10-QPeriod: Q1 FY2018

CROWN CASTLE INC. Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 4, 2018For Securities:CCI

Summary

Crown Castle Inc. (CCI) reported its first quarter 2018 results, showcasing a significant 35% year-over-year increase in total site rental revenues, primarily driven by a substantial 178% surge in the Fiber segment, largely attributed to the November 2017 Lightower acquisition. Despite a notable increase in interest expenses and a one-time loss on debt retirement, the company demonstrated resilience with net income attributable to common stockholders remaining strong at $86 million. The company's strategic focus on growing cash flows from its communications infrastructure and returning capital to shareholders through dividends remains central, supported by a robust balance sheet and strong liquidity position, including significant undrawn availability under its credit facility.

Financial Highlights

51 data points
Beta

Revenue

$1.28B

93.4% Gross Margin

Net Income

$100.00M

7.8% Net Margin

EPS (Diluted)

$0.18

Total Assets

$32.23B

Cash & Equivalents

$220.00M

Free Cash Flow

$452.00M

Financial Statements
Beta
Revenue$1.28B
Cost of Revenue$85.00M
Gross Profit$1.20B
SG&A Expenses$134.00M
Operating Expenses$949.00M
Operating Income$335.00M
Interest Expense-$160.00M
Net Income$100.00M
EPS (Basic)$0.18
EPS (Diluted)$0.18
Shares Outstanding (Basic)409.00M
Shares Outstanding (Diluted)410.00M

Key Highlights

  • 1Total site rental revenues increased by 35% to $1,153 million, driven by a substantial 178% increase in Fiber site rental revenues ($389 million) due to the Lightower acquisition and demand for small cells and fiber solutions.
  • 2Towers segment continues to show steady growth, with site rental revenues increasing by 7% to $764 million, supported by tenant additions and network upgrades by wireless carriers.
  • 3Net income attributable to common stockholders was $86 million, or $0.21 per diluted share, down from $119 million in the prior year, primarily due to losses on debt retirement and increased interest expenses.
  • 4The company generated $452 million in net cash provided by operating activities, demonstrating continued operational strength.
  • 5Total debt and other long-term obligations decreased to $15,746 million from $16,159 million, reflecting active debt management, including the repayment of January 2010 Tower Revenue Notes.
  • 6Crown Castle maintained a strong liquidity position with $220 million in cash and cash equivalents and $3.38 billion in undrawn revolver availability as of March 31, 2018.
  • 7The company declared and paid a common stock dividend of $1.05 per share, totaling $439 million, and anticipates future dividends to be at least $4.20 per share over the next 12 months.

Frequently Asked Questions

The primary driver of revenue growth was the Fiber segment, which saw a 178% increase in site rental revenues to $389 million. This surge was largely attributable to the acquisition of Lightower in November 2017 and increased demand for small cells and fiber solutions.

Crown Castle actively managed its debt by issuing new senior notes in January 2018 and using the proceeds to repay the January 2010 Tower Revenue Notes and a portion of its outstanding revolving credit facility. This resulted in a decrease in total debt and other long-term obligations.

Crown Castle paid a common stock dividend of $1.05 per share in March 2018, totaling $439 million. The company anticipates paying at least $4.20 per share in cumulative common stock dividends over the next 12 months, subject to board approval, reflecting its strategy to return cash flow to shareholders.

Crown Castle operates as a Real Estate Investment Trust (REIT) for U.S. federal income tax purposes. This allows the company to generally deduct dividends paid to stockholders, thereby avoiding U.S. federal corporate income tax on its taxable income that is distributed. To maintain its REIT status, it is required to distribute at least 90% of its REIT taxable income annually.