Crown Castle Inc. (NYSE: CCI) ("Crown Castle") today reported
results for the third quarter ended September 30, 2024 and
maintained its full year 2024 Outlook with the exception of a
reduction to net income.
|
(dollars in millions, except per share amounts) |
Current Full Year 2024 Outlook(a) |
Full Year 2023 Actual |
|
% Change |
Previous Full Year 2024 Outlook(b) |
Current Compared to Previous Outlook |
|
Site rental revenues |
$6,340 |
$6,532 |
|
(3)% |
|
$6,340 |
—% |
|
| Net income (loss) |
$1,020 |
$1,502 |
|
(32)% |
|
$1,158 |
(12)% |
|
| Net income (loss) per
share—diluted |
$2.35 |
$3.46 |
|
(32)% |
|
$2.67 |
(12)% |
|
| Adjusted EBITDA(c) |
$4,168 |
$4,415 |
|
(6)% |
|
$4,168 |
—% |
|
| AFFO(c) |
$3,030 |
$3,277 |
|
(8)% |
|
$3,030 |
—% |
|
| AFFO per share(c) |
$6.97 |
$7.55 |
|
(8)% |
|
$6.97 |
—% |
|
(a) Reflects midpoint of full
year 2024 Outlook as issued on October 16,
2024.(b) Reflects midpoint of full year 2024
Outlook as issued on July 17, 2024.(c) 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.“In the third quarter, we achieved
solid operating and financial performance across our businesses and
reaffirmed our full year 2024 Outlook for Adjusted EBITDA and
AFFO,” stated Steven Moskowitz, Chief Executive Officer of Crown
Castle. “Looking ahead, we continue to be optimistic about the
long-term value creation opportunities in our tower, small cell,
and fiber solutions offerings. Across all forms of digital
connectivity, the U.S. is generating record annual increases in
data consumption, which we expect to drive continued demand for
communications infrastructure. We believe we are well positioned to
benefit from these positive trends and are also actively developing
initiatives that prioritize customer service, revenue generation,
capital discipline, and operational excellence. As part of our
previously announced plans to enhance returns by improving
profitability and capital efficiency in our Fiber segment, we
completed discussions with our customers in the fourth quarter and
jointly identified approximately 7,000 greenfield small cell nodes
in our contracted backlog that we mutually agreed to cancel. These
agreed upon cancellations increase the overall return of our
remaining contracted backlog of approximately 40,000 nodes and
improve our capital efficiency going forward. These changes to our
operating plan and capital expenditure profile are consistent with
our previously provided expectations and position us to increase
the value of our fiber and small cell assets, while we remain
focused on the ongoing Fiber segment strategic review.”
RESULTS FOR THE QUARTERThe
table below sets forth select financial results for the quarters
ended September 30, 2024 and September 30, 2023.
| |
|
|
(dollars in millions, except per share amounts) |
Q3 2024 |
Q3 2023 |
|
Change |
% Change |
|
Site rental revenues |
$1,593 |
$1,577 |
|
$16 |
1% |
|
|
Net income (loss) |
$303 |
$265 |
|
$38 |
14% |
|
|
Net income (loss) per share—diluted |
$0.70 |
$0.61 |
|
$0.09 |
15% |
|
| Adjusted EBITDA(a) |
$1,075 |
$1,047 |
|
$28 |
3% |
|
| AFFO(a) |
$801 |
$767 |
|
$34 |
4% |
|
| AFFO per share(a) |
$1.84 |
$1.77 |
|
$0.07 |
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
- Site rental
revenues. Site rental revenues grew 1%, or $16 million,
from third quarter 2023 to third quarter 2024, inclusive of $65
million in Organic Contribution to Site Rental Billings, a $19
million decrease in amortization of prepaid rent, and a $30 million
decrease in straight-lined revenues. The $65 million in Organic
Contribution to Site Rental Billings benefited from $15 million of
previously disclosed small cell non-recurring revenues primarily
related to early termination payments, partially offset by a $4
million unfavorable impact on fiber solutions due to adjustments
related to prior period revenues and a $6 million unfavorable
impact on fiber solutions from the absence of Sprint Cancellation
payments that occurred in the third quarter of 2023.
- Net income. Net
income for the third quarter 2024 was $303 million compared to
$265 million for the third quarter 2023, and included $48
million of charges incurred in the quarter related to the
restructuring plan announced in June 2024.
- Adjusted EBITDA.
Third quarter 2024 Adjusted EBITDA was $1.1 billion compared to
$1.0 billion for the third quarter 2023. The increase in the
quarter was primarily a result of the higher contribution from site
rental revenues and lower costs related to the reduction in
staffing levels and office closures announced in June 2024,
partially offset by $6 million of advisory fees primarily related
to the recent proxy contest.
- AFFO and AFFO per
share. Third quarter 2024 AFFO was $801 million, or $1.84
per share, representing an increase from the third quarter 2023 of
4%.
- Capital
expenditures. Capital expenditures during the quarter were
$297 million, comprised of $274 million of discretionary capital
expenditures and $23 million of sustaining capital expenditures.
Discretionary capital expenditures included approximately $239
million attributable to Fiber and $30 million attributable to
Towers.
- Common stock
dividend. During the quarter, Crown Castle paid common
stock dividends of approximately $681 million in the aggregate, or
$1.565 per common share, unchanged on a per share basis compared to
the same period a year ago.
- Financing
activity. In August 2024, Crown Castle issued $1.25
billion in aggregate principal amount of senior unsecured notes in
a combination of 5-year and 10-year maturities with a weighted
average maturity and coupon of approximately 8 years and 5.1%,
respectively. Net proceeds from the senior notes offering were used
to repay outstanding indebtedness under Crown Castle's commercial
paper program and pay related fees and expenses.
“Since announcing a change in our operational
strategy in June, we have continued to deliver results in line with
expectations,” said Dan Schlanger, Crown Castle’s Chief Financial
Officer. “The third quarter was highlighted by 5.2% consolidated
organic growth, excluding the impact of Sprint cancellations, as
demand remained strong for our tower, small cell, and fiber
solutions offerings. Complementing the progress we made
implementing our revised operational strategy, we took steps in the
third quarter to strengthen our balance sheet. In August, we issued
$1.25 billion of long-term fixed rate debt at a weighted average
rate of 5.1%, allowing us to end the quarter with more than 90%
fixed rate debt, a weighted average debt maturity of 7 years,
limited maturities through 2025, and approximately $5.7 billion of
liquidity under our revolving credit facility. We believe the
increased flexibility around capital expenditures created by our
revised operational strategy combined with our strong balance sheet
and liquidity profile position us to take advantage of the
opportunities being created by the increasing demand for
connectivity in the U.S.”
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 has been updated to reflect
the impact of the mutual cancellation of approximately 7,000 small
cell nodes as discussed above. These cancellations are expected to
result in a $125 to $150 million asset write-down charge in the
fourth quarter, reducing full year 2024 Outlook for net income by
$138 million at the midpoint.
| (in
millions, except per share amounts) |
Full Year 2024(a) |
|
Changes to Midpoint from Previous Outlook(b) |
|
Site rental billings(c) |
$5,740 |
to |
$5,780 |
|
$0 |
|
| Amortization of prepaid
rent |
$392 |
to |
$417 |
|
$0 |
|
| Straight-lined revenues |
$162 |
to |
$187 |
|
$0 |
|
| Site rental revenues |
$6,317 |
to |
$6,362 |
|
$0 |
|
| Site rental costs of
operations(d) |
$1,686 |
to |
$1,731 |
|
$0 |
|
| Services and other gross
margin |
$65 |
to |
$95 |
|
$0 |
|
|
Net income (loss) |
$975 |
to |
$1,065 |
|
|
($138) |
|
| Net income (loss) per
share—diluted |
$2.24 |
to |
$2.45 |
|
|
($0.32) |
|
| Adjusted EBITDA(e) |
$4,143 |
to |
$4,193 |
|
$0 |
|
| Depreciation, amortization and
accretion |
$1,680 |
to |
$1,775 |
|
$0 |
|
| Interest expense and
amortization of deferred financing costs, net(f) |
$926 |
to |
$971 |
|
$0 |
|
| FFO(e) |
$2,863 |
to |
$2,893 |
|
$0 |
|
| AFFO(e) |
$3,005 |
to |
$3,055 |
|
$0 |
|
| AFFO per share(e) |
$6.91 |
to |
$7.02 |
|
$0.00 |
|
| Towers Segment discretionary
capital expenditures(e) |
$180 |
to |
$180 |
|
$0 |
|
| Fiber Segment discretionary
capital expenditures(e) |
$1,050 |
to |
$1,150 |
|
$0 |
|
(a) As issued on October 16,
2024.(b) As issued on July 17,
2024.(c) See "Non-GAAP Measures and Other
Information" for our definition of site rental
billings.(d) Exclusive of depreciation,
amortization and accretion.(e) 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, and for definition of discretionary capital
expenditures.(f) 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 $22
million of higher-than-expected non-recurring revenues primarily
related to early termination payments which occurred in the third
quarter. 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 approximately $30 million of advisory fees
primarily related to the recent proxy contest, which is expected to
be more than offset by an approximately $65 million decrease in
costs related to the reduction in staffing levels and office
closures announced in June 2024.
- The full year 2024 Outlook for
discretionary capital expenditures 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, October 16,
2024, at 5:00 p.m. Eastern time to discuss its third 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,
October 16, 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 Nine Months Ended |
|
For the Twelve Months Ended |
|
(in millions; totals may not sum due to rounding) |
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
|
December 31, 2023 |
|
Net income (loss) |
$ |
303 |
|
|
$ |
265 |
|
|
$ |
865 |
|
|
$ |
1,139 |
|
|
$ |
1,502 |
|
| Adjustments to increase
(decrease) net income (loss): |
|
|
|
|
|
|
|
|
|
|
Asset write-down charges |
|
15 |
|
|
|
8 |
|
|
|
24 |
|
|
|
30 |
|
|
|
33 |
|
|
Acquisition and integration costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
Depreciation, amortization and accretion |
|
432 |
|
|
|
439 |
|
|
|
1,301 |
|
|
|
1,315 |
|
|
|
1,754 |
|
|
Restructuring charges(a) |
|
48 |
|
|
|
72 |
|
|
|
104 |
|
|
|
72 |
|
|
|
85 |
|
|
Amortization of prepaid lease purchase price adjustments |
|
4 |
|
|
|
4 |
|
|
|
12 |
|
|
|
12 |
|
|
|
16 |
|
|
Interest expense and amortization of deferred financing costs,
net(b) |
|
236 |
|
|
|
217 |
|
|
|
692 |
|
|
|
627 |
|
|
|
850 |
|
|
Interest income |
|
(6 |
) |
|
|
(3 |
) |
|
|
(14 |
) |
|
|
(10 |
) |
|
|
(15 |
) |
|
Other (income) expense |
|
6 |
|
|
|
— |
|
|
|
5 |
|
|
|
4 |
|
|
|
6 |
|
|
(Benefit) provision for income taxes |
|
5 |
|
|
|
7 |
|
|
|
19 |
|
|
|
21 |
|
|
|
26 |
|
|
Stock-based compensation expense, net |
|
30 |
|
|
|
36 |
|
|
|
108 |
|
|
|
126 |
|
|
|
157 |
|
|
Adjusted EBITDA(c)(d) |
$ |
1,075 |
|
|
$ |
1,047 |
|
|
$ |
3,117 |
|
|
$ |
3,339 |
|
|
$ |
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) |
$975 |
|
to |
$1,065 |
|
|
Adjustments to increase (decrease) net income (loss): |
|
|
|
|
Asset write-down charges(g) |
$167 |
|
to |
$202 |
|
|
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 Quarterly Report on Form 10-Q for the quarter ended June 30,
2024 ("2024 Restructuring Plan"), as applicable for the respective
period. For the three-month period ended September 30, 2024, there
were ($3) million of adjustments related to the July 2023
Restructuring Plan and $51 million of restructuring charges related
to the June 2024 Restructuring Plan. For the nine-month period
ended September 30, 2024, there were $10 million and $94 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 October 16,
2024.(g) Change in current full year 2024 Outlook for
asset write-down charges are related to the impact of cancellations
of small cell nodes, as further discussed above.
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, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
|
December 31, 2023 |
|
Net income (loss) |
$ |
303 |
|
|
$ |
265 |
|
|
$ |
865 |
|
|
$ |
1,139 |
|
|
$ |
1,502 |
|
|
Real estate related depreciation, amortization and accretion |
|
419 |
|
|
|
425 |
|
|
|
1,259 |
|
|
|
1,266 |
|
|
|
1,692 |
|
|
Asset write-down charges |
|
15 |
|
|
|
8 |
|
|
|
24 |
|
|
|
30 |
|
|
|
33 |
|
|
FFO(a)(b) |
$ |
737 |
|
|
$ |
698 |
|
|
$ |
2,148 |
|
|
$ |
2,435 |
|
|
$ |
3,227 |
|
|
Weighted-average common shares outstanding—diluted |
|
436 |
|
|
|
434 |
|
|
|
435 |
|
|
|
434 |
|
|
|
434 |
|
| |
|
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
737 |
|
|
$ |
698 |
|
|
$ |
2,148 |
|
|
$ |
2,435 |
|
|
$ |
3,227 |
|
|
Adjustments to increase (decrease) FFO: |
|
|
|
|
|
|
|
|
|
|
Straight-lined revenues |
|
(29 |
) |
|
|
(59 |
) |
|
|
(145 |
) |
|
|
(222 |
) |
|
|
(274 |
) |
|
Straight-lined expenses |
|
16 |
|
|
|
18 |
|
|
|
49 |
|
|
|
56 |
|
|
|
73 |
|
|
Stock-based compensation expense, net |
|
30 |
|
|
|
36 |
|
|
|
108 |
|
|
|
126 |
|
|
|
157 |
|
|
Non-cash portion of tax provision |
|
1 |
|
|
|
4 |
|
|
|
6 |
|
|
|
8 |
|
|
|
8 |
|
|
Non-real estate related depreciation, amortization and
accretion |
|
13 |
|
|
|
14 |
|
|
|
42 |
|
|
|
49 |
|
|
|
62 |
|
|
Amortization of non-cash interest expense |
|
2 |
|
|
|
3 |
|
|
|
9 |
|
|
|
11 |
|
|
|
14 |
|
|
Other (income) expense |
|
6 |
|
|
|
— |
|
|
|
5 |
|
|
|
4 |
|
|
|
6 |
|
|
Acquisition and integration costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
Restructuring charges(c) |
|
48 |
|
|
|
72 |
|
|
|
104 |
|
|
|
72 |
|
|
|
85 |
|
|
Sustaining capital expenditures |
|
(23 |
) |
|
|
(21 |
) |
|
|
(72 |
) |
|
|
(54 |
) |
|
|
(83 |
) |
|
AFFO(a)(b) |
$ |
801 |
|
|
$ |
767 |
|
|
$ |
2,255 |
|
|
$ |
2,487 |
|
|
$ |
3,277 |
|
|
Weighted-average common shares outstanding—diluted |
|
436 |
|
|
|
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 three-month period ended
September 30, 2024, there were ($3) million of adjustments related
to the July 2023 Restructuring Plan and $51 million of
restructuring charges related to the June 2024 Restructuring Plan.
For the nine-month period ended September 30, 2024, there were $10
million and $94 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 Nine Months Ended |
|
For the Twelve Months Ended |
| (in millions, except per share
amounts; totals may not sum due to rounding) |
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
|
December 31, 2023 |
|
Net income (loss) |
$ |
0.70 |
|
|
$ |
0.61 |
|
|
$ |
1.99 |
|
|
$ |
2.62 |
|
|
$ |
3.46 |
|
|
Real estate related depreciation, amortization and accretion |
|
0.96 |
|
|
|
0.98 |
|
|
|
2.89 |
|
|
|
2.92 |
|
|
|
3.90 |
|
|
Asset write-down charges |
|
0.03 |
|
|
|
0.02 |
|
|
|
0.06 |
|
|
|
0.07 |
|
|
|
0.08 |
|
|
FFO(a)(b) |
$ |
1.69 |
|
|
$ |
1.61 |
|
|
$ |
4.94 |
|
|
$ |
5.61 |
|
|
$ |
7.43 |
|
|
Weighted-average common shares outstanding—diluted |
|
436 |
|
|
|
434 |
|
|
|
435 |
|
|
|
434 |
|
|
|
434 |
|
| |
|
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
1.69 |
|
|
$ |
1.61 |
|
|
$ |
4.94 |
|
|
$ |
5.61 |
|
|
$ |
7.43 |
|
|
Adjustments to increase (decrease) FFO: |
|
|
|
|
|
|
|
|
|
|
Straight-lined revenues |
|
(0.07 |
) |
|
|
(0.14 |
) |
|
|
(0.33 |
) |
|
|
(0.51 |
) |
|
|
(0.63 |
) |
|
Straight-lined expenses |
|
0.04 |
|
|
|
0.04 |
|
|
|
0.11 |
|
|
|
0.13 |
|
|
|
0.17 |
|
|
Stock-based compensation expense, net |
|
0.07 |
|
|
|
0.08 |
|
|
|
0.25 |
|
|
|
0.29 |
|
|
|
0.36 |
|
|
Non-cash portion of tax provision |
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
Non-real estate related depreciation, amortization and
accretion |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.10 |
|
|
|
0.11 |
|
|
|
0.14 |
|
|
Amortization of non-cash interest expense |
|
— |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.03 |
|
|
|
0.03 |
|
|
Other (income) expense |
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
Acquisition and integration costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Restructuring charges(c) |
|
0.11 |
|
|
|
0.17 |
|
|
|
0.24 |
|
|
|
0.17 |
|
|
|
0.20 |
|
|
Sustaining capital expenditures |
|
(0.05 |
) |
|
|
(0.05 |
) |
|
|
(0.17 |
) |
|
|
(0.12 |
) |
|
|
(0.19 |
) |
|
AFFO(a)(b) |
$ |
1.84 |
|
|
$ |
1.77 |
|
|
$ |
5.18 |
|
|
$ |
5.73 |
|
|
$ |
7.55 |
|
|
Weighted-average common shares outstanding—diluted |
|
436 |
|
|
|
434 |
|
|
|
435 |
|
|
|
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 three-month period ended
September 30, 2024, there were ($3) million of adjustments related
to the July 2023 Restructuring Plan and $51 million of
restructuring charges related to the June 2024 Restructuring Plan.
For the nine-month period ended September 30, 2024, there were $10
million and $94 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, except per share amounts; totals may not sum due to
rounding) |
Outlook(a) |
|
Outlook per share(a) |
|
Net income (loss) |
$975 |
|
to |
|
$1,065 |
|
|
$2.24 |
|
to |
|
$2.45 |
|
|
Real estate related depreciation, amortization and accretion |
$1,634 |
|
to |
|
$1,714 |
|
|
$3.76 |
|
to |
|
$3.94 |
|
|
Asset write-down charges(e) |
$167 |
|
to |
|
$202 |
|
|
$0.38 |
|
to |
|
$0.46 |
|
|
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 October 16,
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 period
shown.(d) Represents restructuring charges related
to the 2023 Restructuring Plan and the 2024 Restructuring
Plan.(e) Change in current full year 2024 Outlook
for asset write-down charges are related to the impact of
cancellations of small cell nodes, as further discussed above.
For Comparative Purposes -
Reconciliation of Previous Outlook for Adjusted
EBITDA:
| |
Previously Issued |
|
(in millions; totals may not sum due to rounding) |
Full Year 2024 Outlook(a) |
|
Net income (loss) |
$1,125 |
|
to |
|
$1,190 |
|
| Adjustments to increase
(decrease) income (loss) from continuing operations: |
|
|
|
|
|
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(b) |
$100 |
|
to |
|
$130 |
|
|
Amortization of prepaid lease purchase price adjustments |
$15 |
|
to |
|
$17 |
|
|
Interest expense and amortization of deferred financing costs,
net(c) |
$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(d)(e) |
$4,143 |
|
to |
|
$4,193 |
|
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 2024Outlook(a) |
|
Full Year 2024 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(d)(e) |
$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(b) |
$100 |
|
to |
|
$130 |
|
|
$0.23 |
|
to |
|
$0.30 |
|
|
Sustaining capital expenditures |
$(85) |
|
to |
|
$(65) |
|
|
$(0.20) |
|
to |
|
$(0.15) |
|
|
AFFO(d)(e) |
$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) Represents restructuring charges recorded
related to the 2023 Restructuring Plan and the 2024 Restructuring
Plan.(c) See the reconciliation of "Outlook for
Components of Interest Expense" for a discussion of non-cash
interest expense.(d) See discussion of and our
definition of Adjusted EBITDA, FFO and AFFO, including per share
amounts in this "Non-GAAP Measures and Other
Information."(e) The above reconciliation excludes
line items included in our definition which are not applicable for
the period shown.
Components of Changes in Site Rental
Revenues for the Quarters Ended September 30, 2024 and
2023:
| |
Three Months Ended September 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) |
$ |
1,386 |
|
|
$ |
1,339 |
|
|
Prior year payments for Sprint Cancellations(a)(b) |
|
6 |
|
|
|
— |
|
|
Prior year site rental billings(a) |
|
1,392 |
|
|
|
1,339 |
|
| |
|
|
|
|
Core leasing activity(a) |
|
85 |
|
|
|
66 |
|
|
Escalators |
|
25 |
|
|
|
24 |
|
|
Non-renewals(a) |
|
(38 |
) |
|
|
(37 |
) |
|
Organic Contribution to Site Rental Billings as Adjusted for Impact
of Sprint Cancellations(a) |
|
72 |
|
|
|
53 |
|
|
Payments for Sprint Cancellations(a)(b) |
|
(5 |
) |
|
|
6 |
|
|
Non-renewals associated with Sprint Cancellations(a)(b) |
|
(1 |
) |
|
|
(6 |
) |
|
Organic Contribution to Site Rental Billings(a) |
|
65 |
|
|
|
53 |
|
|
Straight-lined revenues |
|
29 |
|
|
|
58 |
|
|
Amortization of prepaid rent |
|
107 |
|
|
|
126 |
|
|
Acquisitions(c) |
|
— |
|
|
|
1 |
|
|
Total site rental revenues |
$ |
1,593 |
|
|
$ |
1,577 |
|
| |
|
|
|
|
Year-over-year changes in revenues: |
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
|
1.0 |
% |
|
|
0.6 |
% |
|
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) |
|
5.2 |
% |
|
|
4.0 |
% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(a) |
|
4.7 |
% |
|
|
3.9 |
% |
(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 third quarter 2023, we received
$6 million of payments for Sprint Cancellations that related to
fiber solutions. These payments are non-recurring and therefore
reduce full year 2024 Organic Contribution to Site Rental Billings
by the same amount. Additionally, during the third quarter 2023,
there were $5 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 September 30, 2024
and 2023:
| |
Three Months Ended September 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) |
$ |
956 |
|
|
$ |
915 |
|
| |
|
|
|
|
Core leasing activity(a) |
|
26 |
|
|
|
25 |
|
|
Escalators |
|
23 |
|
|
|
22 |
|
|
Non-renewals(a) |
|
(8 |
) |
|
|
(7 |
) |
|
Organic Contribution to Site Rental Billings(a) |
|
41 |
|
|
|
40 |
|
|
Straight-lined revenues |
|
28 |
|
|
|
57 |
|
|
Amortization of prepaid rent |
|
39 |
|
|
|
61 |
|
|
Acquisitions(b) |
|
— |
|
|
|
1 |
|
|
Other |
|
— |
|
|
|
— |
|
|
Total site rental revenues |
$ |
1,063 |
|
|
$ |
1,074 |
|
| |
|
|
|
|
Year-over-year changes in revenues: |
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
(1.0)% |
|
(0.9)% |
|
Changes in revenues as a percentage of prior year site rental
billings: |
|
|
|
|
Organic Contribution to Site Rental Billings(a) |
|
4.3 |
% |
|
|
4.4 |
% |
(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) 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
September 30, 2024 and 2023:
|
Small Cells |
Three Months Ended September 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) |
$ |
113 |
|
|
$ |
109 |
|
|
Prior year payments for Sprint Cancellations(a) |
|
— |
|
|
|
— |
|
|
Prior year site rental billings(a) |
|
113 |
|
|
|
109 |
|
| |
|
|
|
|
Core leasing activity(a) |
|
28 |
|
|
|
8 |
|
|
Escalators |
|
2 |
|
|
|
2 |
|
|
Non-renewals(a) |
|
(2 |
) |
|
|
(1 |
) |
|
Organic Contribution to Site Rental Billings as Adjusted for Impact
of Sprint Cancellations(a) |
|
28 |
|
|
|
8 |
|
|
Payments for Sprint Cancellations(a) |
|
— |
|
|
|
— |
|
|
Non-renewals associated with Sprint Cancellations(a)(b) |
|
(1 |
) |
|
|
(5 |
) |
|
Organic Contribution to Site Rental Billings(a) |
|
28 |
|
|
|
3 |
|
|
Straight-lined revenues |
|
(2 |
) |
|
|
(1 |
) |
|
Amortization of prepaid rent |
|
51 |
|
|
|
45 |
|
|
Acquisitions(c) |
|
— |
|
|
|
— |
|
|
Total site rental revenues |
$ |
190 |
|
|
$ |
157 |
|
| |
|
|
|
|
Year-over-year changes in revenues: |
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
|
21.0 |
% |
|
|
1.9 |
% |
|
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) |
|
25.0 |
% |
|
|
7.3 |
% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(a) |
|
24.5 |
% |
|
|
3.1 |
% |
(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 third quarter 2023, there were
$5 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
September 30, 2024 and 2023:
|
Fiber Solutions |
Three Months Ended September 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) |
$ |
318 |
|
|
$ |
315 |
|
|
Prior year payments for Sprint Cancellations(a)(b) |
|
6 |
|
|
|
— |
|
|
Prior year site rental billings(a) |
|
324 |
|
|
|
315 |
|
| |
|
|
|
|
Core leasing activity(a) |
|
31 |
|
|
|
34 |
|
|
Escalators |
|
— |
|
|
|
— |
|
|
Non-renewals(a) |
|
(29 |
) |
|
|
(29 |
) |
|
Organic Contribution to Site Rental Billings as Adjusted for Impact
of Sprint Cancellations(a) |
|
2 |
|
|
|
5 |
|
|
Payments for Sprint Cancellations(a)(b) |
|
(5 |
) |
|
|
6 |
|
|
Non-renewals associated with Sprint Cancellations(a)(b) |
|
(1 |
) |
|
|
(2 |
) |
|
Organic Contribution to Site Rental Billings(a) |
|
(4 |
) |
|
|
9 |
|
|
Straight-lined revenues |
|
3 |
|
|
|
2 |
|
|
Amortization of prepaid rent |
|
17 |
|
|
|
20 |
|
|
Acquisitions(c) |
|
— |
|
|
|
— |
|
|
Total site rental revenues |
$ |
340 |
|
|
$ |
346 |
|
| |
|
|
|
|
Year-over-year changes in revenues: |
|
|
|
|
Site rental revenues as a percentage of prior year site rental
revenues |
(1.7)% |
|
|
4.8 |
% |
|
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) |
|
0.7 |
% |
|
|
1.5 |
% |
|
Organic Contribution to Site Rental Billings as a percentage of
prior year site rental billings(a) |
(1.1)% |
|
|
2.8 |
% |
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 third quarter 2023, we
received $6 million of payments for Sprint Cancellations that
related to fiber solutions. These payments are non-recurring and
therefore reduce full year 2024 Organic Contribution to Site Rental
Billings by the same amount. In the third 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 October 16, 2024 and
unchanged from previous outlook 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.
These payments are non-recurring and therefore reduce full year
2024 Organic Contribution to Site Rental Billings by the same
amount.
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 October 16,
2024 and unchanged from previous outlook 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 |
| |
September 30, 2024 |
|
September 30, 2023 |
|
(in millions) |
Towers |
Fiber |
Other |
Total |
|
Towers |
Fiber |
Other |
Total |
|
Discretionary capital expenditures: |
|
|
|
|
|
|
|
|
|
|
Communications infrastructure improvements and other capital
projects |
$ |
16 |
$ |
239 |
$ |
5 |
$ |
260 |
|
$ |
34 |
$ |
273 |
$ |
5 |
$ |
312 |
|
Purchases of land interests |
|
14 |
|
— |
|
— |
|
14 |
|
|
13 |
|
— |
|
— |
|
13 |
|
Sustaining capital expenditures |
|
2 |
|
18 |
|
3 |
|
23 |
|
|
2 |
|
14 |
|
6 |
|
22 |
|
Total capital expenditures |
$ |
32 |
$ |
257 |
$ |
8 |
$ |
297 |
|
$ |
49 |
$ |
287 |
$ |
11 |
$ |
347 |
| |
|
|
|
|
|
|
|
|
|
| |
For the Nine Months Ended |
| |
September 30, 2024 |
|
September 30, 2023 |
|
(in millions) |
Towers |
Fiber |
Other |
Total |
|
Towers |
Fiber |
Other |
Total |
|
Discretionary capital expenditures: |
|
|
|
|
|
|
|
|
|
|
Communications infrastructure improvements and other capital
projects |
$ |
51 |
$ |
769 |
$ |
16 |
$ |
836 |
|
$ |
101 |
$ |
843 |
$ |
17 |
$ |
961 |
|
Purchases of land interests |
|
38 |
|
— |
|
— |
|
38 |
|
|
51 |
|
— |
|
— |
|
51 |
|
Sustaining capital expenditures |
|
7 |
|
50 |
|
15 |
|
72 |
|
|
8 |
|
29 |
|
18 |
|
55 |
|
Total capital expenditures |
$ |
96 |
$ |
819 |
$ |
31 |
$ |
946 |
|
$ |
160 |
$ |
872 |
$ |
35 |
$ |
1,067 |
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) |
September 30, 2024 |
|
September 30, 2023 |
|
Interest expense on debt obligations |
$ |
234 |
|
|
$ |
213 |
|
|
Amortization of deferred financing costs and adjustments on
long-term debt |
|
8 |
|
|
|
8 |
|
|
Capitalized interest |
|
(6 |
) |
|
|
(4 |
) |
|
Interest expense and amortization of deferred financing
costs, net |
$ |
236 |
|
|
$ |
217 |
|
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 October 16, 2024 and
unchanged from previous outlook 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
September 30, 2024:
|
(in millions) |
Face Value(a) |
|
Final Maturity |
|
Cash and cash equivalents and restricted cash and cash
equivalents |
$ |
371 |
|
|
| |
|
|
|
|
Senior Secured Notes, Series 2009-1, Class A-2(b) |
|
34 |
|
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 |
| Installment purchase
liabilities and finance leases(d) |
|
301 |
|
Various |
|
Total secured debt |
$ |
1,785 |
|
|
|
2016 Revolver(e) |
|
— |
|
July 2027 |
|
2016 Term Loan A(f) |
|
1,132 |
|
July 2027 |
|
Commercial Paper Notes(g) |
|
1,312 |
|
Various |
|
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 |
|
4.900% Senior Notes |
|
550 |
|
Sept. 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 |
|
5.200% Senior Notes |
|
700 |
|
Sept. 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 |
$ |
22,444 |
|
|
|
Net Debt(h) |
$ |
23,858 |
|
|
(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,
2024, reflects $30 million in finance lease obligations (primarily
related to vehicles).(e) As of September 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 September 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 September 30, 2024, the
Company had $0.7 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 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) discretionary capital expenditures, (12) prepaid
rent additions and amortization, (13) core leasing activity, (14)
increase in our expenses, including its driving factors, (15) Fiber
segment strategic review and the potential impacts and benefits
therefrom, (16) changes to our operating plans and capital
expenditure profile for the Fiber segment and the impacts and
potential benefits therefrom (including with respect to the value
of our assets), (17) operating cost reductions, including cost
savings and other resulting benefits, (18) payment of advisory
fees, including timing, and the impact on our results, (19) the
trends impacting our business and the potential benefits derived
therefrom, (20) small cell node cancellations and the impacts
thereof and (21) our ability to capitalize on potential
opportunities created by increasing data demand. 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) |
|
|
September 30,2024 |
|
December 31, 2023 |
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
194 |
|
|
$ |
105 |
|
|
Restricted cash and cash equivalents |
|
172 |
|
|
|
171 |
|
|
Receivables, net |
|
413 |
|
|
|
481 |
|
|
Prepaid expenses |
|
144 |
|
|
|
103 |
|
|
Deferred site rental receivables |
|
158 |
|
|
|
116 |
|
|
Other current assets |
|
43 |
|
|
|
56 |
|
|
Total current assets |
|
1,124 |
|
|
|
1,032 |
|
|
Deferred site rental receivables |
|
2,340 |
|
|
|
2,239 |
|
|
Property and equipment, net |
|
15,643 |
|
|
|
15,666 |
|
|
Operating lease right-of-use assets |
|
5,843 |
|
|
|
6,187 |
|
|
Goodwill |
|
10,085 |
|
|
|
10,085 |
|
|
Other intangible assets, net |
|
2,878 |
|
|
|
3,179 |
|
|
Other assets, net |
|
130 |
|
|
|
139 |
|
|
Total assets |
$ |
38,043 |
|
|
$ |
38,527 |
|
| |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
200 |
|
|
$ |
252 |
|
|
Accrued interest |
|
164 |
|
|
|
219 |
|
|
Deferred revenues |
|
483 |
|
|
|
605 |
|
|
Other accrued liabilities |
|
338 |
|
|
|
342 |
|
|
Current maturities of debt and other obligations |
|
611 |
|
|
|
835 |
|
|
Current portion of operating lease liabilities |
|
301 |
|
|
|
332 |
|
|
Total current liabilities |
|
2,097 |
|
|
|
2,585 |
|
|
Debt and other long-term obligations |
|
23,452 |
|
|
|
22,086 |
|
|
Operating lease liabilities |
|
5,272 |
|
|
|
5,561 |
|
|
Other long-term liabilities |
|
1,926 |
|
|
|
1,914 |
|
|
Total liabilities |
|
32,747 |
|
|
|
32,146 |
|
|
Commitments and contingencies |
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common stock, 0.01 par value; 1,200 shares authorized; shares
issued and outstanding: September 30, 2024—435 and December
31, 2023—434 |
|
4 |
|
|
|
4 |
|
|
Additional paid-in capital |
|
18,371 |
|
|
|
18,270 |
|
|
Accumulated other comprehensive income (loss) |
|
(5 |
) |
|
|
(4 |
) |
|
Dividends/distributions in excess of earnings |
|
(13,074 |
) |
|
|
(11,889 |
) |
|
Total equity |
|
5,296 |
|
|
|
6,381 |
|
|
Total liabilities and equity |
$ |
38,043 |
|
|
$ |
38,527 |
|
|
|
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, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net revenues: |
|
|
|
|
|
|
|
|
Site rental |
$ |
1,593 |
|
|
$ |
1,577 |
|
|
$ |
4,761 |
|
|
$ |
4,929 |
|
|
Services and other |
|
59 |
|
|
|
90 |
|
|
|
158 |
|
|
|
378 |
|
|
Net revenues |
|
1,652 |
|
|
|
1,667 |
|
|
|
4,919 |
|
|
|
5,307 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Costs of operations:(a) |
|
|
|
|
|
|
|
|
Site rental |
|
430 |
|
|
|
420 |
|
|
|
1,292 |
|
|
|
1,259 |
|
|
Services and other |
|
30 |
|
|
|
66 |
|
|
|
91 |
|
|
|
268 |
|
|
Selling, general and administrative |
|
153 |
|
|
|
176 |
|
|
|
540 |
|
|
|
581 |
|
|
Asset write-down charges |
|
15 |
|
|
|
8 |
|
|
|
24 |
|
|
|
30 |
|
|
Acquisition and integration costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Depreciation, amortization and accretion |
|
432 |
|
|
|
439 |
|
|
|
1,301 |
|
|
|
1,315 |
|
|
Restructuring charges |
|
48 |
|
|
|
72 |
|
|
|
104 |
|
|
|
72 |
|
|
Total operating expenses |
|
1,108 |
|
|
|
1,181 |
|
|
|
3,352 |
|
|
|
3,526 |
|
|
Operating income (loss) |
|
544 |
|
|
|
486 |
|
|
|
1,567 |
|
|
|
1,781 |
|
|
Interest expense and amortization of deferred financing costs,
net |
|
(236 |
) |
|
|
(217 |
) |
|
|
(692 |
) |
|
|
(627 |
) |
|
Interest income |
|
6 |
|
|
|
3 |
|
|
|
14 |
|
|
|
10 |
|
|
Other income (expense) |
|
(6 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
(4 |
) |
|
Income (loss) before income taxes |
|
308 |
|
|
|
272 |
|
|
|
884 |
|
|
|
1,160 |
|
|
Benefit (provision) for income taxes |
|
(5 |
) |
|
|
(7 |
) |
|
|
(19 |
) |
|
|
(21 |
) |
|
Net income (loss) |
$ |
303 |
|
|
$ |
265 |
|
|
$ |
865 |
|
|
$ |
1,139 |
|
| |
|
|
|
|
|
|
|
|
Net income (loss), per common share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.70 |
|
|
$ |
0.61 |
|
|
$ |
1.99 |
|
|
$ |
2.63 |
|
|
Diluted |
$ |
0.70 |
|
|
$ |
0.61 |
|
|
$ |
1.99 |
|
|
$ |
2.63 |
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
435 |
|
|
|
434 |
|
|
|
434 |
|
|
|
434 |
|
|
Diluted |
|
436 |
|
|
|
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) |
| |
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
Cash flows from operating activities: |
|
|
|
|
Net income (loss) |
$ |
865 |
|
|
$ |
1,139 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used for) operating activities: |
|
|
|
|
Depreciation, amortization and accretion |
|
1,301 |
|
|
|
1,315 |
|
|
Amortization of deferred financing costs and other non-cash
interest |
|
24 |
|
|
|
22 |
|
|
Stock-based compensation expense, net |
|
108 |
|
|
|
126 |
|
|
Asset write-down charges |
|
24 |
|
|
|
30 |
|
|
Deferred income tax (benefit) provision |
|
5 |
|
|
|
1 |
|
|
Other non-cash adjustments, net |
|
20 |
|
|
|
10 |
|
|
Changes in assets and liabilities, excluding the effects of
acquisitions: |
|
|
|
|
Increase (decrease) in liabilities |
|
(195 |
) |
|
|
(220 |
) |
|
Decrease (increase) in assets |
|
(86 |
) |
|
|
(165 |
) |
|
Net cash provided by (used for) operating activities |
|
2,066 |
|
|
|
2,258 |
|
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
|
(946 |
) |
|
|
(1,067 |
) |
|
Payments for acquisitions, net of cash acquired |
|
(8 |
) |
|
|
(93 |
) |
|
Other investing activities, net |
|
7 |
|
|
|
5 |
|
|
Net cash provided by (used for) investing activities |
|
(947 |
) |
|
|
(1,155 |
) |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from issuance of long-term debt |
|
1,244 |
|
|
|
2,347 |
|
|
Principal payments on debt and other long-term obligations |
|
(71 |
) |
|
|
(58 |
) |
|
Purchases and redemptions of long-term debt |
|
(750 |
) |
|
|
(750 |
) |
|
Borrowings under revolving credit facility |
|
— |
|
|
|
2,943 |
|
|
Payments under revolving credit facility |
|
(670 |
) |
|
|
(4,088 |
) |
|
Net borrowings (repayments) under commercial paper program |
|
1,312 |
|
|
|
561 |
|
|
Payments for financing costs |
|
(12 |
) |
|
|
(23 |
) |
|
Purchases of common stock |
|
(32 |
) |
|
|
(29 |
) |
|
Dividends/distributions paid on common stock |
|
(2,049 |
) |
|
|
(2,044 |
) |
|
Net cash provided by (used for) financing activities |
|
(1,028 |
) |
|
|
(1,141 |
) |
|
Net increase (decrease) in cash and cash equivalents and restricted
cash |
|
91 |
|
|
|
(38 |
) |
|
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 |
$ |
371 |
|
|
$ |
289 |
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
Interest paid |
|
739 |
|
|
|
654 |
|
|
Income taxes paid (refunded) |
|
13 |
|
|
|
13 |
|
|
|
CROWN CASTLE INC.SEGMENT OPERATING RESULTS
(UNAUDITED)(In millions of dollars) |
|
SEGMENT OPERATING RESULTS |
| |
Three Months Ended
September 30, 2024 |
|
Three Months Ended
September 30, 2023 |
|
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Segment site rental revenues |
$ |
1,063 |
|
$ |
530 |
|
|
|
$ |
1,593 |
|
$ |
1,074 |
|
$ |
503 |
|
|
|
$ |
1,577 |
|
Segment services and other revenues |
|
54 |
|
|
5 |
|
|
|
|
59 |
|
|
86 |
|
|
4 |
|
|
|
|
90 |
|
Segment revenues |
|
1,117 |
|
|
535 |
|
|
|
|
1,652 |
|
|
1,160 |
|
|
507 |
|
|
|
|
1,667 |
|
Segment site rental costs of operations |
|
240 |
|
|
182 |
|
|
|
|
422 |
|
|
236 |
|
|
175 |
|
|
|
|
411 |
|
Segment services and other costs of operations |
|
25 |
|
|
3 |
|
|
|
|
28 |
|
|
61 |
|
|
3 |
|
|
|
|
64 |
|
Segment costs of operations(a)(b) |
|
265 |
|
|
185 |
|
|
|
|
450 |
|
|
297 |
|
|
178 |
|
|
|
|
475 |
|
Segment site rental gross margin(c) |
|
823 |
|
|
348 |
|
|
|
|
1,171 |
|
|
838 |
|
|
328 |
|
|
|
|
1,166 |
|
Segment services and other gross margin(c) |
|
29 |
|
|
2 |
|
|
|
|
31 |
|
|
25 |
|
|
1 |
|
|
|
|
26 |
|
Segment selling, general and administrative expenses(b) |
|
19 |
|
|
40 |
|
|
|
|
59 |
|
|
24 |
|
|
48 |
|
|
|
|
72 |
| Segment operating
profit(c) |
|
833 |
|
|
310 |
|
|
|
|
1,143 |
|
|
839 |
|
|
281 |
|
|
|
|
1,120 |
| Other selling, general and
administrative expenses(b) |
|
|
|
|
$ |
70 |
|
|
70 |
|
|
|
|
|
$ |
75 |
|
|
75 |
|
Stock-based compensation expense, net |
|
|
|
|
|
30 |
|
|
30 |
|
|
|
|
|
|
36 |
|
|
36 |
| Depreciation, amortization and
accretion |
|
|
|
|
|
432 |
|
|
432 |
|
|
|
|
|
|
439 |
|
|
439 |
| Restructuring charges(d) |
|
|
|
|
|
48 |
|
|
48 |
|
|
|
|
|
|
72 |
|
|
72 |
| Interest expense and
amortization of deferred financing costs, net |
|
|
|
|
|
236 |
|
|
236 |
|
|
|
|
|
|
217 |
|
|
217 |
| Other (income) expenses to
reconcile to income (loss) before income taxes(e) |
|
|
|
|
|
19 |
|
|
19 |
|
|
|
|
|
|
9 |
|
|
9 |
| Income (loss) before income
taxes |
|
|
|
|
|
|
$ |
308 |
|
|
|
|
|
|
|
$ |
272 |
(a) Exclusive of depreciation,
amortization and accretion shown
separately.(b) Segment costs of operations exclude
(1) stock-based compensation expense, net of $6 million and $7
million for the three months ended September 30, 2024 and
2023, respectively and (2) prepaid lease purchase price adjustments
of $4 million for each of the three months ended September 30,
2024 and 2023. Segment selling, general and administrative expenses
and other selling, general and administrative expenses exclude
stock-based compensation expense, net of $24 million and $29
million for the three months ended September 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 adjustments and 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 September 30, 2024, there were ($3)
million of adjustments related to the July 2023 Restructuring Plan
and $51 million of restructuring charges related to the June 2024
Restructuring Plan. For the three-month period ended September 30,
2023, there were $72 million of restructuring charges related to
the June 2023 Restructuring Plan. (e) See
condensed consolidated statement of operations for further
information.
|
SEGMENT OPERATING RESULTS |
| |
Nine Months
Ended September 30, 2024 |
|
Nine Months
Ended September 30, 2023 |
|
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Towers |
|
Fiber |
|
Other |
|
Total |
|
Segment site rental revenues |
$ |
3,196 |
|
$ |
1,565 |
|
|
|
$ |
4,761 |
|
$ |
3,234 |
|
$ |
1,695 |
|
|
|
$ |
4,929 |
|
Segment services and other revenues |
|
143 |
|
|
15 |
|
|
|
|
158 |
|
|
356 |
|
|
22 |
|
|
|
|
378 |
|
Segment revenues |
|
3,339 |
|
|
1,580 |
|
|
|
|
4,919 |
|
|
3,590 |
|
|
1,717 |
|
|
|
|
5,307 |
|
Segment site rental costs of operations |
|
723 |
|
|
542 |
|
|
|
|
1,265 |
|
|
714 |
|
|
518 |
|
|
|
|
1,232 |
|
Segment services and other costs of operations |
|
76 |
|
|
10 |
|
|
|
|
86 |
|
|
252 |
|
|
8 |
|
|
|
|
260 |
|
Segment costs of operations(a)(b) |
|
799 |
|
|
552 |
|
|
|
|
1,351 |
|
|
966 |
|
|
526 |
|
|
|
|
1,492 |
|
Segment site rental gross margin(c) |
|
2,473 |
|
|
1,023 |
|
|
|
|
3,496 |
|
|
2,520 |
|
|
1,177 |
|
|
|
|
3,697 |
|
Segment services and other gross margin(c) |
|
67 |
|
|
5 |
|
|
|
|
72 |
|
|
104 |
|
|
14 |
|
|
|
|
118 |
|
Segment selling, general and administrative expenses(b) |
|
56 |
|
|
137 |
|
|
|
|
193 |
|
|
84 |
|
|
148 |
|
|
|
|
232 |
| Segment operating
profit(c) |
|
2,484 |
|
|
891 |
|
|
|
|
3,375 |
|
|
2,540 |
|
|
1,043 |
|
|
|
|
3,583 |
| Other selling, general and
administrative expenses(b) |
|
|
|
|
$ |
259 |
|
|
259 |
|
|
|
|
|
$ |
246 |
|
|
246 |
|
Stock-based compensation expense, net |
|
|
|
|
|
108 |
|
|
108 |
|
|
|
|
|
|
126 |
|
|
126 |
| Depreciation, amortization and
accretion |
|
|
|
|
|
1,301 |
|
|
1,301 |
|
|
|
|
|
|
1,315 |
|
|
1,315 |
| Restructuring charges(d) |
|
|
|
|
|
104 |
|
|
104 |
|
|
|
|
|
|
72 |
|
|
72 |
| Interest expense and
amortization of deferred financing costs, net |
|
|
|
|
|
692 |
|
|
692 |
|
|
|
|
|
|
627 |
|
|
627 |
| Other (income) expenses to
reconcile to income (loss) before income taxes(e) |
|
|
|
|
|
27 |
|
|
27 |
|
|
|
|
|
|
37 |
|
|
37 |
| Income (loss) before income
taxes |
|
|
|
|
|
|
$ |
884 |
|
|
|
|
|
|
|
$ |
1,160 |
(a) Exclusive of depreciation,
amortization and accretion shown separately.(b) Segment
costs of operations exclude (1) stock-based compensation expense,
net of $20 million and $23 million for the nine months
ended September 30, 2024 and 2023, respectively, and (2)
prepaid lease purchase price adjustments of $12 million for
each of the nine-months ended September 30, 2024 and 2023.
Segment selling, general and administrative expenses and other
selling, general and administrative expenses exclude stock-based
compensation expense, net of $88 million and $103 million
for the nine-months ended September 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 nine-month period ended
September 30, 2024, there were $10 million and $94 million of
restructuring charges related to the July 2023 Restructuring Plan
and the June 2024 Restructuring Plan, respectively. For the
nine-month period ended September 30, 2023, there were $72 million
of restructuring charges related to the June 2023 Restructuring
Plan. (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 |
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7b1f5236-9357-4f5b-b628-0943596f6e2f
https://www.globenewswire.com/NewsRoom/AttachmentNg/dfe002b9-2cbf-4677-951e-f1f9205693f4
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