10-Q 1 cci-20230930.htm 10-Q cci-20230930
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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 September 30, 2023
OR
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
____________________________________
ccilogoa04.jpg
CROWN CASTLE INC.
(Exact name of registrant as specified in its charter)
 
Delaware76-0470458
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueCCINew 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 filerAccelerated filer
Non-accelerated filerSmaller 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 October 30, 2023: 433,688,863



CROWN CASTLE INC. AND SUBSIDIARIES
INDEX
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 and 2024 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) site rental revenues, including the growth thereof, (12) sources and uses of liquidity, (13) impact to our financial results from the Sprint Cancellations (as defined below), (14) drivers of cash flow growth, (15) our competitive advantage, (16) our dividends, including timing, amount, growth, targets, payment or tax characterization, (17) the timing of small cell deployments, (18) discretionary and sustaining capital expenditures and expansion of our business, (19) impact of interest rate increases, (20) the growth in our business and its driving factors, and (21) restructuring activities and the cost reductions, charges, scope, actions and savings associated therewith, including timing, amounts, impact and recurrence. 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.
1


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.

2


PART I—FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
CROWN CASTLE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(Amounts in millions, except par values)
 September 30, 2023December 31, 2022
ASSETS  
Current assets:
Cash and cash equivalents$117 $156 
Restricted cash167 166 
Receivables, net512 593 
Prepaid expenses143 102 
Current portion of deferred site rental receivables115 127 
Other current assets72 73 
Total current assets1,126 1,217 
Deferred site rental receivables2,189 1,954 
Property and equipment, net of accumulated depreciation of $13,987 and $13,071, respectively
15,573 15,407 
Operating lease right-of-use assets6,309 6,526 
Goodwill10,085 10,085 
Other intangible assets, net3,276 3,596 
Other assets, net141 136 
Total assets$38,699 $38,921 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable$215 $236 
Accrued interest145 183 
Deferred revenues650 736 
Other accrued liabilities373 407 
Current maturities of debt and other obligations827 819 
Current portion of operating lease liabilities339 350 
Total current liabilities2,549 2,731 
Debt and other long-term obligations21,903 20,910 
Operating lease liabilities5,660 5,881 
Other long-term liabilities1,918 1,950 
Total liabilities32,030 31,472 
Commitments and contingencies (note 8)
Stockholders' equity:
Common stock, $0.01 par value; 1,200 shares authorized; shares issued and outstanding: September 30, 2023—434 and December 31, 2022—433
4 4 
Additional paid-in capital18,241 18,116 
Accumulated other comprehensive income (loss)(5)(5)
Dividends/distributions in excess of earnings(11,571)(10,666)
Total equity6,669 7,449 
Total liabilities and equity$38,699 $38,921 

See notes to condensed consolidated financial statements.
3

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 September 30,Nine Months Ended September 30,
2023202220232022
Net revenues:
Site rental$1,577 $1,568 $4,929 $4,711 
Services and other90 178 378 511 
Net revenues1,667 1,746 5,307 5,222 
Operating expenses:
Costs of operations:(a)
Site rental420 405 1,259 1,204 
Services and other66 119 268 344 
Selling, general and administrative176 187 581 558 
Asset write-down charges8 3 30 26 
Acquisition and integration costs  1 1 
Depreciation, amortization and accretion439 430 1,315 1,276 
Restructuring charges
72 — 72 — 
Total operating expenses1,181 1,144 3,526 3,409 
Operating income (loss)486 602 1,781 1,813 
Interest expense and amortization of deferred financing costs, net(217)(177)(627)(506)
Gains (losses) on retirement of long-term obligations (2) (28)
Interest income3 1 10 1 
Other income (expense) (2)(4)(5)
Income (loss) before income taxes272 422 1,160 1,275 
Benefit (provision) for income taxes(7)(3)(21)(14)
Net income (loss) 265 419 1,139 1,261 
Other comprehensive income (loss):
Foreign currency translation adjustments (2) (3)
Total other comprehensive income (loss) (2) (3)
Comprehensive income (loss) $265 $417 $1,139 $1,258 
Net income (loss), per common share:
Basic$0.61 $0.97 $2.63 $2.91 
Diluted$0.61 $0.97 $2.63 $2.91 
Weighted-average common shares outstanding:
Basic434433 434 433 
Diluted434434 434 434 
(a)Exclusive of depreciation, amortization and accretion shown separately.

See notes to condensed consolidated financial statements.
4

CROWN CASTLE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In millions of dollars)
 Nine Months Ended September 30,
 20232022
Cash flows from operating activities:  
Net income (loss)$1,139 $1,261 
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation, amortization and accretion1,315 1,276 
(Gains) losses on retirement of long-term obligations 28 
Amortization of deferred financing costs and other non-cash interest22 10 
Stock-based compensation expense, net126 120 
Asset write-down charges30 26 
Deferred income tax (benefit) provision1 2 
Other non-cash adjustments, net10 6 
Changes in assets and liabilities, excluding the effects of acquisitions:
Increase (decrease) in accrued interest(38)(63)
Increase (decrease) in accounts payable(20)(10)
Increase (decrease) in other liabilities(162)(256)
Decrease (increase) in receivables87 8 
Decrease (increase) in other assets(252)(370)
Net cash provided by (used for) operating activities2,258 2,038 
Cash flows from investing activities: 
Capital expenditures(1,067)(921)
Payments for acquisitions, net of cash acquired(93)(15)
Other investing activities, net5 (10)
Net cash provided by (used for) investing activities(1,155)(946)
Cash flows from financing activities:
Proceeds from issuance of long-term debt2,347 748 
Principal payments on debt and other long-term obligations(58)(55)
Purchases and redemptions of long-term debt(750)(1,274)
Borrowings under revolving credit facility2,943 2,625 
Payments under revolving credit facility(4,088)(2,580)
Net issuances (repayments) under commercial paper program561 1,329 
Payments for financing costs(23)(14)
Purchases of common stock(29)(64)
Dividends/distributions paid on common stock(2,044)(1,924)
Net cash provided by (used for) financing activities(1,141)(1,209)
Net increase (decrease) in cash, cash equivalents and restricted cash(38)(117)
Effect of exchange rate changes (2)
Cash, cash equivalents, and restricted cash at beginning of period327 466 
Cash, cash equivalents, and restricted cash at end of period$289 $347 

See notes to condensed consolidated financial statements.
5

CROWN CASTLE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(Amounts in millions) (Unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated Other Comprehensive Income (Loss) ("AOCI")Dividends/Distributions in Excess of Earnings
Shares($0.01 Par)Total
Balance, June 30, 2023
434 $4 $18,202 $(5)$(11,155)$7,046 
Stock-based compensation related activity, net of forfeitures— 39 — — 39 
Purchases and retirement of common stock— —  — —  
Other comprehensive income (loss)(a)
— — —  —  
Common stock dividends/distributions— — — — (681)(681)
Net income (loss)— — — — 265 265 
Balance, September 30, 2023
434 $4 $18,241 $(5)$(11,571)$6,669 
Balance, June 30, 2022
433 $4 $18,050 $(5)$(10,188)$7,861 
Stock-based compensation related activity, net of forfeitures — 38 — — 38 
Purchases and retirement of common stock— — (1)— — (1)
Other comprehensive income (loss)(a)
— — — (2)— (2)
Common stock dividends/distributions— — — — (636)(636)
Net income (loss)— — — — 419 419 
Balance, September 30, 2022
433 $4 $18,087 $(7)$(10,405)$7,679 
Balance, December 31, 2022
433 $4 $18,116 $(5)$(10,666)$7,449 
Stock-based compensation related activity, net of forfeitures
1 — 154 — — 154 
Purchases and retirement of common stock
— — (29)— — (29)
Other comprehensive income (loss)(a)
— — — —  
Common stock dividends/distributions— — — — (2,044)(2,044)
Net income (loss)— — — — 1,139 1,139 
Balance, September 30, 2023
434 $4 $18,241 $(5)$(11,571)$6,669 
Balance, December 31, 2021
432 $4 $18,011 $(4)$(9,753)$8,258 
Stock-based compensation related activity, net of forfeitures
1 — 140 — — 140 
Purchases and retirement of common stock
— — (64)— — (64)
Other comprehensive income (loss)(a)
— — — (3)— (3)
Common stock dividends/distributions— — — — (1,913)(1,913)
Net income (loss)— — — — 1,261 1,261 
Balance, September 30, 2022
433 $4 $18,087 $(7)$(10,405)$7,679 
(a)See the condensed consolidated statement of operations and other comprehensive income (loss) for the components of other comprehensive income (loss).

See notes to condensed consolidated financial statements.
6

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited
(Tabular dollars in millions, except per share amounts)

1.General
The information contained in the following notes to the condensed consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the condensed consolidated financial statements included herein should be reviewed in conjunction with the consolidated financial statements for the fiscal year ended December 31, 2022, and related notes thereto, included in the 2022 Form 10-K filed by Crown Castle Inc. ("CCI") with the SEC. Capitalized terms used but not defined in these notes to the condensed consolidated financial statements have the same meaning given to them in the 2022 Form 10-K. References to the "Company" refer to CCI and its predecessor, as applicable, and their subsidiaries, unless otherwise indicated or the context indicates otherwise. 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 the context suggests otherwise, references to "U.S." are to the United States of America and Puerto Rico, collectively.
The Company owns, operates and leases shared communications infrastructure that is geographically dispersed throughout the U.S., including (1) towers and other structures, such as rooftops (collectively, "towers"), and (2) fiber primarily supporting small cell networks ("small cells") and fiber solutions. The Company's towers, small cells and fiber assets are collectively referred to herein as "communications infrastructure," and the Company's customers on its communications infrastructure are referred to herein as "tenants."
The Company's core business is providing access, including space or capacity, to its shared communications infrastructure via long-term contracts in various forms, including lease, license, sublease and service agreements (collectively, "tenant contracts").
The Company's operating segments consist of (1) Towers and (2) Fiber. See note 10.
As part of the Company's effort to provide comprehensive communications infrastructure solutions, as an ancillary business, the Company also offers certain services primarily relating to its Towers segment, predominately consisting of (1) site development services relating to existing or new tenant equipment installations, including: site acquisition, architectural and engineering, or zoning and permitting (collectively, "site development services") and (2) tenant equipment installation or subsequent augmentations (collectively, "installation services"). See note 12 for a discussion of the Company's restructuring plan, which includes discontinuing installation services as a Towers product offering.
The Company operates as a REIT for U.S. federal income tax purposes. In addition, the Company has certain taxable REIT subsidiaries ("TRSs"). See note 6.
Approximately 53% of the Company's towers are leased or subleased or operated and managed under master leases, subleases, and other agreements with AT&T and T-Mobile (including those which T-Mobile assumed in its merger with Sprint). The Company has the option to purchase these towers at the end of their respective lease terms. The Company has no obligation to exercise such purchase options.
Basis of Presentation
The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to state fairly the condensed consolidated financial position of the Company as of September 30, 2023, the condensed consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, and the condensed consolidated cash flows for the nine months ended September 30, 2023 and 2022. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
7

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
2.Summary of Significant Accounting Policies
Recently Adopted Accounting Pronouncements
No accounting pronouncements adopted during the nine months ended September 30, 2023 had a material impact on the Company's condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
No new accounting pronouncements issued but not yet adopted are expected to have a material impact on the Company's condensed consolidated financial statements.
3.Revenues
Site Rental Revenues
The Company generates site rental revenues from its core business by providing tenants with access, including space or capacity, to its shared communications infrastructure via long-term tenant contracts in various forms, including lease, license, sublease and service agreements. Typically, providing such access over the length of the tenant contract term represents the Company’s sole performance obligation under its tenant contracts.
Site rental revenues from the Company's tenant contracts are recognized on a straight-line, ratable basis over the fixed, non-cancelable term of the relevant tenant contract, which generally ranges from five to 15 years for wireless tenants and three to 20 years for fiber solutions tenants (including from organizations with high-bandwidth and multi-location demands), regardless of whether the payments from the tenant are received in equal monthly amounts during the life of the tenant contract. Certain of the Company's tenant contracts contain (1) fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the CPI), (2) multiple renewal periods exercisable at the tenant's option and (3) only limited termination rights at the applicable tenant's option through the current term. If the payment terms call for fixed escalators, upfront payments, or rent-free periods, the revenue is recognized on a straight-line basis over the fixed, non-cancelable term of the tenant contract. When calculating straight-line rental revenues, the Company considers all fixed elements of tenant contractual escalation provisions, even if such escalation provisions contain a variable element in addition to a minimum. The Company's assets related to straight-line site rental revenues are recorded within "Current portion of deferred site rental receivables" and "Deferred site rental receivables" on the Company's condensed consolidated balance sheet. Amounts billed or received prior to being earned are deferred and reflected in "Deferred revenues" and "Other long-term liabilities" on the Company's condensed consolidated balance sheet. Amounts to which the Company has an unconditional right to payment, which are related to both satisfied or partially satisfied performance obligations, are recorded within "Receivables, net" on the Company's condensed consolidated balance sheet.
Sprint Cancellation Payments. For the three and nine months ended September 30, 2023, site rental revenues include $6 million and $160 million, respectively, of payments in the Company's Fiber segment to satisfy the remaining rental obligations of certain canceled Sprint leases as a result of the T-Mobile US, Inc. and Sprint network consolidation. In connection with such canceled Sprint leases, the Company also recognized $57 million of accelerated prepaid rent amortization in the Company's Fiber segment during the nine months ended September 30, 2023.
Services and Other Revenues
As part of the Company’s effort to provide comprehensive communications infrastructure solutions, as an ancillary business, the Company offers certain services primarily relating to its Towers segment, predominately consisting of (1) site development services and (2) installation services. See note 12 for a discussion of the Company's restructuring plan, which includes discontinuing installation services as a Towers product offering. Upon contract commencement, the Company assesses its services to tenants and identifies performance obligations for each promise to provide a distinct service.
The Company may have multiple performance obligations for site development services, which primarily include: structural analysis, zoning, permitting and construction drawings. For each of these performance obligations, services revenues are recognized at completion of the applicable performance obligation, which represents the point at which the Company believes it has transferred goods or services to the tenant. The services revenue recognized is based on an allocation of the transaction price among the performance obligations in a respective tenant contract based on estimated standalone selling price. The volume and mix of site development services may vary among tenant contracts and may include a combination of some or all of the above performance obligations. Amounts are billed per contractual milestones, with payments generally due within 45
8

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
to 60 days, and generally do not contain variable-consideration provisions. The transaction price for the Company's tower installation services consists of amounts for (1) permanent improvements to the Company's towers that represent a lease component and (2) the performance of the service. Amounts under the Company's tower installation service agreements that represent a lease component are recognized as site rental revenues on a straight-line basis over the length of the associated estimated lease term. For the performance of the installation service, the Company has one performance obligation, which is satisfied at the time of the applicable installation or augmentation and recognized as services and other revenues on the Company's condensed consolidated statement of operations and comprehensive income (loss). Since performance obligations are typically satisfied prior to receiving payment from tenants, the unconditional right to payment is recorded within "Receivables, net" on the Company’s condensed consolidated balance sheet. Generally, the services the Company provides to its tenants have a duration of one year or less.
Additional Information on Revenues
As of January 1, 2023 and September 30, 2023, $2.3 billion and $2.2 billion of unrecognized revenues, respectively, were reported in "Deferred revenues" and "Other long-term liabilities" on the Company's condensed consolidated balance sheet. During the nine months ended September 30, 2023, approximately $503 million of the January 1, 2023 unrecognized revenues balance was recognized as revenues. As of January 1, 2022, $2.6 billion of unrecognized revenues were reported in "Deferred revenues" and "Other long-term liabilities" on the Company's condensed consolidated balance sheet. During the nine months ended September 30, 2022, approximately $495 million of the January 1, 2022 unrecognized revenues balance was recognized as revenues.
The following table is a summary of the contracted amounts owed to the Company by tenants pursuant to tenant contracts in effect as of September 30, 2023.
Three Months Ending December 31,
Years Ending December 31,
20232024202520262027ThereafterTotal
Contracted amounts(a)
$1,255 $4,937 $4,586 $4,448 $4,386 $19,781 $39,393 
(a)Based on the nature of the contract, tenant contracts are accounted for pursuant to relevant lease accounting (ASC 842) or revenue accounting (ASC 606) guidance. Excludes amounts related to services, as those contracts generally have a duration of one year or less.
See note 10 for further information regarding the Company's operating segments.
9

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
4.Debt and Other Obligations
The table below sets forth the Company's debt and other obligations as of September 30, 2023.
Original
Issue Date
Final
Maturity
Date(a)
Balance as of September 30, 2023
Balance as of
December 31, 2022
Stated Interest
Rate as of September 30, 2023(a)(b)
Secured Notes, Series 2009-1, Class A-2July 2009Aug. 2029$41 $47 9.0 %
Tower Revenue Notes, Series 2015-2May 2015May 2045
(c)
698 698 3.7 %
Tower Revenue Notes, Series 2018-2July 2018July 2048
(c)
746 745 4.2 %
Finance leases and other obligationsVarious
(d)
Various
(d)
264 246 Various
(d)
Total secured debt1,749 1,736 
2016 RevolverJan. 2016July 2027160 
(e)
1,305 6.5 %
(f)
2016 Term Loan AJan. 2016July 20271,169 1,192 6.5 %
(f)
Commercial Paper NotesVarious
(g)
Various
(g)
1,803 
(g)
1,241 6.1 %
3.150% Senior NotesJan. 2018July 2023 
(h)
749 N/A
3.200% Senior NotesAug. 2017Sept. 2024749 748 3.2 %
1.350% Senior NotesJune 2020July 2025498 497 1.4 %
4.450% Senior NotesFeb. 2016Feb. 2026897 896 4.5 %
3.700% Senior NotesMay 2016June 2026748 747 3.7 %
1.050% Senior NotesFeb. 2021July 2026994 992 1.1 %
4.000% Senior NotesFeb. 2017Mar. 2027498 497 4.0 %
2.900% Senior NotesMar. 2022Mar. 2027744 742 2.9 %
3.650% Senior NotesAug. 2017Sept. 2027996 996 3.7 %
5.000% Senior NotesJan. 2023
(i)
Jan. 2028
(i)
991  5.0 %
3.800% Senior NotesJan. 2018Feb. 2028994 993 3.8 %
4.800% Senior NotesApr. 2023
(j)
Sept. 2028
(j)
594  4.8 %
4.300% Senior NotesFeb. 2019Feb. 2029595 594 4.3 %
3.100% Senior NotesAug. 2019Nov. 2029546 545 3.1 %
3.300% Senior NotesApr. 2020July 2030740 739 3.3 %
2.250% Senior NotesJune 2020Jan. 20311,091 1,090 2.3 %
2.100% Senior NotesFeb. 2021Apr. 2031990 989 2.1 %
2.500% Senior NotesJune 2021July 2031742 742 2.5 %
5.100% Senior NotesApr. 2023
(j)
May 2033
(j)
742  5.1 %
2.900% Senior NotesFeb. 2021Apr. 20411,234 1,233 2.9 %
4.750% Senior NotesMay 2017May 2047344 344 4.8 %
5.200% Senior NotesFeb. 2019Feb. 2049396 396 5.2 %
4.000% Senior NotesAug. 2019Nov. 2049346 346 4.0 %
4.150% Senior NotesApr. 2020July 2050490 490 4.2 %
3.250% Senior NotesJune 2020Jan. 2051890 890 3.3 %
Total unsecured debt20,981 19,993 
Total debt and other obligations22,730 21,729 
Less: current maturities of debt and other obligations827 819 
Non-current portion of debt and other long-term obligations$21,903 $20,910 
(a)See the 2022 Form 10-K, including note 7 to the consolidated financial statements, for additional information regarding the maturity and principal amortization provisions and interest rates relating to the Company's indebtedness.
(b)Represents the weighted-average stated interest rate, as applicable.
(c)If the Tower Revenue Notes, Series 2015-2 and Series 2018-2 (collectively, "Tower Revenue Notes") are not paid in full on or prior to an applicable anticipated repayment date, then Excess Cash Flow (as defined in the indenture governing the terms of such notes) of the issuers of such notes will be used to repay principal of the applicable series and class of the Tower Revenue Notes, and additional interest (of an additional approximately 5% per annum) will accrue on the respective Tower Revenue Notes. As of September 30, 2023, the Tower Revenue Notes, Series 2015-2 and Series 2018-2 have principal amounts of $700 million and $750 million, with anticipated repayment dates in 2025 and 2028, respectively.
(d)The Company's finance leases and other obligations relate to land, fiber, vehicles, and other assets and bear interest rates up to 10% and mature in periods ranging from less than one year to approximately 25 years.
(e)As of September 30, 2023, the undrawn availability under the Company's senior unsecured revolving credit facility ("2016 Revolver") was $6.8 billion.
10

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
(f)Both the 2016 Revolver and the senior unsecured term loan A facility ("2016 Term Loan A" and, collectively, "2016 Credit Facility") bear interest, at the Company's option, at either (1) Term SOFR plus (i) a credit spread adjustment of 0.10% per annum and (ii) a credit spread ranging from 0.875% to 1.750% per annum or (2) an alternate base rate plus a credit spread ranging from 0.000% to 0.750% per annum, in each case, with the applicable credit spread based on the Company's senior unsecured debt rating. The Company pays a commitment fee ranging from 0.080% to 0.300%, based on the Company's senior unsecured debt rating, per annum on the undrawn available amount under the 2016 Revolver. See the 2022 Form 10-K, including note 7 to the consolidated financial statements, for information regarding potential adjustments to such percentages.
(g)The maturities of the Commercial Paper Notes, when outstanding, may vary but may not exceed 397 days from the date of issue. The Commercial Paper Notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. At any point in time, the Company intends to maintain available commitments under its 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding. While any outstanding Commercial Paper Notes generally have short-term maturities, the Company classifies the outstanding issuances, when applicable, as long-term based on its ability and intent to refinance the outstanding issuances on a long-term basis.
(h)In July 2023, the Company repaid in full the 3.150% Senior Notes on the contractual maturity date.
(i)In January 2023, the Company issued $1.0 billion aggregate principal amount of 5.000% senior unsecured notes due January 2028 ("January 2023 Senior Notes"). The Company used the net proceeds from the January 2023 Senior Notes offering to repay a portion of the outstanding indebtedness under the 2016 Revolver and pay related fees and expenses.
(j)In April 2023, the Company issued $600 million aggregate principal amount of 4.800% senior unsecured notes due September 2028 and $750 million aggregate principal amount of 5.100% senior unsecured notes due May 2033 (collectively, "April 2023 Senior Notes"). The Company used the net proceeds from the April 2023 Senior Notes offering to repay a portion of the outstanding indebtedness under the 2016 Revolver and pay related fees and expenses.
Scheduled Principal Payments and Final Maturities
The following are the scheduled principal payments and final maturities of the total debt and other long-term obligations of the Company outstanding as of September 30, 2023, which do not consider the principal payments that will commence following the anticipated repayment dates on the Tower Revenue Notes.
 
Three Months Ending December 31,
Years Ending December 31,Total Cash ObligationsUnamortized Adjustments, NetTotal Debt and Other Obligations Outstanding
 20232024202520262027Thereafter
Scheduled principal payments and
final maturities
$1,819 
(a)
$835 $597 $2,775 $3,406 

$13,456 $22,888 $(158)$22,730 
(a)Predominately consists of outstanding indebtedness under the CP Program as discussed in footnote (g) of the preceding table.
Purchases and Redemptions of Long-Term Debt
The following is a summary of purchases and redemptions of long-term debt during the nine months ended September 30, 2023.
Principal Amount
Cash Paid(a)
Gains (Losses)
3.150% Senior Notes
$750 $750 $ 
(a)Exclusive of accrued interest.

Interest Expense and Amortization of Deferred Financing Costs, Net
The components of interest expense and amortization of deferred financing costs, net are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Interest expense on debt obligations$213 $174 $616 $496 
Amortization of deferred financing costs and adjustments on long-term debt8 6 22 19 
Capitalized interest(4)(3)(11)(9)
Total$217 $177 $627 $506 
11

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
5.Fair Value Disclosures
Level in Fair Value HierarchySeptember 30, 2023December 31, 2022
Carrying AmountFair ValueCarrying AmountFair Value
Assets:
Cash and cash equivalents1$117 $117 $156 $156 
Restricted cash, current and non-current1172 172 171 171 
Liabilities:
Total debt and other obligations222,730 20,046 21,729 19,554 
The fair values of cash and cash equivalents and restricted cash approximate the carrying values. The Company determines the fair value of its debt securities based on indicative, non-binding quotes from brokers. Quotes from brokers require judgment and are based on the brokers' interpretation of market information, including implied credit spreads for similar borrowings on recent trades or bid/ask prices or quotes from active markets if available. Since December 31, 2022, there have been no changes in the Company's valuation techniques used to measure fair values.
6.Income Taxes
The Company operates as a REIT for U.S. federal income tax purposes. As a REIT, the Company is generally entitled to a deduction for dividends that it pays and, therefore, is not subject to U.S. federal corporate income tax on its net taxable income that is currently distributed to its stockholders. The Company may be subject to certain federal, state, local and foreign taxes on its income, including (1) taxes on any undistributed income and (2) taxes related to the TRSs. In addition, the Company could, under certain circumstances, be required to pay an excise or penalty tax, which could be significant in amount, in order to utilize one or more relief provisions under the Internal Revenue Code of 1986, as amended, to maintain qualification for taxation as a REIT.
The Company's TRS assets and operations will continue to be subject, as applicable, to federal and state corporate income taxes or to foreign taxes in the jurisdictions in which such assets and operations are located. The Company's foreign assets and operations (including its tower operations in Puerto Rico) are subject to foreign income taxes in the jurisdictions in which such assets and operations are located, regardless of whether they are included in a TRS or not.
For the nine months ended September 30, 2023 and 2022, the Company's effective tax rate differed from the federal statutory rate predominately due to the Company's REIT status, including the dividends paid deduction.
7.Per Share Information
Basic net income (loss), per common share, excludes dilution and is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. For the three and nine months ended September 30, 2023 and 2022, diluted net income (loss), per common share, is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, plus any potential dilutive common share equivalents, including shares issuable upon the vesting of restricted stock units ("RSUs") as determined under the treasury stock method.
12

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Net income (loss) $265 $419 $1,139 $1,261 
Weighted-average number of common shares outstanding (in millions):
Basic weighted-average number of common stock outstanding434 433 434 433 
Effect of assumed dilution from potential issuance of common shares relating to restricted stock units 1  1 
Diluted weighted-average number of common shares outstanding434 434 434 434 
Net income (loss), per common share:
Basic$0.61 $0.97 $2.63 $2.91 
Diluted$0.61 $0.97 $2.63 $2.91 
Dividends/distributions declared per share of common stock$1.565 $1.470 $4.695 $4.410 
During the nine months ended September 30, 2023, the Company granted two million RSUs to the Company's executives and certain other employees.
8.Commitments and Contingencies
The Company is involved in various claims, assessments, lawsuits or proceedings arising in the ordinary course of business. While there are uncertainties inherent in the ultimate outcome of such matters and it is impossible to presently determine the ultimate costs or losses that may be incurred, if any, management believes the adverse resolution of such uncertainties and the incurrence of such costs should not have a material adverse effect on the Company's condensed consolidated financial position or results of operations. The Company and certain of its subsidiaries are also contingently liable for commitments or performance guarantees arising in the ordinary course of business, including certain letters of credit or surety bonds. In addition, as mentioned in note 1, the Company has the option to purchase approximately 53% of its towers at the end of their respective lease terms. The Company has no obligation to exercise such purchase options.
9.Equity
Declaration and Payment of Dividends
During the nine months ended September 30, 2023, the following dividends/distributions were declared or paid:
Equity TypeDeclaration DateRecord DatePayment DateDividends Per Share
Aggregate
Payment
Amount(a)
Common StockFebruary 7, 2023March 15, 2023March 31, 2023$1.565 $681 
Common StockMay 1, 2023June 15, 2023June 30, 2023$1.565 $681 
Common StockJuly 21, 2023September 15, 2023September 29, 2023$1.565 $681 
(a)Inclusive of dividends accrued for holders of unvested RSUs, which will be paid when and if the RSUs vest.
See also note 13 for a discussion of the Company's common stock dividend declared in October 2023.
Purchases of the Company's Common Stock
For the nine months ended September 30, 2023, the Company purchased 0.2 million shares of its common stock utilizing $29 million in cash. The shares of common stock purchased relate to shares withheld in connection with the payment of withholding taxes upon vesting of RSUs.
2021 "At-the-Market" Stock Offering Program
In March 2021, the Company established an "at-the-market" stock offering program through which it may issue and sell shares of its common stock having an aggregate gross sales price of up to $750 million ("2021 ATM Program"). Sales under the
13

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
2021 ATM Program may be made by means of ordinary brokers' transactions on the NYSE or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or, subject to the Company's specific instructions, at negotiated prices. The Company intends to use the net proceeds from any sales under the 2021 ATM Program for general corporate purposes, which may include (1) the funding of future acquisitions or investments or (2) the repayment or repurchase of any outstanding indebtedness. The Company has not sold any shares of common stock under the 2021 ATM Program.
10.Operating Segments
The Company's operating segments consist of (1) Towers and (2) Fiber. The Towers segment provides access, including space or capacity, to the Company's more than 40,000 towers geographically dispersed throughout the U.S. The Towers segment also reflects certain ancillary services relating to the Company's towers, predominately consisting of site development services and installation services. See note 12 for a discussion of the Company's restructuring plan, which includes discontinuing installation services as a Towers product offering. The Fiber segment provides access, including space or capacity, to the Company's approximately (1) 115,000 small cells on air or under contract and (2) 85,000 route miles of fiber primarily supporting small cells and fiber solutions geographically dispersed throughout the U.S.
The measurements of profit or loss used by the Company's chief operating decision maker ("CODM") to evaluate the performance of its operating segments are (1) segment site rental gross margin, (2) segment services and other gross margin and (3) segment operating profit (loss). The Company defines segment site rental gross margin as segment site rental revenues less segment site rental costs of operations, excluding stock-based compensation expense, net and amortization of prepaid lease purchase price adjustments recorded in consolidated site rental costs of operations. The Company defines segment services and other gross margin as segment services and other revenues less segment services and other costs of operations, excluding stock-based compensation expense, net recorded in consolidated services and other costs of operations. The Company defines segment operating profit (loss) as segment site rental gross margin plus segment services and other gross margin, and segment other operating (income) expense, less segment selling, general and administrative expenses. All of these measurements of profit or loss are exclusive of depreciation, amortization and accretion, which are shown separately.
The following tables set forth the Company's segment operating results for the three and nine months ended September 30, 2023 and 2022. Costs that are directly attributable to Towers and Fiber are assigned to those respective segments. Additionally, certain costs are shared across segments and are reflected in the Company's segment measures through allocations that management believes to be reasonable. The "Other" column (1) represents amounts excluded from specific segments, such as restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, net, gains (losses) on retirement of long-term obligations, interest income, other income (expense), stock-based compensation expense, net and certain selling, general and administrative expenses, and (2) reconciles segment operating profit (loss) to income (loss) before income taxes, as the amounts are not utilized in assessing each segment’s performance. The "Other" total assets balance includes corporate assets such as cash and cash equivalents which have not been allocated to specific segments. There are no significant revenues resulting from transactions between the Company's operating segments.
14

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
Three Months Ended September 30, 2023
Three Months Ended September 30, 2022
TowersFiberOtherConsolidated
Total
TowersFiberOtherConsolidated
Total
Segment site rental revenues$1,074 $503 $1,577 $1,084 $484 $1,568 
Segment services and other revenues86 4 90 175 3 178 
Segment revenues1,160 507 1,667 1,259 487 1,746 
Segment site rental costs of operations236 175 411 230 166 396 
Segment services and other costs of operations61 3 64 114 3 117 
Segment costs of operations(a)(b)
297 178 475 344 169 513 
Segment site rental gross margin838 328 1,166 854 318 1,172 
Segment services and other gross margin25 1 26 61  61 
Segment selling, general and administrative expenses(b)
24 48 72 28 47 75 
Segment operating profit (loss)839 281 1,120 887 271 1,158 
Other selling, general and administrative expenses(b)
$75 75 $81 81 
Stock-based compensation expense, net36 36 38 38 
Depreciation, amortization and accretion439 439 430 430 
Restructuring charges
72 72   
Interest expense and amortization of deferred financing costs, net217 217 177 177 
Other (income) expenses to reconcile to income (loss) before income taxes(c)
9 9 10 10 
Income (loss) before income taxes$272 $422 
Capital expenditures$49 $287 $11 $347 $45 $277 $15 $337 
Total assets (at period end)$21,783 $16,237 $679 $38,699 $22,226 $15,914 $721 $38,861 
(a)Exclusive of depreciation, amortization and accretion shown separately.
(b)Segment costs of operations excludes (1) stock-based compensation expense, net of $7 million for each of the three months ended September 30, 2023 and 2022 and (2) prepaid lease purchase price adjustments of $4 million for each of the three months ended September 30, 2023 and 2022. Segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense, net of $29 million and $31 million for the three months ended September 30, 2023 and 2022, respectively.
(c)See condensed consolidated statement of operations and comprehensive income (loss) for further information.
15

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
Nine Months Ended September 30, 2023
Nine Months Ended September 30, 2022
TowersFiberOtherConsolidated
Total
TowersFiberOtherConsolidated
Total
Segment site rental revenues$3,234 $1,695 $4,929 $3,237 $1,474 $4,711 
Segment services and other revenues356 22 378 502 9 511 
Segment revenues3,590 1,717 5,307 3,739 1,483 5,222 
Segment site rental costs of operations714 518 1,232 689 490 1,179 
Segment services and other costs of operations252 8 260 329 7 336 
Segment costs of operations(a)(b)
966 526 1,492 1,018 497 1,515 
Segment site rental gross margin2,520 1,177 3,697 2,548 984 3,532 
Segment services and other gross margin104 14 118 173 2 175 
Segment selling, general and administrative expenses(b)
84 148 232 84 140 224 
Segment operating profit (loss)
2,540 1,043 3,583 2,637 846 3,483 
Other selling, general and administrative expenses(b)
$246 246 $234 234 
Stock-based compensation expense126 126 121 121 
Depreciation, amortization and accretion
1,315 1,315 1,276 1,276 
Restructuring charges
72 72   
Interest expense and amortization of deferred financing costs, net627 627 506 506 
Other (income) expenses to reconcile to income (loss) before income taxes(c)
37 37 71 71 
Income (loss) before income taxes$1,160 $1,275 
Capital expenditures$160 $872 $35 $1,067 $137 $746 $38 $921 
(a)Exclusive of depreciation, amortization and accretion shown separately.
(b)Segment costs of operations excludes (1) stock-based compensation expense, net of $23 million and $21 million for the nine months ended September 30, 2023 and 2022, respectively, and (2) prepaid lease purchase price adjustments of $12 million for each of the nine months ended September 30, 2023 and 2022. Segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense, net of $103 million and $100 million for the nine months ended September 30, 2023 and 2022, respectively.
(c)See condensed consolidated statement of operations and comprehensive income (loss) for further information.
11.Supplemental Cash Flow Information
The following table is a summary of the Company's supplemental cash flow information for the nine months ended September 30, 2023 and 2022:
Nine Months Ended September 30,
20232022
Supplemental disclosure of cash flow information:  
Cash payments related to operating lease liabilities(a)
$429 $420 
Interest paid654 559 
Income taxes paid13 10 
Supplemental disclosure of non-cash operating, investing and financing activities:
ROU assets recorded in exchange for operating lease liabilities
21 162 
Increase (decrease) in accounts payable for purchases of property and equipment5 (7)
Purchase of property and equipment under finance leases and installment land purchases45 17 
(a)Excludes the Company's contingent payments pursuant to operating leases, which are recorded as expense in the period such contingencies are resolved.
16

CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
The reconciliation of cash, cash equivalents and restricted cash reported within various lines on the condensed consolidated balance sheet to amounts reported in the condensed consolidated statement of cash flows is shown below.
September 30, 2023December 31, 2022
Cash and cash equivalents$117 $156 
Restricted cash, current167 166 
Restricted cash reported within other assets, net5 5 
Cash, cash equivalents and restricted cash$289 $327 
12.Restructuring
On July 24, 2023, the Company initiated a restructuring plan ("Plan") as part of its efforts to reduce costs to better align the Company's operational needs with lower tower activity. The Plan includes reducing the Company's total employee headcount by approximately 15%, discontinuing installation services as a Towers product offering while continuing to offer site development services on Company towers, and consolidating office space.
In the third quarter 2023, the Company recorded approximately $72 million in charges in connection with the Plan, $61 million of which represent cash payments that have been or will be made in connection with employee severance and other one-time termination benefits. An additional $1 million of non-cash charges relate to share-based compensation. In connection with the office space consolidation, the Company recorded a $6 million charge related to remaining obligations under facility leases and $4 million of non-cash charges representing accelerated depreciation.
The Company expects to incur an additional approximately $35 million of related charges during the fourth quarter 2023, primarily related to the office space consolidation.
The actions announced in July 2023 associated with the Plan and related charges are expected to be substantially complete and recorded by December 31, 2023 while the payments are expected to be completed for the employee headcount reduction and office space consolidation in 2024 and 2027, respectively.
The following table summarizes the activities related to the restructuring for the nine months ended September 30, 2023:
Employee Headcount Reduction
Office Space Consolidation
Total
Charges
$62 $10 $72 
Payments
(35)(1)(36)
Non-cash items
(1)(4)(5)
Liability as of September 30, 2023
$26 $5 $31 
As of September 30, 2023, the liability for restructuring charges is included in "Other accrued liabilities" on the consolidated balance sheet, and the corresponding expense is included in "Restructuring charges" on the condensed consolidated statements of operations and comprehensive income.
The Company does not allocate restructuring charges between its operating segments. If such charges were allocated to operating segments, for the three and nine months ended September 30, 2023, $41 million and $13 million of the aforementioned charge would have been allocated to the Company's Towers and Fiber segment, respectively, with the remaining $18 million allocated to Other.

13.Subsequent Events
Common Stock Dividend
On October 17, 2023, the Company's board of directors declared a quarterly cash dividend of $1.565 per common share. The quarterly dividend will be payable on December 29, 2023 to common stockholders of record as of December 15, 2023.
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CROWN CASTLE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-Unaudited (Continued)
(Tabular dollars in millions, except per share amounts)
Restructuring Update
On October 18, 2023, the Company announced plans to relocate approximately 1,000 employee positions from several locations nationwide to a centralized location by the end of the third quarter 2024. In connection with this action, the Company anticipates recording related restructuring charges, including employee relocation costs, employee severance and other one-time termination benefits, remaining obligations under facility leases and write-off of leasehold improvements; however, the magnitude of these charges is highly uncertain at this time.
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ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the response to Part I, Item 1 of this report and the consolidated financial statements of the Company including the related notes and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A") included in the 2022 Form 10-K.
General Overview
Overview
We own, operate and lease shared communications infrastructure that is geographically dispersed throughout the U.S., including (1) more than 40,000 towers and other structures, such as rooftops (collectively, "towers"), (2) approximately 115,000 small cells on air or under contract and (3) approximately 85,000 route miles of fiber primarily supporting small cells and fiber solutions.
Our towers have a significant presence in each of the top 100 basic trading areas ("BTAs"), and the majority of our small cells and fiber assets are located in major metropolitan areas, including a presence within every major U.S. market. Site rental revenues represented 95% of our third quarter 2023 consolidated net revenues, of which 68% and 32% were from our Towers segment and Fiber segment, respectively. Within our Fiber segment, 69% and 31% of our third quarter 2023 Fiber site rental revenues related to fiber solutions and small cells, respectively. See note 10 to our condensed consolidated financial statements. The vast majority of our site rental revenues are of a recurring nature and are derived from long-term tenant contracts.
Strategy
As a leading provider of shared communications infrastructure in the U.S., our strategy is to create long-term stockholder value via a combination of (1) growing cash flows generated from our existing portfolio of communications infrastructure, (2) returning a meaningful portion of our cash generated by operating activities to our common stockholders in the form of dividends and (3) investing capital efficiently to grow cash flows and long-term dividends per share. Our strategy is based, in part, on our belief that the U.S. is the most attractive market for shared communications infrastructure investment with the greatest long-term growth potential. We measure our efforts to create "long-term stockholder value" by the combined payment of dividends to stockholders and growth in our per-share results. The key elements of our strategy are to:
Grow cash flows from our existing communications infrastructure. We are focused on maximizing the recurring site rental cash flows generated from providing our tenants with long-term access to our shared infrastructure assets, which we believe is the core driver of value for our stockholders. Tenant additions or modifications of existing tenant equipment (collectively, "tenant additions") enable our tenants to expand coverage and capacity in order to meet increasing demand for data while generating high incremental returns for our business. We believe our product offerings of towers and small cells through our shared communications infrastructure model provide a comprehensive, efficient and cost-effective solution for our wireless tenants' growing networks. Additionally, we believe our ability to share our fiber assets across multiple tenants to both deploy small cells and offer fiber solutions allows us to generate cash flows and increase stockholder return.
Return cash generated by operating activities to common stockholders in the form of dividends. We believe that distributing a meaningful portion of our cash generated by operating activities appropriately provides common stockholders with increased certainty for a portion of expected long-term stockholder value while still allowing us to retain sufficient flexibility to invest in our business and deliver growth. We believe this decision reflects the translation of the high-quality, long-term contractual cash flows of our business into stable capital returns to common stockholders.
Invest capital efficiently to grow cash flows and long-term dividends per share. In addition to adding tenants to existing communications infrastructure, we seek to invest our available capital, including the net cash generated by our operating activities and external financing sources, in a manner that will increase long-term stockholder value on a risk-adjusted basis. These investments include constructing and acquiring new communications infrastructure that we expect will generate future cash flow growth and attractive long-term returns by adding tenants to those assets over time. Our historical investments have included the following (in no particular order):
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construction of towers, fiber and small cells;
acquisitions of towers, fiber and small cells;
acquisitions of land interests (which primarily relate to land assets under towers);
improvements and structural enhancements to our existing communications infrastructure;
purchases of shares of our common stock from time to time; and
purchases, repayments or redemptions of our debt.
Our strategy to create long-term stockholder value is based on our belief that there will be considerable future demand for our communications infrastructure based on the location of our assets and the rapid and continuing growth in the demand for data. We believe that such demand for our communications infrastructure will continue, will result in growth of our cash flows due to tenant additions on our existing communications infrastructure, and will create other growth opportunities for us, such as demand for newly constructed or acquired communications infrastructure, as described above. Further, we seek to augment the long-term value creation associated with growing our recurring site rental cash flows by offering certain ancillary site development services within our Towers segment. See note 12 to our condensed consolidated financial statements for a discussion of our restructuring plan, which includes discontinuing installation services as a Towers product offering.
Highlights of Business Fundamentals and Results
We operate as a REIT for U.S. federal income tax purposes
As a REIT, we are generally entitled to a deduction for dividends that we pay and, therefore, are not subject to U.S. federal corporate income tax on our net taxable income that is currently distributed to our stockholders.
To remain qualified and be taxed as a REIT, we will generally be required to annually distribute to our stockholders at least 90% of our REIT taxable income, after the utilization of our NOLs (determined without regard to the dividends paid deduction and excluding net capital gain).
See note 6 to our condensed consolidated financial statements for further discussion of our REIT status.
Potential growth resulting from the increasing demand for data
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.
We expect U.S. wireless carriers will continue to focus on improving network quality and expanding capacity (including through 5G initiatives) by utilizing a combination of towers and small cells. We believe our product offerings of towers and small cells provide a comprehensive solution to our wireless tenants' growing communications infrastructure needs.
We expect organizations will continue to increase the usage of high-bandwidth applications that will require the utilization of more fiber infrastructure and fiber solutions, such as those we provide.
Within our Fiber segment, we are able to generate growth and returns for our stockholders by deploying our fiber for both small cells and fiber solutions tenants.
Tenant additions on our existing communications infrastructure are achieved at a low incremental operating cost, delivering high incremental returns.
Substantially all of our communications infrastructure can accommodate additional tenancy, either as currently constructed or with appropriate modifications.
Investing capital efficiently to grow long-term dividends per share (see also "Item 2. MD&A—General Overview—Strategy")
We had discretionary capital expenditures of $1.0 billion for the nine months ended September 30, 2023, predominately resulting from the construction of new communications infrastructure and improvements to existing communications infrastructure in order to support additional tenants.
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.
Site rental revenues under long-term tenant contracts
Our wireless tenant contracts have initial terms of five to 15 years, with contractual escalators and multiple renewal periods of five to 10 years each, exercisable at the option of the tenant.
Our fiber solutions tenant contracts' initial terms generally vary between three to 20 years.
20


As of September 30, 2023, our weighted-average remaining term was approximately six years, exclusive of renewals exercisable at the tenants' option, currently representing approximately $39.4 billion of expected future cash inflows.
Majority of our revenues from large wireless carriers
For the nine months ended September 30, 2023, approximately three-fourths of our site rental revenues were derived from T-Mobile, AT&T and Verizon Wireless.
Majority of land under our towers under long-term control
For the nine months ended September 30, 2023, approximately 90% of our towers site rental gross margin and approximately 80% of our towers site rental gross margin was derived from towers located on land that we own or control for greater than 10 and 20 years, respectively. The aforementioned percentages include towers located on land that is owned, including through fee interests and perpetual easements, which represented approximately 40% of our towers site rental gross margin.
Majority of our fiber assets are located in major metropolitan areas and are on public rights-of-way
Minimal sustaining capital expenditure requirements
For the nine months ended September 30, 2023, sustaining capital expenditures represented approximately 1% of net revenues.
Debt portfolio with long-dated maturities extended over multiple years, with the vast majority of such debt having a fixed rate (see note 4 to our condensed consolidated financial statements and "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt)
As of September 30, 2023, our outstanding debt had a weighted-average interest rate of 3.8% and weighted-average maturity of approximately nine years (assuming anticipated repayment dates on certain debt).
As of September 30, 2023, 86% of our debt had fixed rate coupons.
Our debt service coverage and leverage ratios are within their respective financial maintenance covenants.
During 2023, we completed the following financing activities (see note 4 to our condensed consolidated financial statements)
In January 2023, we issued $1.0 billion aggregate principal amount of 5.000% senior unsecured notes due 2028 ("January 2023 Senior Notes"). We used the net proceeds from the January 2023 Senior Notes offering to repay a portion of the outstanding indebtedness under the 2016 Revolver and pay related fees and expenses.
In April 2023, we issued $600 million aggregate principal amount of 4.800% senior unsecured notes due 2028 and $750 million aggregate principal amount of 5.100% senior unsecured notes due 2033 (collectively, "April 2023 Senior Notes"). We used the net proceeds from the April 2023 Senior Notes offering to repay a portion of the outstanding indebtedness under the 2016 Revolver and pay related fees and expenses.
In July 2023, we repaid all of the 3.150% Senior Notes on the contractual maturity date.
Significant cash flows from operations
Net cash provided by operating activities was $2.3 billion for the nine months ended September 30, 2023.
In addition to the positive impact of contractual escalators, we expect to grow our core business of providing access to our communications infrastructure as a result of future anticipated additional demand for our communications infrastructure.
Returning cash flows provided by operations to stockholders in the form of dividends
During each of the first three quarters of 2023, we paid a common stock dividend of $1.565 per share, totaling approximately $2.0 billion.
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 generally commensurate with our growth in cash flows. Any future common stock dividends are subject to declaration by our board of directors. See notes 9 and 13 to our condensed consolidated financial statements for further information regarding our common stock and dividends.
Restructuring Plan
On July 24, 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 12 to our condensed consolidated financial statements and "Item 2. MD&A—Results of Operations" for further discussion of the Plan.
The actions announced in July 2023 associated with the Plan and related charges are expected to be substantially complete and recorded by December 31, 2023 while the payments are expected to be completed for the employee headcount reduction and office space consolidation in 2024 and 2027, respectively.
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Outlook Highlights
The following are certain highlights of our full year 2023 and 2024 outlook that impact our business fundamentals described above.
We expect that, when compared to full year 2022, our full year 2023 and 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. Site rental revenues growth in 2023 will also be positively impacted by payments received 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 ("Sprint Cancellations"), substantially all of which were received in the first half of 2023. Management expects the absence of the aforementioned payments and a decline in long-term deferred revenue amortization will result in lower reported site rental revenues in 2024 as compared to 2023.
We expect to continue to invest a significant amount of our available capital in the form of discretionary capital expenditures for 2023 and 2024 based on the anticipated returns on such discretionary investments.
We expect that our discretionary capital expenditures will increase as we accelerate the pace of small cell deployments.
We also expect sustaining capital expenditures of approximately 1% of net revenues for full year 2023 and 2024, consistent with historical annual levels.
As part of the aforementioned Plan:
We expect to incur an additional approximately $35 million of related charges during the fourth quarter 2023, primarily related to the office space consolidation.
Additionally, we expect to realize approximately $30 million in labor and facilities cost savings in 2023, of which $15 million is expected in selling, general and administrative, $10 million in services and other costs of operations and $5 million in site rental costs of operations. 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.
On October 18, 2023, we announced plans to relocate approximately 1,000 employee positions from several locations nationwide to a centralized location by the end of the third quarter 2024. In connection with this action, we anticipate recording related restructuring charges, including employee relocation costs, employee severance and other one-time termination benefits, remaining obligations under facility leases due to office closures and write-off of leasehold improvements; however, the magnitude of these charges is highly uncertain at this time.
See also "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a discussion of our interest rate risks.
Results of Operations
The following discussion of our results of operations should be read in conjunction with our condensed consolidated financial statements and the 2022 Form 10-K.
The following discussion of our results of operations is based on our condensed consolidated financial statements prepared in accordance with GAAP, which requires us to make estimates and judgments that affect the reported amounts (see "Item 2. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 2 to our consolidated financial statements in the 2022 Form 10-K). See "Item 2. 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).
Our operating segments consist of (1) Towers and (2) Fiber. See note 10 to our condensed consolidated financial statements for further discussion of our operating segments.
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Highlights of our results of operations for the three months ended September 30, 2023 and 2022 are depicted below.
(In millions of dollars)Three Months Ended September 30,
20232022$ Change% Change
Site rental revenues:
Towers site rental revenues$1,074$1,084$(10)(1)%
Fiber site rental revenues$503$484+$19+4%
Total site rental revenues$1,577$1,568+$9+1%
Segment site rental gross margin:(a)
Towers site rental gross margin
$838$854$(16)(2)%
Fiber site rental gross margin
$328$318+$10+3%
Segment services and other gross margin:(a)
Towers services and other gross margin
$25$61$(36)(59)%
Fiber services and other gross margin
$1$—+$1+100%
Segment operating profit (loss):(a)
Towers operating profit (loss)
$839$887$(48)(5)%
Fiber operating profit (loss)
$281$271+$10+4%
Net income (loss)$265$419$(154)(37)%
Adjusted EBITDA(b)
$1,047$1,077$(30)(3)%
(a)See note 10 to our condensed consolidated financial statements and "Item 2. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures" for further discussion of our definitions of segment site rental gross margin, segment services and other gross margin and segment operating profit (loss).
(b)See reconciliation of this non-GAAP financial measure to net income (loss) and definition included in "Item 2. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures."
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Site rental revenues grew $9 million, or 1%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. This growth was predominately comprised of the factors depicted in the chart below:
(In millions of dollars)
802
(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.
(b)Core leasing activity and non-renewals include $6 million and $6 million, respectively, of payments received from and non-renewals associated with Sprint Cancellations, respectively.
(c)Prepaid rent amortization includes amortization of upfront payments received from long-term tenants and other deferred credits.
(d)Represents the contribution from recent acquisitions until the one-year anniversary of such acquisitions.
Towers site rental revenues and Towers site rental gross margin for the third quarter of 2023 were $1.1 billion and $838 million, respectively, compared to $1.1 billion and $854 million, respectively, in the same period in the prior year. The decrease in Towers site rental gross margin was primarily due to a decrease in prepaid rent amortization and higher Towers site rental costs of operations, including ground lease agreements that contain contingent payment provisions such as consumer price index ("CPI")-based escalations.
Fiber site rental revenues and Fiber site rental gross margin for the third quarter of 2023 were $503 million and $328 million, respectively, and increased by $19 million and $10 million, respectively, from the same period in the prior year. The increase in Fiber site rental revenues was predominately impacted by the increased demand for small cells and fiber solutions.
Towers services and other gross margin was $25 million for the third quarter of 2023 and decreased by $36 million from $61 million during the same period in the prior year, 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 12 to our condensed consolidated financial statements for a discussion of the Plan, which includes discontinuing installation services as a Towers product offering.
Selling, general and administrative expenses for the third quarter of 2023 were $176 million and decreased by $11 million, or 6%, from $187 million during the same period in the prior year. This decrease was primarily related to decreases in employee-related costs.
Towers operating profit (loss) for the third quarter of 2023 decreased by $48 million, or 5%, from the same period in the prior year as a result of the previously-mentioned decreases in both Towers site rental gross margin and Towers services and other gross margin.
Fiber operating profit (loss) for the third quarter of 2023 increased by $10 million, or 4%, from the same period in the prior year as a result of the previously-mentioned increase in Fiber site rental gross margin.
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Depreciation, amortization and accretion was $439 million for third quarter of 2023 and increased by $9 million, or 2%, from the same period in the prior year. This increase predominately resulted from a corresponding increase in our gross property and equipment due to capital expenditures.
Restructuring charges in connection with the Plan were $72 million for the third quarter of 2023. The charges primarily consisted of $61 million related to cash payments that have been or will be made associated with employee severance and other one-time termination benefits and $6 million of remaining obligations under facility leases payable through 2027. Additionally, non-cash charges of $1 million related to share-based compensation and $4 million for accelerated depreciation and asset write downs were also recorded.
Interest expense and amortization of deferred financing costs, net were $217 million for the third quarter of 2023 and increased by $40 million, or 23%, from $177 million during the same period in the prior year. The increase predominately resulted from an increase in the variable interest rate on our 2016 Term Loan A, 2016 Revolver and outstanding Commercial Paper Notes, as well as an increase in our outstanding indebtedness due to the financing of our discretionary capital expenditures. See note 4 to our condensed consolidated financial statements for a further discussion of our debt and "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our interest rate exposure.
For the third quarter of 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 note 6 to our condensed consolidated financial statements and also note 9 to our consolidated financial statements in the 2022 Form 10-K.
Net income (loss) was $265 million for the third quarter of 2023 compared to $419 million during the third quarter of 2022. The decrease was primarily related to the previously-mentioned decrease in Towers operating profit and previously-mentioned increases in restructuring charges and interest expense and amortization of deferred financing costs, net.
Adjusted EBITDA decreased by $30 million, or 3%, from the third quarter of 2022 to the third quarter of 2023, reflecting the previously-mentioned decrease in Towers operating profit.
Highlights of our results of operations for the nine months ended September 30, 2023 and 2022 are depicted below.