Crown Castle International Corp. (NYSE: CCI) (“Crown Castle”) today
issued the following statement in response to the letter from
Elliott Associates, L.P. and Elliott International, L.P.
(“Elliott”):
Since its inception over 25 years ago, Crown
Castle has established an unmatched portfolio of towers, small cell
networks and fiber, which are all integral components of
communications networks and are shared among multiple tenants. By
continuing to execute on our strategy to own and operate this
critical infrastructure within the communications ecosystem in the
United States, we believe we are providing the best opportunity for
Crown Castle to generate significant growth while delivering
compelling returns for shareholders.
We believe the U.S. is the best market in the
world for shared communications infrastructure ownership. Through
our investment of approximately $30 billion over the last ten
years1, we have built a unique portfolio of assets, unparalleled
capabilities and strong customer relationships that position us
well to capture the upside of the anticipated decade-long
investment cycle required to meet the increasing demand for mobile
data and deploy 5G in the U.S. While continuing to make the
investments necessary to access this potential, we remain confident
in our ability to generate compelling value for our shareholders,
including through our goal of growing our dividend per share 7% to
8% per year.
1Includes capital expenditures and acquisitions
for the 10-year period ending December 31, 2019.
Crown Castle, under the leadership of its Board
of Directors and management team, has a proven record of creating
significant shareholder value and has:
- generated 32%, 90% and 154% total
returns over the last 1-, 3-, and 5-year periods, compared to 7%,
37% and 67% total returns generated by the S&P 500 and -12%, 2%
and 22% generated by the RMZ index over the same periods2,
respectively;
- exceeded total returns generated by
89%, 86% and 84% of the S&P 500 constituents and 97%, 96% and
88% of the RMZ index over the last 1-, 3- and 5-year periods2,
respectively;
- distributed $1.9 billion of cash to
common shareholders through dividends in 2019 and more than $9
billion since initiating a common stock dividend in 2014.
2As of close of trading July 2, 2020.
Crown Castle’s performance and strong investment
grade balance sheet reflect the strength of our assets. For the
four-year period ending December 31, 2019, we have delivered:
- site rental revenue growth of 67%;
- 61% growth in Adjusted EBITDA3;
- and 73% AFFO growth3, resulting in
39% growth in AFFO per share3 and a corresponding increase in
dividends per share of 37%.
3See “Non-GAAP Financial Measures and
Reconciliations” included herein for further information and
reconciliation of this non-GAAP financial measure to net
income.
As is always the case, the Crown Castle Board of
Directors and management team are open to all ideas to enhance
shareholder value. In this regard, members of our Board and
management team have met with Elliott multiple times to fully
understand and extensively evaluate their assumptions and proposed
changes to our strategic plan. While we firmly believe our strategy
best positions Crown Castle to deliver near- and long-term value
creation, we remain open to having continuing dialogue with
Elliott, as we do with all shareholders.
Morgan Stanley & Co. LLC is acting as
financial advisor and Cravath, Swaine & Moore LLP is acting as
legal advisor to Crown Castle.
ABOUT CROWN CASTLE
Crown Castle owns, operates and leases more than
40,000 cell towers and approximately 80,000 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.
CAUTIONARY LANGUAGE REGARDING
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking
statements that are based on Crown Castle management's current
expectations. Such statements include plans, projections and
estimates regarding (1) our strategy, including the benefits which
may be derived therefrom, (2) our growth, (3) shareholder value and
returns, (4) the U.S. market for shared communications
infrastructure ownership, (5) our capabilities, (6) our strategic
position, (7) investment cycles, demand for mobile data, and 5G
deployment, (8) our investments, and (9) dividends, including
growth thereof. Such forward-looking statements are subject to
certain risks, uncertainties and assumptions, including prevailing
market conditions and other factors. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those expected. More information about potential risk
factors that could affect Crown Castle and its results is included
in Crown Castle's filings with the SEC. The term "including," and
any variation thereof, means "including, without limitation.”
NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS
This press release includes presentations of
Adjusted EBITDA, Adjusted Funds from Operations ("AFFO"), including
per share amounts, 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").
We define our non-GAAP financial measures,
segment measures and other calculations as follows:
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, (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, cumulative effect of
a change in accounting principle, (income) loss from discontinued
operations and stock-based compensation expense.
Adjusted Funds from Operations. We define
Adjusted Funds from Operations as FFO before straight-lined
revenue, straight-lined expense, stock-based compensation expense,
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, acquisition
and integration costs, and adjustments for noncontrolling
interests, and less sustaining capital expenditures.
AFFO per share. We define AFFO per share as AFFO
divided by diluted weighted-average common shares outstanding.
Funds from Operations. We define Funds from
Operations as net income plus real estate related depreciation,
amortization and accretion and asset write-down charges, less
noncontrolling interest and cash paid for preferred stock
dividends, and is a measure of funds from operations attributable
to CCIC common stockholders. Our definition of FFO is consistent
with guidelines from the National Association of Real Estate
Investment Trusts with the exception of the impact of income taxes
in periods prior to our REIT conversion in 2014.
FFO per share. We define FFO per share as FFO
divided by diluted weighted-average common shares outstanding.
The tables set forth below reconcile the
non-GAAP financial measures used herein to comparable GAAP
financial measures. The components in these tables may not sum to
the total due to rounding.
Reconciliation of Historical FFO and
AFFO:
|
|
|
(in
millions, except per share amounts) |
FY 2015(As Restated)(a) |
FY 2019 |
Net income (loss)(b) |
$456 |
$860 |
Real estate related depreciation, amortization and
accretion |
$1,018 |
$1,517 |
Asset write-down charges |
$33 |
$19 |
Dividends on preferred stock |
($44) |
($113) |
FFO(c)(d)(e)(f) |
$1,464 |
$2,284 |
Weighted-average common shares outstanding- diluted(g) |
334 |
418 |
FFO per share(c)(d)(e)(f)(g) |
$4.38 |
$5.47 |
|
|
|
FFO (from above) |
$1,464 |
$2,283 |
Adjustments to increase (decrease) FFO: |
|
|
Straight-lined revenue |
($111) |
($80) |
Straight-lined expense |
$99 |
$93 |
Stock-based compensation expense |
$67 |
$116 |
Non-cash portion of tax provision |
($64) |
$5 |
Non-real estate related depreciation, amortization and
accretion |
$18 |
$55 |
Amortization of non-cash interest expense |
$37 |
$1 |
Other (income) expense |
($57) |
($1) |
(Gains) losses on retirement of long-term obligations |
$4 |
$2 |
Acquisition and integration costs |
$16 |
$13 |
Sustaining capital expenditures |
($105) |
($117) |
AFFO(c)(d)(e)(f) |
$1,368 |
$2,371 |
Weighted-average common shares outstanding- diluted(g) |
334 |
418 |
AFFO per share(c)(d)(e)(f)(g) |
$4.09 |
$5.68 |
- See our Annual Report on Form 10-K
for the year ended December 31, 2019 for further information.
- Exclusive of income (loss) from
discontinued operations and related noncontrolling interest of $1.0
billion for the twelve months ended December 31, 2015.
- See definitions of FFO, including
per share amounts, and AFFO, including per share amounts
herein.
- FFO and AFFO are reduced by cash
paid for preferred stock dividends during the period in which they
are paid.
- Attributable to CCIC common
stockholders.
- The above reconciliation excludes
line items included in our definition which are not applicable for
the periods shown.
- For all periods presented, the
diluted weighted-average common shares outstanding does not include
any assumed conversion of preferred stock in the share count.
Reconciliation of Adjusted
EBITDA:
|
|
|
(in
millions, except per share amounts) |
FY 2015(As Restated)(a) |
FY 2019 |
Net Income (loss) |
$1,455 |
$860 |
Adjustments to increase
(decrease) net income (loss): |
|
|
Income (loss) from
discontinued operations |
($999) |
- |
Asset write-down charges |
$33 |
$19 |
Acquisition and integration
costs |
$16 |
$13 |
Depreciation, amortization and
accretion |
$1,036 |
$1,572 |
Amortization of prepaid lease
purchase price adjustments |
$21 |
$20 |
Interest expense and
amortization of deferred financing costs |
$527 |
$683 |
(Gains) losses on retirement
of long-term obligations |
$4 |
$2 |
Interest income |
($2) |
($6) |
Other (income) expense |
($57) |
($1) |
(Benefit) provision for income
taxes |
($51) |
$21 |
Stock-based compensation
expense |
$67 |
$116 |
Adjusted EBITDA(b)(c) |
$2,050 |
$3,299 |
- See our Annual Report on Form 10-K for the year ended December
31, 2019 for further information.
- See definition of Adjusted EBITDA herein.
- The above reconciliation excludes line items included in our
definition which are not applicable for the periods shown.
CONTACTS |
InvestorsDan
Schlanger, CFOBen Lowe, VP & TreasurerCrown Castle
International Corp.713-570-3050 MediaAndy Brimmer / Nick
Lamplough / Adam PollackJoele Frank, Wilkinson Brimmer
Katcher212-355-4449 |
Crown Castle (NYSE:CCI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Crown Castle (NYSE:CCI)
Historical Stock Chart
From Sep 2023 to Sep 2024