When announcing its 2022 second quarter report yesterday afternoon, Crown Castle led off by saying it plans to change its corporate name to Crown Castle Inc., effective August 1, 2022. Its common stock will continue to trade under the ticker symbol “CCI” on the New York Stock Exchange.
“We delivered another solid quarter of growth in the second quarter and once again increased our operating expectations for the full year 2022,” said Jay Brown, Crown Castle’s Chief Executive Officer. “Consistent with the last couple of decades, it is clear to us that the U.S. represents the highest growth and lowest risk market in the world for communications infrastructure ownership. We are busy supporting our customers as they have begun to upgrade their existing cell sites and deploy thousands of new sites on our macro towers as part of the first phase of the 5G build out, which drove 6 percent organic revenue growth in our Towers segment through the first half of this year.”
In issuing announcements regarding the quarterly report, Crown said site rental revenues grew 10 percent, or $142 million, from second quarter 2021 to second quarter 2022, inclusive of approximately $58 million in Organic Contribution to Site Rental Billings and a $75 million increase in straight-lined revenues.
“At the same time,” Brown said. “2022 represents an important transition year for our small cells and fiber business as we prepare to double the rate of expected small cell deployments next year when compared to the approximately 5,000 small cell nodes we expect to deploy this year. We believe our comprehensive offering of 40,000 towers, 115,000 small cells on air or under contract and 85,000 route miles of fiber provides shareholders with the most exposure to the development of next-generation wireless networks in the best market in the world and extends our opportunity to create value for our shareholders by delivering long-term annual dividend per share growth of 7 percent to 8 percent.”
The $58 million in Organic Contribution to Site Rental Billings represents approximately 4.7 percent growth, comprising approximately 7.8 percent growth from core leasing activity and contacted tenant escalations, net of approximately 3.1 percent from tenant non-renewals.
Income from continuing operations for the second quarter 2022 was $421 million compared to $333 million for the second quarter 2021.
Adjusted EBITDA
Second quarter 2022 Adjusted EBITDA was $1.1 billion compared to $958 million for the second quarter 2021, representing 13 percent growth from the second quarter 2021 as a result of the growth in site rental revenues and higher services contribution.
“Our cost structure is largely fixed in nature, and we have taken deliberate steps to further strengthen our balance sheet position to where we sit today with nine years of weighted average term remaining and 85 percent fixed-rate debt,” said Dan Schlanger, Crown Castle’s Chief Financial Officer. “With significant liquidity following the increase in our Revolving Credit Facility to $7 billion and limited debt maturities through 2024, we are well positioned to pursue investment opportunities that are consistent with our strategy and support our ability to deliver attractive risk-adjusted returns through a combination of dividends and growth.”
AFFO and AFFO per share
Second quarter 2022 AFFO was $783 million, or $1.80 per share, representing growth from the second quarter 2021 of 6% and 5%, respectively.
Capital expenditures
Capital expenditures during the quarter were $303 million, comprised of $21 million of sustaining capital expenditures and $282 million of discretionary capital expenditures. Discretionary capital expenditures during the quarter primarily included approximately $235 million attributable to Fiber and approximately $42 million attributable to Towers.
Common stock dividend
During the quarter, Crown Castle paid common stock dividends of approximately $637 million in the aggregate, or $1.47 per common share, an increase of approximately 11% on a per share basis compared to the same period a year ago.
Crown said in July 2022 it increased the commitments under its Senior Unsecured Revolving Credit Facility by $2 billion, for aggregate commitments of $7 billion, and extended the maturity date on its Senior Unsecured Credit Facility from June 2026 to July 2027.
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