10-QPeriod: Q3 FY2021

CROWN CASTLE INC. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 5, 2021For Securities:CCI

Summary

Crown Castle Inc. (CCI) reported solid financial results for the nine months ended September 30, 2021. The company demonstrated strong revenue growth, particularly in its Towers segment, driven by increased tenant additions and demand for network expansion. The Fiber segment also showed consistent growth, reflecting the increasing need for small cells and fiber solutions. Financially, CCI maintained a healthy liquidity position and managed its debt effectively, including refinancing activities that reduced interest expenses. The company reiterated its commitment to returning capital to shareholders through dividends, announcing an increase in its quarterly dividend. While facing typical operational challenges and macroeconomic factors, the company's outlook for the remainder of 2021 and into 2022 remains positive, driven by continued demand for communication infrastructure.

Financial Highlights

50 data points
Beta

Revenue

$1.62B

92.9% Gross Margin

Net Income

$351.00M

21.7% Net Margin

EPS (Diluted)

$0.81

Total Assets

$39.00B

Cash & Equivalents

$357.00M

Free Cash Flow

$684.00M

Financial Statements
Beta
Revenue$1.62B
Cost of Revenue$115.00M
Gross Profit$1.50B
SG&A Expenses$167.00M
Operating Expenses$1.09B
Operating Income$526.00M
Interest Expense$163.00M
Net Income$351.00M
EPS (Basic)$0.81
EPS (Diluted)$0.81
Shares Outstanding (Basic)432.00M
Shares Outstanding (Diluted)434.00M

Key Highlights

  • 1Total site rental revenues increased by 8% to $1.45 billion for the three months ended September 30, 2021, and by 7% to $4.25 billion for the nine months ended September 30, 2021, year-over-year.
  • 2Towers segment site rental revenues grew 11% year-over-year for the third quarter and 8% for the first nine months, driven by tenant additions and network capacity needs.
  • 3Fiber segment site rental revenues increased by 4% for the third quarter and 5% for the first nine months, reflecting strong demand for small cells and fiber solutions.
  • 4Net income attributable to CCIC stockholders was $351 million for the three months ended September 30, 2021, compared to $163 million in the prior year period.
  • 5Net cash provided by operating activities was $2.06 billion for the nine months ended September 30, 2021, showing resilience despite a slight decrease from the prior year.
  • 6The company declared a quarterly cash dividend of $1.47 per common share in October 2021, representing an approximate 11% increase from previous quarters, and expects to pay at least $5.88 per share over the next 12 months.
  • 7Total assets grew slightly to $39.00 billion as of September 30, 2021, from $38.77 billion as of December 31, 2020, with a significant portion in Property and equipment and Goodwill.

Frequently Asked Questions

Crown Castle's core business is owning, operating, and leasing shared communications infrastructure, primarily towers and fiber, across the U.S. Their revenue model is largely recurring, generated from long-term tenant contracts for space or capacity on these assets. Site rental revenue constitutes the vast majority of their total revenue.

The company reported strong revenue growth in both its Towers and Fiber segments for the three and nine months ended September 30, 2021, compared to the prior year. Net income also saw a significant increase year-over-year, indicating improved profitability. Cash flow from operations remained robust, and the company actively managed its debt through refinancing activities.

Crown Castle's strategy focuses on three key pillars: growing cash flows from its existing infrastructure through tenant additions and modifications, returning a meaningful portion of operating cash flow to stockholders via dividends, and investing capital efficiently to grow future cash flows and dividends per share. This includes constructing and acquiring new communications infrastructure.

The company expects continued growth in site rental revenue for 2021 and 2022, driven by increasing demand for data, 5G deployment, and the expansion of small cells and fiber solutions. Key drivers include new technologies, increased mobile data usage, wireless carrier focus on network quality and capacity, and the adoption of bandwidth-intensive applications. Discretionary capital expenditures are expected to support this growth, albeit at a reduced level compared to 2020.