10-QPeriod: Q1 FY2016

CROWN CASTLE INC. Quarterly Report for Q1 Ended Mar 31, 2016

Filed May 9, 2016For Securities:CCI

Summary

Crown Castle International Corp. (CCI) reported its first quarter 2016 financial results, indicating a shift in focus towards its core wireless infrastructure business, with segments now categorized as Towers and Small Cells. While overall net income attributable to stockholders decreased year-over-year due to factors like debt retirement losses and increased depreciation, the company demonstrated solid performance in its site rental revenues, up 9% to $799.3 million, primarily driven by growth in both its tower and small cell segments. The company also highlighted its strategy to deliver long-term stockholder value through growing cash flows, returning capital to shareholders via dividends, and efficient capital investment. Significant debt refinancing and equity issuances occurred during the quarter, positioning the company for future growth and dividend payments.

Financial Highlights

48 data points
Beta

Revenue

$934.38M

Net Income

$47.84M

5.1% Net Margin

EPS (Diluted)

$0.11

Total Assets

$21.72B

Cash & Equivalents

$175.70M

Free Cash Flow

$437.66M

Financial Statements
Beta
Revenue$934.38M
SG&A Expenses$97.58M
Operating Expenses$722.64M
Operating Income$211.74M
Interest Expense$122.17M
Net Income$47.84M
EPS (Basic)$0.11
EPS (Diluted)$0.11
Shares Outstanding (Basic)334.15M
Shares Outstanding (Diluted)334.93M

Key Highlights

  • 1Net revenues increased by 3.8% year-over-year to $934.4 million, primarily driven by a 9% increase in site rental revenues to $799.3 million.
  • 2Operating income decreased by 13.5% to $211.7 million, mainly due to increased operating expenses, including depreciation, amortization, and accretion.
  • 3Net income attributable to CCIC stockholders significantly decreased by 67% to $36.8 million compared to $111.8 million in the prior year's quarter, impacted by losses on debt retirement and higher depreciation expenses.
  • 4The company maintained a strong liquidity position with $175.7 million in cash and cash equivalents and $2.19 billion in undrawn revolver availability.
  • 5Crown Castle declared and paid a common stock dividend of $0.885 per share, totaling approximately $300 million, reflecting its commitment to returning capital to shareholders.
  • 6The company completed significant debt refinancing activities in early 2016, issuing $1.5 billion in senior unsecured notes to manage its debt structure.
  • 7Crown Castle operated as a REIT for U.S. federal income tax purposes, generally allowing for a deduction for dividends paid and avoiding corporate income tax on distributed earnings.

Frequently Asked Questions

Revenue growth was primarily driven by a 9% increase in site rental revenues, which reached $799.3 million. This growth was attributable to tenant additions on existing tower infrastructure and the expansion of the small cell business, including contributions from recent acquisitions like Sunesys.

The substantial decrease in net income was primarily due to non-recurring losses of $30.5 million related to the retirement of long-term obligations and a 10% increase in depreciation, amortization, and accretion expenses. These factors outweighed the growth in operating income from site rentals.

Crown Castle has actively managed its debt through refinancing activities, including issuing $1.5 billion in senior unsecured notes in February 2016 to repay existing debt and optimize its capital structure. The company targets a leverage ratio of approximately four to five times Adjusted EBITDA and maintains significant liquidity, with ample availability under its revolving credit facility.