Crown Castle Announces Agreement To Sell Fiber Segment to EQT and Zayo, Reports Fourth Quarter and Full Year 2024 Results, and Provides Outlook for Full Year 2025

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Successfully Concludes Strategic Review with Agreement to Sell Small Cells and Fiber Solutions for $8.5 Billion

Results in Crown Castle as the Only Pure-Play, Publicly-Traded US Tower Company

Increases Capital Efficiency with Updated Capital Allocation Framework, Including Anticipated New Dividend Policy and Proposed Approximately $3.0 Billion Share Repurchase Program

HOUSTON, March 13, 2025 (GLOBE NEWSWIRE) -- Crown Castle Inc. (NYSE: CCI) ("Crown Castle" or "Company") today reported results for the full year ended December 31, 2024, as reflected in the table below.

(a) See "Non-GAAP Measures and Other Information" for further information and reconciliation of non-GAAP financial measures to net income (loss), including on a per share basis.

^{(b) Reflects midpoint of full year 2024 Outlook as issued on October 16, 2024.}

"Together with our Board of Directors, I am excited to announce that we have concluded the strategic review of our Fiber segment with an agreement to sell our small cells and fiber solutions businesses for $8.5 billion," stated Steven Moskowitz, Chief Executive Officer of Crown Castle. "We are also pleased to report that we were able to deliver solid full year 2024 results while conducting the strategic review, highlighted by 4.5% tower organic growth^(a) as we remained focused on delivering for our customers. In 2025, we expect a consistent level of activity with organic growth^(a) of 4.5% in towers, excluding the impact of Sprint consolidation churn, and anticipate lease and amendment applications to increase year-over-year as our customers continue to add capacity to their 5G networks to meet the persistent growth in mobile data demand in the U.S. We believe a focused, pure-play U.S. tower business will be uniquely well positioned to benefit from the anticipated consistent growth in mobile data demand as we plan to continue to unlock additional value by pursuing initiatives that enhance customer service, revenue growth, capital discipline, and operational excellence. To increase free cash flow generation and financial flexibility, we are updating our capital allocation framework, which is anticipated to result in a reduction to our annualized dividend to approximately $4.25 per share in the second quarter of 2025, and the expected implementation of an approximately $3.0 billion share repurchase program following the closing of the transaction^(b).  We believe this capital allocation framework can provide an attractive combination of near-term capital return, flexible share repurchases, and long-term financial flexibility to pursue growth opportunities in the future."

^{(a) Organic revenue growth figures are shown under new definition of Organic Contribution to Site Rental Billings. See "Non-GAAP Measures and Other Information" for further information.}

^{(b) Dividends and the repurchase program remain subject to the approval of our Board of Directors which has the discretion to determine whether to declare dividends or authorize a repurchase program and the amounts and timing of the dividends and repurchase program.}

COMPANY CONCLUDES STRATEGIC REVIEW WITH AGREEMENT TO SELL FIBER SEGMENT

The Company announced today that management has signed a definitive agreement to sell all of its Fiber segment, together with certain supporting assets and personnel, with EQT Active Core Infrastructure fund ("EQT") acquiring the small cells business and Zayo Group Holdings Inc. ("Zayo") acquiring the fiber solutions business ("Transaction") for $8.5 billion in aggregate, subject to customary closing adjustments. The Transaction is expected to close in the first half of 2026, subject to certain closing conditions and required government and regulatory approvals. Crown Castle currently expects to use the cash proceeds from the Transaction to repay existing indebtedness and fund anticipated share repurchases, positioning the Company to maintain an investment grade credit rating while instituting a share repurchase program of approximately $3.0 billion in conjunction with the closing of the Transaction. The Company's Board of Directors will ultimately determine how to use such cash proceeds.

As previously announced in December 2023, Crown Castle's Board of Directors established a Fiber Review Committee to conduct a strategic and operating review of the Company's small cells and fiber solutions businesses, with the goal of enhancing shareholder value. In consultation with its financial, legal and strategic advisors, the Fiber Review Committee, the Company's Board of Directors and Company management conducted a comprehensive review of a broad range of potential options. Based on that review and after assessing offers from financial and strategic buyers that proposed a variety of transaction structures, the Company's Board of Directors approved the sale of its small cells business to EQT and fiber solutions business to Zayo. Crown Castle believes this transaction enhances value for the Company's shareholders and positions the company for long-term success as a focused, pure-play U.S. tower company.

As a pure-play U.S. tower company, Crown Castle believes it will have a unique opportunity to enhance shareholder value by providing focused exposure to what we believe to be the best market for wireless infrastructure in the world, which is expected to continue to experience increasing demand for wireless data that is expected to drive tower growth for years to come. Crown Castle believes its U.S. tower portfolio has some of the best geographic characteristics in our industry and will benefit as carriers plan to continue the multi-decade trend toward greater network densification. To augment this expected industry growth, the Company believes it can maximize profitability by streamlining processes, reducing cycle times, and automating and customizing systems to deliver best-in-class service to its customers.

Along with the sale of the Fiber segment, Crown Castle is also announcing changes to its capital allocation framework. The Company currently expects to reduce its annualized dividend to approximately $4.25 per share starting in the second quarter of 2025. Following the closing of the Transaction, Crown Castle intends to set its annualized dividend at an amount approximating 75% to 80% of AFFO excluding amortization of prepaid rent. Based on the Company's current expectations around future performance, Crown Castle believes it will be able to grow its annualized dividend in-line with the growth in AFFO excluding amortization of prepaid rent per share following the close of the Transaction. Any dividends remain subject to the approval of our Board of Directors which has the discretion to determine whether to declare dividends and the amounts and timing of the dividends.

Crown Castle currently expects to use the cash proceeds from the Transaction to repay debt and fund share repurchases, while managing its balance sheet to maintain an investment grade rating. Based on preliminary analysis, Crown Castle believes that the enhanced stability of its free cash flow profile as a pure-play U.S. tower business would allow it to maintain an investment grade credit rating with a target leverage of 6.0-6.5x. Consequently, subject to the approval of our Board of Directors, the Company intends to authorize a share repurchase program of approximately $3.0 billion (or such other amount as may be approved by our Board of Directors) in conjunction with the close of the Transaction. Crown Castle believes these changes to its dividend and leverage targets will increase the stability and predictability of Crown Castle's cash flows while providing financial flexibility to maximize long-term returns for shareholders.

"Selling our Fiber segment represents a significant step on Crown Castle's path towards a refined focus as a pure-play provider of multi-tenant tower assets," stated Mr. Moskowitz. "As we look ahead, with our expansive and capital efficient portfolio of approximately 40,000 towers across key locations in the U.S., which we believe is the best wireless market in the world, and greater focus on customer service and operational initiatives, we anticipate that we can generate durable and growing cash flows that will provide attractive returns to our shareholders."

ADVISORS

Morgan Stanley & Co. LLC and Bank of America acted as financial advisors to Crown Castle on the Transaction. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Crown Castle.

IMPACT ON FIBER SEGMENT ACCOUNTING TREATMENT

Beginning in the first quarter of 2025, the Fiber segment will be presented within Crown Castle's financial statements as a discontinued operation and its net assets will be classified as held for sale, with comparable prior periods recast to reflect this change. Upon classification as held for sale, the Company expects to recognize a loss of approximately $800 million in the first quarter of 2025 and a total loss of between $700 million and $900 million for the full year 2025, inclusive of estimated transaction fees. Due to being included as a discontinued operation going forward, contributions from the Fiber segment are included in the Company's full year 2025 Outlook for net income but excluded from site rental revenues, Adjusted EBITDA and AFFO.

HIGHLIGHTS FROM THE YEAR

• Site rental revenues. Site rental revenues decreased 2.7%, or $174 million, from full year 2023 to full year 2024, inclusive of $235 million Organic Contribution to Site Rental Billings, which was more than offset by reductions in non-cash amortization of prepaid rent and straight-lined revenues of $266 million and a $145 million decrease in other revenues. The $145 million decrease in other revenues includes a $165 million decrease due to the absence of Sprint Cancellation payments that occurred in 2023, partially offset by approximately $20 million of small cell early termination payments received in 2024. The $235 million in Organic Contribution to Site Rental Billings includes a $9 million unfavorable impact from Sprint Cancellations.
• Goodwill impairment. Management performed its annual goodwill impairment test in the fourth quarter of 2024. The quantitative impairment test indicated that the carrying amount of the Fiber reporting unit exceeded its estimated fair value. As such, management recorded a goodwill impairment charge of approximately $5.0 billion for the year ended December 31, 2024, resulting in no goodwill remaining with respect to the Fiber reporting unit.
• Net income. Net income for the full year 2024 was ($3.9) billion compared to $1.5 billion for the full year 2023, reflecting the $5.0 billion goodwill impairment charge in 2024 associated with the Company's Fiber business. Net income for full year 2024 also includes $100 million of charges related to the restructuring plan announced in June 2024 and a $106 million asset write-down charge related to the small cell node cancellations mutually agreed upon with certain of our customers announced in October 2024.
• Adjusted EBITDA. Full year 2024 Adjusted EBITDA was $4.2 billion compared to $4.4 billion for the full year 2023. The decrease in the year was primarily a result of the lower contribution from site rental revenues, as discussed above, a $42 million decrease in services contribution, and $40 million of advisory fees primarily related to our proxy contest earlier in the year and the Fiber strategic review.
• AFFO and AFFO per share. Full year 2024 AFFO was $3.0 billion, or $6.98 per share, representing a 7% decrease, or 8% per share, from the full year 2023.
• Capital expenditures. Capital expenditures during the year were $1.2 billion, comprised of $1.1 billion of discretionary capital expenditures and $87 million of sustaining capital expenditures. Discretionary capital expenditures included approximately $1.0 billion attributable to Fiber and $100 million attributable to Towers. Full year 2024 capital expenditures represented a $202 million decrease compared to full year 2023, including a decrease of $61 million in Towers and $130 million in Fiber.
• Common stock dividend. During the year, Crown Castle paid common stock dividends of approximately $2.7 billion in the aggregate, or $6.26 per common share, unchanged on a per share basis compared to the same period a year ago.
• Financing activity. In August 2024, Crown Castle issued $1.25 billion in aggregate principal amount of senior unsecured notes in a combination of 5-year and 10-year maturities with a weighted average maturity and coupon of approximately 8 years and 5.1%, respectively. Net proceeds from the senior notes offering were used to repay a portion of the outstanding indebtedness under Crown Castle's commercial paper program and pay related fees and expenses.

OUTLOOK

This Outlook section contains forward-looking statements, and actual results may differ materially. Information regarding potential risks which could cause actual results to differ from the forward-looking statements herein is set forth below and in Crown Castle's filings with the SEC.

The following table sets forth Crown Castle's current full year 2025 Outlook, which does not include contributions from its Fiber segment unless indicated otherwise. Although Fiber segment results have been excluded from our key performance measurements, except net income and net income per share, full year 2025 Outlook does not assume any receipt or use of proceeds from the Transaction. Additionally, the 2025 Outlook reflects the full impact of all corporate financing costs and a significant majority of corporate selling, general and administrative costs. Collectively, these items result in lower FFO, AFFO, and AFFO per share than would be the case if those proceeds are applied as anticipated upon closing of the Transaction. Therefore, the full year 2025 Outlook for FFO, AFFO, and AFFO per share and are not representative of pro forma results for the standalone tower business following the closing of the Transaction.

(a) See "Non-GAAP Measures and Other Information" for further information and reconciliation of non-GAAP financial measures to net income (loss), including on a per share basis, and for definition of site rental billings and discretionary capital expenditures.

^{(b) Exclusive of depreciation, amortization and accretion.}

^{(c) Includes contributions from discontinued operations.}

^{(d) See "Non-GAAP Measures and Other Information" for the reconciliation of "Outlook for Components of Interest Expense."}

(e) Represents results from the Fiber business, including an estimated loss on sale of $700 million to $900 million.

"Our expectations for 2025 represent the second consecutive year of 4.5% tower organic growth, excluding the impact of Sprint cancellations, as the level of demand for our assets we experienced in 2024 persists into 2025," said Dan Schlanger, Crown Castle's Chief Financial Officer. "We believe the anticipated durable tower top-line growth combined with the changes we plan to make to our capital allocation framework following the closing of the Transaction will increase the stability and predictability of Crown Castle's cash flows, maximizing long-term shareholder value. These changes are also expected to increase the health and flexibility of the balance sheet, which we believe will continue to be investment grade rated, positioning Crown Castle to take advantage of the opportunities being created by the increasing demand for connectivity in the U.S."

• The chart below reconciles the components contributing to the expected 2025 decrease in site rental revenues. Full year consolidated site rental billings growth, excluding the impact of Sprint Cancellations, is expected to be 4.5%. For comparative purposes, full year 2024 results are shown excluding contributions from the Fiber segment.

• We are changing our core leasing definition to more accurately reflect changes to recurring revenue by excluding the impact from changes in other billings and other revenues (as described below). Other billings, which is included in site rental billings, captures the impact of contractual charges unrelated to recurring leasing activity, such as back-billings. Other revenues captures the impact of unusual items we believe should be reflected outside of core leasing, primarily pass-through taxes and tenant cancellation fees. Core leasing activity is expected to contribute $110 million at the midpoint of full year 2025 Outlook.
• Sprint Cancellations are expected to be $205 million for full year 2025. We believe 2025 will be the last year for Sprint Cancellations to fall outside our historical churn rates of 1% to 2% of annual site rental revenues.
• Full year 2025 straight-line site rental revenues are expected to be approximately $145 million to $175 million lower than full year 2024, reflecting the significant portion of our tower growth that is already contracted.
• Prepaid rent amortization is expected to decrease by approximately $50 million to $80 million for full year 2025, primarily driven by declining prepaid rent additions received in recent years.
• The below chart reconciles the core leasing amounts previously disclosed based upon the prior definition to the updated core leasing amounts per the new definition:

• Full year 2025 discretionary capital expenditures are expected to be $185 million, and prepaid rent additions are expected to be approximately $40 million. Full year 2025 discretionary capital expenditures from discontinued operations are expected to be $970 million, and prepaid rent additions from discontinued operations are expected to be approximately $350 million.

Additional information is available in Crown Castle's quarterly Supplemental Information Package posted in the Investors section of our website.

CONFERENCE CALL DETAILS

Crown Castle has scheduled a conference call for Wednesday, March 13, 2025, at 5:00 p.m. Eastern time to discuss its full year 2024 results. A listen only live audio webcast of the conference call, along with supplemental materials for the call, can be accessed on the Crown Castle website at https://investor.crowncastle.com. Participants may join the conference call by dialing 833-816-1115 (Toll Free) or 412-317-0694 (International) at least 30 minutes prior to the start time. All dial-in participants should ask to join the Crown Castle call.

A replay of the webcast will be available on the Investor page of Crown Castle's website until end of day, Thursday, March 13, 2026.

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