CROWN CASTLE INC.
For the period ended Dec 31, 2024. Filed Mar 14, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 14, 2025
CCI$88.60-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0001051470-24-000062
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-14.
0001051470-25-000089
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 192 previous paragraphs and 219 current paragraphs.
117 unchanged; 60 reworded; 33 added; 15 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
On March 13, 2025, management signed the Strategic Fiber Agreement to sell our Fiber Business, with Zayo acquiring the fiber solutions business and EQT acquiring the small cell business. Under the Strategic Fiber Agreement, we will receive $8.5 billion in aggregate, subject to certain closing adjustments. The Strategic Fiber Transaction is expected to close in the first half of 2026, subject to certain closing conditions and regulatory approvals. See"Item 1. Business—Overview" for further discussion of the pending sale of the Fiber Business.
Current report
The Fiber Business did not meet the criteria for assets held for sale as of December 31, 2024, and therefore remains presented as a component of continuing operations. As a result, this document, unless otherwise noted, does not contemplate the planned sale of the Fiber Business.
Current report
◦In June 2024, we initiated the 2024 Restructuring Plan as part of our efforts to drive operational efficiencies, enhance returns by increasing return thresholds on new growth opportunities and reduce operating costs and capital expenditures, with a primary focus on our Fiber segment. See note 16 to our consolidated financial statements and "Item 2. MD&A—Results of Operations" for further discussion of the 2024 Restructuring Plan.
Current report
MD&A—Results of Operations" for further discussion of the 2024 Restructuring Plan and "Item 1. Business—Overview"for further discussion of the pending sale of the Fiber Business.
Current report
◦As part of the announced plans to enhance returns in the Fiber segment, during the fourth quarter of 2024 we completed discussions with certain of our tenants regarding approximately 7,000 previously-identified greenfield small cell nodes in our contracted backlog that we mutually agreed to cancel. We wrote off property and equipment deemed to have no alternative future use, and as a result, recognized approximately $106 million as "Asset write-down charges" on our consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2024.
Current report
•Goodwill Impairment
Current report
◦Management performed its annual goodwill impairment test in the fourth quarter of 2024. The quantitative impairment test indicated that the carrying amount of our Fiber reporting unit exceeded its estimated fair value. As such, management recorded a goodwill impairment charge of $5.0 billion for the year ended December 31, 2024, resulting in no goodwill remaining for the Fiber reporting unit. See"Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates"and note 5 to our consolidated financial statements.
Current report
•Beginning in the first quarter 2025, the Fiber Business will be presented as a discontinued operation, and its net assets will be classified as held for sale and comparable prior periods will be recast to reflect this change. Upon classification as held for sale in the first quarter of 2025, we expect to recognize a loss of between $700 and $800 million, inclusive of estimated transaction fees.
Current report
•We expect a year over year reduction in site rental revenues in our Towers segment related to (1) higher Towers non-renewals in 2025, which are expected to reduce site rental revenues by approximately $200 million as a result of the T-Mobile US, Inc. and Sprint network consolidation and (2) a decline in long-term deferred revenue amortization.
Current report
(a)See reconciliations of these non-GAAP financial measures to segment operating profit (loss) and definitions included in"Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP.
Current report
(c)Represents $170 million of payments associated with Sprint Cancellations received in 2023 and not recurring in 2024, which were partially offset by approximately $5 million of payments associated with Sprint Cancellations received in 2024.
Current report
Selling, general and administrative expenses for 2024 were $706 million and decreased by $53 million, or 7%, from $759 million from 2023. The decrease in selling, general and administrative expenses was primarily related to a decrease in employee- and facility-related costs as a result of our aforementioned restructuring activities, which was partially offset by an increase in advisory fees, mostly stemming from our recent proxy contest and the Fiber strategic review.
Current report
Asset write-down charges for 2024 increased by $115 million, or 348% from 2023. The increase was primarily related to the $106 million charge due to the cancellation of approximately 7,000 greenfield small cell nodes in our contracted backlog, as was mutually agreed upon with certain of our tenants. See"Item 7. MD&A—General Overview"for additional information.
Current report
Depreciation, amortization and accretion was approximately $1.7 billion for 2024 and decreased by $16 million, or 1%, from 2023. This decrease predominately resulted from certain site rental contracts and tenant relationships intangible assets becoming fully amortized.
Current report
Restructuring charges in connection with the Restructuring Plans for 2024 were $109 million and increased by $24 million, or 28%, from $85 million in 2023. This increase primarily resulted from an increase in office closure or consolidation costs in connection with the 2024 Restructuring Plan, when compared to the 2023 Restructuring Plan. This increase was partially offset by lower employee headcount reduction charges in connection with the 2024 Restructuring Plan, when compared to the 2023 Restructuring Plan. See note 16 to our consolidated financial statements for further discussion of our Restructuring Plans.
Current report
Goodwill impairment charges of $5.0 billion were recorded for our Fiber reporting unit for 2024. See"Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 5 to our consolidated financial statements.
Current report
Adjusted EBITDA decreased by $254 million, or 6%, from 2023 to 2024, reflecting the previously mentioned decreases in Towers and Fiber operating profits.
Current report
ATM Program. We previously maintained a 2021 ATM Program through which we had the right to issue and sell shares of our common stock having an aggregate gross sales price of up to $750 million to or through sales agents. In March 2024, we terminated the formerly outstanding 2021 ATM Program with the entire gross sales price of $750 million remaining unsold.
Current report
For purposes of our Fiber segment, we evaluate financial performance of major U.S. markets where we have made significant investments. In addition, as discrete cash flows (including projected cash flows) are most readily available at the segment level, we also review the undiscounted cash flows at this level to evaluate potential impairment of our long-lived assets.
Current report
In light of the aforementioned impairment of the Fiber segment goodwill balance, we conducted a review during the fourth quarter of 2024, including analysis of both market-level and segment-level information, and determined there was no impairment of Fiber segment long-lived assets. In regard to our Towers segment, there were no events or circumstances that caused us to review the carrying value of our intangible assets or property and equipment due in part to our assets performing consistently with or better than our expectations.
Current report
The Fiber Business did not meet the criteria for assets held for sale as of December 31, 2024, and therefore remains presented as a component of continuing operations. Following the announcement of the Strategic Fiber Transaction and beginning with the Company's filing of Form 10-Q for the quarter ended March 31, 2025, the Fiber Business will be presented as a discontinued operation, and its net assets will be classified as held for sale and comparable prior periods will be recast to reflect this change. Upon classification as held for sale, we expect to recognize a loss of between $700 and $800 million, inclusive of estimated transaction fees.
Current report
For the year ended December 31, 2024, we recorded an impairment charge of approximately $5.0 billion related to the goodwill associated with our Fiber segment, which represents a reporting unit for purposes of evaluating goodwill, which resulted in no goodwill remaining for the Fiber reporting unit.
Current report
Management performed its annual goodwill impairment test in the fourth quarter of 2024. The means of estimating the fair value of our reporting units is using discounted cash flow ("DCF") models developed by management. Key assumptions and estimates used in the DCF models included projected future revenues, operating cash flows, capital expenditures (net of certain payments received from customers), an exit multiple and a discount rate. With respect to the Towers reporting unit, there was no indication of impairment following the quantitative assessment, as the estimated fair value was well in excess of the corresponding carrying amount.
Current report
The quantitative impairment test indicated that the carrying amount of our Fiber reporting unit exceeded its estimated fair value. The impairment was due to a number of factors, one of which was a reduction in management’s assumptions for long-term revenue growth as actual demand, particularly related to small cells, has continued to be lower than previous expectations. In the face of this reduced demand, and consistent with the recently concluded operating review of the Fiber business, management implemented operational and strategic changes targeted at reducing future capital investment in the Fiber business by focusing primarily on colocation opportunities which require less capital expenditures than new-build opportunities. Although this more targeted strategy is focused on higher-return projects, the lower capital investment is expected to result in lower overall revenues and operating cash flows in the Fiber business. Following implementation of these changes, and consistent with the ongoing developments surrounding the Company's strategic review of its Fiber business, during the fourth quarter of 2024, management incorporated the anticipated impact of these changes in expectations into its long-term forecasts, which decreased the estimated fair value of the Fiber reporting unit. Additionally, management’s expectations regarding the terminal value of the projections decreased due to several factors, including lower operating cash flows forecasted by management in the terminal year as well as lower exit multiples derived from industry research firms' outlook reports, which management uses in its DCF models. Finally, changes in the macroeconomic environment, including elevated interest rates, resulted in an increase in the discount rate used in the valuation model, which had a negative impact on estimated fair value.
Current report
The impairment charges for the Fiber reporting unit are recorded in "Goodwill impairment charges" on the consolidated statement of operations and comprehensive income (loss).
Current report
We define segment operating profit (loss) as segment site rental revenues plus segment services and other revenues, less segment site rental costs of operations, segment services and other costs of operations, and segment selling, general and administrative expenses, each of which excludes stock-based compensation, net, and prepaid lease purchase price adjustments, which are recorded in the respective consolidated figures.
Current report
(a)Segment services and other costs of operations for the year ended December 31, 2024 excludes stock-based compensation expense, net of $6 million, and for the years ended December 31, 2023 and 2022, excludes $10 million of stock-based compensation expense, net in each year.
Current report
(b)Segment selling, general and administrative expenses for the years ended December 31, 2024, 2023 and 2022 excludes stock-based compensation expense, net of $44 million, $50 million and $47 million, respectively.
Current report
(c)Segment site rental costs of operations for the years ended December 31, 2024 and 2023 excludes stock-based compensation expense, net of $19 million in each year, and for the year ended December 31, 2022, excludes $18 million of stock-based compensation expense, net. Additionally, segment site rental costs of operations excludes prepaid lease purchase price adjustments of $16 million in each of the three years ended December 31, 2024, 2023 and 2022.
Current report
(d)Exclusive of depreciation, amortization and accretion shown separately.
Current report
We believe Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin are useful to investors or other interested parties in evaluating our financial performance because:
Current report
Our management uses Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin:
Current report
i. as a measurement of financial performance because it assists us in comparing our financial performance excluding the impact of certain non-cash items such as stock-based compensation expense, net and amortization of prepaid lease purchase price adjustments and asset base (primarily depreciation, amortization and accretion) from our operating results and before consideration of segment selling, general and administrative expenses; and
Removed paragraphs (15)
Previous report
◦The actions announced in July 2023 associated with the Plan and related charges are expected to be substantially completed and recorded by June 30, 2024, while the payments are expected to be completed for the employee headcount reduction and office space consolidation in 2024 and 2032, respectively.
Previous report
•We expect that, when compared to full year 2023, our full year 2024 site rental revenues growth will be positively impacted by tenant additions, as large wireless carriers and fiber solutions tenants continue to focus on meeting the increasing demand for data. We expect site rental revenues to decrease year over year due to the absence in 2024 of payments received in 2023 that T-Mobile paid to satisfy remaining rental obligations for certain canceled Sprint leases, net of estimated non-renewals, as a result of the T-Mobile US, Inc. and Sprint network consolidation and a decline in long-term deferred revenue amortization.
Previous report
◦We expect that our discretionary capital expenditures will increase as we accelerate the pace of small cell deployments.
Previous report
(d)Represents the contribution from recent acquisitions until the one-year anniversary of such acquisitions.
Previous report
Selling, general and administrative expenses for 2023 were $759 million and increased by $9 million, or 1%, from $750 million from 2022. The increase in selling, general and administrative expenses was primarily related to (1) increased investment in information technology, (2) the strategic review previously announced in December 2023 and (3) certain other expenses, including facilities, returning to their pre-pandemic operations following our return to office in February 2022, partially offset by (4) a decrease in labor cost as a result of our aforementioned restructuring activities.
Previous report
Depreciation, amortization and accretion was approximately $1.8 billion for 2023 and increased by $47 million, or 3%, from 2022. This increase predominately resulted from a corresponding increase in our gross property and equipment due to capital expenditures.
Previous report
Restructuring charges in connection with the Plan were $85 million for 2023. The charges primarily consisted of $62 million related to cash payments that have been made in 2023 or are expected to be made in 2024 associated with employee severance and other one-time termination benefits and $16 million of remaining obligations under facility leases payable through 2032. Additionally, we also recorded non-cash charges of $1 million related to share-based compensation and $6 million for accelerated depreciation.
Previous report
As a result of repaying certain of our indebtedness in conjunction with our refinancing activities during 2022, we incurred losses on retirement of long-term obligations of $28 million. We did not incur any losses on retirement of long-term obligations during 2023. See note 7 to our consolidated financial statements.
Previous report
Adjusted EBITDA increased by $75 million, or 2%, from 2022 to 2023. The increase was predominately related to the previously mentioned increase in Fiber operating profit (loss), partially offset by the previously-mentioned decrease in Towers services and other gross margin.
Previous report
(a)See note 9 to our consolidated financial statements for further information.
Previous report
•prepaying in full the previously outstanding Tower Revenue Notes, Series 2018-1 in March 2022;
Previous report
•redeeming in full the previously outstanding 3.849% Secured Notes in March 2022;
Previous report
•entering into an amendment to the 2016 Credit Facility in July 2022 that provided for, among other things, (1) the extension of the maturity date from June 2026 to July 2027, (2) an increase to the aggregate commitments under the 2016 Revolver from $5.0 billion to $7.0 billion, (3) certain modifications to a specified sustainability metric and (4) the replacement of the LIBOR pricing benchmark with the Term SOFR pricing benchmark; and
Previous report
•increasing the size of our CP Program in March 2022 to permit the issuance of Commercial Paper Notes in an aggregate principal amount not to exceed $2.0 billion at any time outstanding.
Previous report
For purposes of our Fiber segment, we consider major U.S. markets where we have made significant investments to be the most appropriate level for purposes of grouping our long-lived assets for potential impairment evaluation.
Reworded paragraphs (60)
Previous wording
We own, operate and lease shared communications infrastructure. See"Item 1. Business" for a further discussion of our business, including our long-term strategy, our REIT status, certain key terms of our tenant contracts and growth trends in the demand for data. Site rental revenues represented 94% of our 2023 consolidated net revenues. The vast majority of our site rental revenues is of a recurring nature and has been contracted for in prior years.
Current wording
We own, operate and lease shared communications infrastructure. See"Item 1. Business" for a further discussion of our business, including our long-term strategy, our REIT status, certain key terms of our tenant contracts and growth trends in the demand for data.
Previous wording
◦We expect existing and potential new tenant demand for our communications infrastructure will result from (1) new technologies, (2) increased usage of mobile entertainment, mobile internet, and machine-to-machine applications, (3) adoption of other emerging and embedded wireless devices (including smartphones, laptops, tablets, wearables and other devices), (4) increasing smartphone penetration, (5) wireless carrier focus on expanding both network quality and capacity, including the use of both towers and small cells, (6) the adoption of other bandwidth-intensive applications (such as cloud services and video communications), (7) the availability of additional spectrum and (8) increased government initiatives to support connectivity throughout the U.S.
Current wording
◦We expect existing and potential new tenant demand for our communications infrastructure will result from (1) new technologies, (2) increased usage of mobile entertainment, mobile internet, and machine-to-machine applications, (3) adoption of other emerging and embedded wireless devices (including smartphones, laptops, tablets, wearables and other devices), (4) increasing smartphone penetration, (5) wireless carrier focus on expanding both network quality and capacity, including the use of both towers and small cells, (6) the adoption of other bandwidth-intensive applications (such as cloud services, artificial intelligence and video communications), (7) the availability of additional spectrum and (8) increased government initiatives to support connectivity throughout the U.S.
Previous wording
◦We had discretionary capital expenditures of $1.3 billion for theyear ended December 31, 2023, predominately resulting from the construction of new communications infrastructure and improvements to existing communications infrastructure in order to support additional tenants.
Current wording
◦We had discretionary capital expenditures of $1.1 billion for theyear ended December 31, 2024, predominately resulting from the construction of new communications infrastructure and improvements to existing communications infrastructure in order to support additional tenants.
Previous wording
◦We expect to continue to construct and acquire new communications infrastructure based on our tenants' needs and generate attractive long-term returns by adding additional tenants over time.
Current wording
◦We expect to continue to construct and acquire new communications infrastructure based on our tenants' needs and generate attractive long-term returns by adding additional tenants over time. See note 16 to our consolidated financial statements for a discussion of the 2024 Restructuring Plan, which resulted in, among other things, an increase in return thresholds on new growth opportunities in the Fiber segment and a reduction in Fiber segment capital expenditures for the year ended December 31, 2024.
Previous wording
◦Our wireless tenant contracts have initial terms generally between five to 15 years with contractual escalators and multiple renewal periods generally between five to ten years each, exercisable at the option of the tenant.
Current wording
◦Our wireless tenant contracts have initial terms generally between five to 15 years with contractual escalators and multiple renewal periods generally between five to 10 years each, exercisable at the option of the tenant.
Previous wording
◦As of December 31, 2023, our weighted-average remaining term was approximately six years, exclusive of renewals exercisable at the tenants' option, currently representing approximately $39 billion of expected future cash inflows.
Current wording
◦As of December 31, 2024, our weighted-average remaining term was approximately six years, exclusive of renewals exercisable at the tenants' option, currently representing approximately $35.9 billion of expected future cash inflows.
Previous wording
◦As of December 31, 2023, 92% of our debt has fixed rate coupons.
Current wording
◦As of December 31, 2024, 90% of our debt has fixed rate coupons.
Previous wording
◦Net cash provided by operating activities was $3.1 billion for theyear ended December 31, 2023,
Current wording
◦Net cash provided by operating activities was $2.9 billion for theyear ended December 31, 2024.
Previous wording
•Full year 2023 results included certain impacts from the small cell and fiber solutions lease cancellations ("Sprint Cancellations") related to the previously disclosed T-Mobile and Sprint network consolidation. For 2023, these Sprint Cancellations resulted in $21 million of non-renewals that were offset by cash payments of $170 million to satisfy the remaining rental obligations. Additionally, $59 million in accelerated amortization of prepaid rent from the remaining deferred revenues was recognized for the year ended December 31, 2023.
Current wording
•When compared to full year 2023, full year 2024 results were impacted by a reduction of the small cell and fiber solutions lease cancellations ("Sprint Cancellations") related to the previously disclosed T-Mobile and Sprint network consolidation. For full year 2024, there was a reduction in cash payments related to Sprint Cancellations of $165 million to satisfy the remaining rental obligations. Additionally, $59 million in accelerated amortization of prepaid rent from the remaining deferred revenues was recognized for the year ended December 31, 2023 that did not recur for the year ended December 31, 2024.
Previous wording
◦In July 2023, we initiated a restructuring plan ("Plan") as part of our efforts to reduce costs to better align our operational needs with lower tower activity. The Plan includes reducing the total employee headcount by approximately 15%, discontinuing installation services as a Towers product offering while continuing to offer site development services on our towers, and consolidating office space. See note 16 to our consolidated financial statements and "Item 2. MD&A—Results of Operations" for further discussion of the Plan.
Current wording
◦In July 2023, we initiated the 2023 Restructuring Plan as part of our efforts to reduce costs to better align our operational needs with lower tower activity. See note 16 to our consolidated financial statements and "Item 2. MD&A—Results of Operations" for further discussion of the 2023 Restructuring Plan.
Previous wording
•In December 2023, we announced a strategic and operating review of our Fiber segment.
Current wording
•In December 2023, we announced a strategic and operating review of our Fiber business, and in the second quarter of 2024, we concluded our operating review and implemented changes to our operating plans and strategy based on the findings. Additionally, in March 2025, we concluded the strategic review following the announcement of the Strategic Fiber Transaction, as discussed above. See note 16 to our consolidated financial statements and "Item 2.
Previous wording
During each of the quarters in the year ended 2023, we paid a common stock dividend of $1.565 per share, totaling approximately $2.7 billion, which represents an increase of approximately 4.7% from the common stock dividends paid in the aggregate in the year ended 2022. We currently expect our common stock dividends over the next 12 months to be a cumulative amount of at least $6.26 per share, or an aggregate amount of approximately $2.7 billion. Over time, we expect to increase our dividend per share as we grow cash flows. Any future common stock dividends are subject to declaration by our board of directors. See notes 10 and 17 to our consolidated financial statements.
Current wording
During each of the quarters in the year ended 2024, we paid a common stock dividend of $1.565 per share, totaling approximately $2.7 billion. We are updating our capital allocation framework to focus more on free cash flow generation and financial flexibility, which we currently expect to result in a reduction to our dividend, beginning with our expected second quarter 2025 dividend. As we grow cash flows thereafter, we expect to increase our dividend per share. Whether dividends are to be declared and the amount and timing thereof remain subject to the discretion of our board of directors. See notes 10 and 17 to our consolidated financial statements.
Previous wording
•As part of the aforementioned Plan:
Current wording
•As part of the aforementioned 2024 Restructuring Plan:
Previous wording
◦In 2024, we expect to realize $105 million in labor and facilities cost savings, of which $50 million is expected in selling, general and administrative, $40 million in services and other costs of operations and $15 million in site rental costs of operations. The 2024 costs savings are expect to be partially offset by a $40 million reduction in services and other gross margin due to the discontinuation of installation services. See"Item 1A. Risk Factors"for a discussion of risks related to our restructuring activities.
Current wording
◦We expect to realize approximately $100 million annualized run-rate labor and facilities cost savings, of which approximately $65 million was realized in 2024. The remaining savings of approximately $35 million are expected to be realized in 2025, with $30 million expected in selling, general and administrative and $5 million in site rental costs of operations. See"Item 1A. Risk Factors"for a discussion of risks related to our restructuring activities.
Previous wording
•We expect to continue to invest a significant amount of our available capital in the form of discretionary capital expenditures for 2024 based on the anticipated returns on such discretionary investments.
Current wording
•Notwithstanding the plan to sell our Fiber Business, we expect to continue to invest a significant amount of our available capital in the form of discretionary capital expenditures until the closing of the Strategic Fiber Transaction.
Previous wording
•We also expect sustaining capital expenditures of approximately 1% of net revenues for full year 2024, consistent with historical annual levels.
Current wording
•We also expect sustaining capital expenditures of approximately 1-2% of net revenues, including with respect to the Fiber Business, for full year 2025, relatively consistent with historical annual levels.
Previous wording
The following discussion of our results of operations is based on our consolidated financial statements prepared in accordance with GAAP, which requires us to make estimates and judgments that affect the reported amounts (see"Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 2 to our consolidated financial statements). See"Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures"for a discussion of our use of (1) segment site rental gross margin, (2) segment services and other gross margin, (3) segment operating profit (loss), including their respective definitions, and (4) Adjusted EBITDA, including its definition and a reconciliation to net income (loss).
Current wording
The following discussion of our results of operations is based on our consolidated financial statements prepared in accordance with GAAP, which requires us to make estimates and judgments that affect the reported amounts (see"Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 2 to our consolidated financial statements). See"Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures"for a discussion of our use of (1) segment operating profit (loss), including its definition, (2) Segment Adjusted Site Rental Gross Margin and (3) Segment Adjusted Services and Other Gross Margin, including their respective definitions and reconciliations to segment operating profit (loss) and (4) Adjusted EBITDA, including its definition and a reconciliation to net income (loss).
Previous wording
(a)See"Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures"and note 14 to our consolidated financial statements for our definitions of segment site rental gross margin, segment services and other gross margin and segment operating profit.
Current wording
(b)See"Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures"and note 14 to our consolidated financial statements for our definition of segment operating profit.
Previous wording
(b)See reconciliation of this non-GAAP financial measure to net income (loss) and definition included in"Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures."
Current wording
(c)See reconciliation of this non-GAAP financial measure to net income (loss) and definition included in"Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures."
Previous wording
Total site rental revenues for 2023 grew by $243 million, or 4%, from 2022. This increase was predominately comprised of the factors depicted in the chart below:
Current wording
Total site rental revenues for 2024 decreased by $174 million, or 3%, from 2023. This decrease was predominately comprised of the factors depicted in the chart below:
Previous wording
(a)Represents site rental revenues growth from tenant additions across our entire portfolio and renewals or extensions of tenant contracts, exclusive of the impacts from both straight-line accounting and amortization of prepaid rent in accordance with GAAP.
Current wording
(a)Represents site rental revenues growth from tenant additions across our entire portfolio and renewals or extensions of tenant contracts, exclusive of the impacts from both straight-line accounting and amortization of prepaid rent in accordance with GAAP and change in payments for Sprint Cancellations.
Previous wording
(b)Core leasing activity and non-renewals include $170 million and $21 million, respectively, of payments received from and non-renewals associated with Sprint Cancellations, respectively.
Current wording
(b)Includes $9 million of non-renewals associated with Sprint Cancellations.
Previous wording
(c)Prepaid rent amortization includes amortization of upfront payments received from long-term tenants and other deferred credits, inclusive of $59 million of accelerated prepaid rent amortization associated with the Sprint Cancellations.
Current wording
(d)Prepaid rent amortization includes amortization of upfront payments received from long-term tenants and other deferred credits. Prepaid rent amortization includes $59 million of accelerated prepaid rent amortization associated with the Sprint Cancellations that was recognized in 2023 that did not recur in 2024.
Previous wording
Towers site rental revenues and Towers site rental gross margin for 2023 were $4.3 billion and $3.4 billion, respectively, compared to $4.3 billion and $3.4 billion, respectively, from 2022. As a significant portion of our Towers site rental revenue growth was generated from long-term contracts, revenue increases under contractual cash escalators were substantially offset by a decline in the associated straight-line accounting adjustment. The $34 million decrease in Towers site rental gross margin was primarily due to higher Towers site rental costs of operations, including ground lease agreements that contain contingent payment provisions such as CPI-based escalations.
Current wording
Towers site rental revenues and Towers Adjusted Site Rental Gross Margin for 2024 were $4.3 billion and $3.3 billion, respectively, compared to $4.3 billion and $3.4 billion, respectively, from 2023. The decrease of $47 million and $63 million in Towers site rental revenue and Towers Adjusted Site Rental Gross Margin, respectively, was primarily due to a decrease in prepaid rent amortization, as new leasing activity and contractual cash escalators were substantially offset by a decline in the associated straight-line accounting adjustment.
Previous wording
Fiber site rental revenues and Fiber site rental gross margin for 2023 were $2.2 billion and $1.5 billion, respectively, and increased by $252 million and $216 million, respectively, from 2022. Both Fiber site rental revenues and Fiber site rental gross margin were predominately impacted by $170 million of payments and $59 million of accelerated prepaid rent amortization, offset by $21 million of non-renewals, each related to the Sprint Cancellations.
Current wording
Fiber site rental revenues and Fiber Adjusted Site Rental Gross Margin for 2024 were $2.1 billion and $1.4 billion, respectively, and decreased by $127 million and $175 million, respectively, from 2023. Both Fiber site rental revenues and Fiber Adjusted Site Rental Gross Margin were predominately impacted by a $165 million reduction in site rental revenues and an absence of $59 million of accelerated prepaid rent amortization, both related to Sprint Cancellations, which were partially offset by increased demand for small cells and fiber solutions.
Previous wording
Towers services and other gross margin was $127 million for 2023 and decreased by $111 million from $238 million from 2022, which is a reflection of the lower volume of activity from carriers' network enhancements and the volume and mix of services and other work. Our services and other offerings are of a variable nature as these revenues are not under long-term tenant contracts. See note 16 to our consolidated financial statements for a discussion of the Plan, which included discontinuing installation services as a Towers product offering.
Current wording
Towers Adjusted Services and Other Gross Margin was $91 million for 2024 and decreased by $36 million from $127 million from 2023, which is a reflection of (1) the lower volume of activity from carriers' network enhancements, (2) the volume and mix of services and other work and (3) the discontinuation of installation services as a Towers product offering. Our services and other offerings are of a variable nature as these revenues are not under long-term tenant contracts. See note 16 to our consolidated financial statements for a discussion of the 2023 Restructuring Plan, which included discontinuing installation services as a Towers product offering.
Previous wording
Fiber services and other gross margin was $16 million for 2023 and increased by $13 million from $3 million from 2022 primarily as a result of site abandonment fees associated with the Sprint Cancellations.
Current wording
Fiber Adjusted Services and Other Gross Margin was $6 million for 2024 and decreased by $10 million from $16 million from 2023 primarily as a result of the absence of payments received for site abandonment fees associated with the Sprint Cancellations that were received during 2023.
Previous wording
Towers operating profit (loss) for 2023 decreased by $134 million, or 4%, from 2022. The decrease in Towers operating profit (loss) was primarily related to the previously-mentioned decreases in both Towers site rental gross margin and Towers services and other gross margin.
Current wording
Towers operating profit (loss) for 2024 decreased by $71 million, or 2%, from 2023. The decrease in Towers operating profit (loss) was primarily related to the previously-mentioned decreases in both Towers Adjusted Site Rental Gross Margin and Towers Adjusted Services and Other Gross Margin, which were partially offset by a decrease in Towers selling, general and administrative expenses as a result of the 2023 Restructuring Plan.
Previous wording
Fiber operating profit (loss) for 2023 increased by $225 million, or 20%, from 2022. The increase in Fiber operating profit (loss) was primarily related to the previously-mentioned increase in Fiber site rental gross margin.
Current wording
Fiber operating profit (loss) for 2024 decreased by $167 million, or 12%, from 2023. The decrease in Fiber operating profit (loss) was primarily related to the previously-mentioned decreases in both Fiber Adjusted Site Rental Gross Margin and Fiber Adjusted Services and Other Gross Margin, which were partially offset by a decrease in Fiber selling, general and administrative expenses following the 2024 Restructuring Plan.
Previous wording
Interest expense and amortization of deferred financing costs, net were $850 million for 2023 and increased by $151 million, or 22%, from $699 million during 2022. The increase predominately resulted from an increase in the interest rates on the 2016 Term Loan A, 2016 Revolver and Commercial Paper Notes, as well as an increase in our outstanding indebtedness due to the financing of our discretionary capital expenditures. See note 7 to our consolidated financial statements,"Item 1A. Risk Factors" and"Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt and interest rate increases.
Current wording
Interest expense and amortization of deferred financing costs, net was $932 million for 2024 and increased by $82 million, or 10%, from $850 million during 2023. The increase predominately resulted from an increase in our outstanding indebtedness due to the financing of our discretionary capital expenditures. See note 7 to our consolidated financial statements,"Item 1A. Risk Factors" and"Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt and interest rate exposure.
Previous wording
The provisions for income taxes for 2023 and 2022 were $26 million and $16 million, respectively. For both 2023 and 2022, the effective tax rate differs from the federal statutory rate predominately due to our REIT status, including the dividends paid deduction. See"Item 1. Business—REIT Status," "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 9 to our consolidated financial statements.
Current wording
The provisions for income taxes for 2024 and 2023 were $24 million and $26 million, respectively. For both 2024 and 2023, the effective tax rate differs from the federal statutory rate predominately due to our REIT status, including the dividends paid deduction. See"Item 1. Business—REIT Status," "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 9 to our consolidated financial statements.
Previous wording
Net income (loss) was $1.5 billion during 2023 compared to $1.7 billion during 2022. The decrease was related to the previously-mentioned decrease in Towers operating profit and previously-mentioned increases in expenses, including interest expense and amortization of deferred financing costs, net, restructuring charges and depreciation, amortization and accretion, while being partially offset by the previously-mentioned increase in Fiber operating profit.
Current wording
Net income (loss) was $(3.9) billion during 2024 compared to $1.5 billion during 2023. The decrease was related to the previously-mentioned decreases in Towers and Fiber operating profits, the previously-mentioned increases in goodwill impairment charges, asset write-down charges and interest expense and amortization of deferred financing costs, net, while being partially offset by a decrease in selling, general and administrative expenses.
Previous wording
We have engaged, and expect to continue to engage, in discretionary investments that we believe will maximize long-term stockholder value. Our historical discretionary investments include (in no particular order): constructing communications infrastructure, acquiring communications infrastructure, acquiring land interests (which primarily relate to land assets under towers), improving and structurally enhancing our existing communications infrastructure, purchasing shares of our common stock, and purchasing, repaying, or redeeming our debt. We have recently spent, and expect to continue to spend, a significant percentage of our discretionary investments on the construction of small cells and fiber. We seek to fund our discretionary investments with both cash generated by operating activities and cash available from financing capacity, such as the use of our availability under our 2016 Revolver, issuances under our CP Program, debt financings and issuances of equity or equity-related securities, including under our 2021 ATM Program or any similar successor program.
Current wording
We have engaged, and expect to continue to engage, in discretionary investments that we believe will maximize long-term stockholder value. Our historical discretionary investments include (in no particular order): constructing communications infrastructure, acquiring communications infrastructure, acquiring land interests (which primarily relate to land assets under towers), improving and structurally enhancing our existing communications infrastructure, purchasing shares of our common stock, and purchasing, repaying, or redeeming our debt. We have recently spent, and expect to continue to spend, a significant percentage of our discretionary investments on the construction of small cells and fiber through the closing of the sale of the Fiber Business. See "Item 1. Business—Overview" for further detail. See note 16 to our consolidated financial statements and "Item 2. MD&A—Results of Operations" for further discussion of the 2024 Restructuring Plan, which resulted in, among other things, an increase in return thresholds on new growth opportunities in the Fiber segment and a reduction in Fiber segment capital expenditures for full year 2024. We seek to fund our discretionary investments with both cash generated by operating activities and cash available from financing capacity, such as the use of our availability under our 2016 Revolver, issuances under our CP Program, debt financings and issuances of equity or equity-related securities, including under our 2024 ATM Program or any similar successor program.
Previous wording
We seek to maintain a capital structure that we believe drives long-term stockholder value and optimizes our weighted-average cost of capital. We target a leverage ratio of approximately five times Adjusted EBITDA, subject to various factors, such as the availability and cost of capital and the potential long-term return on our discretionary investments. We may choose to increase or decrease our leverage from this target for various periods of time. Our contractual debt maturities over the next 12 months, consist of (1) Commercial Paper Notes, of which we had $578 million outstanding as of February 20, 2024, (2) the 3.200% Senior Notes and (3) principal payments on certain outstanding debt. Amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding.
Current wording
We seek to maintain a capital structure that we believe drives long-term stockholder value and optimizes our weighted-average cost of capital. Additionally, we expect to maintain an investment grade credit profile. Our contractual debt maturities over the next 12 months, consist of (1) Commercial Paper Notes, of which we had $1.1 billion outstanding as of March 12, 2025, (2) the 1.350% senior unsecured notes due July 2025 ("1.350% Senior Notes") and (3) principal payments on certain outstanding debt. We currently expect to refinance $700 million of Tower Revenue Notes, Series 2015-2 on or prior to the anticipated repayment date on May 15, 2025. Amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding.
Previous wording
•Our liquidity sources may include (1) cash on hand, (2) cash generated by our operating activities, (3) availability under our 2016 Revolver, (4) issuances under our CP Program, and (5) issuances of equity pursuant to our 2021 ATM Program or any similar successor program. Our liquidity uses over the next 12 months are expected to include (1) debt obligations of $835 million (consisting of the 3.200% Senior Notes and principal payments on certain outstanding debt), (2) cumulative common stock dividend payments expected to be at least $6.26 per share, or an aggregate amount of approximately $2.7 billion (see"Item 7. MD&A—General Overview—Common Stock Dividend"), (3) capital expenditures and (4) restructuring and related charges associated with the Plan described in note 16 to our consolidated financial statements. We may also purchase shares of our common stock. Additionally, amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding. During the next 12 months, while our liquidity uses are expected to exceed our cash generated by operating activities, we expect that our liquidity sources described above should be sufficient to cover our expected uses. Historically, from time to time, we have accessed the capital markets to issue debt and equity.
Current wording
•We may also purchase shares of our common stock. Additionally, amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding. During the next 12 months, while our liquidity uses are expected to exceed our cash generated by operating activities, we expect that our liquidity sources described above should be sufficient to cover our expected uses. Historically, from time to time, we have accessed the capital markets to issue debt and equity.
Previous wording
The increase in net cash provided by operating activities of $248 million for 2023 from 2022 was due primarily to a net increase from changes in working capital and growth in our core business, including $170 million of payments received from Sprint Cancellations. Changes in working capital contribute to variability in net cash provided by operating activities, largely due to the timing of advanced payments by us and advanced receipts from tenants. We expect to grow our net cash provided by operating activities in the future (exclusive of changes in working capital) if we realize expected growth in our core business.
Current wording
The decrease in net cash provided by operating activities of $183 million for 2024 from 2023 was due primarily to the aforementioned decrease in Towers operating profit and the reduction in Fiber site rental revenues related to the absence of Sprint Cancellation payments, which was partially offset by a net increase from changes in working capital. Changes in working capital contribute to variability in net cash provided by operating activities, largely due to the timing of advanced payments by us and advanced receipts from tenants. We expect to grow our net cash provided by operating activities in the future (exclusive of changes in working capital) if we realize expected growth in our core business.
Previous wording
Net cash used for investing activities for 2023 increased by $167 million from 2022 primarily as a result of increased discretionary capital expenditures in our Fiber segment.
Current wording
Net cash used for investing activities for 2024 decreased by $299 million from 2023 primarily as a result of a decrease in discretionary capital expenditures in both our Towers and Fiber segments and a decrease in payments for acquisitions in our Towers segment.
Previous wording
(a)Towers segment includes $32 million, $48 million and $65 million of capital expenditures incurred during the years ended December 31, 2023, 2022 and 2021, respectively, in connection with tenant installations and upgrades on our towers.
Current wording
(a)Towers segment includes $12 million, $32 million and $48 million of capital expenditures incurred during the years ended December 31, 2024, 2023 and 2022, respectively, in connection with tenant installations and upgrades on our towers.
Previous wording
Capital expenditures increased from 2022 to 2023 and were primarily impacted by the previously-mentioned increased discretionary capital expenditures in our Fiber segment. See"Item 7. MD&A—General Overview—Outlook Highlights" for a discussion of our expectations surrounding 2024 capital expenditures.
Current wording
The reduction in discretionary capital expenditures for the Fiber segment was primarily related to the higher return thresholds on new growth opportunities in the Fiber segment as a result of the Fiber operating review completed in the second quarter of 2024, while the reduction in discretionary capital expenditures for the Towers segment was primarily impacted by the discontinuation of installation services as a Towers product offering and the timing of Towers tenant activity during full year 2024 compared to full year 2023. See"Item 7. MD&A—General Overview—Outlook Highlights" for a discussion of our expectations surrounding 2025 capital expenditures.
Previous wording
We seek to allocate cash generated by our operations in a manner that will enhance long-term stockholder value, which may include various financing activities such as (in no particular order): (1) paying dividends on our common stock (currently expected to total at least $6.26 per share over the next 12 months, or an aggregate amount of approximately $2.7 billion), (2) purchasing our common stock or (3) purchasing, repaying, or redeeming our debt. See"Item 7. MD&A—General Overview—Common Stock Dividend," "Item 7. MD&A—Liquidity and Capital Resources—Overview"and notes 7, 10 and 17 to our consolidated financial statements.
Current wording
We seek to allocate cash generated by our operations in a manner that will enhance long-term stockholder value, which may include various financing activities such as (in no particular order): (1) paying dividends on our common stock, subject to declaration by our board of directors, (2) purchasing our common stock or (3) purchasing, repaying, or redeeming our debt. See"Item 7. MD&A—General Overview—Common Stock Dividend," "Item 7. MD&A—Liquidity and Capital Resources—Overview"and notes 7, 10 and 17 to our consolidated financial statements.
Showing the first 40 of 60 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
•Site rental revenues represented 97% of our 2024 consolidated net revenues. The vast majority of our site rental revenues is of a recurring nature and has been contracted for in prior years.
Current report — wording carried from elsewhere
•Our liquidity sources may include (1) cash on hand, (2) cash generated by our operating activities, (3) availability under our 2016 Revolver, (4) issuances under our CP Program, and (5) issuances of equity pursuant to our 2024 ATM
Current report — wording carried from elsewhere
Program or any similar successor program. Our liquidity uses over the next 12 months are expected to include (1) debt obligations of $2.0 billion (consisting of Commercial Paper Notes, the 1.350% Senior Notes and principal payments on certain outstanding debt), (2) common stock dividend payments, subject to declaration by our board of directors (see"Item 7. MD&A—General Overview—Common Stock Dividend"), and (3) capital expenditures. We currently expect to refinance the Tower Revenue Notes, Series 2015-2 on or prior to the anticipated repayment date of May 15, 2025, see "Item 7a. Quantitative and Qualitative Disclosures About Market Risk" for further discussion.
Current report — wording carried from elsewhere
•repaying in full the previously outstanding 3.200% senior unsecured notes on the contractual maturity date in September 2024; and
Current report — wording carried from elsewhere
The three aforementioned segment performance measurements are exclusive of depreciation, amortization and accretion, which are shown separately. Additionally, certain costs are shared across segments and are reflected in our segment measures through allocations that management believes to be reasonable.
Current report — wording carried from elsewhere
We use Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin, which are non-GAAP financial measures, as indicators of segment financial performance. Our measures of Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin may not be comparable to similarly titled measures of other companies, including companies in the communications infrastructure sector or other REITs, and are not measures of performance calculated in accordance with GAAP. Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin should not be considered in isolation or as substitutes for segment operating profit (loss) or other income statement or cash flow statement data prepared in accordance with GAAP and should be considered only as supplements to segment operating profit (loss) computed in accordance with GAAP as measures of our performance. There are material limitations to using measures such as Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin, including the difficulty associated with comparing results among more than one company, including our competitors, and the inability to analyze certain significant items, including stock-based compensation expense, net, prepaid lease purchase price adjustments and depreciation, amortization, and accretion, that directly affect our net income (loss). Management compensates for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with their analysis of net income (loss). The reconciliations of Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin to our segment operating profit (loss) are set forth below:
Current report — wording carried from elsewhere
i. they are measures used by our management (1) to evaluate the economic productivity of our operating segments, (2) to identify underlying business trends that are impacting our performance, and (3) for purposes of making decisions about allocating resources to, and assessing the performance of, our operating segments; and
Current report — wording carried from elsewhere
ii. we believe it helps investors and other interested parties meaningfully evaluate and compare the results of our operations from period to period.
Current report — wording carried from elsewhere
ii. for planning purposes, including preparation of our annual operating budget by operating segment.