CROWN CASTLE INC.
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 2021 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 (2) approximately 85,000 route miles of fiber primarily supporting
small cells and fiber solutions.
Our towers have a significant presence in the top 100 basic trading areas
("BTAs"), and the majority of our small cells and fiber are located in major
metropolitan areas. Site rental revenues represented 90% of our second quarter
2022 consolidated net revenues. Our Towers segment and Fiber segment accounted
for 69% and 31%, respectively, of our second quarter 2022 site rental revenues.
Within our Fiber segment, 68% and 32% of our second quarter 2022 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 with our tenants.
Strategy
As a leading provider of shared communications infrastructure in theU.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 theU.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 provide a comprehensive solution to our wireless tenants' growing network needs through our shared communications infrastructure model, which is an efficient and cost-effective way to serve our tenants. Additionally, we believe our ability to share our fiber assets across multiple tenants to deploy both 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): •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; 19 --------------------------------------------------------------------------------
•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 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 and installation services within our Towers segment.
Highlights of Business Fundamentals and Results
•We operate as a REIT forU.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 toU.S. federal corporate income tax on our taxable income that is distributed to our stockholders. •To remain qualified and 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 theU.S. •We expectU.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") •Discretionary capital expenditures of$542 million for the six months endedJune 30, 2022 , 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 •Initial terms of five to 15 years for site rental revenues derived from wireless tenants, with contractual escalations and multiple renewal periods, exercisable at the option of the tenant, of five to 10 years each. •OnJanuary 6, 2022 , we entered into a 12-year agreement with T-Mobile ("T-Mobile Agreement"), which includes contracted new tower leasing activity and a base escalator that is consistent with historical levels for our Towers segment. The T-Mobile Agreement also includes a contractual commitment by T-Mobile for 35,000 new small cell nodes, including specific commitments in each of the next five years. •Initial terms that generally vary between three to 20 years for site rental revenues derived from our fiber solutions tenants (including from organizations with high-bandwidth and multi-location demands). 20 -------------------------------------------------------------------------------- •Weighted-average remaining term of approximately seven years, exclusive of renewals exercisable at the tenants' option, currently representing approximately$42 billion of expected future cash inflows. •Majority of our revenues from large wireless carriers •Approximately three-fourths of our site rental revenues were derived from T-Mobile, AT&T andVerizon Wireless for the six months endedJune 30, 2022 . •Majority of land under our towers under long-term control •Approximately 90% of our Towers site rental gross margin and approximately 80% of our Towers site rental gross margin is 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 represent 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 •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 ofJune 30, 2022 , after giving effect to the change to the pricing benchmark from LIBOR to Term SOFR and the extension of maturity date contemplated in the 2022 Credit Agreement Amendment, our outstanding debt had a weighted-average interest rate of 3.2% and weighted-average maturity of approximately nine years (assuming anticipated repayment dates on our outstanding Tower Revenue Notes). •85% of our debt has fixed rate coupons. •Our debt service coverage and leverage ratios are within their respective financial maintenance covenants. •During 2022, we completed the following financing activities (see notes 4 and 12 to our condensed consolidated financial statements) •InMarch 2022 , we increased the size of our CP Program to permit the issuance of Commercial Paper Notes in an aggregate principal amount not to exceed$2.0 billion at any time outstanding. Notes under the CP Program may be issued, repaid and re-issued from time to time. •InMarch 2022 , we issued$750 million aggregate principal amount of 2.900% senior unsecured notes due 2027 ("March 2022 Senior Notes"). We used the net proceeds from theMarch 2022 Senior Notes offering to repay a portion of the outstanding indebtedness under our CP Program and pay related fees and expenses. •InMarch 2022 , we (1) prepaid in full the previously outstanding Tower Revenue Notes, Series 2018-1 and (2) redeemed in full the previously outstanding 3.849% Secured Notes. •InJuly 2022 , we entered into the 2022 Credit Agreement Amendment that provided for, among other things, (1) the extension of the maturity date of the 2016 Credit Facility fromJune 2026 toJuly 2027 , (2) an increase to the aggregate commitments under the 2016 Revolver from$5.0 billion to$7.0 billion , (3) certain modifications to a specified sustainability metric and (4) the replacement of the LIBOR pricing benchmark with the Term SOFR pricing benchmark. •Significant cash flows from operations •Net cash provided by operating activities was$1.3 billion for the six months endedJune 30, 2022 . •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 two quarters of 2022, we paid a common stock dividend of$1.47 per share, totaling approximately$1.3 billion . •We currently expect our common stock dividends over the next 12 months to be a cumulative amount of at least$5.88 per share, or an aggregate amount of approximately$2.5 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 note 9 to our condensed consolidated financial statements for further information regarding our common stock and dividends. 21 --------------------------------------------------------------------------------
Outlook Highlights
The following are certain highlights of our full year 2022 outlook that impact our business fundamentals described above. •We expect that, when compared to full year 2021, our full year 2022 site rental revenues will be positively impacted by tenant additions, as large wireless carriers and fiber solutions tenants continue to focus on meeting the increasing demand for data. •We expect to continue to invest a meaningful amount of our available capital in the form of discretionary capital expenditures for 2022 based on the anticipated returns on such discretionary investments. •We also expect sustaining capital expenditures to be approximately 1% of net revenues for full year 2022. •We expect the T-Mobile Agreement to result in at least$250 million of additional straight-lined revenues for the year endedDecember 31, 2022 . See the 2021 Form 10-K for further discussion of the T-Mobile Agreement, including a discussion of the future expected impact from the T-Mobile and Sprint network consolidation contemplated in the T-Mobile Agreement.
Results of Operations
The following discussion of our results of operations should be read in conjunction with our condensed consolidated financial statements and the 2021 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 2021 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, including their respective definitions, and (4) Adjusted EBITDA, including its definition, and a reconciliation to income (loss) from continuing operations.
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.
Highlights of our results of operations for the three months endedJune 30, 2022 and 2021 are depicted below. Three Months Ended June 30, (In millions of dollars) 2022 2021 $ Change % Change Site rental revenues: Towers site rental revenues$1,078 $952 +$126 +13% Fiber site rental revenues$489 $473 +$16 +3% Total site rental revenues$1,567 $1,425 +$142 +10% Segment site rental gross margin: Towers site rental gross margin(a)$846 $731 +$115 +16% Fiber site rental gross margin(a)$327 $312 +$15 +5% Segment services and other gross margin: Towers services and other gross margin(a)$57 $54 +$3 +6% Fiber services and other gross margin(a)$1 $1 - - Segment operating profit: Towers operating profit(a)$875 $759 +$116 +15% Fiber operating profit(a)$282 $269 +$13 +5% Income (loss) from continuing operations$421 $333 +$88 +26% Net income (loss)$421 $334 +$87 +26% Adjusted EBITDA(b)$1,078 $958 +$120 +13% (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. (b)See reconciliation of this non-GAAP financial measure to income (loss) from continuing operations and definition included in "Item 2. MD&A-Accounting and Reporting Matters-Non-GAAP and Segment Financial Measures." 22 --------------------------------------------------------------------------------
Site rental revenues grew
(In millions of dollars)
[[Image Removed: cci-20220630_g2.jpg]]
(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)Prepaid rent amortization includes amortization of up-front payments received
from long-term tenant contracts and other deferred credits.
(c)Represents the contribution from recent acquisitions until the one-year
anniversary of the acquisition.
Towers site rental revenues for the second quarter of 2022 were $1.1 billion and
increased by $126 million , or 13%, from $952 million during the same period in
the prior year. The increase in Towers site rental revenues was impacted by the
following items, inclusive of straight-line accounting (including the impact of
the T-Mobile Agreement): tenant additions across our entire portfolio, renewals
or extensions of tenant contracts, escalations and non-renewals of tenants
contracts. Tenant additions were influenced by our tenants' ongoing efforts to
improve network quality and capacity.
Fiber site rental revenues for the second quarter of 2022 were $489 million and
increased by $16 million , or 3%, from $473 million during 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. Increased
demand for small cells was driven by our tenants' network strategy in an effort
to provide capacity and relieve network congestion, and increased demand for
fiber solutions was driven by increasing demand for data.
The increase in Towers site rental gross margin from the second quarter of 2021
to the second quarter of 2022 was related to the previously-mentioned 13%
increase in Towers site rental revenues and relatively fixed costs to operate
our towers. The increase in Fiber site rental gross margin was predominately
related to the previously-mentioned 3% increase in Fiber site rental revenues.
Towers services and other gross margin was $57 million for the second quarter of
2022 and increased by $3 million from $54 million during the same period in the
prior year, which is a reflection of the 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 contracts.
Selling, general and administrative expenses for the second quarter of 2022 were
$190 million and increased by $21 million , or 12%, from $169 million during the
same period in the prior year. The increase in selling, general and
administrative expenses was primarily related to the growth in our business.
23
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Towers operating profit for the second quarter of 2022 increased by $116
million , or 15%, from the same period in the prior year. The increase in Towers
operating profit was primarily related to the growth in our Towers site rental
revenues and relatively fixed costs to operate our towers as well as the
previously-mentioned increase in Towers services and other gross margin.
Fiber operating profit increased by $13 million , or 5% for the second quarter of
2022 from the same period in the prior year. The increase in Fiber operating
profit was primarily related to the previously-mentioned growth in our Fiber
site rental revenues.
Depreciation, amortization and accretion was approximately
Interest expense and amortization of deferred financing costs were$165 million for the second quarter of 2022 and increased by$4 million , or 2%, from$161 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 and 2016 Revolver, 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 and "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt. For the second quarter of 2022 and 2021, 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 2021 Form 10-K. Income from continuing operations was$421 million during the second quarter of 2022 compared to$333 million during the second quarter of 2021. The increase was predominately related to growth in our site rental activities in both our Towers and Fiber segments, partially offset by an increase in expenses, including (1) selling, general and administrative expenses and (2) depreciation, amortization and accretion.
Net income was
Adjusted EBITDA increased
Highlights of our results of operations for the six months endedJune 30, 2022 and 2021 are depicted below. Six Months Ended June 30, (In millions of dollars) 2022 2021 $ Change % Change Site rental revenues: Towers site rental revenues$2,153 $1,847 +$306 +17% Fiber site rental revenues$990 $947 +$43 +5% Total site rental revenues$3,143 $2,794 +$349 +12% Segment site rental gross margin: Towers site rental gross margin(a)$1,695 $1,414 +$281 +20% Fiber site rental gross margin(a)$667 $625 +$42 +7% Segment services and other gross margin: Towers services and other gross margin(a)$111 $90 +$21 +23% Fiber services and other gross margin(a)$2 $3 $(1) (33)% Segment operating profit: Towers operating profit(a)$1,750 $1,453 +$297 +20 Fiber operating profit(a)$576 $539 +$37 +7% Income from continuing operations$842 $455 +$387 +85% 24 --------------------------------------------------------------------------------
Net income (loss) $842 $393 +$449 +114%
Adjusted EBITDA(b) $2,173 $1,856 +$317 +17%
(a)See note 10 to our condensed consolidated financial statements for further
discussion of our definitions of segment site rental gross margin, segment
services and other gross margin and segment operating profit.
(b)See reconciliation of this non-GAAP financial measure to income (loss) from
continuing operations and definition included in "Item 2. MD&A-Accounting and
Reporting Matters-Non-GAAP and Segment Financial Measures."
Site rental revenues grew
(In millions of dollars)
[[Image Removed: cci-20220630_g3.jpg]]
(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)Prepaid rent amortization includes amortization of up-front payments received
from long-term tenant contracts and other deferred credits.
(c)Represents the contribution from recent acquisitions until the one-year
anniversary of the acquisition.
Towers site rental revenues for the first six months of 2022 were $2.2 billion
and increased by $306 million , or 17%, from the same period in the prior year.
The increase in Towers site rental revenues was impacted by the following items,
inclusive of straight-line accounting (including the impact of the T-Mobile
Agreement): tenant additions across our entire portfolio, renewals or extensions
of tenant contracts, escalations and non-renewals of tenant contracts. Tenant
additions were influenced by our tenants' ongoing efforts to improve network
quality and capacity.
Fiber site rental revenues for the first six months of 2022 were $990 million
and increased by $43 million , or 5%, from $947 million during 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. Increased
demand for small cells was driven by our tenants' network strategy in an effort
to provide capacity and relieve network congestion, and increased demand for
fiber solutions was driven by increasing demand for data.
The increase in Towers site rental gross margin was related to the previously-mentioned 17% increase in Towers site rental revenues and relatively fixed costs to operate our towers. The increase in Fiber site rental gross margin was predominately related to the previously-mentioned 5% increase in Fiber site rental revenues.
Towers services and other gross margin was$111 million for the first six months of 2022 and increased by$21 million from$90 million during the same period in the prior year, which is a reflection of the volume of activity from carriers' network 25 --------------------------------------------------------------------------------
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 contracts.
Selling, general and administrative expenses for the first six months of 2022 were$371 million and increased by$38 million , or 11%, from$333 million during the same period in the prior year. The increase in selling, general and administrative expenses was primarily due to the growth in our business. Towers operating profit for the first six months of 2022 increased by$297 million , or 20%, from the prior year as a result of the previously-mentioned increase in Towers site rental gross margin as well as the previously-mentioned increase in Towers services and other gross margin. Fiber operating profit for the first six months of 2022 increased by$37 million , or 7%, from the same period in the prior year. The increase in Fiber operating profit was primarily related to the the previously-mentioned growth in our Fiber site rental gross margin. Depreciation, amortization and accretion was$847 million for the first six months of 2022 and increased by$31 million , or 4%, 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. Interest expense and amortization of deferred financing costs were$329 million for the first six months of 2022 and decreased$1 million , from$330 million during the same period in the prior year. The decrease predominately resulted from a reduction in the weighted-average interest rate on our fixed rate debt as a result of our refinancing activities, partially offset by an increase in the variable interest rate on our 2016 Term Loan A and 2016 Revolver 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 and "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt.
As a result of repaying certain of our indebtedness in conjunction with our
refinancing activities, we incurred losses on retirement of long-term
obligations of
For the first six months of 2022 and 2021, 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 2021 Form 10-K. Income from continuing operations was$842 million for the first six months of 2022 compared to$455 million during the first six months of 2021. The increase was related to (1) growth in our site rental activities in both our Towers and Fiber segments, (2) the previously-mentioned increase in Towers services activity and (3) the decrease in losses on retirement of long-term obligations, partially offset by by an increase in expenses, including (1) selling, general and administrative expenses and (2) depreciation, amortization and accretion.
Loss from discontinued operations, net of tax, was
Net income was$842 million for the first six months of 2022 compared to$393 million during the first six months of 2021. The increase was due to (1) the previously-mentioned increase in income from continuing operations and (2) the previously-mentioned loss from discontinued operations, net of tax recorded during the first six months of 2021. Adjusted EBITDA increased$317 million , or 17%, from the first six months of 2021 to the first six months of 2022, reflecting the growth in our site rental activities in both our Towers and Fiber segments as well as the previously-mentioned increase in Towers service activity. 26 --------------------------------------------------------------------------------
Liquidity and Capital Resources
Overview
General. Our core business generates revenues under long-term tenant contracts (see "Item 2. MD&A-General Overview-Overview") from (1) the largestU.S. wireless carriers and (2) fiber solutions tenants. As a leading provider of shared communications infrastructure in theU.S. , our strategy is to create long-term stockholder value via a combination of (1) growing cash flows generated from our portfolio of communications infrastructure, (2) returning a meaningful portion of our cash generated by operating activities to our 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 theU.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. We have engaged, and expect to continue to engage, in discretionary investments that we believe will maximize long-term stockholder value. Our historical discretionary investments include (in no particular order): constructing communications infrastructure, acquiring communications infrastructure, acquiring land interests (which primarily relate to land assets under towers), improving and structurally enhancing our existing communications infrastructure, purchasing shares of our common stock, and purchasing, repaying, or redeeming our debt. We have recently spent, and expect to continue to spend, a significant percentage of our discretionary investments on the construction of small cells and fiber. We seek to fund our discretionary investments with both net cash generated by operating activities and cash available from financing capacity, such as the use of our undrawn availability from the 2016 Revolver, issuances under our CP Program, debt financings and issuances of equity or equity-related securities, including under our 2021 ATM Program. We seek to maintain a capital structure that we believe drives long-term stockholder value and optimizes our weighted-average cost of capital. We target a leverage ratio of approximately five times Adjusted EBITDA, subject to various factors, such as the availability and cost of capital and the potential long-term return on our discretionary investments. We may choose to increase or decrease our leverage from this target for various periods of time. We have no significant contractual debt maturities until 2023 (other than Commercial Paper Notes that may be outstanding from time to time and principal payments on certain outstanding debt). We operate as a REIT forU.S. federal income tax purposes. We expect to continue to pay minimal cash income taxes as a result of our REIT status and our NOLs. See note 6 to our condensed consolidated financial statements and also the 2021 Form 10-K. Liquidity Position. The following is a summary of our capitalization and liquidity position as ofJune 30, 2022 . See "Item 3. Quantitative and Qualitative Disclosures About Market Risk" and notes 4 and 12 to our condensed consolidated financial statements for additional information regarding our debt, as well as note 9 to our condensed consolidated financial statements for additional information regarding our 2021 ATM Program.
(In millions of dollars)
Cash, cash equivalents, and restricted cash(a) $
446
Undrawn 2016 Revolver availability(b)
5,816
Debt and other long-term obligations (current and non-current)(c) 21,282 Total equity 7,861 (a)Inclusive of$5 million included within "Other assets, net" on our condensed consolidated balance sheet. (b)After giving effect to the 2022 Credit Agreement Amendment. Availability at any point in time is subject to certain restrictions based on the maintenance of financial covenants contained in the 2016 Credit Facility. See the 2021 Form 10-K. At any point in time, we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of outstanding Commercial Paper Notes. (c)See "Item 2. MD&A-General Overview-Overview" and note 4 to our condensed consolidated financial statements for further information regarding the CP Program. 27
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Over the next 12 months: •Our liquidity sources may include (1) cash on hand, (2) net cash generated by our operating activities, (3) undrawn availability under our 2016 Revolver, (4) issuances under our CP Program, and (5) issuances of equity pursuant to our 2021 ATM Program. Our liquidity uses over the next 12 months are expected to include (1) debt obligations of$1.0 billion (consisting of Commercial Paper Notes and principal payments), (2) cumulative common stock dividend payments expected to be at least$5.88 per share, or an aggregate amount of approximately$2.5 billion (see "Item 2. MD&A-Business Fundamentals and Results") and (3) capital expenditures. We may also purchase shares of our common stock. Additionally, amounts available under the CP Program may be repaid and re-issued from time to time. During the next 12 months, while our liquidity uses are expected to exceed our net cash provided by operating activities, we expect that our liquidity sources described above should be sufficient to cover our expected uses. Historically, from time to time, we have accessed the capital markets to issue debt and equity. •See "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a discussion of interest rate risk and note 4 to our condensed consolidated financial statements for a tabular presentation of our debt maturities and a discussion of anticipated repayment dates.
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