Crown Castle International Corp. (NYSE: CCI) ("Crown Castle") today
reported results for the first quarter ended March 31, 2022
and increased its full year 2022 outlook, as reflected in the table
below.
(dollars in millions, except per share amounts) |
Current Full Year 2022 Outlook(a) |
Full Year 2021 Actual |
% Change |
Previous Full Year 2022 Outlook(b) |
Current Compared to Previous Outlook |
Site rental revenues |
$6,265 |
$5,719 |
10% |
$6,225 |
+$40 |
Income (loss) from continuing
operations |
$1,714 |
$1,158(c) |
48% |
$1,674 |
+$40 |
Income (loss) from continuing
operations per share—diluted |
$3.94 |
$2.67(c) |
48% |
$3.85 |
+$0.09 |
Adjusted EBITDA(d) |
$4,332 |
$3,816 |
14% |
$4,272 |
+$60 |
AFFO(d) |
$3,201 |
$3,013 |
6% |
$3,201 |
$— |
AFFO per share(d) |
$7.36 |
$6.95 |
6% |
$7.36 |
$— |
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(a) Reflects midpoint of full year 2022 Outlook
as issued on April 20, 2022.(b) Reflects midpoint of full year 2022
Outlook as issued on January 26, 2022.(c) Does not reflect the
impact related to the ATO Settlement (as defined in the Form 8-K
filed with the Securities and Exchange Commission on April 26, 2021
("April 2021 8-K"), which is attributable to discontinued
operations in the first quarter of 2021 as discussed in the April
2021 8-K.(d) See "Non-GAAP Financial Measures, Segment Measures and
Other Calculations" for further information and reconciliation of
non-GAAP financial measures to income (loss) from continuing
operations, as computed in accordance with GAAP.
"We are seeing the benefit of a robust 5G
leasing environment that contributed to the 9% AFFO per share
growth we delivered in the first quarter and led to an increase in
our operating expectations for the full year 2022," stated Jay
Brown, Crown Castle’s Chief Executive Officer. "Consistent with the
last couple of decades, it is clear to us that the U.S. represents
the highest growth and lowest risk market in the world for
communications infrastructure ownership. We believe our
comprehensive offering of 40,000 towers, 115,000 small cells on air
or under contract and 80,000 route miles of fiber provides
shareholders with the largest exposure to the development of
next-generation wireless networks in the best market to own shared
network infrastructure. We expect the deployment of 5G in the U.S.
to extend our opportunity to create long-term value for our
shareholders while delivering dividend per share growth of 7% to 8%
per year."
"After experiencing the highest level of tower
application activity in our history last year, we expect elevated
levels of tower leasing to continue this year and believe we will
once again lead the U.S. tower industry with 6% organic tower
revenue growth. At the same time, I believe 2022 will be an
important transition year for our small cells and fiber business.
Our team is focused on scaling our small cell deployment
capabilities so we can accelerate from what we expect to be
approximately 5,000 small cell nodes installed this year to more
than 10,000 per year starting in 2023 as we deliver on our record
backlog of more than 60,000 small cell nodes."
RESULTS FOR THE QUARTER
The table below sets forth select financial
results for the quarter ended March 31, 2022 and
March 31, 2021.
(dollars in millions, except per share amounts) |
Q1 2022 |
Q1 2021 |
Change |
Change % |
Site rental revenues |
$1,576 |
$1,369 |
$207 |
15% |
Income (loss) from continuing
operations |
$421 |
$121(b) |
$300 |
248% |
Income (loss) from continuing
operations per share—diluted |
$0.97 |
$0.28(b) |
$0.69 |
246% |
Adjusted EBITDA(a) |
$1,095 |
$897 |
$198 |
22% |
AFFO(a) |
$812 |
$738 |
$74 |
10% |
AFFO per share(a) |
$1.87 |
$1.71 |
$0.16 |
9% |
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(a) See "Non-GAAP Financial Measures, Segment
Measures and Other Calculations" for further information and
reconciliation of non-GAAP financial measures to income (loss) from
continuing operations, as computed in accordance with GAAP.(b) Does
not reflect the impact related to the ATO Settlement (as defined in
the April 2021 8-K), which is attributable to discontinued
operations in the first quarter of 2021 as discussed in the April
2021 8-K.
HIGHLIGHTS FROM THE QUARTER
- Site rental
revenues. Site rental revenues grew 15%, or $207 million,
from first quarter 2021 to first quarter 2022, inclusive of
approximately $75 million in Organic Contribution to Site Rental
Billings (see "Outlook" below for a definition of site rental
billings) and a $126 million increase in straight-lined revenues.
The $75 million in Organic Contribution to Site Rental Billings
represents approximately 6.0% growth, comprised of approximately
9.4% growth from core leasing activity and contracted tenant
escalations, net of approximately 3.4% from tenant non-renewals.
First quarter 2022 site rental revenues benefited by approximately
$15 million from items not expected to recur in 2022.
- Income from continuing
operations. Income from continuing operations for the
first quarter 2022 was $421 million compared to $121 million for
the first quarter 2021 and was predominantly impacted by the
increase in site rental revenues as well as a reduction in losses
on retirement of long-term obligations of $117 million.
- Adjusted EBITDA.
First quarter 2022 Adjusted EBITDA was $1.1 billion compared to
$897 million for the first quarter 2021.
- AFFO and AFFO per
share. First quarter 2022 AFFO was $812 million,
representing 10% growth from first quarter 2021. AFFO per share for
first quarter 2022 was $1.87, representing 9% growth when compared
to first quarter 2021.
- Capital
expenditures. Capital expenditures during the quarter were
$281 million, comprised of $21 million of sustaining capital
expenditures and $260 million of discretionary capital
expenditures. Discretionary capital expenditures during the quarter
primarily included approximately $209 million attributable to Fiber
and approximately $45 million attributable to Towers.
- Common stock
dividend. During the quarter, Crown Castle paid common
stock dividends of approximately $650 million in the aggregate, or
$1.47 per common share, an increase of approximately 11% on a per
share basis compared to the same period a year ago.
- Financing
activities. In March, Crown Castle issued $750 million in
aggregate principal amount of senior unsecured notes with a
five-year maturity and a coupon of 2.9%. Net proceeds from the
senior notes offering were used to repay a portion of the
outstanding indebtedness under Crown Castle's commercial paper
program and related fees and expenses. Also in March, Crown Castle
repaid in full the previously outstanding 3.720% Senior Secured
Tower Revenue Notes, Series 2018-1, Class C-2023 and the previously
outstanding 3.849% Secured Notes due 2023.
"We are experiencing strong leasing activity
across our portfolio of towers as our customers upgrade and densify
their networks as they roll out 5G, resulting in strong first
quarter results and our increased expectations for the full year,"
stated Dan Schlanger, Crown Castle’s Chief Financial Officer. "We
have also continued to strengthen our balance sheet to pursue
investment opportunities consistent with our strategy that we
believe will add to long-term dividend per share growth while
navigating an increasing interest rate environment. We finished the
quarter with a weighted average debt maturity of approximately 9
years, a weighted average interest rate of 3% and 85% of our
outstanding debt being fixed rate. We believe our U.S. focused
strategy offering towers, small cells and fiber, combined with our
solid financial position, provide unique exposure to the most
attractive wireless market fundamentals and support our ability to
deliver attractive risk-adjusted returns through a compelling
combination of dividends and growth."
OUTLOOKThis 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 outlook for full year 2022.
(in millions, except per share amounts) |
Full Year 2022 |
|
Change to Midpoint from Previous Outlook |
Site rental revenues |
$6,242 to $6,287 |
|
+$40 |
Site rental costs of operations(a) |
$1,548 to $1,593 |
|
$— |
Income (loss) from continuing operations |
$1,674 to $1,754 |
|
+$40 |
Adjusted EBITDA(b) |
$4,309 to $4,354 |
|
+$60 |
Interest expense and
amortization of deferred financing costs(c) |
$635 to $680 |
|
+$20 |
FFO(b) |
$3,358 to $3,403 |
|
+$40 |
AFFO(b) |
$3,178 to $3,223 |
|
$— |
AFFO per share(b) |
$7.31 to $7.41 |
|
$— |
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(a) Exclusive of depreciation, amortization and
accretion. (b) See "Non-GAAP Financial Measures, Segment Measures
and Other Calculations" for further information and reconciliation
of non-GAAP financial measures to income (loss) from continuing
operations, as computed in accordance with GAAP.(c) See
reconciliation of "Components of Outlook for Interest Expense and
Amortization of Deferred Financing Costs" for a discussion of
non-cash interest expense.
- The increase to the
midpoint of the full year 2022 Outlook for site rental revenues and
Adjusted EBITDA reflects an increase in expected Tower activity
resulting in an additional $40 million in straight-lined revenues
and $20 million in additional contribution from our services
business.
- The full year 2022 Outlook for AFFO
is unchanged, reflecting a $20 million increase to the expected
full year interest expense resulting from higher interest
rates.
- The chart below reconciles the
components of expected growth in site rental revenues from 2021 to
2022 of $535 million to $580 million, inclusive of Organic
Contribution to Site Rental Billings during 2022 of $230 million to
$270 million, or approximately 5%.
- As previously discussed,
year-over-year organic revenue growth is now reported as Organic
Contribution to Site Rental Billings, which excludes year-over-year
changes in amortization of prepaid rent.
- Site rental billings is defined 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. See page 10 of
the First Quarter 2022 Supplemental Information Package for a
historical reconciliation of Organic Contribution to Site Rental
Billings and "Non-GAAP Financial Measures, Segment Measures and
Other Calculations" herein for definitions and further
information.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/52d89030-2250-47ca-8e9c-06b462efa247
- The chart below reconciles the
components of expected growth in AFFO from 2021 to 2022 of $165
million to $210 million. The $20 million reduction in the Other
category is attributable to the previously mentioned increase in
expected 2022 interest expense.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/2f3e8b97-eb62-4678-a718-c1ca72883341
Additional information is available in Crown
Castle's quarterly Supplemental Information Package posted in the
Investors section of our website.
CONFERENCE CALL DETAILS Crown
Castle has scheduled a conference call for Thursday, April 21,
2022, at 10:30 a.m. Eastern time to discuss its first quarter 2022
results. The conference call may be accessed by dialing
800-458-4121 and asking for the Crown Castle call (access code
8859825) at least 30 minutes prior to the start time. The
conference call may also be accessed live over the Internet at
investor.crowncastle.com. Supplemental materials for the call have
been posted on the Crown Castle website at
investor.crowncastle.com.
A telephonic replay of the conference call will
be available from 1:30 p.m. Eastern time on Thursday, April 21,
2022, through 1:30 p.m. Eastern time on Wednesday, July 20, 2022,
and may be accessed by dialing 888-203-1112 and using access code
8859825. An audio archive will also be available on Crown Castle's
website at investor.crowncastle.com shortly after the call and will
be accessible for approximately 90 days.
ABOUT CROWN CASTLECrown Castle
owns, operates and leases more than 40,000 cell towers and more
than 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. For more information on Crown Castle, please visit
www.crowncastle.com.
Contacts: |
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Dan Schlanger, CFOBen Lowe, SVP & TreasurerCrown Castle
International Corp.713-570-3050 |
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Non-GAAP Financial Measures, Segment
Measures and Other Calculations
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, and Organic Contribution to Site Rental Billings,
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 income (loss) from continuing operations 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 income (loss) from continuing
operations 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 income (loss) from
continuing operations 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 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 the 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. Organic Contribution to Site Rental Billings 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.
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
income (loss) from continuing operations 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 and stock-based compensation
expense.
Adjusted Funds from Operations. We define
Adjusted Funds from Operations as FFO before straight-lined
revenues, straight-lined expenses, 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, impairment of
available-for-sale securities, acquisition and integration costs,
restructuring charges (credits), 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.
Funds from Operations. We define Funds from
Operations as income (loss) from continuing operations 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 CCIC common
stockholders.
FFO per share. We define FFO per share as FFO
divided by diluted weighted-average common shares outstanding.
Organic Contribution to Site Rental Billings. We
define Organic Contribution to Site Rental Billings as the sum of
the change in GAAP site rental revenues related to core leasing
activity and escalators, less non-renewals of tenant contracts.
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 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 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, and segment other operating
(income) expense, less selling, general and administrative expenses
attributable to the respective segment.
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 Calculations
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 the impacts from both straight-lined
revenues and amortization of prepaid rent in accordance with
GAAP.
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.
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.
The tables set forth on the following pages
reconcile the non-GAAP financial measures used herein to comparable
GAAP financial measures.
Reconciliations of Non-GAAP Financial
Measures, Segment Measures and Other Calculations to Comparable
GAAP Financial Measures:
Reconciliation of Historical Adjusted
EBITDA:
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
(in millions) |
March 31, 2022 |
|
March 31, 2021 |
|
December 31, 2021 |
|
Income (loss) from continuing operations |
$ |
421 |
|
$ |
121 |
|
(a) |
$ |
1,158 |
|
(a) |
Adjustments to increase
(decrease) income (loss) from continuing operations: |
|
|
|
|
|
|
Asset write-down charges |
|
14 |
|
|
3 |
|
|
|
21 |
|
|
Acquisition and integration costs |
|
— |
|
|
— |
|
|
|
1 |
|
|
Depreciation, amortization and accretion |
|
420 |
|
|
408 |
|
|
|
1,644 |
|
|
Amortization of prepaid lease purchase price adjustments |
|
4 |
|
|
5 |
|
|
|
18 |
|
|
Interest expense and amortization of deferred financing
costs(b) |
|
164 |
|
|
170 |
|
|
|
657 |
|
|
(Gains) losses on retirement of long-term obligations |
|
26 |
|
|
143 |
|
|
|
145 |
|
|
Interest income |
|
— |
|
|
(1 |
) |
|
|
(1 |
) |
|
Other (income) expense |
|
1 |
|
|
8 |
|
|
|
21 |
|
|
(Benefit) provision for income taxes |
|
6 |
|
|
7 |
|
|
|
21 |
|
|
Stock-based compensation expense |
|
39 |
|
|
33 |
|
|
|
131 |
|
|
Adjusted EBITDA(c)(d) |
$ |
1,095 |
|
$ |
897 |
|
|
$ |
3,816 |
|
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Reconciliation of Current Outlook for
Adjusted EBITDA:
|
Full Year 2022 |
(in millions) |
Outlook(f) |
Income (loss) from continuing operations |
$1,674 |
|
to |
$1,754 |
Adjustments to increase
(decrease) income (loss) from continuing operations: |
|
|
|
Asset write-down charges |
$15 |
|
to |
$25 |
Acquisition and integration costs |
$0 |
|
to |
$8 |
Depreciation, amortization and accretion |
$1,650 |
|
to |
$1,745 |
Amortization of prepaid lease purchase price adjustments |
$16 |
|
to |
$18 |
Interest expense and amortization of deferred financing
costs(e) |
$635 |
|
to |
$680 |
(Gains) losses on retirement of long-term obligations |
$25 |
|
to |
$75 |
Interest income |
$(1 |
) |
to |
$0 |
Other (income) expense |
$0 |
|
to |
$5 |
(Benefit) provision for income taxes |
$25 |
|
to |
$33 |
Stock-based compensation expense |
$135 |
|
to |
$139 |
Adjusted EBITDA(c)(d) |
$4,309 |
|
to |
$4,354 |
(a) |
Does not reflect the impact related to the ATO Settlement (as
defined in the April 2021 8-K), which is attributable to
discontinued operations in the first quarter of 2021 as discussed
in the April 2021 8-K. |
(b) |
See reconciliation of "Components
of Historical Interest Expense and Amortization of Deferred
Financing Costs" for a discussion of non-cash interest
expense. |
(c) |
See "Non-GAAP Financial Measures,
Segment Measures and Other Calculations" for a discussion of our
definition of Adjusted EBITDA. |
(d) |
The above reconciliation excludes
line items included in our definition which are not applicable for
the periods shown. |
(e) |
See reconciliation of "Components
of Outlook for Interest Expense and Amortization of Deferred
Financing Costs" for a discussion of non-cash interest
expense. |
(f) |
As issued on April 20, 2022. |
Reconciliation of Historical FFO and
AFFO:
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
(in millions, except per share amounts) |
March 31, 2022 |
|
March 31, 2021 |
|
December 31, 2021 |
|
Income (loss) from continuing operations |
$ |
421 |
|
|
$ |
121 |
|
(a) |
$ |
1,158 |
|
(a) |
Real estate related depreciation, amortization and accretion |
|
408 |
|
|
|
395 |
|
|
|
1,593 |
|
|
Asset write-down charges |
|
14 |
|
|
|
3 |
|
|
|
21 |
|
|
FFO(b)(c) |
$ |
843 |
|
|
$ |
519 |
|
|
$ |
2,772 |
|
|
Weighted-average common shares outstanding—diluted |
|
434 |
|
|
|
433 |
|
|
|
434 |
|
|
FFO per
share(b)(c) |
$ |
1.94 |
|
|
$ |
1.20 |
|
|
$ |
6.39 |
|
|
|
|
|
|
|
|
|
FFO (from above) |
$ |
843 |
|
|
$ |
519 |
|
|
$ |
2,772 |
|
|
Adjustments to increase (decrease) FFO: |
|
|
|
|
|
|
Straight-lined revenues |
|
(116 |
) |
|
|
10 |
|
|
|
(111 |
) |
|
Straight-lined expenses |
|
19 |
|
|
|
19 |
|
|
|
76 |
|
|
Stock-based compensation expense |
|
39 |
|
|
|
33 |
|
|
|
131 |
|
|
Non-cash portion of tax provision |
|
5 |
|
|
|
7 |
|
|
|
1 |
|
|
Non-real estate related depreciation, amortization and
accretion |
|
12 |
|
|
|
13 |
|
|
|
51 |
|
|
Amortization of non-cash interest expense |
|
4 |
|
|
|
3 |
|
|
|
13 |
|
|
Other (income) expense |
|
1 |
|
|
|
8 |
|
|
|
21 |
|
|
(Gains) losses on retirement of long-term obligations |
|
26 |
|
|
|
143 |
|
|
|
145 |
|
|
Acquisition and integration costs |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Sustaining capital expenditures |
|
(21 |
) |
|
|
(17 |
) |
|
|
(87 |
) |
|
AFFO(b)(c) |
$ |
812 |
|
|
$ |
738 |
|
|
$ |
3,013 |
|
|
Weighted-average common shares outstanding—diluted |
|
434 |
|
|
|
433 |
|
|
|
434 |
|
|
AFFO per
share(b)(c) |
$ |
1.87 |
|
|
$ |
1.71 |
|
|
$ |
6.95 |
|
|
(a) |
Does not reflect the impact related to the ATO Settlement (as
defined in the April 2021 8-K), which is attributable to
discontinued operations in the first quarter of 2021 as discussed
in the April 2021 8-K. |
(b) |
See "Non-GAAP Financial Measures,
Segment Measures and Other Calculations" for a discussion of our
definitions of FFO and AFFO, including per share amounts. |
(c) |
The above reconciliation excludes
line items included in our definition which are not applicable for
the periods shown. |
Reconciliation of Current Outlook for
FFO and AFFO:
|
Full Year 2022 |
(in millions, except per share amounts) |
Outlook(a) |
Income (loss) from continuing operations |
$1,674 |
|
to |
$1,754 |
|
Real estate related depreciation, amortization and accretion |
$1,607 |
|
to |
$1,687 |
|
Asset write-down charges |
$15 |
|
to |
$25 |
|
FFO(b)(c) |
$3,358 |
|
to |
$3,403 |
|
Weighted-average common shares outstanding—diluted(d) |
435 |
|
|
|
|
FFO per
share(b)(c)(d) |
$7.72 |
|
to |
$7.82 |
|
|
|
|
|
|
|
FFO (from above) |
$3,358 |
|
to |
$3,403 |
|
Adjustments to increase (decrease) FFO: |
|
|
|
|
|
Straight-lined revenues |
$(419 |
) |
to |
$(399) |
|
Straight-lined expenses |
$56 |
|
to |
$76 |
|
Stock-based compensation expense |
$135 |
|
to |
$139 |
|
Non-cash portion of tax provision |
$0 |
|
to |
$15 |
|
Non-real estate related depreciation, amortization and
accretion |
$43 |
|
to |
$58 |
|
Amortization of non-cash interest expense |
$5 |
|
to |
$15 |
|
Other (income) expense |
$0 |
|
to |
$5 |
|
(Gains) losses on retirement of long-term obligations |
$25 |
|
to |
$75 |
|
Acquisition and integration costs |
$0 |
|
to |
$8 |
|
Sustaining capital expenditures |
$(113 |
) |
to |
$(93) |
|
AFFO(b)(c) |
$3,178 |
|
to |
$3,223 |
|
Weighted-average common shares outstanding—diluted(d) |
435 |
|
|
|
|
AFFO per
share(b)(c)(d) |
$7.31 |
|
to |
$7.41 |
|
(a) |
As
issued on April 20, 2022. |
(b) |
See "Non-GAAP Financial Measures,
Segment Measures and Other Calculations" for a discussion of our
definitions of FFO and AFFO, including per share amounts. |
(c) |
The above reconciliation excludes
line items included in our definition which are not applicable for
the periods shown. |
(d) |
The assumption for diluted
weighted-average common shares outstanding for full year 2022
Outlook is based on the diluted common shares outstanding as of
March 31, 2022. |
For Comparative Purposes - Reconciliation
of Previous Outlook for Adjusted EBITDA:
|
Previously Issued |
|
Full Year 2022 |
(in millions) |
Outlook(a) |
Income (loss) from continuing operations |
$1,634 |
|
to |
$1,714 |
Adjustments to increase
(decrease) income (loss) from continuing operations: |
|
|
|
Asset write-down charges |
$15 |
|
to |
$25 |
Acquisition and integration costs |
$0 |
|
to |
$8 |
Depreciation, amortization and accretion |
$1,650 |
|
to |
$1,745 |
Amortization of prepaid lease purchase price adjustments |
$16 |
|
to |
$18 |
Interest expense and amortization of deferred financing
costs(b) |
$615 |
|
to |
$660 |
(Gains) losses on retirement of long-term obligations |
$0 |
|
to |
$100 |
Interest income |
$(1 |
) |
to |
$0 |
Other (income) expense |
$0 |
|
to |
$5 |
(Benefit) provision for income taxes |
$25 |
|
to |
$33 |
Stock-based compensation expense |
$135 |
|
to |
$139 |
Adjusted EBITDA(c)(d) |
$4,249 |
|
to |
$4,294 |
For Comparative Purposes -
Reconciliation of Previous Outlook for FFO and AFFO:
|
Previously Issued |
|
Full Year 2022 |
(in millions, except per share amounts) |
Outlook(a) |
Income (loss) from continuing operations |
$1,634 |
|
to |
$1,714 |
|
Real estate related depreciation, amortization and accretion |
$1,607 |
|
to |
$1,687 |
|
Asset write-down charges |
$15 |
|
to |
$25 |
|
FFO(c)(d) |
$3,318 |
|
to |
$3,363 |
|
Weighted-average common shares outstanding—diluted(e) |
435 |
|
|
|
|
FFO per share(c)(d)(e) |
$7.63 |
|
to |
$7.73 |
|
|
|
|
|
|
|
FFO (from above) |
$3,318 |
|
to |
$3,363 |
|
Adjustments to increase (decrease) FFO: |
|
|
|
|
|
Straight-lined revenues |
$(379) |
|
to |
$(359) |
|
Straight-lined expenses |
$56 |
|
to |
$76 |
|
Stock-based compensation expense |
$135 |
|
to |
$139 |
|
Non-cash portion of tax provision |
$0 |
|
to |
$15 |
|
Non-real estate related depreciation, amortization and
accretion |
$43 |
|
to |
$58 |
|
Amortization of non-cash interest expense |
$5 |
|
to |
$15 |
|
Other (income) expense |
$0 |
|
to |
$5 |
|
(Gains) losses on retirement of long-term obligations |
$0 |
|
to |
$100 |
|
Acquisition and integration costs |
$0 |
|
to |
$8 |
|
Sustaining capital expenditures |
$(113) |
|
to |
$(93) |
|
AFFO(c)(d) |
$3,178 |
|
to |
$3,223 |
|
Weighted-average common shares outstanding—diluted(e) |
435 |
|
|
|
|
AFFO per
share(c)(d)(e) |
$7.31 |
|
to |
$7.41 |
|
(a) |
As
issued on January 26, 2022. |
(b) |
See reconciliation of "Components
of Outlook for Interest Expense and Amortization of Deferred
Financing Costs" for a discussion of non-cash interest
expense. |
(c) |
See "Non-GAAP Financial Measures,
Segment Measures and Other Calculations" for a discussion of our
definitions of Adjusted EBITDA as well as FFO and AFFO, including
per share amounts |
(d) |
The above reconciliation excludes
line items included in our definition which are not applicable for
the periods shown. |
(e) |
The assumption for diluted
weighted-average common shares outstanding for full year 2022
Outlook is based on the diluted common shares outstanding as of
March 31, 2022. |
Components of Changes in Site Rental
Revenues for the Quarters Ended March 31, 2022 and
2021:(a)
|
Three Months Ended March 31, |
(dollars in millions) |
|
2022 |
|
|
|
2021 |
|
Components of changes in site rental revenues:(b) |
|
|
|
Prior year site rental billings(c) |
$ |
1,243 |
|
|
$ |
1,170 |
|
|
|
|
|
Core leasing activity(c) |
|
92 |
|
|
|
89 |
|
Escalators |
|
25 |
|
|
|
23 |
|
Non-renewals(c) |
|
(42 |
) |
|
|
(40 |
) |
Organic Contribution to Site Rental Billings(c) |
|
75 |
|
|
|
72 |
|
Impact from straight-lined revenues associated with fixed
escalators |
|
116 |
|
|
|
(10 |
) |
Impact from prepaid rent amortization |
|
141 |
|
|
|
136 |
|
Acquisitions(d) |
|
1 |
|
|
|
1 |
|
Other |
|
— |
|
|
|
— |
|
Total GAAP site rental revenues |
$ |
1,576 |
|
|
$ |
1,369 |
|
|
|
|
|
Year-over-year changes in revenues: |
|
|
|
Reported GAAP site rental revenues |
|
15.1 |
% |
|
|
Contribution from core leasing and escalators(c)(e) |
|
9.4 |
% |
|
|
Organic Contribution to Site Rental Billings(c)(f) |
|
6.0 |
% |
|
|
Components of Changes in Site Rental
Revenues for Full Year 2022
Outlook:(a)
(dollars in millions) |
Current Full Year 2022 Outlook(g) |
|
Previous Full Year 2022 Outlook(h) |
Components of changes in site rental revenues:(b) |
|
|
|
Prior year site rental billings(c) |
$5,048 |
|
$5,048 |
|
|
|
|
Core leasing activity(c) |
$320 |
to |
$350 |
|
$320 |
to |
$350 |
Escalators |
$95 |
to |
$105 |
|
$95 |
to |
$105 |
Non-renewals(c) |
$(195) |
to |
$(175) |
|
$(195) |
to |
$(175) |
Organic Contribution to Site Rental Billings(c) |
$230 |
to |
$270 |
|
$230 |
to |
$270 |
Impact from straight-lined revenues associated with fixed
escalators |
$399 |
to |
$419 |
|
$359 |
to |
$379 |
Impact from prepaid rent amortization |
$560 |
to |
$570 |
|
$560 |
to |
$570 |
Acquisitions(d) |
— |
|
— |
Other |
— |
|
— |
Total GAAP site rental revenues |
$6,242 |
to |
$6,287 |
|
$6,202 |
to |
$6,247 |
|
|
|
|
Year-over-year changes in revenues: |
|
|
|
Reported GAAP site rental revenues |
9.5%(i) |
|
8.8%(i) |
Contribution from core leasing and escalators(c)(e) |
8.6%(i) |
|
8.6%(i) |
Organic Contribution to Site Rental Billings(c)(f) |
5.0%(i) |
|
5.0%(i) |
(a) |
Beginning in the first quarter of 2022, we have revised our
presentation of "Components of Changes in Site Rental Revenues"
(most notably, by removing the concept of the impact of prepaid
amortization from Organic Contribution to Site Rental Billings) in
order to increase the usefulness of the table for investors or
other interested parties. See "Non-GAAP Financial Measures, Segment
Measures and Other Calculations" for further information. |
(b) |
Additional information regarding our site rental revenues,
including projected revenues from tenant contracts, straight-lined
revenues and prepaid rent is available in our quarterly
Supplemental Information Package posted in the Investors section of
our website. |
(c) |
See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" for our definitions of site rental billings, core
leasing activity, non-renewals and Organic Contribution to Site
Rental Billings. |
(d) |
Represents the contribution from recent acquisitions. The financial
impact of recent acquisitions is excluded from Organic Contribution
to Site Rental Billings until the one-year anniversary of such
acquisitions. |
(e) |
Calculated as the percentage change from prior year site rental
billings compared to the sum of core leasing and escalators for the
current period. |
(f) |
Calculated as the percentage change from prior year site rental
billings compared to Organic Contribution to Site Rental Billings
for the current period. |
(g) |
As issued on April 20, 2022. |
(h) |
As issued on January 26, 2022. |
(i) |
Calculated based on midpoint of respective full year 2022
Outlook. |
Components of Historical Interest
Expense and Amortization of Deferred Financing Costs:
|
For the Three Months Ended |
(in millions) |
March 31, 2022 |
|
March 31, 2021 |
Interest expense on debt obligations |
$ |
160 |
|
|
$ |
167 |
|
Amortization of deferred financing costs and adjustments on
long-term debt, net |
|
7 |
|
|
|
6 |
|
Capitalized interest |
|
(3 |
) |
|
|
(3 |
) |
Interest expense and amortization of deferred financing
costs |
$ |
164 |
|
|
$ |
170 |
|
Components of Outlook for Interest
Expense and Amortization of Deferred Financing Costs:
(in millions) |
Current Full Year 2022 Outlook(a) |
|
Previous Full Year 2022 Outlook(b) |
Interest expense on debt obligations |
$637 |
to |
$657 |
|
$617 |
to |
$637 |
Amortization of deferred financing costs and adjustments on
long-term debt, net |
$25 |
to |
$30 |
|
$25 |
to |
$30 |
Capitalized interest |
$(20) |
to |
$(15) |
|
$(20) |
to |
$(15) |
Interest expense and amortization of deferred financing
costs |
$635 |
to |
$680 |
|
$615 |
to |
$660 |
(a) |
As
issued on April 20, 2022. |
(b) |
As issued on January 26,
2022. |
Debt Balances and Maturity Dates as of
March 31, 2022:
(in millions) |
Face Value |
|
Final Maturity |
Cash, cash equivalents and restricted cash |
$ |
482 |
|
|
|
|
|
|
Secured Notes, Series 2009-1, Class A-2(a) |
|
52 |
|
Aug. 2029 |
Tower Revenue Notes, Series 2015-2(b) |
|
700 |
|
May 2045 |
Tower Revenue Notes, Series 2018-2(b) |
|
750 |
|
July 2048 |
Finance leases and other
obligations |
|
236 |
|
Various |
Total secured debt |
$ |
1,738 |
|
|
2016 Revolver(c) |
|
900 |
|
June 2026 |
2016 Term Loan A |
|
1,215 |
|
June 2026 |
Commercial Paper Notes(d) |
|
1,042 |
|
Various |
3.150% Senior Notes |
|
750 |
|
July 2023 |
3.200% Senior Notes |
|
750 |
|
Sept. 2024 |
1.350% Senior Notes |
|
500 |
|
July 2025 |
4.450% Senior Notes |
|
900 |
|
Feb. 2026 |
3.700% Senior Notes |
|
750 |
|
June 2026 |
1.050% Senior Notes |
|
1,000 |
|
July 2026 |
2.900% Senior Notes |
|
750 |
|
Mar. 2027 |
4.000% Senior Notes |
|
500 |
|
Mar. 2027 |
3.650% Senior Notes |
|
1,000 |
|
Sept. 2027 |
3.800% Senior Notes |
|
1,000 |
|
Feb. 2028 |
4.300% Senior Notes |
|
600 |
|
Feb. 2029 |
3.100% Senior Notes |
|
550 |
|
Nov. 2029 |
3.300% Senior Notes |
|
750 |
|
July 2030 |
2.250% Senior Notes |
|
1,100 |
|
Jan. 2031 |
2.100% Senior Notes |
|
1,000 |
|
Apr. 2031 |
2.500% Senior Notes |
|
750 |
|
July 2031 |
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 |
$ |
19,557 |
|
|
Total net debt |
$ |
20,813 |
|
|
(a) |
The Senior Secured Notes, 2009-1, Class A-2 principal amortizes
over a period ending in August 2029. |
(b) |
If the respective series of such debt is 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. |
(c) |
As of March 31, 2022, the undrawn availability under the $5.0
billion 2016 Revolver was $4.1 billion. |
(d) |
As of March 31, 2022, the Company had $958 million
available for issuance under the $2.0 billion unsecured commercial
paper program ("CP Program"). The maturities of the Commercial
Paper Notes, when outstanding, may vary but may not exceed 397 days
from the date of issue. |
Net Debt to Last Quarter Annualized
Adjusted EBITDA Calculation:
(dollars in millions) |
For the Three Months Ended March 31, 2022 |
|
Total face value of debt |
$ |
21,295 |
|
Less: Ending cash, cash equivalents and restricted cash |
|
482 |
|
Total Net Debt |
$ |
20,813 |
|
|
|
|
|
Adjusted EBITDA for the three months ended March 31, 2022 |
$ |
1,095 |
|
Last quarter annualized Adjusted EBITDA |
|
4,380 |
|
Net Debt to Last Quarter Annualized Adjusted
EBITDA |
|
4.8 |
x |
Components of Capital
Expenditures:(a)
|
For the Three Months Ended |
(in millions) |
March 31, 2022 |
|
March 31, 2021 |
|
Towers |
Fiber |
Other |
Total |
|
Towers |
Fiber |
Other |
Total |
Discretionary: |
|
|
|
|
|
|
|
|
|
Purchases of land interests |
$ |
10 |
$ |
— |
$ |
— |
$ |
10 |
|
$ |
14 |
$ |
— |
$ |
— |
$ |
14 |
Communications infrastructure improvements and other
capital projects |
|
35 |
|
209 |
|
6 |
|
250 |
|
|
35 |
|
225 |
|
11 |
|
271 |
Sustaining |
|
2 |
|
13 |
|
6 |
|
21 |
|
|
2 |
|
12 |
|
3 |
|
17 |
Total |
$ |
47 |
$ |
222 |
$ |
12 |
$ |
281 |
|
$ |
51 |
$ |
237 |
$ |
14 |
$ |
302 |
(a) |
See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" for further discussion of our components of capital
expenditures. |
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 2022 Outlook and plans,
projections, and estimates regarding (1) potential benefits,
growth, returns, capabilities, opportunities and shareholder value
which may be derived from our business, strategy, risk profile,
assets and customer solutions, investments, acquisitions and
dividends, (2) our business, strategy, strategic position, business
model and capabilities and the strength thereof, (3) 5G deployment
in the United States and our customers' strategy and plans with
respect thereto and demand for our assets and solutions created by
such deployment and our customers' strategy and plans, (4) our
long- and short-term prospects and the trends, events and industry
activities impacting our business, (5) opportunities we see to
deliver value to our shareholders, (6) our dividends (including
timing of payment thereof), dividend targets, dividend payout
ratio, and our long- and short-term dividend (including on a per
share basis) growth rate, and its driving factors, (7) our debt and
debt maturities, (8) cash flows, including growth thereof,
(9) leasing environment (including with respect to tower
application volumes) and the leasing activity we see in our
business, and benefits and opportunities created thereby, (10)
tenant non-renewals, including the impact and timing thereof, (11)
capital expenditures, including sustaining and discretionary
capital expenditures, the timing and funding thereof and any
benefits that may result therefrom, (12) revenues and growth
thereof (including with respect to our Towers business) and
benefits derived therefrom, (13) Income (loss) from continuing
operations (including on a per share basis), (14) Adjusted
EBITDA, including components thereof and growth thereof,
(15) costs and expenses, including interest expense and
amortization of deferred financing costs, (16) FFO (including on a
per share basis) and growth thereof, (17) AFFO (including on a per
share basis) and its components and growth thereof and
corresponding driving factors, (18) Organic Contribution to
Site Rental Billings and its components, including growth thereof
and contributions therefrom, (19) our weighted-average common
shares outstanding (including on a diluted basis) and growth
thereof, (20) site rental revenues, including as impacted by
non-recurring items, and the growth thereof, (21) annual small cell
deployment and the impacts therefrom, including its driving
factors, (22) prepaid rent, including the additions and the
amortization and growth thereof, (23) the strength of the U.S.
market for communications infrastructure ownership, (24) the
strength of our balance sheet, (25) the utility of certain
financial measures, including non-GAAP financial measures and (26)
investment opportunities and the benefits that may be derived
therefrom. All future dividends are subject to declaration by our
board of directors.
Such forward-looking statements are subject to
certain risks, uncertainties and assumptions, including prevailing
market conditions and the following:
- Our business
depends on the demand for our communications infrastructure, 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 or reduce demand for our
communications infrastructure and services.
- The expansion or development of our
business, including through acquisitions, increased product
offerings or other strategic growth opportunities, may cause
disruptions in our business, which may have an adverse effect on
our business, operations or financial results.
- Our Fiber segment has expanded
rapidly, 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.
- 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.
- The impact of COVID-19 and related
risks could materially affect our financial position, results of
operations and cash flows.
- 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 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 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 REIT involves highly technical and complex provisions of the U.S.
Internal Revenue Code. Failure to remain qualified as a REIT would
result in our inability to deduct dividends to stockholders when
computing our taxable income, which would reduce 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 INTERNATIONAL
CORP.CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)(Amounts in millions, except par values)
|
March 31,2022 |
|
December 31,2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
312 |
|
|
$ |
292 |
|
Restricted cash |
|
165 |
|
|
|
169 |
|
Receivables, net |
|
503 |
|
|
|
543 |
|
Prepaid expenses |
|
119 |
|
|
|
105 |
|
Other current assets |
|
162 |
|
|
|
145 |
|
Total current assets |
|
1,261 |
|
|
|
1,254 |
|
Deferred site rental receivables |
|
1,682 |
|
|
|
1,588 |
|
Property and equipment, net |
|
15,226 |
|
|
|
15,269 |
|
Operating lease right-of-use assets |
|
6,759 |
|
|
|
6,682 |
|
Goodwill |
|
10,078 |
|
|
|
10,078 |
|
Other intangible assets, net |
|
3,935 |
|
|
|
4,046 |
|
Other assets, net |
|
130 |
|
|
|
123 |
|
Total assets |
$ |
39,071 |
|
|
$ |
39,040 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
224 |
|
|
$ |
246 |
|
Accrued interest |
|
117 |
|
|
|
182 |
|
Deferred revenues |
|
721 |
|
|
|
776 |
|
Other accrued liabilities |
|
288 |
|
|
|
401 |
|
Current maturities of debt and other obligations |
|
71 |
|
|
|
72 |
|
Current portion of operating lease liabilities |
|
355 |
|
|
|
349 |
|
Total current liabilities |
|
1,776 |
|
|
|
2,026 |
|
Debt and other long-term obligations |
|
21,055 |
|
|
|
20,557 |
|
Operating lease liabilities |
|
6,098 |
|
|
|
6,031 |
|
Other long-term liabilities |
|
2,106 |
|
|
|
2,168 |
|
Total liabilities |
|
31,035 |
|
|
|
30,782 |
|
Commitments and contingencies |
|
|
|
CCIC stockholders' equity: |
|
|
|
Common stock, $0.01 par value; 600 shares authorized; shares issued
and outstanding: March 31, 2022—433 and December 31,
2021—432 |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
18,006 |
|
|
|
18,011 |
|
Accumulated other comprehensive income (loss) |
|
(3 |
) |
|
|
(4 |
) |
Dividends/distributions in excess of earnings |
|
(9,971 |
) |
|
|
(9,753 |
) |
Total equity |
|
8,036 |
|
|
|
8,258 |
|
Total liabilities and equity |
$ |
39,071 |
|
|
$ |
39,040 |
|
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (UNAUDITED)(Amounts in millions, except per
share amounts)
|
Three Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Net revenues: |
|
|
|
Site rental |
$ |
1,576 |
|
|
$ |
1,369 |
|
Services and other |
|
166 |
|
|
|
116 |
|
Net revenues |
|
1,742 |
|
|
|
1,485 |
|
Operating expenses: |
|
|
|
Costs of operations:(a) |
|
|
|
Site rental |
|
396 |
|
|
|
381 |
|
Services and other |
|
113 |
|
|
|
81 |
|
Selling, general and administrative |
|
181 |
|
|
|
164 |
|
Asset write-down charges |
|
14 |
|
|
|
3 |
|
Acquisition and integration costs |
|
— |
|
|
|
— |
|
Depreciation, amortization and accretion |
|
420 |
|
|
|
408 |
|
Total operating expenses |
|
1,124 |
|
|
|
1,037 |
|
Operating income (loss) |
|
618 |
|
|
|
448 |
|
Interest expense and amortization of deferred financing costs |
|
(164 |
) |
|
|
(170 |
) |
Gains (losses) on retirement of long-term obligations |
|
(26 |
) |
|
|
(143 |
) |
Interest income |
|
— |
|
|
|
1 |
|
Other income (expense) |
|
(1 |
) |
|
|
(8 |
) |
Income (loss) before income taxes |
|
427 |
|
|
|
128 |
|
Benefit (provision) for income taxes |
|
(6 |
) |
|
|
(7 |
) |
Income (loss) from continuing operations |
|
421 |
|
|
|
121 |
|
Discontinued operations: |
|
|
|
Net gain (loss) from disposal of discontinued operations, net of
tax |
|
— |
|
|
|
(63 |
) |
Income (loss) from discontinued operations, net of tax |
|
— |
|
|
|
(63 |
) |
Net income (loss) |
|
421 |
|
|
|
58 |
|
|
|
|
|
Net income (loss), per common
share: |
|
|
|
Income (loss) from continuing operations, basic |
$ |
0.97 |
|
|
$ |
0.28 |
|
Income (loss) from discontinued operations, basic |
|
— |
|
|
|
(0.15 |
) |
Net income (loss), basic |
$ |
0.97 |
|
|
$ |
0.13 |
|
Income (loss) from continuing operations, diluted |
$ |
0.97 |
|
|
$ |
0.28 |
|
Income (loss) from discontinued operations, diluted |
|
— |
|
|
|
(0.15 |
) |
Net income (loss), diluted |
$ |
0.97 |
|
|
$ |
0.13 |
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
Basic |
|
433 |
|
|
|
432 |
|
Diluted |
|
434 |
|
|
|
433 |
|
(a) |
Exclusive of depreciation, amortization and accretion shown
separately. |
CROWN CASTLE INTERNATIONAL
CORP.CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (UNAUDITED)(In millions of dollars)
|
Three Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
Income (loss) from continuing operations |
$ |
421 |
|
|
$ |
121 |
|
Adjustments to reconcile
income (loss) from continuing operations to net cash provided by
(used for) operating activities: |
|
|
|
Depreciation, amortization and accretion |
|
420 |
|
|
|
408 |
|
(Gains) losses on retirement of long-term obligations |
|
26 |
|
|
|
143 |
|
Amortization of deferred financing costs and other non-cash
interest, net |
|
4 |
|
|
|
3 |
|
Stock-based compensation expense |
|
38 |
|
|
|
33 |
|
Asset write-down charges |
|
14 |
|
|
|
3 |
|
Deferred income tax (benefit) provision |
|
1 |
|
|
|
1 |
|
Other non-cash adjustments, net |
|
1 |
|
|
|
10 |
|
Changes in assets and liabilities, excluding the effects of
acquisitions: |
|
|
|
Increase (decrease) in liabilities |
|
(274 |
) |
|
|
(146 |
) |
Decrease (increase) in assets |
|
(93 |
) |
|
|
8 |
|
Net cash provided by (used for) operating activities |
|
558 |
|
|
|
584 |
|
Cash flows from investing activities: |
|
|
|
Capital expenditures |
|
(281 |
) |
|
|
(302 |
) |
Payments for acquisitions, net of cash acquired |
|
(3 |
) |
|
|
(4 |
) |
Other investing activities, net |
|
(5 |
) |
|
|
(5 |
) |
Net cash provided by (used for) investing activities |
|
(289 |
) |
|
|
(311 |
) |
Cash flows from financing activities: |
|
|
|
Proceeds from issuance of long-term debt |
|
748 |
|
|
|
3,237 |
|
Principal payments on debt and other long-term obligations |
|
(18 |
) |
|
|
(1,026 |
) |
Purchases and redemptions of long-term debt |
|
(1,274 |
) |
|
|
(1,789 |
) |
Borrowings under revolving credit facility |
|
900 |
|
|
|
580 |
|
Payments under revolving credit facility |
|
(665 |
) |
|
|
(290 |
) |
Net borrowings (repayments) under commercial paper program |
|
777 |
|
|
|
(245 |
) |
Payments for financing costs |
|
(8 |
) |
|
|
(29 |
) |
Purchases of common stock |
|
(63 |
) |
|
|
(67 |
) |
Dividends/distributions paid on common stock |
|
(650 |
) |
|
|
(588 |
) |
Net cash provided by (used for) financing activities |
|
(253 |
) |
|
|
(217 |
) |
Net increase (decrease) in cash, cash equivalents, and
restricted cash |
|
16 |
|
|
|
56 |
|
Effect of exchange rate changes on cash |
|
— |
|
|
|
1 |
|
Cash, cash equivalents, and restricted cash at beginning of
period |
|
466 |
|
|
|
381 |
|
Cash, cash equivalents, and restricted cash at end of
period |
$ |
482 |
|
|
$ |
438 |
|
Supplemental disclosure of cash flow
information: |
|
|
|
Interest paid |
|
225 |
|
|
|
259 |
|
Income taxes paid |
|
— |
|
|
|
— |
|
CROWN CASTLE INTERNATIONAL CORP.SEGMENT
OPERATING RESULTS (UNAUDITED)(In millions of dollars)
SEGMENT OPERATING RESULTS |
|
Three Months Ended March 31, 2022 |
|
Three Months Ended March 31, 2021 |
|
Towers |
|
Fiber |
|
Other |
|
Consolidated Total |
|
Towers |
|
Fiber |
|
Other |
|
Consolidated Total |
Segment site rental revenues |
$ |
1,075 |
|
$ |
501 |
|
|
|
$ |
1,576 |
|
$ |
895 |
|
$ |
474 |
|
|
|
$ |
1,369 |
Segment services and other revenues |
|
163 |
|
|
3 |
|
|
|
|
166 |
|
|
111 |
|
|
5 |
|
|
|
|
116 |
Segment revenues |
|
1,238 |
|
|
504 |
|
|
|
|
1,742 |
|
|
1,006 |
|
|
479 |
|
|
|
|
1,485 |
Segment site rental costs of operations |
|
225 |
|
|
162 |
|
|
|
|
387 |
|
|
212 |
|
|
161 |
|
|
|
|
373 |
Segment services and other costs of operations |
|
109 |
|
|
2 |
|
|
|
|
111 |
|
|
76 |
|
|
3 |
|
|
|
|
79 |
Segment costs of operations(a)(b) |
|
334 |
|
|
164 |
|
|
|
|
498 |
|
|
288 |
|
|
164 |
|
|
|
|
452 |
Segment site rental gross margin(c) |
|
850 |
|
|
339 |
|
|
|
|
1,189 |
|
|
683 |
|
|
313 |
|
|
|
|
996 |
Segment services and other gross margin(c) |
|
54 |
|
|
1 |
|
|
|
|
55 |
|
|
35 |
|
|
2 |
|
|
|
|
37 |
Segment selling, general and administrative expenses(b) |
|
28 |
|
|
47 |
|
|
|
|
75 |
|
|
25 |
|
|
45 |
|
|
|
|
70 |
Segment operating
profit(c) |
|
876 |
|
|
293 |
|
|
|
|
1,169 |
|
|
693 |
|
|
270 |
|
|
|
|
963 |
Other selling, general and
administrative expenses(b) |
|
|
|
|
$ |
74 |
|
|
74 |
|
|
|
|
|
$ |
66 |
|
|
66 |
Stock-based compensation expense |
|
|
|
|
|
39 |
|
|
39 |
|
|
|
|
|
|
33 |
|
|
33 |
Depreciation, amortization and
accretion |
|
|
|
|
|
420 |
|
|
420 |
|
|
|
|
|
|
408 |
|
|
408 |
Interest expense and
amortization of deferred financing costs |
|
|
|
|
|
164 |
|
|
164 |
|
|
|
|
|
|
170 |
|
|
170 |
Other (income) expenses to
reconcile to income (loss) before income taxes(d) |
|
|
|
|
|
45 |
|
|
45 |
|
|
|
|
|
|
158 |
|
|
158 |
Income (loss) before income
taxes |
|
|
|
|
|
|
$ |
427 |
|
|
|
|
|
|
|
$ |
128 |
FIBER SEGMENT SITE RENTAL REVENUES SUMMARY |
|
Three Months Ended March 31, |
|
|
2022 |
|
|
2021 |
|
Fiber Solutions |
|
Small Cells |
|
Total |
|
Fiber Solutions |
|
Small Cells |
|
Total |
Site rental revenues |
$ |
346 |
|
$ |
155 |
|
$ |
501 |
|
$ |
331 |
|
$ |
143 |
|
$ |
474 |
(a) |
Exclusive of depreciation, amortization and accretion shown
separately. |
(b) |
Segment costs of operations exclude (1) stock-based compensation
expense of $7 million and $5 million for the three months
ended March 31, 2022 and 2021, respectively, (2) prepaid lease
purchase price adjustments of $4 million and $5 million for the
three months ended March 31, 2022 and 2021, respectively.
Selling, general and administrative expenses exclude stock-based
compensation expense of $32 million and $28 million for the
three months ended March 31, 2022 and 2021, respectively. |
(c) |
See "Non-GAAP Financial Measures, Segment Measures and Other
Calculations" for a discussion of our definitions of segment site
rental gross margin, segment services and other gross margin and
segment operating profit. |
(d) |
See condensed consolidated statement of operations for further
information. |
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