cci-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

FORM 10-Q

___________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period to

Commission File Number 001-16441

____________________________________

CROWN CASTLE INC.

(Exact name of registrant as specified in its charter)


Delaware						76-0470458
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

8020 Katy Freeway, Houston, Texas 77024

(Address of principal executives office) (Zip Code)

(713) 570-3000

(Registrant's telephone number, including area code)

____________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	CCI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding at May 1, 2023: 433,671,293

CROWN CASTLE INC. AND SUBSIDIARIES

INDEX


		Page
PART I—FINANCIAL INFORMATION		3
ITEM 1.	FINANCIAL STATEMENTS	3
	CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)	3
	CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)	4
	CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)	5
	CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited)	6
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	7
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
ITEM 4.	CONTROLS AND PROCEDURES	28
PART II—OTHER INFORMATION		29
ITEM 1.	LEGAL PROCEEDINGS	29
ITEM 1A.	RISK FACTORS	29
ITEM 6.	EXHIBITS	29
EXHIBIT INDEX		29
SIGNATURES		30

Cautionary Language Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q ("Form 10-Q") contains forward-looking statements that are based on our management's expectations as of the filing date of this report with the Securities and Exchange Commission ("SEC"). Statements that are not historical facts are hereby identified as forward-looking statements. In addition, words such as "estimate," "anticipate," "project," "plan," "intend," "believe," "expect," "likely," "predicted," "positioned," "continue," "target," "seek," "focus" and any variations of these words and similar expressions are intended to identify forward-looking statements.

Examples of forward-looking statements include our full year 2023 outlook and plans, projections and estimates regarding (1) the value of our business model and demand for our communications infrastructure, (2) the growth of the U.S. market for shared communications infrastructure, (3) growth in the communications infrastructure industry, (4) demand for data and factors driving such demand, (5) the duration of our construction projects, (6) tenants' investment in wireless networks, (7) use of high-bandwidth applications, (8) our ability to service our debt and comply with debt covenants, (9) the level of commitment under our debt instruments, (10) our ability to remain qualified as a real estate investment trust ("REIT"), (11) sources and uses of liquidity, (12) impact to our financial results from the Sprint Cancellations (as defined below), (13) drivers of cash flow growth, (14) our competitive advantage, (15) our dividends, including timing, amount, growth, targets, payment or tax characterization, (16) the timing of small cell deployments, (17) discretionary capital expenditures and expansion of our business and (18) impact of interest rate increases. All future dividends are subject to declaration by our board of directors.

Such forward-looking statements should, therefore, be considered in light of various risks, uncertainties and assumptions, including prevailing market conditions, risk factors described in "Item 1A. Risk Factors" of the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 ("2022 Form 10-K") and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected.

Our filings with the SEC are available through the SEC website at www.sec.gov or through our investor relations website at investor.crowncastle.com. We use our investor relations website to disclose information about us that may be deemed to be material. We encourage investors, the media and others interested in us to visit our investor relations website from time to time to review up-to-date information or to sign up for e-mail alerts to be notified when new or updated information is posted on the site.

Interpretation

As used herein, the term "including," and any variation thereof, means "including without limitation." The use of the word "or" herein is not exclusive. Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms "we," "our," "our company," "the company" or "us" as used in this Form 10-Q refer to Crown Castle Inc. ("CCI") and its predecessor (organized in 1995), as applicable, each a Delaware corporation, and their subsidiaries. Additionally, unless the context suggests otherwise, references to "U.S." are to the United States of America and Puerto Rico, collectively. Capitalized terms used but not defined in this Form 10-Q have the same meaning given to them in the 2022 Form 10-K.

PART I—FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

CROWN CASTLE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(Amounts in millions, except par values)


	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	187	$	156
Restricted cash	196		166
Receivables, net	565		593
Prepaid expenses	159		102
Current portion of deferred site rental receivables	125		127
Other current assets	93		73
Total current assets	1,325		1,217
Deferred site rental receivables	2,040		1,954
Property and equipment, net of accumulated depreciation of $13,377 and $13,071, respectively	15,492		15,407
Operating lease right-of-use assets	6,482		6,526
Goodwill	10,085		10,085
Other intangible assets, net	3,496		3,596
Other assets, net	134		136
Total assets	$	39,054	$	38,921

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	233	$	236
Accrued interest	132		183
Deferred revenues	721		736
Other accrued liabilities	300		407
Current maturities of debt and other obligations	819		819
Current portion of operating lease liabilities	330		350
Total current liabilities	2,535		2,731
Debt and other long-term obligations	21,513		20,910
Operating lease liabilities	5,856		5,881
Other long-term liabilities	1,927		1,950
Total liabilities	31,831		31,472
Commitments and contingencies (note 8)
Stockholders' equity:
Common stock, $0.01 par value; 1,200 shares authorized; shares issued and outstanding: March 31, 2023—434 and December 31, 2022—433	4		4
Additional paid-in capital	18,154		18,116
Accumulated other comprehensive income (loss)	(6)		(5)
Dividends/distributions in excess of earnings	(10,929)		(10,666)
Total equity	7,223		7,449
Total liabilities and equity	$	39,054	$	38,921

See notes to condensed consolidated financial statements.

CROWN CASTLE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Amounts in millions, except per share amounts)


	Three Months Ended March 31,
		2023		2022
Net revenues:
Site rental		$	1,624	$	1,576
Services and other		149		166
Net revenues		1,773		1,742
Operating expenses:
Costs of operations:(a)
Site rental		415		396
Services and other		104		113
Selling, general and administrative		195		181
Asset write-down charges		—		14

Depreciation, amortization and accretion		431		420
Total operating expenses		1,145		1,124
Operating income (loss)		628		618
Interest expense and amortization of deferred financing costs, net		(202)		(164)
Gains (losses) on retirement of long-term obligations		—		(26)
Interest income		2		—
Other income (expense)		(3)		(1)
Income (loss) before income taxes		425		427
Benefit (provision) for income taxes		(7)		(6)
Net income (loss)		418		421
Other comprehensive income (loss):
Foreign currency translation adjustments		(1)		1
Total other comprehensive income (loss)		(1)		1
Comprehensive income (loss)		$	417	$	422
Net income (loss), per common share:
Basic		$	0.97	$	0.97
Diluted		$	0.97	$	0.97
Weighted-average common shares outstanding:
Basic		433		433
Diluted		434		434

(a)Exclusive of depreciation, amortization and accretion shown separately.

See notes to condensed consolidated financial statements.

CROWN CASTLE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(In millions of dollars)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	418	$	421
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation, amortization and accretion	431		420
(Gains) losses on retirement of long-term obligations	—		26
Amortization of deferred financing costs and other non-cash interest	7		4
Stock-based compensation expense, net	41		38
Asset write-down charges	—		14
Deferred income tax (benefit) provision	1		1
Other non-cash adjustments, net	2		1
Changes in assets and liabilities, excluding the effects of acquisitions:
Increase (decrease) in accrued interest	(51)		(65)
Increase (decrease) in accounts payable	(5)		(13)
Increase (decrease) in other liabilities	(127)		(196)
Decrease (increase) in receivables	28		40
Decrease (increase) in other assets	(139)		(133)
Net cash provided by (used for) operating activities	606		558
Cash flows from investing activities:
Capital expenditures

SEC Form 10-Q filed by Crown Castle Inc.