10-QPeriod: Q3 FY2020

CROWN CASTLE INC. Quarterly Report for Q3 Ended Sep 30, 2020

Filed October 28, 2020For Securities:CCI

Summary

Crown Castle Inc. (CCI) reported its third-quarter 2020 financial results, showing a modest increase in total revenues to $1.486 billion, up from $1.482 billion in the prior year's comparable period. Site rental revenues, the company's core business, grew 4% year-over-year to $1.339 billion, driven by continued tenant additions and escalations in both the Towers and Fiber segments. Despite revenue growth, net income attributable to stockholders declined by 33% to $163 million, primarily due to a significant $95 million loss on the retirement of long-term debt and a decrease in services and other gross margin. The company's balance sheet remains robust, with total assets of $38.786 billion. Debt levels increased to $19.190 billion in long-term obligations. Cash flow from operations remained strong at $2.070 billion for the first nine months of the year. Crown Castle continues to execute its strategy of returning capital to shareholders, announcing a new quarterly dividend of $1.33 per share, an increase of approximately 11% from previous quarters, and expects to pay out at least $5.32 per share over the next 12 months.

Financial Highlights

50 data points
Beta

Revenue

$1.49B

92.1% Gross Margin

Net Income

$163.00M

11.0% Net Margin

EPS (Diluted)

$0.38

Total Assets

$38.79B

Cash & Equivalents

$242.00M

Free Cash Flow

$661.00M

Financial Statements
Beta
Revenue$1.49B
Cost of Revenue$117.00M
Gross Profit$1.37B
SG&A Expenses$154.00M
Operating Expenses$1.05B
Operating Income$434.00M
Interest Expense$168.00M
Net Income$163.00M
EPS (Basic)$0.38
EPS (Diluted)$0.38
Shares Outstanding (Basic)427.00M
Shares Outstanding (Diluted)429.00M

Key Highlights

  • 1Total revenues increased slightly by 0.3% to $1.486 billion in Q3 2020 compared to $1.482 billion in Q3 2019.
  • 2Site rental revenues grew 4% to $1.339 billion in Q3 2020, driven by both Towers and Fiber segments.
  • 3Net income attributable to CCIC stockholders decreased by 33% to $163 million in Q3 2020, largely due to $95 million in losses from debt retirement.
  • 4Net cash provided by operating activities was strong at $2.070 billion for the first nine months of 2020.
  • 5Discretionary capital expenditures for the nine months ended September 30, 2020, were $1.2 billion, a decrease from the prior year, mainly due to the completion of large fiber expansion projects.
  • 6The company declared a quarterly cash dividend of $1.33 per common share, an 11% increase from the previous quarter.
  • 7All outstanding 6.875% Mandatory Convertible Preferred Stock was converted into common stock during July and August 2020.

Frequently Asked Questions

Crown Castle's total revenues saw a slight increase of 0.3%, reaching $1.486 billion in the third quarter of 2020, compared to $1.482 billion in the same period of 2019. Site rental revenues, the company's primary revenue stream, grew by a more substantial 4% to $1.339 billion, indicating continued demand for its core infrastructure services.

The decrease in net income attributable to CCIC stockholders by 33% to $163 million in the third quarter of 2020 was primarily driven by a significant $95 million loss incurred from the retirement of long-term debt. Additionally, a decline in the gross margin from services and other activities also contributed to the lower net income.

Crown Castle's long-term debt obligations increased to $19.190 billion as of September 30, 2020. The company actively manages its debt through issuances and redemptions, having recently issued significant amounts of senior unsecured notes in April and June 2020, some of which were used to refinance existing debt. The company targets a leverage ratio of approximately five times Adjusted EBITDA and aims to maintain a long-dated debt maturity profile with a majority of fixed-rate debt.

Crown Castle is committed to returning capital to its common stockholders. The company declared a quarterly cash dividend of $1.33 per common share, representing an 11% increase from prior quarters. It expects to distribute at least $5.32 per share over the next 12 months. This strategy aligns with its belief in growing cash flows from its existing infrastructure and investing capital efficiently to support long-term dividend growth.