuring charges | 72 | — | 72 | — | — | ||||||||||||||
Sustaining capital expenditures | (21 | ) | (23 | ) | (54 | ) | (65 | ) | (95 | ) | |||||||||
AFFO(a)(b) | $ | 767 | $ | 804 | $ | 2,487 | $ | 2,398 | $ | 3,200 | |||||||||
Weighted-average common shares outstanding—diluted | 434 | 434 | 434 | 434 | 434 |
(a) See discussion and our definitions of FFO and AFFO in this "Non-GAAP Measures and Other Information."
(b) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
Reconciliation of Historical FFO and AFFO per share:
For the Three Months Ended | For the Nine Months Ended | For the Twelve Months Ended | |||||||||||||||||
(in millions, except per share amounts; totals may not sum due to rounding) | September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | December 31, 2022 | ||||||||||||||
Net income (loss) | $ | 0.61 | $ | 0.97 | $ | 2.62 | $ | 2.91 | $ | 3.86 | |||||||||
Real estate related depreciation, amortization and accretion | 0.98 | 0.96 | 2.92 | 2.85 | 3.81 | ||||||||||||||
Asset write-down charges | 0.02 | 0.01 | 0.07 | 0.06 | 0.08 | ||||||||||||||
FFO(a)(b) | $ | 1.61 | $ | 1.93 | $ | 5.61 | $ | 5.81 | $ | 7.75 | |||||||||
Weighted-average common shares outstanding—diluted | 434 | 434 | 434 | 434 | 434 | ||||||||||||||
FFO (from above) | $ | 1.61 | $ | 1.93 | $ | 5.61 | $ | 5.81 | $ | 7.75 | |||||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||||||
Straight-lined revenues | (0.14 | ) | (0.21 | ) | (0.51 | ) | (0.75 | ) | (0.94 | ) | |||||||||
Straight-lined expenses | 0.04 | 0.04 | 0.13 | 0.13 | 0.17 | ||||||||||||||
Stock-based compensation expense, net | 0.08 | 0.09 | 0.29 | 0.28 | 0.36 | ||||||||||||||
Non-cash portion of tax provision | 0.01 | — | 0.02 | 0.01 | 0.01 | ||||||||||||||
Non-real estate related depreciation, amortization and accretion | 0.03 | 0.03 | 0.11 | 0.09 | 0.13 | ||||||||||||||
Amortization of non-cash interest expense | 0.01 | 0.01 | 0.03 | 0.02 | 0.03 | ||||||||||||||
Other (income) expense | — | 0.01 | 0.01 | 0.01 | 0.02 | ||||||||||||||
(Gains) losses on retirement of long-term obligations | — | — | — | 0.06 | 0.06 | ||||||||||||||
Acquisition and integration costs | — | 0.01 | — | — | 0.01 | ||||||||||||||
Restructuring charges | 0.17 | — | 0.17 | — | — | ||||||||||||||
Sustaining capital expenditures | (0.05 | ) | (0.05 | ) | (0.12 | ) | (0.15 | ) | (0.22 | ) | |||||||||
AFFO(a)(b) | $ | 1.77 | $ | 1.85 | $ | 5.73 | $ | 5.52 | $ | 7.38 | |||||||||
Weighted-average common shares outstanding—diluted | 434 | 434 | 434 | 434 | 434 |
(a) See discussion and our definitions of FFO and AFFO, including per share amounts in this "Non-GAAP Measures and Other Information."
(b) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
Reconciliation of Current Outlook for FFO and AFFO:
Full Year 2023 | Full Year 2024 | ||||||||||||||
(in millions; totals may not sum due to rounding) | Outlook(a) | Outlook(a) | |||||||||||||
Net income (loss) | $1,429 | to | $1,509 | $1,213 | to | $1,293 | |||||||||
Real estate related depreciation, amortization and accretion | $1,666 | to | $1,746 | $1,634 | to | $1,714 | |||||||||
Asset write-down charges | $26 | to | $36 | $42 | to | $52 | |||||||||
FFO(b)(c) | $3,183 | to | $3,218 | $2,951 | to | $2,996 | |||||||||
Weighted-average common shares outstanding—diluted | 435 | 435 | |||||||||||||
FFO (from above) | $3,183 | to | $3,218 | $2,951 | to | $2,996 | |||||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||
Straight-lined revenues | $(284) | to | $(264) | $(197) | to | $(177) | |||||||||
Straight-lined expenses | $61 | to | $81 | $55 | to | $75 | |||||||||
Stock-based compensation expense, net | $165 | to | $169 | $142 | to | $146 | |||||||||
Non-cash portion of tax provision | $0 | to | $8 | $2 | to | $17 | |||||||||
Non-real estate related depreciation, amortization and accretion | $47 | to | $62 | $46 | to | $61 | |||||||||
Amortization of non-cash interest expense | $7 | to | $17 | $9 | to | $19 | |||||||||
Other (income) expense | $2 | to | $7 | $0 | to | $9 | |||||||||
(Gains) losses on retirement of long-term obligations | $0 | to | $0 | $0 | to | $0 | |||||||||
Acquisition and integration costs | $0 | to | $8 | $0 | to | $6 | |||||||||
Restructuring charges | $102 | to | $122 | $0 | to | $0 | |||||||||
Sustaining capital expenditures | $(88) | to | $(68) | $(85) | to | $(65) | |||||||||
AFFO(b)(c) | $3,261 | to | $3,296 | $2,980 | to | $3,030 | |||||||||
Weighted-average common shares outstanding—diluted | 435 | 435 |
Reconciliation of Current Outlook for FFO and AFFO per share:
Full Year 2023 | Full Year 2024 | ||||||||||||||
(in millions, except per share amounts; totals may not sum due to rounding) | Outlook per share(a) | Outlook per share(a) | |||||||||||||
Net income (loss) | $3.29 | to | $3.47 | $2.79 | to | $2.97 | |||||||||
Real estate related depreciation, amortization and accretion | $3.83 | to | $4.01 | $3.76 | to | $3.94 | |||||||||
Asset write-down charges | $0.06 | to | $0.08 | $0.10 | to | $0.12 | |||||||||
FFO(b)(c) | $7.32 | to | $7.40 | $6.78 | to | $6.89 | |||||||||
Weighted-average common shares outstanding—diluted | 435 | 435 | |||||||||||||
FFO (from above) | $7.32 | to | $7.40 | $6.78 | to | $6.89 | |||||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||
Straight-lined revenues | $(0.65) | to | $(0.61) | $(0.45) | to | $(0.41) | |||||||||
Straight-lined expenses | $0.14 | to | $0.19 | $0.13 | to | $0.17 | |||||||||
Stock-based compensation expense, net | $0.38 | to | $0.39 | $0.33 | to | $0.34 | |||||||||
Non-cash portion of tax provision | $0.00 | to | $0.02 | $0.00 | to | $0.04 | |||||||||
Non-real estate related depreciation, amortization and accretion | $0.11 | to | $0.14 | $0.11 | to | $0.14 | |||||||||
Amortization of non-cash interest expense | $0.02 | to | $0.04 | $0.02 | to | $0.04 | |||||||||
Other (income) expense | $0.00 | to | $0.02 | $0.00 | to | $0.02 | |||||||||
(Gains) losses on retirement of long-term obligations | $0.00 | to | $0.00 | $0.00 | to | $0.00 | |||||||||
Acquisition and integration costs | $0.00 | to | $0.02 | $0.00 | to | $0.01 | |||||||||
Restructuring charges | $0.23 | to | $0.28 | $0.00 | to | $0.00 | |||||||||
Sustaining capital expenditures | $(0.20) | to | $(0.16) | $(0.20) | to | $(0.15) | |||||||||
AFFO(b)(c) | $7.50 | to | $7.58 | $6.85 | to | $6.97 | |||||||||
Weighted-average common shares outstanding—diluted | 435 | 435 |
(a) As issued on October 18, 2023.
(b) See discussion and our definitions of FFO and AFFO, including per share amounts in this "Non-GAAP Measures and Other Information."
(c) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
For Comparative Purposes - Reconciliation of Previous Outlook for Adjusted EBITDA:
Previously Issued | |||||||
(in millions; totals may not sum due to rounding) | Full Year 2023 Outlook(a) | ||||||
Net income (loss) | $1,541 | to | $1,621 | ||||
Adjustments to increase (decrease) income (loss) from continuing operations: | |||||||
Asset write-down charges | $26 | to | $36 | ||||
Acquisition and integration costs | $0 | to | $8 | ||||
Depreciation, amortization and accretion | $1,712 | to | $1,807 | ||||
Amortization of prepaid lease purchase price adjustments | $15 | to | $17 | ||||
Interest expense and amortization of deferred financing costs, net(b) | $834 | to | $869 | ||||
(Gains) losses on retirement of long-term obligations | $0 | to | $0 | ||||
Interest income | $(14) | to | $(13) | ||||
Other (income) expense | $2 | to | $7 | ||||
(Benefit) provision for income taxes | $16 | to | $24 | ||||
Stock-based compensation expense, net | $165 | to | $169 | ||||
Adjusted EBITDA(c)(d) | $4,399 | to | $4,444 |
For Comparative Purposes - Reconciliation of Previous Outlook for FFO and AFFO:
Previously Issued | Previously Issued | ||||||||||||||
(in millions, except per share amounts; totals may not sum due to rounding) | Full Year 2023 Outlook(a) | Full Year 2023 Outlook per share(a) | |||||||||||||
Net income (loss) | $1,541 | to | $1,621 | $3.54 | to | $3.73 | |||||||||
Real estate related depreciation, amortization and accretion | $1,666 | to | $1,746 | $3.83 | to | $4.01 | |||||||||
Asset write-down charges | $26 | to | $36 | $0.06 | to | $0.08 | |||||||||
FFO(c)(d) | $3,295 | to | $3,330 | $7.57 | to | $7.66 | |||||||||
Weighted-average common shares outstanding—diluted | 435 | 435 | |||||||||||||
FFO (from above) | $3,295 | to | $3,330 | $7.57 | to | $7.66 | |||||||||
Adjustments to increase (decrease) FFO: | |||||||||||||||
Straight-lined revenues | $(284) | to | $(264) | $(0.65) | to | $(0.61) | |||||||||
Straight-lined expenses | $61 | to | $81 | $0.14 | to | $0.19 | |||||||||
Stock-based compensation expense, net | $165 | to | $169 | $0.38 | to | $0.39 | |||||||||
Non-cash portion of tax provision | $0 | to | $8 | $0.00 | to | $0.02 | |||||||||
Non-real estate related depreciation, amortization and accretion | $47 | to | $62 | $0.11 | to | $0.14 | |||||||||
Amortization of non-cash interest expense | $7 | to | $17 | $0.02 | to | $0.04 | |||||||||
Other (income) expense | $2 | to | $7 | $0.00 | to | $0.02 | |||||||||
(Gains) losses on retirement of long-term obligations | $0 | to | $0 | $0.00 | to | $0.00 | |||||||||
Acquisition and integration costs | $0 | to | $8 | $0.00 | to | $0.02 | |||||||||
Sustaining capital expenditures | $(88) | to | $(68) | $(0.20) | to | $(0.16) | |||||||||
AFFO(c)(d) | $3,261 | to | $3,296 | $7.50 | to | $7.58 | |||||||||
Weighted-average common shares outstanding—diluted | 435 | 435 |
(a) As issued on July 19, 2023.
(b) See the reconciliation of "Outlook for Components of Interest Expense" for a discussion of non-cash interest expense.
(c) See discussion of and our definition of Adjusted EBITDA, FFO and AFFO, including per share amounts in this "Non-GAAP Measures and Other Information."
(d) The above reconciliation excludes line items included in our definition which are not applicable for the periods shown.
Components of Changes in Site Rental Revenues for the Quarters Ended September 30, 2023 and 2022:
Three Months Ended September 30, | |||||||
(dollars in millions; totals may not sum due to rounding) | 2023 | 2022 | |||||
Components of changes in site rental revenues: | |||||||
Prior year site rental billings(a) | $ | 1,339 | $ | 1,270 | |||
Core leasing activity(a) | 66 | 79 | |||||
Escalators | 24 | 30 | |||||
Non-renewals(a) | (37 | ) | (42 | ) | |||
Organic Contribution to Site Rental Billings as Adjusted for Impact of Sprint Cancellations(a) | 53 | 67 | |||||
Payments for Sprint Cancellations(a)(b) | 6 | — | |||||
Non-renewals associated with Sprint Cancellations(a)(b) | (6 | ) | — | ||||
Organic Contribution to Site Rental Billings(a) | 53 | 67 | |||||
Straight-lined revenues | 58 | 90 | |||||
Amortization of prepaid rent | 126 | 140 | |||||
Acquisitions(c) | 1 | 1 | |||||
Other | — | — | |||||
Total site rental revenues | $ | 1,577 | $ | 1,568 | |||
Year-over-year changes in revenues: | |||||||
Site rental revenues as a percentage of prior year site rental revenues | 0.6 | % | 8.1 | % | |||
Changes in revenues as a percentage of prior year site rental billings: | |||||||
Organic Contribution to Site Rental Billings as Adjusted for Impact of Sprint Cancellations(a) | 4.0 | % | 5.3 | % | |||
Organic Contribution to Site Rental Billings(a) | 3.9 | % | 5.3 | % |
(a) See our definitions of site rental billings, core leasing activity, non-renewals, Sprint Cancellations, Organic Contribution to Site Rental Billings and Organic Contribution to Site Rental Billings as Adjusted for Impact of Sprint Cancellations in this "Non-GAAP Measures and Other Information."
(b) In the third quarter 2023, we received $6 million of payments for Sprint Cancellations that relate to fiber solutions, and $5 million and $2 million of non-renewals associated with Sprint Cancellations that relate to small cells and fiber solutions, respectively.
(c) Represents the contribution from recent acquisitions. The financial impact of recent acquisitions is excluded from Organic Contribution to Site Rental Billings, including as Adjusted for Impact of Sprint Cancellations, until the one-year anniversary of such acquisitions.
Components of Changes in Site Rental Revenues for Full Year 2023 and 2024 Outlook:
(dollars in millions; totals may not sum due to rounding) | Full Year 2023 Outlook(a) | Full Year 2024 Outlook(a) | |||||||||||||
Components of changes in site rental revenues: | |||||||||||||||
Prior year site rental billings excluding payments for Sprint Cancellations(b) | $5,310 | $5,486 | |||||||||||||
Prior year payments for Sprint Cancellations | $ — | $165 | |||||||||||||
Prior year site rental billings(b) | $5,310 | $5,651 | |||||||||||||
Core leasing activity(b) | $275 | to | $305 | $305 | to | $335 | |||||||||
Escalators | $90 | to | $100 | $95 | to | $105 | |||||||||
Non-renewals(b) | $(175) | to | $(155) | $(165) | to | $(145) | |||||||||
Organic Contribution to Site Rental Billings as Adjusted for Impact of Sprint Cancellations(b) | $205 | to | $235 | $245 | to | $285 | |||||||||
Payments for Sprint Cancellations(b)(c) | $160 | to | $170 | $(170) | to | $(160) | |||||||||
Non-renewals associated with Sprint Cancellations(b)(c) | $(25) | to | $(25) | $(10) | to | $(10) | |||||||||
Organic Contribution to Site Rental Billings(b) | $340 | to | $380 | $70 | to | $110 | |||||||||
Straight-lined revenues | $264 | to | $284 | $175 | to | $200 | |||||||||
Amortization of prepaid rent | $570 | to | $580 | $410 | to | $435 | |||||||||
Acquisitions(d) | — | — | |||||||||||||
Other | — | — | |||||||||||||
Total site rental revenues | $6,488 | to | $6,533 | $6,347 | to | $6,392 | |||||||||
Year-over-year changes in revenues:(e) | |||||||||||||||
Site rental revenues as a percentage of prior year site rental revenues | 3.5% | (2.2)% | |||||||||||||
Organic Contribution to Site Rental Billings as Adjusted for Impact of Sprint Cancellations as a percentage of prior year site rental billings excluding payments for Sprint Cancellations(b) | 4.1% | 4.8% | |||||||||||||
Organic Contribution to Site Rental Billings as a percentage of prior year site rental billings(b) | 6.8% | 1.6% |
(a) As issued on October 18, 2023.
(b) See our definitions of site rental billings, core leasing activity, non-renewals, Sprint Cancellations, Organic Contribution to Site Rental Billings, and Organic Contribution to Site Rental Billings as Adjusted for Impact of Sprint Cancellations in this "Non-GAAP Measures and Other Information."
(c) Full year 2023 Outlook reflects approximately $70 million and $100 million of payments for Sprint Cancellations that related to fiber solutions and small cells, respectively, and $10 million and $15 million of non-renewals associated with Sprint Cancellations that related to fiber solutions and small cells, respectively. These payments are non-recurring and therefore reduce full year 2024 Organic Contribution to Site Rental Billings by the same amount.
(d) Represents the contribution from recent acquisitions. The financial impact of recent acquisitions is excluded from Organic Contribution to Site Rental Billings, including as Adjusted for Impact of Sprint Cancellations, until the one-year anniversary of such acquisitions.
(e) Calculated based on midpoint of respective full year Outlook, where applicable.
Components of Capital Expenditures:(a)
For the Three Months Ended | |||||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||||||||
(in millions) | Towers | Fiber | Other | Total | Towers | Fiber | Other | Total | |||||||||
Discretionary capital expenditures: | |||||||||||||||||
Communications infrastructure improvements and other capital projects | $ | 34 | $ | 273 | $ | 5 | $ | 312 | $ | 30 | $ | 267 | $ | 5 | $ | 302 | |
Purchases of land interests | 13 | — | — | 13 | 12 | — | — | 12 | |||||||||
Sustaining capital expenditures | 2 | 14 | 6 | 22 | 3 | 10 | 10 | 23 | |||||||||
Total capital expenditures | $ | 49 | $ | 287 | $ | 11 | $ | 347 | $ | 45 | $ | 277 | $ | 15 | $ | 337 | |
For the Nine Months Ended | |||||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||||||||
(in millions) | Towers | Fiber | Other | Total | Towers | Fiber | Other | Total | |||||||||
Discretionary capital expenditures: | |||||||||||||||||
Communications infrastructure improvements and other capital projects | $ | 101 | $ | 843 | $ | 17 | $ | 961 | $ | 92 | $ | 711 | $ | 16 | $ | 819 | |
Purchases of land interests | 51 | — | — | 51 | 37 | — | — | 37 | |||||||||
Sustaining capital expenditures | 8 | 29 | 18 | 55 | 8 | 35 | 22 | 65 | |||||||||
Total capital expenditures | $ | 160 | $ | 872 | $ | 35 | $ | 1,067 | $ | 137 | $ | 746 | $ | 38 | $ | 921 |
Outlook for Discretionary Capital Expenditures Less Prepaid Rent Additions(a)(d):
(in millions) | Full Year 2023 Outlook(b) | Full Year 2024 Outlook(b) | |||||||||
Discretionary capital expenditures | $1,300 | to | $1,400 | $1,530 | to | $1,630 | |||||
Less: Prepaid rent additions(c) | ~$400 | ~$430 | |||||||||
Discretionary capital expenditures less prepaid rent additions | $900 | to | $1,000 | $1,100 | to | $1,200 |
Components of Interest Expense:
For the Three Months Ended | |||||||
(in millions) | September 30, 2023 | September 30, 2022 | |||||
Interest expense on debt obligations | $ | 213 | $ | 174 | |||
Amortization of deferred financing costs and adjustments on long-term debt | 8 | 6 | |||||
Capitalized interest | (4 | ) | (3 | ) | |||
Interest expense and amortization of deferred financing costs, net | $ | 217 | $ | 177 |
Outlook for Components of Interest Expense:
(in millions) | Full Year 2023 Outlook(b) | Full Year 2024 Outlook(b) | |||||||||||||
Interest expense on debt obligations | $824 | to | $854 | $922 | to | $962 | |||||||||
Amortization of deferred financing costs and adjustments on long-term debt | $20 | to | $30 | $20 | to | $30 | |||||||||
Capitalized interest | $(18) | to | $(8) | $(17) | to | $(7) | |||||||||
Interest expense and amortization of deferred financing costs, net | $834 | to | $869 | $933 | to | $978 |
(a) See our definitions of discretionary capital expenditures and sustaining capital expenditures in this "Non-GAAP Measures and Other Information."
(b) As issued on October 18, 2023.
(c) Reflects up-front consideration from long-term tenant contracts (commonly referred to as prepaid rent) that are amortized and recognized as revenue over the associated estimated lease term in accordance with GAAP.
(d) Outlook reflects discretionary capital expenditures, exclusive of sustaining capital expenditures. See "Non-GAAP Measures and Other Information" for our definitions of discretionary capital expenditures and sustaining capital expenditures.
Debt Balances and Maturity Dates as of September 30, 2023:
(in millions) | Face Value(a) | Final Maturity | ||
Cash, cash equivalents and restricted cash | $ | 289 | ||
Senior Secured Notes, Series 2009-1, Class A-2(b) | 41 | Aug. 2029 | ||
Senior Secured Tower Revenue Notes, Series 2015-2(c) | 700 | May 2045 | ||
Senior Secured Tower Revenue Notes, Series 2018-2(c) | 750 | July 2048 | ||
Finance leases and other obligations | 264 | Various | ||
Total secured debt | $ | 1,755 | ||
2016 Revolver(d) | 160 | July 2027 | ||
2016 Term Loan A(e) | 1,169 | July 2027 | ||
Commercial Paper Notes(f) | 1,803 | Various | ||
3.200% Senior Notes | 750 | Sept. 2024 | ||
1.350% Senior Notes | 500 | July 2025 | ||
4.450% Senior Notes | 900 | Feb. 2026 | ||
3.700% Senior Notes | 750 | June 2026 | ||
1.050% Senior Notes | 1,000 | July 2026 | ||
2.900% Senior Notes | 750 | Mar. 2027 | ||
4.000% Senior Notes | 500 | Mar. 2027 | ||
3.650% Senior Notes | 1,000 | Sept. 2027 | ||
5.000% Senior Notes | 1,000 | Jan. 2028 | ||
3.800% Senior Notes | 1,000 | Feb. 2028 | ||
4.800% Senior Notes | 600 | Sept. 2028 | ||
4.300% Senior Notes | 600 | Feb. 2029 | ||
3.100% Senior Notes | 550 | Nov. 2029 | ||
3.300% Senior Notes | 750 | July 2030 | ||
2.250% Senior Notes | 1,100 | Jan. 2031 | ||
2.100% Senior Notes | 1,000 | Apr. 2031 | ||
2.500% Senior Notes | 750 | July 2031 | ||
5.100% Senior Notes | 750 | May. 2033 | ||
2.900% Senior Notes | 1,250 | Apr. 2041 | ||
4.750% Senior Notes | 350 | May 2047 | ||
5.200% Senior Notes | 400 | Feb. 2049 | ||
4.000% Senior Notes | 350 | Nov. 2049 | ||
4.150% Senior Notes | 500 | July 2050 | ||
3.250% Senior Notes | 900 | Jan. 2051 | ||
Total unsecured debt | $ | 21,132 | ||
Net Debt(g) | $ | 22,598 |
(a) Net of required principal amortizations.
(b) The Senior Secured Notes, 2009-1, Class A-2 principal amortizes over a period ending in August 2029.
(c) If the respective series of Tower Revenue Notes are not paid in full on or prior to an applicable anticipated repayment date, then the Excess Cash Flow (as defined in the indenture) of the issuers of such notes will be used to repay principal of the applicable series, and additional interest (of an additional approximately 5% per annum) will accrue on the respective series. The Senior Secured Tower Revenue Notes, 2015-2 and 2018-2 have anticipated repayment dates in 2025 and 2028, respectively. Notes are prepayable at par if voluntarily repaid within eighteen months of maturity; earlier prepayment may require additional consideration.
(d) As of September 30, 2023, the undrawn availability under the $7.0 billion 2016 Revolver was $6.8 billion. The Company pays a commitment fee on the undrawn available amount, which as of June 30, 2023 ranged from 0.080% to 0.300%, based on the Company's senior unsecured debt rating, per annum.
(e) The 2016 Term Loan A principal amortizes over a period ending in July 2027.
(f) As of September 30, 2023, the Company had $0.2 billion available for issuance under its $2.0 billion unsecured commercial paper program. The maturities of the Commercial Paper Notes, when outstanding, may vary but may not exceed 397 days from the date of issue.
(g) See further information on, and our definition and calculation of, Net Debt in this "Non-GAAP Measures and Other Information."
Cautionary Language Regarding Forward-Looking Statements
This news release contains forward-looking statements and information that are based on our management's current expectations as of the date of this news release. Statements that are not historical facts are hereby identified as forward-looking statements. In addition, words such as "estimate," "see," "anticipate," "project," "plan," "intend," "believe," "expect," "likely," "predicted," "positioned," "continue," "target," "focus," and any variations of these words and similar expressions are intended to identify forward-looking statements. Such statements include our full year 2023 and 2024 Outlook and plans, projections, expectations and estimates regarding (1) the value of our business model and strategy, (2) our dividends, including the timing, growth, and targets relating thereto, and its driving factors, (3) cash flow growth and the factors driving such growth, (4) revenue growth and its driving factors, (5) net income (loss) (including on a per share basis), (6) AFFO (including on a per share basis) and its components and growth, (7) Adjusted EBITDA and its components and growth, (8) Organic Contribution to Site Rental Billings (including as Adjusted for Impact of Sprint Cancellations) and its components and growth, (9) site rental revenues and its components and growth, (10) interest expense, (11) our balance sheet, (12) the impact of Sprint Cancellations on our operating and financial results, (13) our restructuring plan and the cost reductions, charges, scope and savings associated therewith, including timing, amounts, impact and recurrence, (14) services contribution, (15) the growth in our business and its driving factors, (16) our customers’ investments and plans and demand for our assets and solutions created thereby, and its driving factors, (17) small cell deployment, including growth in small cell node construction, and the impacts therefrom, (18) discretionary capital expenditures, including the sources of funding related thereto, (19) debt leverage ratio, (20) the impact of the exit from installation services, (21) operating trends across our business and the impacts therefrom and (22) prepaid rent additions and amortization. All future dividends are subject to declaration by our board of directors.
Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including prevailing market conditions and the following:
Should one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors which could affect our results is included in our filings with the SEC. Our filings with the SEC are available through the SEC website at www.sec.gov or through our investor relations website at investor.crowncastle.com. We use our investor relations website to disclose information about us that may be deemed to be material. We encourage investors, the media and others interested in us to visit our investor relations website from time to time to review up-to-date information or to sign up for e-mail alerts to be notified when new or updated information is posted on the site.
As used in this release, the term "including," and any variation thereof, means "including without limitation."
CROWN CASTLE INC. CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (Amounts in millions, except par values) |
September 30, 2023 | December 31, 2022 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 117 | $ | 156 | |||
Restricted cash | 167 | 166 | |||||
Receivables, net | 512 | 593 | |||||
Prepaid expenses | 143 | 102 | |||||
Deferred site rental receivables | 115 | 127 | |||||
Other current assets | 72 | 73 | |||||
Total current assets | 1,126 | 1,217 | |||||
Deferred site rental receivables | 2,189 | 1,954 | |||||
Property and equipment, net | 15,573 | 15,407 | |||||
Operating lease right-of-use assets | 6,309 | 6,526 | |||||
Goodwill | 10,085 | 10,085 | |||||
Other intangible assets, net | 3,276 | 3,596 | |||||
Other assets, net | 141 | 136 | |||||
Total assets | $ | 38,699 | $ | 38,921 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 215 | $ | 236 | |||
Accrued interest | 145 | 183 | |||||
Deferred revenues | 650 | 736 | |||||
Other accrued liabilities | 373 | 407 | |||||
Current maturities of debt and other obligations | 827 | 819 | |||||
Current portion of operating lease liabilities | 339 | 350 | |||||
Total current liabilities | 2,549 | 2,731 | |||||
Debt and other long-term obligations | 21,903 | 20,910 | |||||
Operating lease liabilities | 5,660 | 5,881 | |||||
Other long-term liabilities | 1,918 | 1,950 | |||||
Total liabilities | 32,030 | 31,472 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Common stock, 0.01 par value; 1,200 shares authorized; shares issued and outstanding: September 30, 2023—434 and December 31, 2022—433 | 4 | 4 | |||||
Additional paid-in capital | 18,241 | 18,116 | |||||
Accumulated other comprehensive income (loss) | (5 | ) | (5 | ) | |||
Dividends/distributions in excess of earnings | (11,571 | ) | (10,666 | ) | |||
Total equity | 6,669 | 7,449 | |||||
Total liabilities and equity | $ | 38,699 | $ | 38,921 |
CROWN CASTLE INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (Amounts in millions, except per share amounts) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net revenues: | |||||||||||||||
Site rental | $ | 1,577 | $ | 1,568 | $ | 4,929 | $ | 4,711 | |||||||
Services and other | 90 | 178 | 378 | 511 | |||||||||||
Net revenues | 1,667 | 1,746 | 5,307 | 5,222 | |||||||||||
Operating expenses: | |||||||||||||||
Costs of operations:(a) | |||||||||||||||
Site rental | 420 | 405 | 1,259 | 1,204 | |||||||||||
Services and other | 66 | 119 | 268 | 344 | |||||||||||
Selling, general and administrative | 176 | 187 | 581 | 558 | |||||||||||
Asset write-down charges | 8 | 3 | 30 | 26 | |||||||||||
Acquisition and integration costs | — | — | 1 | 1 | |||||||||||
Depreciation, amortization and accretion | 439 | 430 | 1,315 | 1,276 | |||||||||||
Restructuring charges | 72 | — | 72 | — | |||||||||||
Total operating expenses | 1,181 | 1,144 | 3,526 | 3,409 | |||||||||||
Operating income (loss) | 486 | 602 | 1,781 | 1,813 | |||||||||||
Interest expense and amortization of deferred financing costs, net | (217 | ) | (177 | ) | (627 | ) | (506 | ) | |||||||
Gains (losses) on retirement of long-term obligations | — | (2 | ) | — | (28 | ) | |||||||||
Interest income | 3 | 1 | 10 | 1 | |||||||||||
Other income (expense) | — | (2 | ) | (4 | ) | (5 | ) | ||||||||
Income (loss) before income taxes | 272 | 422 | 1,160 | 1,275 | |||||||||||
Benefit (provision) for income taxes | (7 | ) | (3 | ) | (21 | ) | (14 | ) | |||||||
Net income (loss) | $ | 265 | $ | 419 | $ | 1,139 | $ | 1,261 | |||||||
Net income (loss), per common share: | |||||||||||||||
Basic | $ | 0.61 | $ | 0.97 | $ | 2.63 | $ | 2.91 | |||||||
Diluted | $ | 0.61 | $ | 0.97 | $ | 2.63 | $ | 2.91 | |||||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | 434 | 433 | 434 | 433 | |||||||||||
Diluted | 434 | 434 | 434 | 434 |
(a) Exclusive of depreciation, amortization and accretion shown separately.
CROWN CASTLE INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In millions of dollars) |
Nine Months Ended September 30, | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 1,139 | $ | 1,261 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | |||||||
Depreciation, amortization and accretion | 1,315 | 1,276 | |||||
(Gains) losses on retirement of long-term obligations | — | 28 | |||||
Amortization of deferred financing costs and other non-cash interest | 22 | 10 | |||||
Stock-based compensation expense, net | 126 | 120 | |||||
Asset write-down charges | 30 | 26 | |||||
Deferred income tax (benefit) provision | 1 | 2 | |||||
Other non-cash adjustments, net | 10 | 6 | |||||
Changes in assets and liabilities, excluding the effects of acquisitions: | |||||||
Increase (decrease) in liabilities | (220 | ) | (329 | ) | |||
Decrease (increase) in assets | (165 | ) | (362 | ) | |||
Net cash provided by (used for) operating activities | 2,258 | 2,038 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (1,067 | ) | (921 | ) | |||
Payments for acquisitions, net of cash acquired | (93 | ) | (15 | ) | |||
Other investing activities, net | 5 | (10 | ) | ||||
Net cash provided by (used for) investing activities | (1,155 | ) | (946 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | 2,347 | 748 | |||||
Principal payments on debt and other long-term obligations | (58 | ) | (55 | ) | |||
Purchases and redemptions of long-term debt | (750 | ) | (1,274 | ) | |||
Borrowings under revolving credit facility | 2,943 | 2,625 | |||||
Payments under revolving credit facility | (4,088 | ) | (2,580 | ) | |||
Net borrowings (repayments) under commercial paper program | 561 | 1,329 | |||||
Payments for financing costs | (23 | ) | (14 | ) | |||
Purchases of common stock | (29 | ) | (64 | ) | |||
Dividends/distributions paid on common stock | (2,044 | ) | (1,924 | ) | |||
Net cash provided by (used for) financing activities | (1,141 | ) | (1,209 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | (38 | ) | (117 | ) | |||
Effect of exchange rate changes on cash | — | (2 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 327 | 466 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 289 | $ | 347 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid | 654 | 559 | |||||
Income taxes paid (refunded) | 13 | 10 |
CROWN CASTLE INC. SEGMENT OPERATING RESULTS (UNAUDITED) (In millions of dollars) |
SEGMENT OPERATING RESULTS | |||||||||||||||||||||||
Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||||||||||||||
Towers | Fiber | Other | Consolidated Total | Towers | Fiber | Other | Consolidated Total | ||||||||||||||||
Segment site rental revenues | $ | 1,074 | $ | 503 | $ | 1,577 | $ | 1,084 | $ | 484 | $ | 1,568 | |||||||||||
Segment services and other revenues | 86 | 4 | 90 | 175 | 3 | 178 | |||||||||||||||||
Segment revenues | 1,160 | 507 | 1,667 | 1,259 | 487 | 1,746 | |||||||||||||||||
Segment site rental costs of operations | 236 | 175 | 411 | 230 | 166 | 396 | |||||||||||||||||
Segment services and other costs of operations | 61 | 3 | 64 | 114 | 3 | 117 | |||||||||||||||||
Segment costs of operations(a)(b) | 297 | 178 | 475 | 344 | 169 | 513 | |||||||||||||||||
Segment site rental gross margin(c) | 838 | 328 | 1,166 | 854 | 318 | 1,172 | |||||||||||||||||
Segment services and other gross margin(c) | 25 | 1 | 26 | 61 | — | 61 | |||||||||||||||||
Segment selling, general and administrative expenses(b) | 24 | 48 | 72 | 28 | 47 | 75 | |||||||||||||||||
Segment operating profit(c) | 839 | 281 | 1,120 | 887 | 271 | 1,158 | |||||||||||||||||
Other selling, general and administrative expenses(b) | $ | 75 | 75 | $ | 81 | 81 | |||||||||||||||||
Stock-based compensation expense, net | 36 | 36 | 38 | 38 | |||||||||||||||||||
Depreciation, amortization and accretion | 439 | 439 | 430 | 430 | |||||||||||||||||||
Restructuring charges | 72 | 72 | — | — | |||||||||||||||||||
Interest expense and amortization of deferred financing costs, net | 217 | 217 | 177 | 177 | |||||||||||||||||||
Other (income) expenses to reconcile to income (loss) before income taxes(d) | 9 | 9 | 10 | 10 | |||||||||||||||||||
Income (loss) before income taxes | $ | 272 | $ | 422 |
(a) Exclusive of depreciation, amortization and accretion shown separately.
(b) Segment costs of operations exclude (1) stock-based compensation expense, net of $7 million for each of the three months ended September 30, 2023 and 2022 and (2) prepaid lease purchase price adjustments of $4 million for each of the three months ended September 30, 2023 and 2022. Segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense, net of $29 million and $31 million for the three months ended September 30, 2023 and 2022, respectively.
(c) See "Non-GAAP Measures and Other Information" for a discussion and our definitions of segment site rental gross margin, segment services and other gross margin and segment operating profit.
(d) See condensed consolidated statement of operations for further information.
SEGMENT OPERATING RESULTS | |||||||||||||||||||||||
Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||
Towers | Fiber | Other | Consolidated Total | Towers | Fiber | Other | Consolidated Total | ||||||||||||||||
Segment site rental revenues | $ | 3,234 | $ | 1,695 | $ | 4,929 | $ | 3,237 | $ | 1,474 | $ | 4,711 | |||||||||||
Segment services and other revenues | 356 | 22 | 378 | 502 | 9 | 511 | |||||||||||||||||
Segment revenues | 3,590 | 1,717 | 5,307 | 3,739 | 1,483 | 5,222 | |||||||||||||||||
Segment site rental costs of operations | 714 | 518 | 1,232 | 689 | 490 | 1,179 | |||||||||||||||||
Segment services and other costs of operations | 252 | 8 | 260 | 329 | 7 | 336 | |||||||||||||||||
Segment costs of operations(a)(b) | 966 | 526 | 1,492 | 1,018 | 497 | 1,515 | |||||||||||||||||
Segment site rental gross margin(c) | 2,520 | 1,177 | 3,697 | 2,548 | 984 | 3,532 | |||||||||||||||||
Segment services and other gross margin(c) | 104 | 14 | 118 | 173 | 2 | 175 | |||||||||||||||||
Segment selling, general and administrative expenses(b) | 84 | 148 | 232 | 84 | 140 | 224 | |||||||||||||||||
Segment operating profit(c) | 2,540 | 1,043 | 3,583 | 2,637 | 846 | 3,483 | |||||||||||||||||
Other selling, general and administrative expenses(b) | $ | 246 | 246 | $ | 234 | 234 | |||||||||||||||||
Stock-based compensation expense, net | 126 | 126 | 121 | 121 | |||||||||||||||||||
Depreciation, amortization and accretion | 1,315 | 1,315 | 1,276 | 1,276 | |||||||||||||||||||
Restructuring charges | 72 | 72 | — | — | |||||||||||||||||||
Interest expense and amortization of deferred financing costs, net | 627 | 627 | 506 | 506 | |||||||||||||||||||
Other (income) expenses to reconcile to income (loss) before income taxes(d) | 37 | 37 | 71 | 71 | |||||||||||||||||||
Income (loss) before income taxes | $ | 1,160 | $ | 1,275 |
(a) Exclusive of depreciation, amortization and accretion shown separately.
(b) Segment costs of operations exclude (1) stock-based compensation expense, net of $23 million and $21 million for the nine months ended September 30, 2023 and 2022, respectively, and (2) prepaid lease purchase price adjustments of $12 million for each of the nine months ended September 30, 2023 and 2022, respectively. Segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense, net of $103 million and $100 million for the nine months ended September 30, 2023 and 2022, respectively.
(c) See "Non-GAAP Measures and Other Information" for a discussion and our definitions of segment site rental gross margin, segment services and other gross margin and segment operating profit.
(d) See condensed consolidated statement of operations for further information.
Contacts: | Dan Schlanger, CFO |
Kris Hinson, VP Corp Finance & Treasurer | |
Crown Castle Inc. | |
713-570-3050 |
Charts accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d9e50ea1-2832-4876-a892-ba73f95be3ef
https://www.globenewswire.com/NewsRoom/AttachmentNg/6e1d68e9-c14e-4710-90db-614dc513ddd1
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