Crown Castle Inc. (NYSE: CCI) ("Crown Castle") today reported
results for the second quarter ended June 30, 2024 and
maintained its full year 2024 outlook, as reflected in the table
below.
|
(dollars in millions, except per share amounts) |
Current Full Year 2024 Outlook(a) |
Full Year 2023 Actual |
Change |
% Change |
|
Site rental revenues |
$6,340 |
$6,532 |
$(192) |
(3)% |
| Net income (loss) |
$1,158 |
$1,502 |
$(344) |
(23)% |
| Net income (loss) per
share—diluted |
$2.67 |
$3.46 |
$(0.79) |
(23)% |
| Adjusted EBITDA(b) |
$4,168 |
$4,415 |
$(247) |
(6)% |
| AFFO(b) |
$3,030 |
$3,277 |
$(247) |
(8)% |
| AFFO per share(b) |
$6.97 |
$7.55 |
$(0.58) |
(8)% |
| |
|
|
|
|
(a) Reflects midpoint of full
year 2024 Outlook as issued on July 17,
2024.(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 second quarter results demonstrated the durability and
consistency of Crown Castle’s business, and we remain on track to
deliver our full year outlook for organic revenue growth of 4.5% in
towers, 2% in fiber solutions, and double digits in small cells,
adjusted for the impact of Sprint Cancellations,” said Steven
Moskowitz, Crown Castle’s Chief Executive Officer. “In the Fiber
segment, we announced and implemented changes in the second quarter
to improve the investment outcomes on capital being spent on small
cell anchor builds and fiber solutions opportunities. Through a
comprehensive review of customer needs, we are finding solutions
that utilize more of our existing fiber network, enabling us to
limit new greenfield investments. In response to this change in our
operating plans, we reduced our staffing levels and field office
locations, which is expected to result in approximately $100
million of annualized run-rate operating cost savings. Moving
forward, we are focused on continuing to progress the Fiber segment
strategic review, which remains active and ongoing, while
delivering solid financial and operating results across our tower,
small cell, and fiber solutions businesses.”
RESULTS FOR THE QUARTERThe
table below sets forth select financial results for the quarters
ended June 30, 2024 and June 30, 2023.
| |
|
|
(dollars in millions, except per share amounts) |
Q2 2024 |
Q2 2023 |
Change |
% Change |
|
Site rental revenues |
$1,580 |
$1,728 |
$(148) |
(9)% |
| Net income (loss) |
$251 |
$455 |
$(204) |
(45)% |
| Net income (loss) per
share—diluted |
$0.58 |
$1.05 |
$(0.47) |
(45)% |
| Adjusted EBITDA(a) |
$1,006 |
$1,188 |
$(182) |
(15)% |
| AFFO(a) |
$704 |
$891 |
$(187) |
(21)% |
| AFFO per share(a) |
$1.62 |
$2.05 |
$(0.43) |
(21)% |
| |
|
|
|
|
(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
- Site rental revenues. Organic Contribution to
Site Rental Billings was $63 million, or 4.7% growth from second
quarter 2023, excluding an unfavorable $106 million impact from
Sprint Cancellations. Site rental revenues were also negatively
impacted by an $81 million decrease in amortization of prepaid rent
and a $24 million decrease in straight-lined revenues, resulting in
a decline in site rental revenues of $148 million, or 9%, from
second quarter 2023 to second quarter 2024.
- Net income. Net
income for the second quarter 2024 was $251 million compared to
$455 million for the second quarter 2023, and included $45
million of charges incurred in the quarter related to the
restructuring plan announced in June 2024.
- Adjusted EBITDA.
Second quarter 2024 Adjusted EBITDA was $1.0 billion compared to
$1.2 billion for the second quarter 2023. The decrease in the
quarter was primarily a result of the lower contribution from site
rental revenues, $22 million of lower services contribution, and
$20 million of advisory fees primarily related to the recent proxy
contest.
- AFFO and AFFO per share. Second quarter 2024
AFFO was $704 million, or $1.62 per share, each representing a
decrease from the second quarter 2023 of 21%. The decrease in the
quarter was primarily a result of the lower contribution from
Adjusted EBITDA and higher interest expense compared to second
quarter 2023.
- Capital
expenditures. Capital expenditures during the quarter were
$329 million, comprised of $302 million of discretionary capital
expenditures and $27 million of sustaining capital expenditures.
Discretionary capital expenditures included approximately $271
million attributable to Fiber and $26 million attributable to
Towers.
- Common stock
dividend. During the quarter, Crown Castle paid common
stock dividends of approximately $680 million in the aggregate, or
$1.565 per common share, unchanged on a per share basis compared to
the same period a year ago.
“Having implemented the operational changes
announced in June, we delivered second quarter results in line with
expectations and remain on track to meet our full year guidance,”
said Dan Schlanger, Crown Castle’s Chief Financial Officer. “The
business continues to perform well as we focus on delivering for
our customers and shareholders. The resilience of our top-line
growth is complemented by our strong balance sheet, which is
well-positioned to provide stability and flexibility as we continue
to evaluate strategic paths forward. We finished the second quarter
with 89% fixed rate debt, a weighted average maturity of 7 years,
only 8% of our debt maturing through 2025, and approximately $5.5
billion of liquidity under our revolving credit facility.”
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.
The following table sets forth Crown Castle's
current full year 2024 Outlook, which remains unchanged from the
previous full year 2024 Outlook issued on June 11, 2024.
| (in
millions, except per share amounts) |
Full Year 2024(a) |
|
Site rental billings(b) |
$5,740 |
to |
$5,780 |
| Amortization of prepaid
rent |
$392 |
to |
$417 |
| Straight-lined revenues |
$162 |
to |
$187 |
| Site rental revenues |
$6,317 |
to |
$6,362 |
| Site rental costs of
operations(c) |
$1,686 |
to |
$1,731 |
| Services and other gross
margin |
$65 |
to |
$95 |
| Net income (loss) |
$1,125 |
to |
$1,190 |
| Net income (loss) per
share—diluted |
$2.59 |
to |
$2.74 |
| Adjusted EBITDA(d) |
$4,143 |
to |
$4,193 |
| Depreciation, amortization and
accretion |
$1,680 |
to |
$1,775 |
| Interest expense and
amortization of deferred financing costs, net(e) |
$926 |
to |
$971 |
| FFO(d) |
$2,863 |
to |
$2,893 |
| AFFO(d) |
$3,005 |
to |
$3,055 |
| AFFO per share(d) |
$6.91 |
to |
$7.02 |
| Towers Segment discretionary
capital expenditures(d) |
$180 |
to |
$180 |
| Fiber Segment discretionary
capital expenditures(d) |
$1,050 |
to |
$1,150 |
|
|
|
|
|
(a) As issued on July 17,
2024.(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 including on a per share basis, and
for definition of discretionary capital
expenditures.(e) See "Non-GAAP Measures and Other
Information" for the reconciliation of "Outlook for Components of
Interest Expense."
- The chart below reconciles the components contributing to
expected 2024 growth in site rental revenues. Full year
consolidated site rental billings growth, excluding the impact of
Sprint Cancellations, is expected to be 5%, inclusive of 4.5% from
towers, 15% from small cells, and 2% from fiber solutions.
- Core leasing activity for full year 2024 is expected to
contribute $305 million to $335 million, consisting of $105 million
to $115 million from towers (compared to $126 million in full year
2023), $65 million to $75 million from small cells (compared to $28
million in full year 2023), and $135 million to $145 million from
fiber solutions (compared to $120 million in full year 2023).
- The expected 2024 small cell core leasing activity of $70
million at the midpoint includes $25 million of
higher-than-expected non-recurring revenues primarily related to
early termination payments. Excluding the impact of Sprint
Cancellations and the increase in non-recurring revenues, small
cell organic growth is expected to be 10% in 2024.
- The chart below reconciles the components contributing to the
year over year change to 2024 AFFO.
- The expected increase in full year 2024 expenses includes $25
million of advisory fees related to the recent proxy contest, which
is expected to be more than offset by an approximately $60 million
decrease in costs related to the reduction in staffing levels and
office closures announced in June 2024.
- Interest expense for full year 2024 is expected to be $78
million to $123 million higher than in full year 2023, primarily
related to incremental debt financing to fund discretionary capital
expenditures in 2024.
- The full year 2024 Outlook for discretionary capital
expenditures, which is unchanged from the 2024 Outlook issued in
June 2024 and reflects a $300 million reduction from our 2024
Outlook provided in April 2024, is $1.2 billion to $1.3 billion,
including approximately $1.1 billion in the Fiber segment and $180
million in the Towers segment, and prepaid rent additions are
expected to be approximately $355 million in 2024, including $275
million from Fiber and $80 million from Towers.
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 Wednesday, July 17,
2024, at 5:00 p.m. Eastern time to discuss its second quarter 2024
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, Thursday,
July 17, 2025.
ABOUT CROWN CASTLECrown Castle
owns, operates and leases more than 40,000 cell towers and
approximately 90,000 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:
- Adjusted EBITDA is
useful to investors or other interested parties in evaluating our
financial performance. Adjusted EBITDA is the primary measure used
by management (1) to evaluate the economic productivity of our
operations and (2) for purposes of making decisions about
allocating resources to, and assessing the performance of, our
operations. Management believes that Adjusted EBITDA helps
investors or other interested parties meaningfully evaluate and
compare the results of our operations (1) from period to period and
(2) to our competitors, by removing the impact of our capital
structure (primarily interest charges from our outstanding debt)
and asset base (primarily depreciation, amortization and accretion)
from our financial results. Management also believes Adjusted
EBITDA is frequently used by investors or other interested parties
in the evaluation of the communications infrastructure sector and
other REITs to measure financial performance without regard to
items such as depreciation, amortization and accretion, which can
vary depending upon accounting methods and the book value of
assets. In addition, Adjusted EBITDA is similar to the measure of
current financial performance generally used in our debt covenant
calculations. Adjusted EBITDA should be considered only as a
supplement to net income (loss) computed in accordance with GAAP as
a measure of our performance.
- AFFO, including per
share amounts, is useful to investors or other interested parties
in evaluating our financial performance. Management believes that
AFFO helps investors or other interested parties meaningfully
evaluate our financial performance as it includes (1) the impact of
our capital structure (primarily interest expense on our
outstanding debt and dividends on our preferred stock (in periods
where applicable)) and (2) sustaining capital expenditures, and
excludes the impact of our (1) asset base (primarily depreciation,
amortization and accretion) and (2) certain non-cash items,
including straight-lined revenues and expenses related to fixed
escalations and rent free periods. GAAP requires rental revenues
and expenses related to leases that contain specified rental
increases over the life of the lease to be recognized evenly over
the life of the lease. In accordance with GAAP, if payment terms
call for fixed escalations or rent free periods, the revenues or
expenses are recognized on a straight-lined basis over the fixed,
non-cancelable term of the contract. Management notes that Crown
Castle uses AFFO only as a performance measure. AFFO should be
considered only as a supplement to net income (loss) computed in
accordance with GAAP as a measure of our performance and should not
be considered as an alternative to cash flow from operations or as
residual cash flow available for discretionary investment.
- FFO, including per
share amounts, is useful to investors or other interested parties
in evaluating our financial performance. Management believes that
FFO may be used by investors or other interested parties as a basis
to compare our financial performance with that of other REITs. FFO
helps investors or other interested parties meaningfully evaluate
financial performance by excluding the impact of our asset base
(primarily real estate depreciation, amortization and accretion).
FFO is not a key performance indicator used by Crown Castle. FFO
should be considered only as a supplement to net income (loss)
computed in accordance with GAAP as a measure of our performance
and should not be considered as an alternative to cash flow from
operations.
- Organic
Contribution to Site Rental Billings (also referred to as organic
growth) is useful to investors or other interested parties in
understanding the components of the year-over-year changes in our
site rental revenues computed in accordance with GAAP. Management
uses Organic Contribution to Site Rental Billings to assess
year-over-year growth rates for our rental activities, to evaluate
current performance, to capture trends in rental rates, core
leasing activities and tenant non-renewals in our core business, as
well as to forecast future results. Separately, we are also
disclosing Organic Contribution to Site Rental Billings as Adjusted
for Impact of Sprint Cancellations (including by line of business),
which is outside of ordinary course, to provide further insight
into our results of operations and underlying trends. Management
believes that identifying the impact for Sprint Cancellations
provides increased transparency and comparability across periods.
Organic Contribution to Site Rental Billings (including as Adjusted
for Impact of Sprint Cancellations) is not meant as an alternative
measure of revenue and should be considered only as a supplement in
understanding and assessing the performance of our site rental
revenues computed in accordance with GAAP.
- Net Debt is useful
to investors or other interested parties in evaluating our overall
debt position and future debt capacity. Management uses Net Debt in
assessing our leverage. Net Debt is not meant as an alternative
measure of debt and should be considered only as a supplement in
understanding and assessing our leverage.
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 (also referred
to as organic growth) 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 (including by
line of business).
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 and cash equivalents and restricted cash and cash
equivalents.
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 Six Months Ended |
|
For the Twelve Months Ended |
| (in millions; totals may not
sum due to rounding) |
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
|
December 31, 2023 |
|
Net income (loss) |
$ |
251 |
|
|
$ |
455 |
|
|
$ |
562 |
|
|
$ |
874 |
|
|
$ |
1,502 |
|
| Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
|
|
|
Asset write-down charges |
|
3 |
|
|
|
22 |
|
|
|
9 |
|
|
|
22 |
|
|
|
33 |
|
|
Acquisition and integration costs |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
Depreciation, amortization and accretion |
|
430 |
|
|
|
445 |
|
|
|
869 |
|
|
|
876 |
|
|
|
1,754 |
|
|
Restructuring charges(a) |
|
45 |
|
|
|
— |
|
|
|
56 |
|
|
|
— |
|
|
|
85 |
|
|
Amortization of prepaid lease purchase price adjustments |
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
|
|
16 |
|
|
Interest expense and amortization of deferred financing costs,
net(b) |
|
230 |
|
|
|
208 |
|
|
|
456 |
|
|
|
410 |
|
|
|
850 |
|
|
Interest income |
|
(4 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
|
|
(7 |
) |
|
|
(15 |
) |
|
Other (income) expense |
|
1 |
|
|
|
2 |
|
|
|
(1 |
) |
|
|
4 |
|
|
|
6 |
|
|
(Benefit) provision for income taxes |
|
7 |
|
|
|
7 |
|
|
|
14 |
|
|
|
14 |
|
|
|
26 |
|
|
Stock-based compensation expense, net |
|
40 |
|
|
|
50 |
|
|
|
78 |
|
|
|
91 |
|
|
|
157 |
|
|
Adjusted
EBITDA(c)(d) |
$ |
1,006 |
|
|
$ |
1,188 |
|
|
$ |
2,043 |
|
|
$ |
2,292 |
|
|
$ |
4,415 |
|
Reconciliation of Current Outlook for Adjusted
EBITDA:
| |
Full Year 2024 |
| (in millions; totals may not
sum due to rounding) |
Outlook(f) |
|
Net income (loss) |
$1,125 |
to |
$1,190 |
| Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
Asset write-down charges |
$42 |
to |
$52 |
|
Acquisition and integration costs |
$0 |
to |
$6 |
|
Depreciation, amortization and accretion |
$1,680 |
to |
$1,775 |
|
Restructuring charges(a) |
$100 |
to |
$130 |
|
Amortization of prepaid lease purchase price adjustments |
$15 |
to |
$17 |
|
Interest expense and amortization of deferred financing costs,
net(e) |
$926 |
to |
$971 |
|
(Gains) losses on retirement of long-term obligations |
— |
to |
— |
|
Interest income |
$(12) |
to |
$(11) |
|
Other (income) expense |
$0 |
to |
$9 |
|
(Benefit) provision for income taxes |
$20 |
to |
$28 |
|
Stock-based compensation expense, net |
$142 |
to |
$146 |
|
Adjusted
EBITDA(c)(d) |
$4,143 |
to |
$4,193 |
(a) Represents restructuring charges
recorded for the periods presented related to (1) the Company's
restructuring plan announced in July 2023, as further discussed in
the Annual Report on Form 10-K for the fiscal year ended December
31, 2023 ("2023 Restructuring Plan"), and (2) the Company's
restructuring plan announced in June 2024, as further discussed in
the Current Report on Form 8-K filed on June 11, 2024 ("2024
Restructuring Plan"), as applicable for the respective period. For
the six-month period ended June 30, 2024, there were $13 million
and $43 million of restructuring charges related to the July 2023
Restructuring Plan and the June 2024 Restructuring Plan,
respectively.(b) See the reconciliation of "Components of
Interest Expense" for a discussion of non-cash interest
expense.(c) See discussion and our definition of Adjusted
EBITDA 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.(e)
See the reconciliation of "Outlook for Components of Interest
Expense" for a discussion of non-cash interest expense. (f)
As issued on July 17, 2024.
Reconciliation of Historical FFO and
AFFO:
| |
|
For the Three Months Ended |
|
For the Six Months Ended |
|
For the Twelve Months Ended |
| (in millions; totals may not
sum due to rounding) |
|
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
|
December 31, 2023 |
|
Net income (loss) |
|
$ |
251 |
|
|
$ |
455 |
|
|
$ |
562 |
|
|
$ |
874 |
|
|
$ |
1,502 |
|
|
Real estate related depreciation, amortization and accretion |
|
|
415 |
|
|
|
424 |
|
|
|
841 |
|
|
|
841 |
|
|
|
1,692 |
|
|
Asset write-down charges |
|
|
3 |
|
|
|
22 |
|
|
|
9 |
|
|
|
22 |
|
|
|
33 |
|
|
FFO(a)(b) |
|
$ |
669 |
|
|
$ |
901 |
|
|
$ |
1,412 |
|
|
$ |
1,737 |
|
|
$ |
3,227 |
|
|
Weighted-average common shares outstanding—diluted |
|
|
435 |
|
|
|
434 |
|
|
|
435 |
|
|
|
434 |
|
|
|
434 |
|
| |
|
|
|
|
|
|
|
|
|
|
| FFO (from above) |
|
$ |
669 |
|
|
$ |
901 |
|
|
$ |
1,412 |
|
|
$ |
1,737 |
|
|
$ |
3,227 |
|
| Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
|
|
|
|
Straight-lined revenues |
|
|
(56 |
) |
|
|
(80 |
) |
|
|
(116 |
) |
|
|
(163 |
) |
|
|
(274 |
) |
|
Straight-lined expenses |
|
|
17 |
|
|
|
18 |
|
|
|
33 |
|
|
|
39 |
|
|
|
73 |
|
|
Stock-based compensation expense, net |
|
|
40 |
|
|
|
50 |
|
|
|
78 |
|
|
|
91 |
|
|
|
157 |
|
|
Non-cash portion of tax provision |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
5 |
|
|
|
4 |
|
|
|
8 |
|
|
Non-real estate related depreciation, amortization and
accretion |
|
|
15 |
|
|
|
21 |
|
|
|
28 |
|
|
|
35 |
|
|
|
62 |
|
|
Amortization of non-cash interest expense |
|
|
3 |
|
|
|
4 |
|
|
|
6 |
|
|
|
7 |
|
|
|
14 |
|
|
Other (income) expense |
|
|
1 |
|
|
|
2 |
|
|
|
(1 |
) |
|
|
4 |
|
|
|
6 |
|
|
Acquisition and integration costs |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
Restructuring charges(c) |
|
|
45 |
|
|
|
— |
|
|
|
56 |
|
|
|
— |
|
|
|
85 |
|
|
Sustaining capital expenditures |
|
|
(27 |
) |
|
|
(18 |
) |
|
|
(49 |
) |
|
|
(33 |
) |
|
|
(83 |
) |
|
AFFO(a)(b) |
|
$ |
704 |
|
|
$ |
891 |
|
|
$ |
1,453 |
|
|
$ |
1,720 |
|
|
$ |
3,277 |
|
|
Weighted-average common shares outstanding—diluted |
|
|
435 |
|
|
|
434 |
|
|
|
435 |
|
|
|
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.(c) Represents restructuring charges recorded for the
periods presented related to the 2023 Restructuring Plan and the
2024 Restructuring Plan, as applicable for the respective period.
For the six-month period ended June 30, 2024, there were $13
million and $43 million of restructuring charges related to the
July 2023 Restructuring Plan and the June 2024 Restructuring Plan,
respectively.
Reconciliation of Historical FFO and
AFFO per share:
| |
|
For the Three Months Ended |
|
For the Six Months Ended |
|
For the Twelve Months Ended |
| (in millions, except per share
amounts; totals may not sum due to rounding) |
|
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
|
December 31, 2023 |
|
Net income (loss) |
|
$ |
0.58 |
|
|
$ |
1.05 |
|
|
$ |
1.29 |
|
|
$ |
2.01 |
|
|
$ |
3.46 |
|
|
Real estate related depreciation, amortization and accretion |
|
|
0.95 |
|
|
|
0.98 |
|
|
|
1.93 |
|
|
|
1.94 |
|
|
|
3.90 |
|
|
Asset write-down charges |
|
|
0.01 |
|
|
|
0.05 |
|
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.08 |
|
|
FFO(a)(b) |
|
$ |
1.54 |
|
|
$ |
2.08 |
|
|
$ |
3.25 |
|
|
$ |
4.00 |
|
|
$ |
7.43 |
|
|
Weighted-average common shares outstanding—diluted |
|
|
435 |
|
|
|
434 |
|
|
|
435 |
|
|
|
434 |
|
|
|
434 |
|
| |
|
|
|
|
|
|
|
|
|
|
| FFO (from above) |
|
$ |
1.54 |
|
|
$ |
2.08 |
|
|
$ |
3.25 |
|
|
$ |
4.00 |
|
|
$ |
7.43 |
|
| Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
|
|
|
|
Straight-lined revenues |
|
|
(0.13 |
) |
|
|
(0.18 |
) |
|
|
(0.27 |
) |
|
|
(0.38 |
) |
|
|
(0.63 |
) |
|
Straight-lined expenses |
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.08 |
|
|
|
0.09 |
|
|
|
0.17 |
|
|
Stock-based compensation expense, net |
|
|
0.09 |
|
|
|
0.12 |
|
|
|
0.18 |
|
|
|
0.21 |
|
|
|
0.36 |
|
|
Non-cash portion of tax provision |
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
Non-real estate related depreciation, amortization and
accretion |
|
|
0.03 |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
|
0.08 |
|
|
|
0.14 |
|
|
Amortization of non-cash interest expense |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.03 |
|
|
Other (income) expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
Acquisition and integration costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Restructuring charges(c) |
|
|
0.10 |
|
|
|
— |
|
|
|
0.13 |
|
|
|
— |
|
|
|
0.20 |
|
|
Sustaining capital expenditures |
|
|
(0.06 |
) |
|
|
(0.04 |
) |
|
|
(0.11 |
) |
|
|
(0.08 |
) |
|
|
(0.19 |
) |
|
AFFO(a)(b) |
|
$ |
1.62 |
|
|
$ |
2.05 |
|
|
$ |
3.34 |
|
|
$ |
3.96 |
|
|
$ |
7.55 |
|
|
Weighted-average common shares outstanding—diluted |
|
|
435 |
|
|
|
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.(c) Represents restructuring
charges recorded for the periods presented related to the 2023
Restructuring Plan and the 2024 Restructuring Plan, as applicable
for the respective period. For the six-month period ended June 30,
2024, there were $13 million and $43 million of restructuring
charges related to the July 2023 Restructuring Plan and the June
2024 Restructuring Plan, respectively.
Reconciliation of Current Outlook for
FFO and AFFO:
| |
|
Full Year 2024 |
|
Full Year 2024 |
| (in millions; totals may not
sum due to rounding) |
|
Outlook(a) |
|
Outlook per share(a) |
| Net income (loss) |
|
$1,125 |
to |
$1,190 |
|
$2.59 |
to |
$2.74 |
|
Real estate related depreciation, amortization and accretion |
|
$1,634 |
to |
$1,714 |
|
$3.76 |
to |
$3.94 |
|
Asset write-down charges |
|
$42 |
to |
$52 |
|
$0.10 |
to |
$0.12 |
|
FFO(b)(c) |
|
$2,863 |
to |
$2,893 |
|
$6.58 |
to |
$6.65 |
|
Weighted-average common shares outstanding—diluted |
|
435 |
|
435 |
| |
|
|
|
|
|
|
|
|
| FFO (from above) |
|
$2,863 |
to |
$2,893 |
|
$6.58 |
to |
$6.65 |
| Adjustments to increase
(decrease) FFO: |
|
|
|
|
|
|
|
|
|
Straight-lined revenues |
|
$(187) |
to |
$(162) |
|
$(0.43) |
to |
$(0.37) |
|
Straight-lined expenses |
|
$55 |
to |
$75 |
|
$0.13 |
to |
$0.17 |
|
Stock-based compensation expense, net |
|
$142 |
to |
$146 |
|
$0.33 |
to |
$0.34 |
|
Non-cash portion of tax provision |
|
$2 |
to |
$17 |
|
$0.00 |
to |
$0.04 |
|
Non-real estate related depreciation, amortization and
accretion |
|
$46 |
to |
$61 |
|
$0.11 |
to |
$0.14 |
|
Amortization of non-cash interest expense |
|
$9 |
to |
$19 |
|
$0.02 |
to |
$0.04 |
|
Other (income) expense |
|
$0 |
to |
$9 |
|
$0.00 |
to |
$0.02 |
|
(Gains) losses on retirement of long-term obligations |
|
— |
to |
— |
|
— |
to |
— |
|
Acquisition and integration costs |
|
$0 |
to |
$6 |
|
$0.00 |
to |
$0.01 |
|
Restructuring charges(d) |
|
$100 |
to |
$130 |
|
$0.23 |
to |
$0.30 |
|
Sustaining capital expenditures |
|
$(85) |
to |
$(65) |
|
$(0.20) |
to |
$(0.15) |
|
AFFO(b)(c) |
|
$3,005 |
to |
$3,055 |
|
$6.91 |
to |
$7.02 |
|
Weighted-average common shares outstanding—diluted |
|
435 |
|
435 |
(a) As issued on July 17, 2024.(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.(d) Represents restructuring charges recorded for the
periods presented related to 2023 Restructuring Plan and 2024
Restructuring Plan, as applicable for the respective
period.Components of Changes in Site Rental Revenues for
the Quarters Ended June 30, 2024 and 2023:
| |
|
Three Months Ended June 30, |
|
(dollars in millions; totals may not sum due to rounding) |
|
|
2024 |
|
|
|
2023 |
|
| Components of changes in site
rental revenues: |
|
|
|
|
|
Prior year site rental billings excluding payments for Sprint
Cancellations(a) |
|
$1,354 |
|
|
$1,304 |
|
|
Prior year payments for Sprint Cancellations(a)(b) |
|
|
106 |
|
|
|
— |
|
|
Prior year site rental billings(a) |
|
|
1,460 |
|
|
|
1,304 |
|
| |
|
|
|
|
|
Core leasing activity(a) |
|
|
76 |
|
|
|
73 |
|
|
Escalators |
|
|
24 |
|
|
|
24 |
|
|
Non-renewals(a) |
|
|
(37 |
) |
|
|
(42 |
) |
|
Organic Contribution to Site Rental Billings as
Adjusted for Impact of Sprint Cancellations(a) |
|
|
63 |
|
|
|
54 |
|
|
Payments for Sprint Cancellations(a)(b) |
|
|
(105) |
|
|
|
106 |
|
|
Non-renewals associated with Sprint Cancellations(a)(b) |
|
|
(1 |
) |
|
|
(6 |
) |
|
Organic Contribution to Site Rental
Billings(a) |
|
|
(44) |
|
|
|
155 |
|
|
Straight-lined revenues |
|
|
56 |
|
|
|
80 |
|
|
Amortization of prepaid rent |
|
|
107 |
|
|
|
188 |
|
|
Acquisitions(c) |
|
|
— |
|
|
|
1 |
|
| Total site rental
revenues |
|
$1,580 |
|
|
$1,728 |
|
| |
|
|
|
|
|
|
| Year-over-year changes in
revenues: |
|
|
|
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
|
|
(8.6 |
)% |
|
|
10.3 |
% |
|
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(a) |
|
|
4.7 |
% |
|
|
4.2 |
% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(a) |
|
|
(3.0 |
)% |
|
|
11.9 |
% |
(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 second quarter 2023, we received $101
million and $5 million of payments for Sprint Cancellations that
related to small cells and fiber solutions, respectively. These
payments are non-recurring and therefore reduce full year 2024
Organic Contribution to Site Rental Billings by the same amount.
Additionally, during the second quarter 2023, there were $4 million
and $2 million of non-renewals associated with Sprint Cancellations
that related 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.
Towers Segment Components of Changes in Site Rental
Revenues for the Quarters Ended June 30, 2024 and
2023:
| |
|
Three Months Ended June 30, |
|
(dollars in millions; totals may not sum due to rounding) |
|
|
2024 |
|
|
|
2023 |
|
| Components of changes in site
rental revenues: |
|
|
|
|
|
Prior year site rental billings(a) |
|
$ |
929 |
|
|
$ |
877 |
|
| |
|
|
|
|
|
Core leasing activity(a) |
|
|
26 |
|
|
|
38 |
|
|
Escalators |
|
|
23 |
|
|
|
22 |
|
|
Non-renewals(a) |
|
|
(7 |
) |
|
|
(8 |
) |
|
Organic Contribution to Site Rental
Billings(a) |
|
|
42 |
|
|
|
51 |
|
|
Straight-lined revenues |
|
|
54 |
|
|
|
84 |
|
|
Amortization of prepaid rent |
|
|
39 |
|
|
|
67 |
|
|
Acquisitions(b) |
|
|
— |
|
|
|
1 |
|
|
Other |
|
|
— |
|
|
|
— |
|
| Total site rental
revenues |
|
$ |
1,064 |
|
|
$ |
1,080 |
|
| |
|
|
|
|
| Year-over-year changes in
revenues: |
|
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
|
|
(1.5 |
)% |
|
|
0.2 |
% |
|
Changes in revenues as a percentage of prior year site rental
billings: |
|
|
|
|
|
Organic Contribution to Site Rental
Billings(a) |
|
|
4.4 |
% |
|
|
5.8 |
% |
|
|
|
|
|
|
|
|
|
|
(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) 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.
Fiber Segment Components of Changes in
Site Rental Revenues by Line of Business for the Quarters Ended
June 30, 2024 and 2023:
| Small
Cells |
|
Three Months Ended June 30, |
|
(dollars in millions; totals may not sum due to rounding) |
|
|
2024 |
|
|
|
2023 |
|
| Components of changes in site
rental revenues: |
|
|
|
|
|
Prior year site rental billings excluding payments for Sprint
Cancellations(a) |
|
$ |
110 |
|
|
$ |
109 |
|
|
Prior year payments for Sprint Cancellations(a)(b) |
|
|
101 |
|
|
|
— |
|
|
Prior year site rental billings(a) |
|
|
211 |
|
|
|
109 |
|
| |
|
|
|
|
|
Core leasing activity(a) |
|
|
11 |
|
|
|
6 |
|
|
Escalators |
|
|
2 |
|
|
|
2 |
|
|
Non-renewals(a) |
|
|
(1 |
) |
|
|
(2 |
) |
|
Organic Contribution to Site Rental Billings as
Adjusted for Impact of Sprint Cancellations(a) |
|
|
12 |
|
|
|
5 |
|
|
Payments for Sprint Cancellations(a)(b) |
|
|
(101 |
) |
|
|
101 |
|
|
Non-renewals associated with Sprint Cancellations(a)(b) |
|
|
(1 |
) |
|
|
(4 |
) |
|
Organic Contribution to Site Rental
Billings(a) |
|
|
(90 |
) |
|
|
102 |
|
|
Straight-lined revenues |
|
|
(1 |
) |
|
|
(6 |
) |
|
Amortization of prepaid rent |
|
|
50 |
|
|
|
102 |
|
|
Acquisitions(c) |
|
|
— |
|
|
|
— |
|
| Total site rental
revenues |
|
$ |
170 |
|
|
$ |
308 |
|
| |
|
|
|
|
| Year-over-year changes in
revenues: |
|
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
|
|
(44.8 |
)% |
|
|
97.4 |
% |
|
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(a) |
|
|
10.9 |
% |
|
|
5.0 |
% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(a) |
|
|
(42.5 |
)% |
|
|
93.6 |
% |
(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 second quarter 2023, we received $101
million of payments for Sprint Cancellations that related to small
cells, which will not recur in 2024. In second quarter 2023, there
were $4 million of non-renewals associated with Sprint
Cancellations that related to small cells.(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.
Fiber Segment Components of Changes in
Site Rental Revenues by Line of Business for the Quarters Ended
June 30, 2024 and 2023:
| Fiber
Solutions |
|
Three Months Ended June 30, |
|
(dollars in millions; totals may not sum due to rounding) |
|
|
2024 |
|
|
|
2023 |
|
| Components of changes in site
rental revenues: |
|
|
|
|
|
Prior year site rental billings excluding payments for Sprint
Cancellations(a) |
|
$ |
314 |
|
|
$ |
318 |
|
|
Prior year payments for Sprint Cancellations(a)(b) |
|
|
5 |
|
|
|
— |
|
|
Prior year site rental billings(a) |
|
|
319 |
|
|
|
318 |
|
| |
|
|
|
|
|
Core leasing activity(a) |
|
|
39 |
|
|
|
30 |
|
|
Escalators |
|
|
— |
|
|
|
— |
|
|
Non-renewals(a) |
|
|
(29 |
) |
|
|
(32 |
) |
|
Organic Contribution to Site Rental Billings as
Adjusted for Impact of Sprint Cancellations(a) |
|
|
10 |
|
|
|
(2 |
) |
|
Payments for Sprint Cancellations(a)(b) |
|
|
(4 |
) |
|
|
5 |
|
|
Non-renewals associated with Sprint Cancellations(a)(b) |
|
|
(1 |
) |
|
|
(2 |
) |
|
Organic Contribution to Site Rental
Billings(a) |
|
|
5 |
|
|
|
1 |
|
|
Straight-lined revenues |
|
|
3 |
|
|
|
2 |
|
|
Amortization of prepaid rent |
|
|
18 |
|
|
|
19 |
|
|
Acquisitions(c) |
|
|
— |
|
|
|
— |
|
| Total site rental
revenues |
|
$ |
346 |
|
|
$ |
340 |
|
| |
|
|
|
|
| Year-over-year changes in
revenues: |
|
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
|
|
1.8 |
% |
|
|
2.1 |
% |
|
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(a) |
|
|
3.2 |
% |
|
|
(0.7 |
)% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(a) |
|
|
1.7 |
% |
|
|
0.4 |
% |
Outlook for Components Changes in Site Rental Revenues
by Line of Business
|
|
|
Full Year 2024 Outlook(d) |
| |
|
Towers |
|
Fiber Segment |
| (in millions) |
|
|
|
|
|
Small Cells |
|
Fiber Solutions |
|
Core leasing activity (a) |
|
$105 |
to |
$115 |
|
$65 |
to |
$75 |
|
$135 |
to |
$145 |
|
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(a)(e)(f) |
|
4.5% |
|
15% |
|
2% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(a)(e) |
|
4.5% |
|
(8)% |
|
(4)% |
(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 second quarter 2023, we received $5
million of payments for Sprint Cancellations that related to fiber
solutions, which will not recur in 2024. In the second quarter
2023, there were $2 million of non-renewals associated with Sprint
Cancellations that related to fiber solutions. (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.(d) As issued on July 17, 2024.(e)
Calculated based on midpoint of full year 2024 Outlook.(f) In
full year 2023, we received $104 million and $66 million of
payments for Sprint Cancellations that related to small cells and
fiber solutions, respectively.
Components of Changes in Site Rental
Revenues for Full Year 2024 Outlook:
| (dollars in millions; totals
may not sum due to rounding) |
|
Full Year 2024 Outlook(a) |
| Components of changes in site
rental revenues: |
|
|
|
Prior year site rental billings excluding payments for Sprint
Cancellations(b) |
|
$5,505 |
|
Prior year payments for Sprint Cancellations(b)(c) |
|
$170 |
|
Prior year site rental billings(b) |
|
$5,675 |
| |
|
|
|
Core leasing activity(b) |
|
$305 |
to |
$335 |
|
Escalators |
|
$95 |
to |
$105 |
|
Non-renewals(b) |
|
$(165) |
to |
$(145) |
|
Organic Contribution to Site Rental Billings as
Adjusted for Impact of Sprint Cancellations(b) |
|
$245 |
to |
$285 |
|
Payments for Sprint Cancellations(b)(c) |
|
$(170) |
to |
$(160) |
|
Non-renewals associated with Sprint Cancellations(b)(c) |
|
$(10) |
to |
$(10) |
|
Organic Contribution to Site Rental
Billings(b) |
|
$70 |
to |
$110 |
|
Straight-lined revenues |
|
$162 |
to |
$187 |
|
Amortization of prepaid rent |
|
$392 |
to |
$417 |
|
Acquisitions(d) |
|
— |
| Total site rental
revenues |
|
$6,317 |
to |
$6,362 |
| |
|
|
| Year-over-year changes in
revenues:(e) |
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
|
(3.0)% |
|
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) |
|
4.8% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(b) |
|
1.6% |
(a) As issued on July 17, 2024.(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) In 2023, we received $104
million and $66 million of payments for Sprint Cancellations that
related to small cells and fiber solutions, respectively, and $14
million and $7 million of non-renewals associated with Sprint
Cancellations that related to small cells and fiber solutions,
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 full year 2024 Outlook, where
applicable.
Components of Capital
Expenditures:(a)
| |
|
For the Three Months Ended |
| |
|
June 30, 2024 |
|
June 30, 2023 |
| (in millions) |
|
Towers |
Fiber |
Other |
Total |
|
Towers |
Fiber |
Other |
Total |
| Discretionary capital
expenditures: |
|
|
|
|
|
|
|
|
|
|
|
Communications infrastructure improvements and other capital
projects |
|
$ |
15 |
$ |
271 |
$ |
5 |
$ |
291 |
|
$ |
34 |
$ |
298 |
$ |
6 |
$ |
338 |
|
Purchases of land interests |
|
|
11 |
|
— |
|
— |
|
11 |
|
|
23 |
|
— |
|
— |
|
23 |
| Sustaining capital
expenditures |
|
|
3 |
|
18 |
|
6 |
|
27 |
|
|
4 |
|
8 |
|
6 |
|
18 |
| Total capital
expenditures |
|
$ |
29 |
$ |
289 |
$ |
11 |
$ |
329 |
|
$ |
61 |
$ |
306 |
$ |
12 |
$ |
379 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
For the Six Months Ended |
| |
|
June 30, 2024 |
|
June 30, 2023 |
| (in millions) |
|
Towers |
Fiber |
Other |
Total |
|
Towers |
Fiber |
Other |
Total |
| Discretionary capital
expenditures: |
|
|
|
|
|
|
|
|
|
|
|
Communications infrastructure improvements and other capital
projects |
|
$ |
35 |
$ |
530 |
$ |
11 |
$ |
576 |
|
$ |
67 |
$ |
570 |
$ |
12 |
$ |
649 |
|
Purchases of land interests |
|
|
24 |
|
— |
|
— |
|
24 |
|
|
38 |
|
— |
|
— |
|
38 |
| Sustaining capital
expenditures |
|
|
5 |
|
32 |
|
12 |
|
49 |
|
|
6 |
|
15 |
|
12 |
|
33 |
| Total capital
expenditures |
|
$ |
64 |
$ |
562 |
$ |
23 |
$ |
649 |
|
$ |
111 |
$ |
585 |
$ |
24 |
$ |
720 |
Outlook for Discretionary Capital
Expenditures Less Prepaid Rent
Additions:(d)
| (in millions) |
|
Full Year 2023 |
|
Full Year 2024 Outlook(b) |
|
Discretionary capital expenditures |
|
$1,341 |
|
$1,230 |
to |
$1,330 |
|
Less: Prepaid rent additions(c) |
|
$348 |
|
~$355 |
| Discretionary capital
expenditures less prepaid rent additions |
|
$993 |
|
$875 |
to |
$975 |
Components of Interest
Expense:
| |
|
For the Three Months Ended |
| (in millions) |
|
June 30, 2024 |
|
June 30, 2023 |
|
Interest expense on debt obligations |
|
$ |
227 |
|
|
$ |
205 |
|
| Amortization of deferred
financing costs and adjustments on long-term debt |
|
|
8 |
|
|
|
7 |
|
| Capitalized interest |
|
|
(5 |
) |
|
|
(4 |
) |
| Interest expense and
amortization of deferred financing costs, net |
|
$ |
230 |
|
|
$ |
208 |
|
Outlook for Components of Interest
Expense:
| (in millions) |
|
Full Year 2024 Outlook(b) |
|
Interest expense on debt obligations |
|
$915 |
to |
$955 |
| Amortization of deferred
financing costs and adjustments on long-term debt |
|
$20 |
to |
$30 |
| Capitalized interest |
|
$(17) |
to |
$(7) |
| Interest expense and
amortization of deferred financing costs, net |
|
$926 |
to |
$971 |
(a) See our definitions of discretionary capital
expenditures and sustaining capital expenditures in this "Non-GAAP
Measures and Other Information." (b) As issued on July
17, 2024. (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) Excludes 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
June 30, 2024:
|
(in millions) |
|
Face Value(a) |
|
Final Maturity |
|
Cash and cash equivalents and restricted cash and cash
equivalents |
|
$ |
331 |
|
|
| |
|
|
|
|
| Senior Secured Notes, Series
2009-1, Class A-2(b) |
|
|
36 |
|
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(d) |
|
|
295 |
|
Various |
|
Total secured debt |
|
$ |
1,781 |
|
|
| 2016 Revolver(e) |
|
|
— |
|
July 2027 |
| 2016 Term Loan A(f) |
|
|
1,155 |
|
July 2027 |
| Commercial Paper Notes(g) |
|
|
1,438 |
|
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 |
| 5.600% Senior Notes |
|
|
750 |
|
June 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 |
| 5.800% Senior Notes |
|
|
750 |
|
Mar. 2034 |
| 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 |
|
$ |
22,093 |
|
|
|
Net Debt(h) |
|
$ |
23,543 |
|
|
(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) $8
million represents obligations under finance leases as of June 30,
2024.(e) As of June 30, 2024, the undrawn availability
under the $7.0 billion 2016 Revolver was $7.0 billion. The Company
pays a commitment fee on the undrawn available amount, which as of
June 30, 2024 ranged from 0.080% to 0.300%, based on the
Company's senior unsecured debt rating, per annum.(f) The
2016 Term Loan A principal amortizes over a period ending in July
2027.(g) As of June 30, 2024, the Company had $0.6
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.(h) 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 2024 Outlook and plans,
projections, expectations and estimates regarding (1) the value of
our business model and strategy, the durability and performance of
our business and the demand for our communications infrastructure,
(2) revenue growth and its driving factors, (3) net income (loss)
(including on a per share basis), (4) AFFO (including on a per
share basis) and its components and growth, (5) Adjusted EBITDA and
its components and growth, (6) Organic Contribution to Site Rental
Billings (including as Adjusted for Impact of Sprint Cancellations)
and its components and growth, (7) site rental revenues and its
components and growth, (8) interest expense, (9) the impact of
Sprint Cancellations on our operating and financial results, (10)
services contribution, (11) the growth in our business and its
driving factors, (12) discretionary capital expenditures, (13)
prepaid rent additions and amortization, (14) core leasing
activity, (15) increase in our expenses, including its driving
factors, (16) fiber strategic review and the potential impacts and
benefits therefrom, (17) changes to our operating plans for the
Fiber segment and the impacts therefrom, (18) operating cost
reductions, including cost savings and other resulting benefits,
(19) debt and debt maturities, (20) payment of advisory fees,
including timing, and the impact on our results and (21) fiber
solutions and small cell opportunities and the potential impacts
and benefits therefrom. 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:
- Our business
depends on the demand for our communications infrastructure
(including towers, small cells and fiber), driven primarily by
demand for data, and we may be adversely affected by any slowdown
in such demand. Additionally, a reduction in the amount or change
in the mix of network investment by our tenants may materially and
adversely affect our business (including reducing demand for our
communications infrastructure or services).
- A substantial portion of our
revenues is derived from a small number of tenants, and the loss,
consolidation or financial instability of any of such tenants may
materially decrease revenues, reduce demand for our communications
infrastructure and services and impact our dividend per share
growth.
- The expansion or development of our
business, including through acquisitions, increased product
offerings or other strategic opportunities, may cause disruptions
in our business, which may have an adverse effect on our business,
operations or financial results.
- Our Fiber segment has expanded, and
the Fiber business model contains certain differences from our
Towers business model, resulting in different operational risks. If
we do not successfully operate our Fiber business model or identify
or manage the related operational risks, such operations may
produce results that are lower than anticipated.
- Our review of potential strategic
alternatives may not result in an executed or consummated
transaction or other strategic alternative, and the process of
reviewing strategic alternatives or the outcome could adversely
affect our business. There is no guarantee that any transaction
resulting from the strategic review will ultimately benefit our
shareholders.
- Failure to timely, efficiently and
safely execute on our construction projects could adversely affect
our business.
- New technologies may reduce demand
for our communications infrastructure or negatively impact our
revenues.
- If we fail to retain rights to our
communications infrastructure, including the rights to land under
our towers and the right-of-way and other agreements related to our
small cells and fiber, our business may be adversely affected.
- Our services business has
historically experienced significant volatility in demand, which
reduces the predictability of our results.
- If radio frequency emissions from
wireless handsets or equipment on our communications infrastructure
are demonstrated to cause negative health effects, potential future
claims could adversely affect our operations, costs or
revenues.
- Cybersecurity breaches or other
information technology disruptions could adversely affect our
operations, business, and reputation.
- Our business may be adversely
impacted by climate-related events, natural disasters, including
wildfires, and other unforeseen events.
- As a result of competition in our
industry, we may find it more difficult to negotiate favorable
rates on our new or renewing tenant contracts.
- New wireless technologies may not
deploy or be adopted by tenants as rapidly or in the manner
projected.
- Our focus on and disclosure of our
Environmental, Social and Governance position, metrics, strategy,
goals and initiatives expose us to potential litigation and other
adverse effects to our business.
- Failure to attract, recruit and
retain qualified and experienced employees could adversely affect
our business, operations and costs.
- Changes to management, including
turnover of our top executives, could have an adverse effect on our
business.
- Actions that we are taking to restructure our business in
alignment with our strategic priorities may not be as effective as
anticipated.
- Actions of activist stockholders
could impact the pursuit of our business strategies and adversely
affect our results of operations, financial condition, or stock
price.
- Our substantial level of
indebtedness could adversely affect our ability to react to changes
in our business, and the terms of our debt instruments limit our
ability to take a number of actions that our management might
otherwise believe to be in our best interests. In addition, if we
fail to comply with our covenants, our debt could be
accelerated.
- We have a substantial amount of
indebtedness. In the event we do not repay or refinance such
indebtedness, we could face substantial liquidity issues and might
be required to issue equity securities or securities convertible
into equity securities, or sell some of our assets, possibly on
unfavorable terms, to meet our debt payment obligations.
- Sales or issuances of a substantial
number of shares of our common stock or securities convertible into
shares of our common stock may adversely affect the market price of
our common stock.
- Certain provisions of our restated
certificate of incorporation amended and restated by-laws and
operative agreements, and domestic and international competition
laws may make it more difficult for a third party to acquire
control of us or for us to acquire control of a third party, even
if such a change in control would be beneficial to our
stockholders.
- 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.
- Future dividend payments to our
stockholders will reduce the availability of our cash on hand
available to fund future discretionary investments, and may result
in a need to incur indebtedness or issue equity securities to fund
growth opportunities. In such event, the then current economic,
credit market or equity market conditions will impact the
availability or cost of such financing, which may hinder our
ability to grow our per share results of operations.
- Remaining qualified to be taxed as
a Real Estate Investment Trust ("REIT") involves highly technical
and complex provisions of the Code. Failure to remain qualified as
a REIT would result in our inability to deduct dividends to
stockholders when computing our taxable income, thereby increasing
our tax obligations and reducing our available cash.
- Complying with REIT requirements,
including the 90% distribution requirement, may limit our
flexibility or cause us to forgo otherwise attractive
opportunities, including certain discretionary investments and
potential financing alternatives.
- REIT related ownership limitations
and transfer restrictions may prevent or restrict certain transfers
of our capital stock.
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) |
| |
|
June 30,2024 |
|
December 31, 2023 |
|
ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
155 |
|
|
$ |
105 |
|
|
Restricted cash and cash equivalents |
|
|
171 |
|
|
|
171 |
|
|
Receivables, net |
|
|
420 |
|
|
|
481 |
|
|
Prepaid expenses |
|
|
155 |
|
|
|
103 |
|
|
Deferred site rental receivables |
|
|
129 |
|
|
|
116 |
|
|
Other current assets |
|
|
51 |
|
|
|
56 |
|
|
Total current assets |
|
|
1,081 |
|
|
|
1,032 |
|
| Deferred site rental
receivables |
|
|
2,341 |
|
|
|
2,239 |
|
| Property and equipment,
net |
|
|
15,698 |
|
|
|
15,666 |
|
| Operating lease right-of-use
assets |
|
|
5,930 |
|
|
|
6,187 |
|
| Goodwill |
|
|
10,085 |
|
|
|
10,085 |
|
| Other intangible assets,
net |
|
|
2,974 |
|
|
|
3,179 |
|
| Other assets, net |
|
|
137 |
|
|
|
139 |
|
|
Total assets |
|
$ |
38,246 |
|
|
$ |
38,527 |
|
| |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
| Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
225 |
|
|
$ |
252 |
|
|
Accrued interest |
|
|
228 |
|
|
|
219 |
|
|
Deferred revenues |
|
|
509 |
|
|
|
605 |
|
|
Other accrued liabilities |
|
|
359 |
|
|
|
342 |
|
|
Current maturities of debt and other obligations |
|
|
865 |
|
|
|
835 |
|
|
Current portion of operating lease liabilities |
|
|
308 |
|
|
|
332 |
|
|
Total current liabilities |
|
|
2,494 |
|
|
|
2,585 |
|
| Debt and other long-term
obligations |
|
|
22,854 |
|
|
|
22,086 |
|
| Operating lease
liabilities |
|
|
5,354 |
|
|
|
5,561 |
|
| Other long-term
liabilities |
|
|
1,892 |
|
|
|
1,914 |
|
|
Total liabilities |
|
|
32,594 |
|
|
|
32,146 |
|
| Commitments and
contingencies |
|
|
|
|
| Stockholders' equity: |
|
|
|
|
|
Common stock, 0.01 par value; 1,200 shares authorized; shares
issued and outstanding: June 30, 2024—435 and December 31,
2023—434 |
|
|
4 |
|
|
|
4 |
|
|
Additional paid-in capital |
|
|
18,347 |
|
|
|
18,270 |
|
|
Accumulated other comprehensive income (loss) |
|
|
(5 |
) |
|
|
(4 |
) |
|
Dividends/distributions in excess of earnings |
|
|
(12,694 |
) |
|
|
(11,889 |
) |
|
Total equity |
|
|
5,652 |
|
|
|
6,381 |
|
|
Total liabilities and equity |
|
$ |
38,246 |
|
|
$ |
38,527 |
|
|
|
| CROWN CASTLE
INC.CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)(Amounts in millions, except per share
amounts) |
| |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
Site rental |
|
$ |
1,580 |
|
|
$ |
1,728 |
|
|
$ |
3,168 |
|
|
$ |
3,352 |
|
|
Services and other |
|
|
46 |
|
|
|
139 |
|
|
|
99 |
|
|
|
288 |
|
|
Net revenues |
|
|
1,626 |
|
|
|
1,867 |
|
|
|
3,267 |
|
|
|
3,640 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
Costs of operations:(a) |
|
|
|
|
|
|
|
|
|
Site rental |
|
|
432 |
|
|
|
424 |
|
|
|
862 |
|
|
|
839 |
|
|
Services and other |
|
|
27 |
|
|
|
98 |
|
|
|
61 |
|
|
|
202 |
|
|
Selling, general and administrative |
|
|
204 |
|
|
|
210 |
|
|
|
387 |
|
|
|
405 |
|
|
Asset write-down charges |
|
|
3 |
|
|
|
22 |
|
|
|
9 |
|
|
|
22 |
|
|
Acquisition and integration costs |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
Depreciation, amortization and accretion |
|
|
430 |
|
|
|
445 |
|
|
|
869 |
|
|
|
876 |
|
|
Restructuring charges |
|
|
45 |
|
|
|
— |
|
|
|
56 |
|
|
|
— |
|
|
Total operating expenses |
|
|
1,141 |
|
|
|
1,200 |
|
|
|
2,244 |
|
|
|
2,345 |
|
| Operating income (loss) |
|
|
485 |
|
|
|
667 |
|
|
|
1,023 |
|
|
|
1,295 |
|
| Interest expense and
amortization of deferred financing costs, net |
|
|
(230 |
) |
|
|
(208 |
) |
|
|
(456 |
) |
|
|
(410 |
) |
| Interest income |
|
|
4 |
|
|
|
5 |
|
|
|
8 |
|
|
|
7 |
|
| Other income (expense) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
1 |
|
|
|
(4 |
) |
| Income (loss) before income
taxes |
|
|
258 |
|
|
|
462 |
|
|
|
576 |
|
|
|
888 |
|
| Benefit (provision) for income
taxes |
|
|
(7 |
) |
|
|
(7 |
) |
|
|
(14 |
) |
|
|
(14 |
) |
| Net income (loss) |
|
$ |
251 |
|
|
$ |
455 |
|
|
$ |
562 |
|
|
$ |
874 |
|
| |
|
|
|
|
|
|
|
|
| Net income (loss), per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.58 |
|
|
$ |
1.05 |
|
|
$ |
1.29 |
|
|
$ |
2.02 |
|
|
Diluted |
|
$ |
0.58 |
|
|
$ |
1.05 |
|
|
$ |
1.29 |
|
|
$ |
2.01 |
|
| Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
435 |
|
|
|
434 |
|
|
|
434 |
|
|
|
433 |
|
|
Diluted |
|
|
435 |
|
|
|
434 |
|
|
|
435 |
|
|
|
434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Exclusive of depreciation, amortization and
accretion shown separately.
| |
| CROWN CASTLE
INC.CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)(In millions of dollars) |
| |
|
Six Months Ended June 30, |
|
|
|
|
2024 |
|
|
|
2023 |
|
| Cash flows from operating
activities: |
|
|
|
|
| Net income (loss) |
|
$ |
562 |
|
|
$ |
874 |
|
| Adjustments to reconcile net
income (loss) to net cash provided by (used for) operating
activities: |
|
|
|
|
|
Depreciation, amortization and accretion |
|
|
869 |
|
|
|
876 |
|
|
(Gains) losses on retirement of long-term obligations |
|
|
— |
|
|
|
— |
|
|
Amortization of deferred financing costs and other non-cash
interest |
|
|
18 |
|
|
|
14 |
|
|
Stock-based compensation expense, net |
|
|
78 |
|
|
|
91 |
|
|
Asset write-down charges |
|
|
9 |
|
|
|
22 |
|
|
Deferred income tax (benefit) provision |
|
|
5 |
|
|
|
1 |
|
|
Other non-cash adjustments, net |
|
|
8 |
|
|
|
2 |
|
|
Changes in assets and liabilities, excluding the effects of
acquisitions: |
|
|
|
|
|
Increase (decrease) in liabilities |
|
|
(99 |
) |
|
|
(35 |
) |
|
Decrease (increase) in assets |
|
|
(83 |
) |
|
|
(120 |
) |
|
Net cash provided by (used for) operating
activities |
|
|
1,367 |
|
|
|
1,725 |
|
| Cash flows from investing
activities: |
|
|
|
|
|
Capital expenditures |
|
|
(649 |
) |
|
|
(720 |
) |
|
Payments for acquisitions, net of cash acquired |
|
|
(1 |
) |
|
|
(89 |
) |
|
Other investing activities, net |
|
|
— |
|
|
|
3 |
|
|
Net cash provided by (used for) investing
activities |
|
|
(650 |
) |
|
|
(806 |
) |
| Cash flows from financing
activities: |
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
— |
|
|
|
2,347 |
|
|
Principal payments on debt and other long-term obligations |
|
|
(36 |
) |
|
|
(39 |
) |
|
Purchases and redemptions of long-term debt |
|
|
— |
|
|
|
— |
|
|
Borrowings under revolving credit facility |
|
|
— |
|
|
|
2,113 |
|
|
Payments under revolving credit facility |
|
|
(670 |
) |
|
|
(2,739 |
) |
|
Net borrowings (repayments) under commercial paper program |
|
|
1,438 |
|
|
|
(1,024 |
) |
|
Payments for financing costs |
|
|
— |
|
|
|
(23 |
) |
|
Purchases of common stock |
|
|
(30 |
) |
|
|
(29 |
) |
|
Dividends/distributions paid on common stock |
|
|
(1,368 |
) |
|
|
(1,364 |
) |
|
Net cash provided by (used for) financing
activities |
|
|
(666 |
) |
|
|
(758 |
) |
| Net increase (decrease) in
cash and cash equivalents and restricted cash |
|
|
51 |
|
|
|
161 |
|
| Effect of exchange rate
changes on cash |
|
|
(1 |
) |
|
|
— |
|
|
Cash and cash equivalents and restricted cash and cash equivalents
at beginning of period |
|
|
281 |
|
|
|
327 |
|
| Cash and cash equivalents and
restricted cash and cash equivalents at end of period |
|
$ |
331 |
|
|
$ |
488 |
|
| Supplemental disclosure of
cash flow information: |
|
|
|
|
|
Interest paid |
|
|
441 |
|
|
|
367 |
|
|
Income taxes paid (refunded) |
|
|
9 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
| CROWN CASTLE
INC.SEGMENT OPERATING RESULTS
(UNAUDITED)(In millions of dollars) |
|
SEGMENT OPERATING RESULTS |
| |
|
Three Months Ended
June 30, 2024 |
|
Three Months Ended
June 30, 2023 |
|
|
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Segment site rental revenues |
|
$ |
1,064 |
|
$ |
516 |
|
|
|
$ |
1,580 |
|
$ |
1,080 |
|
$ |
648 |
|
|
|
$ |
1,728 |
| Segment services and other
revenues |
|
|
43 |
|
|
3 |
|
|
|
|
46 |
|
|
124 |
|
|
15 |
|
|
|
|
139 |
| Segment revenues |
|
|
1,107 |
|
|
519 |
|
|
|
|
1,626 |
|
|
1,204 |
|
|
663 |
|
|
|
|
1,867 |
| Segment site rental costs of
operations |
|
|
245 |
|
|
178 |
|
|
|
|
423 |
|
|
243 |
|
|
171 |
|
|
|
|
414 |
| Segment services and other
costs of operations |
|
|
23 |
|
|
2 |
|
|
|
|
25 |
|
|
92 |
|
|
3 |
|
|
|
|
95 |
| Segment costs of
operations(a)(b) |
|
|
268 |
|
|
180 |
|
|
|
|
448 |
|
|
335 |
|
|
174 |
|
|
|
|
509 |
| Segment site rental gross
margin(c) |
|
|
819 |
|
|
338 |
|
|
|
|
1,157 |
|
|
837 |
|
|
477 |
|
|
|
|
1,314 |
| Segment services and other
gross margin(c) |
|
|
20 |
|
|
1 |
|
|
|
|
21 |
|
|
32 |
|
|
12 |
|
|
|
|
44 |
| Segment selling, general and
administrative expenses(b) |
|
|
16 |
|
|
50 |
|
|
|
|
66 |
|
|
30 |
|
|
51 |
|
|
|
|
81 |
| Segment operating
profit(c) |
|
|
823 |
|
|
289 |
|
|
|
|
1,112 |
|
|
839 |
|
|
438 |
|
|
|
|
1,277 |
| Other selling, general and
administrative expenses(b) |
|
|
|
|
|
$ |
105 |
|
|
105 |
|
|
|
|
|
$ |
88 |
|
|
88 |
| Stock-based compensation
expense, net |
|
|
|
|
|
|
40 |
|
|
40 |
|
|
|
|
|
|
50 |
|
|
50 |
| Depreciation, amortization and
accretion |
|
|
|
|
|
|
430 |
|
|
430 |
|
|
|
|
|
|
445 |
|
|
445 |
| Restructuring charges(d) |
|
|
|
|
|
|
45 |
|
|
45 |
|
|
|
|
|
|
— |
|
|
— |
| Interest expense and
amortization of deferred financing costs, net |
|
|
|
|
|
|
230 |
|
|
230 |
|
|
|
|
|
|
208 |
|
|
208 |
| Other (income) expenses to
reconcile to income (loss) before income taxes(e) |
|
|
|
|
|
|
4 |
|
|
4 |
|
|
|
|
|
|
24 |
|
|
24 |
| Income (loss) before income
taxes |
|
|
|
|
|
|
|
$ |
258 |
|
|
|
|
|
|
|
$ |
462 |
(a) Exclusive of depreciation,
amortization and accretion shown separately.(b) Segment costs
of operations exclude (1) stock-based compensation expense, net of
$7 million and $9 million for the three months ended
June 30, 2024 and 2023, respectively and (2) prepaid lease
purchase price adjustments of $4 million for each of the three
months ended June 30, 2024 and 2023. Segment selling, general
and administrative expenses and other selling, general and
administrative expenses exclude stock-based compensation expense,
net of $33 million and $41 million for the three months ended
June 30, 2024 and 2023, 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)
Represents restructuring charges recorded for the periods presented
related to the 2023 Restructuring Plan and the 2024 Restructuring
Plan, as applicable for the respective period. For the three-month
period ended June 30, 2024, there were $2 million and $43 million
of restructuring charges related to the July 2023 Restructuring
Plan and the June 2024 Restructuring Plan, respectively.(e)
See condensed consolidated statement of operations for further
information.
|
SEGMENT OPERATING RESULTS |
| |
|
Six Months Ended
June 30, 2024 |
|
Six Months Ended
June 30, 2023 |
|
|
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Segment site rental revenues |
|
$ |
2,132 |
|
$ |
1,036 |
|
|
|
$ |
3,168 |
|
$ |
2,161 |
|
$ |
1,191 |
|
|
|
$ |
3,352 |
| Segment services and other
revenues |
|
|
89 |
|
|
10 |
|
|
|
|
99 |
|
|
270 |
|
|
18 |
|
|
|
|
288 |
| Segment revenues |
|
|
2,221 |
|
|
1,046 |
|
|
|
|
3,267 |
|
|
2,431 |
|
|
1,209 |
|
|
|
|
3,640 |
| Segment site rental costs of
operations |
|
|
483 |
|
|
360 |
|
|
|
|
843 |
|
|
477 |
|
|
343 |
|
|
|
|
820 |
| Segment services and other
costs of operations |
|
|
51 |
|
|
7 |
|
|
|
|
58 |
|
|
191 |
|
|
5 |
|
|
|
|
196 |
| Segment costs of
operations(a)(b) |
|
|
534 |
|
|
367 |
|
|
|
|
901 |
|
|
668 |
|
|
348 |
|
|
|
|
1,016 |
| Segment site rental gross
margin(c) |
|
|
1,649 |
|
|
676 |
|
|
|
|
2,325 |
|
|
1,684 |
|
|
848 |
|
|
|
|
2,532 |
| Segment services and other
gross margin(c) |
|
|
38 |
|
|
3 |
|
|
|
|
41 |
|
|
79 |
|
|
13 |
|
|
|
|
92 |
| Segment selling, general and
administrative expenses(b) |
|
|
37 |
|
|
97 |
|
|
|
|
134 |
|
|
61 |
|
|
100 |
|
|
|
|
161 |
| Segment operating
profit(c) |
|
|
1,650 |
|
|
582 |
|
|
|
|
2,232 |
|
|
1,702 |
|
|
761 |
|
|
|
|
2,463 |
| Other selling, general and
administrative expenses(b) |
|
|
|
|
|
$ |
189 |
|
|
189 |
|
|
|
|
|
$ |
170 |
|
|
170 |
| Stock-based compensation
expense, net |
|
|
|
|
|
|
78 |
|
|
78 |
|
|
|
|
|
|
91 |
|
|
91 |
| Depreciation, amortization and
accretion |
|
|
|
|
|
|
869 |
|
|
869 |
|
|
|
|
|
|
876 |
|
|
876 |
| Restructuring charges(d) |
|
|
|
|
|
|
56 |
|
|
56 |
|
|
|
|
|
|
— |
|
|
— |
| Interest expense and
amortization of deferred financing costs, net |
|
|
|
|
|
|
456 |
|
|
456 |
|
|
|
|
|
|
410 |
|
|
410 |
| Other (income) expenses to
reconcile to income (loss) before income taxes(e) |
|
|
|
|
|
|
8 |
|
|
8 |
|
|
|
|
|
|
28 |
|
|
28 |
| Income (loss) before income
taxes |
|
|
|
|
|
|
|
$ |
576 |
|
|
|
|
|
|
|
$ |
888 |
(a) Exclusive of depreciation,
amortization and accretion shown separately.(b) Segment costs
of operations exclude (1) stock-based compensation expense, net of
$14 million and $17 million for the six months ended
June 30, 2024 and 2023, respectively, and (2) prepaid lease
purchase price adjustments of $8 million for each of the six
months ended June 30, 2024 and 2023. Segment selling, general
and administrative expenses and other selling, general and
administrative expenses exclude stock-based compensation expense,
net of $64 million and $74 million for the six months
ended June 30, 2024 and 2023.(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) Represents
restructuring charges recorded for the periods presented related to
the 2023 Restructuring Plan and the 2024 Restructuring Plan, as
applicable for the respective period. For the six-month period
ended June 30, 2024, there were $13 million and $43 million of
restructuring charges related to the July 2023 Restructuring Plan
and the June 2024 Restructuring Plan, respectively.(e) 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/6ad8aaa2-7a63-4fd1-b143-496a0907f87d
https://www.globenewswire.com/NewsRoom/AttachmentNg/2b201b76-99ab-441b-a83e-b7bf20986459
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