8-KRegulation FDExhibits & Filings

CROWN CASTLE INC. 8-K Report, Regulation FD Disclosure (Jan 6, 2022)

Filed January 6, 2022For Securities:CCI

Summary

Crown Castle International Corp. (CCI) announced a significant long-term agreement with T-Mobile US, Inc. on January 6, 2022, impacting its Towers and Small Cell segments. The 12-year agreement includes contracted new tower leasing activity and a base escalator consistent with historical levels, projecting an estimated additional $250 million in straight-lined site rental revenues for its Towers segment in 2022 compared to prior outlooks. This new revenue stream from T-Mobile's ongoing network development is a positive indicator of continued demand for Crown Castle's infrastructure. However, the agreement also anticipates future challenges related to the T-Mobile and Sprint network consolidation. Crown Castle expects tower non-renewals in 2025 to reduce site rental revenues by approximately $200 million, and small cell non-renewals to reduce revenues by about $45 million, primarily in 2023. While the impact of small cell non-renewals is partially offset by amortization of upfront payments, these consolidation-related non-renewals are expected to cause dividend growth in 2025 to fall below the company's long-term annual target of 7% to 8%. Investors should weigh the near-term revenue upside against these longer-term non-renewal risks.

Key Highlights

  • 1Entered into a 12-year long-term agreement with T-Mobile US, Inc.
  • 2Expects approximately $250 million in additional straight-lined site rental revenues for its Towers segment in full-year 2022 due to new leasing activity.
  • 3T-Mobile has committed to 35,000 new small cell nodes, with specific annual commitments for the next five years.
  • 4Anticipates tower non-renewals in 2025 due to T-Mobile/Sprint network consolidation, projecting a ~$200 million reduction in site rental revenues.
  • 5Expects small cell non-renewals of ~$45 million, with the majority occurring in 2023, partially offset by amortization of upfront payments.
  • 6Annual tower and small cell non-renewals are expected to remain within historical ranges (1%-2%) outside of the anticipated 2025 and 2023 impacts, respectively.
  • 7Dividend growth in 2025 is expected to be below the long-term target range of 7%-8% due to the network consolidation non-renewals.

Frequently Asked Questions

In the near term, the agreement is expected to boost Crown Castle's revenue, with an estimated $250 million in additional straight-lined site rental revenues for its Towers segment in full-year 2022 compared to previous outlooks. This is driven by contracted new tower leasing activity.

The agreement anticipates future non-renewals due to the T-Mobile and Sprint network consolidation. Crown Castle expects a reduction of approximately $200 million in site rental revenues from tower non-renewals in 2025 and about $45 million from small cell non-renewals, with the majority occurring in 2023.

Due to the expected non-renewals from the network consolidation in 2025, Crown Castle anticipates that its dividend growth in 2025 will be below its long-term annual target range of 7% to 8%.

Yes, the agreement includes a contractual commitment from T-Mobile for 35,000 new small cell nodes, with specific commitments in each of the next five years for identified small cell locations. A majority of these are expected to be collocated on existing Crown Castle fiber.