CCI - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Crown Castle International Q3 2017 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr.

Son Nguyen. Please go ahead.

Son Nguyen

good and Gina, you, morning, everyone. Thank for third quarter you joining us our review we as XXXX today Thank results. Dan Chief With me Castle's and Crown are Jay Crown on the call Chief this Executive Officer. Financial morning Brown, Schlanger, Castle's Officer; supplemental morning. To Investor in crowncastle.com, we section have throughout to at the will website materials refer aid our the we the which discussion, posted of call this those uncertainties may forward-looking call which are from risks, will vary certain results actual contain statements, and conference and This to assumptions, expected. materially subject Information Factors potential affect filings. results the about which factors our release SEC is could press the and available Company's section in the Risk of

Our statements we any and to are XXXX, update as made forward-looking statements. October XX, no obligations today, assume of

reconciling supplemental In available Company's Jay. measures I'll addition, the today's package includes information website of that, turn call section over Tables non-GAAP call in at these are discussion of the certain the measures. in to Investor financial With the crowncastle.com. financial non-GAAP

Jay Brown

the joining Thanks, Son, and on thank morning. for you us call everyone, this

As with you record financial our great continue we that delivering of our yesterday, results build release on strong our to expectations. track quarter exceeded saw another press from

is expectation clearly into As in and today outlook our our further demonstrate XXXX. of our performing business how third Dan XXXX and positive trends strong continue results detail, discuss will will

growth on stock year continued of Lightower which by of a of and a close flow share track from XXXX growth common our the sustainability to by our anticipated the contribution expectations quarterly dividend acquisition As we’re XX% result in and remains our end. increasing pending cash reflecting the per in

attractive growth moves quality customer model we as that serve we strategy wireless across strategy likely fiber to fiber such further This the U.S. this traffic customers growth additional differentiated highlighted and plans to wired to already network asset. which assets, bandwidth, data expected attractive see our dense our shared solution enterprises, are provide multi us unwanted position allows improving in XX% is underlying fiber recent competitive business. healthcare institution Similar small with our increasing competing towers, thereby investments high the X% believe cells our shared our cells to growth cell estimate large application speed. by see dividends trends, by for annually demands of with long significant a of annual to our and towers, pace the share growth on increasing unparallel bandwidth XXXX, for video use driving expect of as industry fiber devices. connective beyond and portfolio opportunity cells to To tremendous we look and across the to such keep tied anticipated portfolio deliver capitalizing XXXX data we to by infrastructure through our we XG per leading term and communications grow secular and X% assets. XX% to leverage small mobile of to demand in providers, in educational our economic small expected annual trends demand the by our meet high adoption data To to continued customers cases including years the mobile is serve According we the These is in largely driving fiber result opportunities our come. nearly number small As location carriers. in and the the the the carriers data natural to industry, enhance

their to cells our to towers, portfolio picture, fiber small customers are Castle network. the and positions making of bigger augment the Crown advantage investments our to of Turning take uniquely

a that to on But To-date we target XG is we provide This we’ve impacting ever all annual term all of infrastructure our serve have choice had X%. sustained role digital applications and the coming. term assets and increase activity the movie infrastructure as followed. of our these long is sequel Our the a run assuming more cases to come. asset investments for acquisitions long We alone. cash required mission growth every economy. is is similar transition the the existing based played vital late underwritten infrastructure will provides and growth voice dividend our where believe of used returns the our believe for the ongoing shift applications. over wireless growth, to to critical Overtime tower of more and believe X% expanded of mobile world a our an underwrote platform We asset. across supporting a XXXXs to expected of has when portfolio growth value way to long will this flow, investment This industry is there

Much years the today. way wireless that way will ago we are imagine asset. to We the models believe the further To-date way business with users from further end operate live a of been dramatically out create in development XG to As industries and lower the in pulling by consumers revolutionize infrastructure has that work. growth to from and data one network. powered how changed largely all new extend mobile of data XX potential businesses look the data across XG transition primarily a and has runway and the hard the our latency iPhone XG same speed XG traffic faster

these reality, additional the potential the As exchange we believe two virtual traffic consider look wireless data of way, likely as the just city becomes we name drive impact few and augmented merging forward and smart including across applications to autonomous will of technology growth a the and applications network.

continue In continue by terabytes as on advance generate a XG carriers in fiber. and models networks of hyper to business of will capacity of small that into points the single carriers To and to same put by to connected dense to on for path. of Intel used evolve drive by As half powers subscribers perspective the need network their autonomous the invest an preposition monthly towards new equals that approximately deploying greater architecture wireless network of amount towered hour high the support data would to trend example, wireless X networks applications estimate basis. per all vehicle X,XXX mobile The cells that reliance of XG. data approximately a set a

customers small many fiber their world. making are the deployment and of their of RAM meet to XG agility by cells network asset with their investments the those a efficiency network augmenting today of as our macro they Importantly and demand of increase capacity,

XXX continue data is network is and create of fiber which performance we for demand elements infrastructure critical U.S. And small and tissue in the areas Castle the in integrated flowed XX, to coverage any Crown bolstered towers provide believe of network and under than As traffic provide the of provides which capacity. cells network to provider scale. cells. they greater. critical on consist the foundation are are fiber evolve and XXX who air the acquisition. cells capacity XX,XXX the wireless route which towers dense Small will elements more towers, at Lightower where With connective XX, the contract of the the these approximately miles metro small for can of only that needed

demand our continue for value shareholder other needed believe our for to will We the we data shareholders. or value now what creation A networks dividend. needed while is of what for coming is wireless as densify be both creating driver have the of our needs company and positioned significant

an $X.XX per four share current the last dividends share. we years, the have tripled our annualized per to from Over $X.XX

and remain Looking which opportunity. by investment to forward yield driving very when supported deliver goal, term and to X% our a dividends compelling AFFO if we X% confident growth expected annual ability on stated with our growth current combined our long of offers

Over the years, we’ve intentionally edge of last leading disciplined thoughtful the be network. positioned our and to firm at deployment wireless investment the of XX through

made advance market when those materialized. fully in well strategic consistently investments the opportunity has team had Our

towers For the shared example, before across mentioned our know and market. into fundamentals as business the leading simply investing in the early with infrastructure the today, U.S. to in top belief portfolio we Well, began of the those all it in we compliant of have assembled tower turn I shared is towers investments decision. underlying XXXX XX cells same in investment markets the true lightower the XX pro of team built capability U.S. for make forma to our more expertise fiber strategically today our and is we’ve infrastructure extend small drove pending of The recently upon top wireless our cells small model acquisition. to and where include those to of

has portfolio, developing approximately our that in resulted by and away, infrastructure started and shareholders I’ll the S&P share development positioning Since over investments, the than our networks a deploy leading per billion dense while high by share XX% in to miles us top capacity, in All our position fiber XXXX. U.S. path our cells an our U.S. to our Crown $X meeting small term. doubling of on our securing new basis more markets. of of growing the advance than needed the a we of leadership early for AFFO in XX,XXX market on being market cells the this networks of annualized returning to Dan. fully the driven the And much is in time investing more that XXX turn pursuing Open two the period tower is I times in over with total route XXXX dividend grow by strategy strategy returns the call more small with and provider dividends long by there customers’ needs and believe and come. to the As while generated essential focus Capital in purchases tower delivering with to in wireless shareholders their importance acquisition starting our appreciating

Daniel Schlanger

discuss results our with XXXX of morning good third to I overview everyone. slide Jay, X. on to Thanks a and including like lot good quarter outlook. today an of things But We’ve start would

the sale large and of by site low results and third while guidance our driven the keeping quarter environment. adjusted third part were the of exceeded continued Our at rental in XXXX end outlook, help quarter asset for EBITDA provided previously high revenues high end

expenditures. the have still spent now for the the would of high from than $X Adjusting capital AFFO, timing approximately million for quarter will lower capital sustaining end benefit that This expect fourth outlook benefited and expected AFFO. was benefit exceeded use time due third quarter. our be we during the quarter to For we

investment land raised consisting investment million sustaining in year capital full capital results. capital we of and $XXX $XXX of discretionary acquisition. which equity including we In XXXX Moving activity, billion million for $XX quarter onto during of million the approximately debt of will invested third in July expenditures $XX $X approximately approximately opportunities impact expenditures million

pending capital year the upon of by year. the end this that As expect Lightower is which we marked acquisition close of to

we million through significant our return aggregate capital quarterly quarter $XXX During stock the share. common continued to our in dividend per or the to of shareholders $X.XX

is fourth of online. in our the year three who primarily higher quarter offset the our as the help wake in quarter inspection, modest hurricanes and during outlook maintenance to expense full our on by XXXX The debris for in worked repair standby Harvey, driven Turning thank hurricanes. expectations five, updated preparation a natural reflects to increase I all third get expenses the in out-performance and having maintenance well these customers of responding want to assets disasters hurricanes during related from expected increase and as by crews to Irma following tirelessly Jose. slide repair and these the to leasing the on customers removal employees have storms back and

times duty with employees call work stressful a like and ours. of I'm beyond company through proud they at very the went During to above and

not those quarter do our we though from subsequent fourth did impact the sustain additional significant assets Importantly anticipate and hurricanes XXXX. not to damage

the X.XXX and $X.XX per of share XXXX Given share previous and unchanged billion per puts outlook full AFFO the Lightower from exclude financings year respectively. $ adjusting remains our our AFFO impact and and guidance of to these takes for

Lightower the AFFO outlook XXXX Turning Lightower XX% a six, increase in $X.XX and from our the accretion confidence the XXXX. per pending the XXXX financings, business per new and share $X.XX the of year growth in dividends full of expected from impact to per demonstrating our an annualized $X.XX in activity during our acquisition acceleration which to an leasing per slide growth share exclude of share in our organic to XX% share an figure per the of in a share $X.XX XXXX annualized of highlights include

XXXX additional slide $XXX seven, revenues Focusing growth Approximately on approximately the is to half expected million approximately site comprised of driven from the plus million of and at approximately of for the activity midpoint in contribution by for site XXXX. $XX billion new million in XXXX small million $X.XXX of towers and of million rental $XXX XXXX. new of in as up contribution shown from up $XXX $XXX cells in full $XX up on an The for organic contribution million leasing in these rental leasing year revenues from is from site XXXX. solutions compared expectations our $XX organic $XXX revenues million million approximately activity million acceleration rental year of Lightower $XX for approximate to fiber includes $XXX million specifics Wilcon.

site in Change revenues million organic expect to to million in growth is in XXXX. In million expect addition approximately XXXX $XXX escalation consistent organic is $XXX in activity, XXXX escalators supported of an tenant non-renewal of XXXX. $XX $XX growth to which adjustment approximately to contracted by we rental XXXX expected remain new annual tenant straight million with at organic million by is than leasing we up offset $XX approximately is arrive line in what Growth will contribute during tenant by XXXX. from growth which with approximately lower contribution from also offsetting in line slightly approximately

We have as from included of contribution our outlook. any part not FirstNet the XXXX

We rollout and there are the once the optimistic about however recognize is growth FirstNet deployment begins. additional potential

growth meta-finance. at to organic site left partially in AFFO $XX million approximately XXXX operating Starting to by million rental significant the revenues at midpoint expense. the like of adding million would offset the outlook is Similar AFFO expected a to increase eight, on site contribution Turning you rental to expected growth to AFFO XXXX Lightower $XXX the I G&A XXXX. to $XXX revenues approximately of to of and midpoint is in million from be contributor to slide $XXX

with increased through the portion cost nodes is including significant brought business to exit XXXX net in work to small in node growth of changes XXXX. expected be production staff the we've be A typical finally sustaining expected we primarily items. annual from added million related to on be as increasing as additional to throughout business our acquisitions These in cash our to air other support $XX on XXXX to contribution contribution a place will in Beyond by is expenditures, the of robust impacted headcount AFFO increase growth in include this we capital interest negatively related Continuing items XXXX of escalations on be line at XXXX. and that is the backlog services network and to through cell expense, XXXX. investments approximately basis closed

excluding on share XX% the per generate our initial to the impact expect of AFFO We growth the in financings midpoint of in XXXX. XXXX Lightower after guidance based in

As the on market To allowing while XX% quarterly to a recurring where we track we from expectations future same generate believe Returning the contribution aligns today by growing shareholders headed defined at including dividend business our our is capital to return to previously well-positioned infrastructure significant through high-quality it increased flows. with remain long-term mentioned our our with by as we of our we've that with share in to well where based cash adding shareholders significant our for profile is strategy growth. dividend Lightower the opportunities record dividend further wrap ahead is portfolio and in the growing XXXX confident significant time dividends. us up of to shared our capital long-term through the growth aligns communication and per

on and in I dividend future invest Our and shareholders to that fundamental the questions. the to With grow the per AFFO, would over coming in in X% long-term growth X% call target deliver positioning like rate give confidence return open capital our we near-term to all ability years. year of us to our long-term Gina, to while visibility the over the

Operator

will of Goldman [Operator first take from Instruction] our question Feldman And Brett we Sachs. Thank you.

Brett Feldman

to hoping more sounds a questions. we was in but leasing little I stable on your step the have time spend outlook packing up Thanks and it on try small can a going the for for expecting side. pretty towers like organic you taking activity XXXX, be cell the you're is

what's growth giving the itself organic is growth the maybe could then how the how us help quarter business, cell from had that small the was in curious already into hoping deployed. the much I fiber, on am was visibility much just you you I understand So and you coming of

in fiber much getting Thanks. how fiber? more that new revenue on the So you're deployed existing versus was

Jay Brown

the about than up XXX million, that cells it XX talked million was from to to one each fiber cells comment on in we about up XXXX. XX fiber, expect is of Towers XX. three towers, ABOUT So first Brett, fiber and to new solutions be to million the is in areas your XXXX both X% contribution from to small and we up growth about XXX from the higher in XX then revenue million is small

not to accretion would we builds cover are cell by fiber is Lightower be I your of were Lightower deal to think anchored part and first gift year wanted the that. and So the areas I it's range on selling communications comments the board would in where across growth entire which I would on to question XX% that point think quarter asset. as as that space pretty, new to activity our we in answer going of seeing communication the close well so on geographic end to made be plus To and three question. we building would that are expect that the that think the we outlook the second for about seeing This describe dividend each are though true we small and a the true we both based of your are the of declare we Lightower pipeline for and we reflect confident in of the recently XX as cells. to But the small are

get like we but don't had we outlook what into XX we growth did but point we the get any update as develops anything in over we and what that our we have On based we in this XXXX had to of I assuming deployment the any numbers on FirstNet outlook enough with at likely about it in not course happy the did into into of specifically visibility extent will one look don't conversations it. the read the that time not really put to the put customer obviously to XXXX from assumed will second that question on we’ve FirstNet,

David Barden

revenue I churn Thanks go could in you the – when kind follow-up to ask tearing highest able of the down just guys general that there and been the in you been hearing but and look given I Jay been any market you activity the metro, sites towers to the that one of in that detect? I know immediately possible and clear sites guide change conversations level if at the and decommissioning worst wire first has that so for of have you obviously portfolio you terms reported believe case we've in to

Jay Brown

we’ve say, about the You right, churn over talked in to and are fact years.

put to think always in book end talk that the have less be case end and and tends about about book We than of it scenario. what's the ultimately bookend realized kind worst the of at

what our basically everything down. think XXXX worst have comes would visibility still the As would outlook we some about if we assume of case and to

long-term balanced I talk assuming be on significant has X% big in that about experiences you based dividends to X% the over the Our to view. we down comes we but not been as that would it's everything when in try growth of kind picture as tell bookend

churn on carriers we closer So to worst that of longer conversations. those actually kind and the a view view from short balancing going based get happen assume we and we that what earned of case our term part the in we to that with as scenario adjust term will what's then is

David Barden

Okay. Jay. Thanks

Operator

next question And Simon from we Stanley. Morgan will our Flannery of take

Simon Flannery

small color the I the morning. could might to Lightower, be And color per year do Maybe can on Any get you give at you just more on of touch to end this node be closed the some any about Good forth. this then on tenants much. Thank activity, sometimes great? would us and map? just know right, what cell need or the very us activity examples operational sort of you give current co-location going so earlier this you performance to you right quarter

Jay Brown

based going On you step cell the we deliver small obviously the expected, question, level team. to in working the see teams you’re the first how is the operations, on are can align what result on as XX the the is activity XX XX, the the to increase think we’ve to at nodes activity we able from in results continuing to been step those capabilities operating air in seeing of as and a of

to in that far the we’re this lease and into to continued the be that’s to that’s in yields approvals to be confident in the the X% as end beyond in the additional returns very before and at federal state enough with those that dynamics play of to been acquisition returns out. Lightower to The it build when play to see the to required the teams talked historically seen some up the activity and And will and long point we that we’ve studies we’ve and the about move case get that year. the to that’s assets markets Lightower so as lease continue out the then other approvals at transaction the of a On healthy of densest is along time continue return go be we as the through U.S. standpoint, owned we continued beyond a we in then see thing the level quarter. on out we the on for remain to twice would tenants close rate I point anchor leasing see we call, that that to from terms for did performance of we’re continuing are attractive a that add return operating those we the that a X% able were tower initial period we’ve business

and for we clear quickly all that of as we can update working to can obviously hurdles those give an is time closed January we the to as now when close exact the But as we clear in will the confident will timing. to the we included as get extent to you we hard we’re we as the We’re have by why it we hurdles outlook. it Xst which

Simon Flannery

some or think concerns any guidance here can just any the work you hindrance the what you that do California the On of current there? around you – the beat still infrastructure obviously with is status

Jay Brown

will timelines We current the so to us work about doesn’t our that to the any provided. deliver able be status we on with it there, ability give concerns

Simon Flannery

Great, you. thank

Operator

next Our question is from Matthew Niknam Bank. from Deutsche

Matthew Niknam

you thank the for guys, Hi taking questions.

step I if you about rates, small little those how can then seen are us two win and you maybe if sort Crown recent around give I more if there. maybe you expect the shed curious in around the to color And broadly of guess front within of Just million I fiber, you you could And in Castle. cells, around your past wondering terms a new change some of strong the XX competitive in segments competitive some within from could, more structure secondly, million dynamics particularly acquisitions more light one of know real Thanks. various XX the operating up guidance? just pretty have any talked a just fiber on whether on

Jay Brown

Sure.

at some dynamics the market that’s on effective to more maybe where of infrastructure least around can that or playing cost is we our some portion half is and in model last win which about year performing be terms for continue dynamics the win that about And the those to small that’s us and to And to of that prices. we out rates On prices see market self the most the what activities market building believe few winning fiber the going quarters carrier continue in they the opportunities, of of believe the continue shared consistent half continues so. be about rate. to we the total the based last cells then in

so segment in has as, continued that’s large has I and revenue base providers increase of educational doing the On product as comments I focused fiber and mentioned we’re capacity gotten again would on larger describe to high facilities, our bandwidth still multi-location growth mix my in a to where fiber healthcare required. enterprises, our that

As have revenue the base the number we’ve and we’re associated. of miles increasing asset the of we that fiber increased grown

Daniel Schlanger

generally this with what expected acquisitions. when we very And is performing we in-line much the did

much is provided – point. that what expected we this the at XXXX to So outlook this would is have we for

Matthew Niknam

it, you. Got thank

Operator

our from Jonathan from We Markets. will Atkin RBC take next question Capital

Jonathan Atkin

Thanks.

Jay bit So about talk lot wonder a a [Paper around in the activity? of a you and you. to of spent it XG your kind I context so talking cases of that used perhaps and thoughts sense and make and time required Thank does number bandwidth about forth IO] and that and little investment

Jay Brown

We’ve to the customers think paper today, that have meaningful describe sea as I that as with be will important over made ran a a that a a us a towers small many as likely hubs an as network Paper develops reducing latency, trials opportunity in leverage market that more datacenters will become customers XG well environment. last real that environment tower, increasingly the in we done relatively provides of of the of other hard a used in IO is stage an investment in traditional customers year likely edge we and number a those the sea in as be in early at believe tower that period we will long ran deployment. XG assets believe company them would we estate will sites overtime. we’ve of our we that time, our – the environment which towards is important of of component

to the get about the us So importance very opportunity gives investment of to it's power a edge more moving an way computing of the insight thinking of people network. trial that small the are into some

Jonathan Atkin

comment is quarter, might to no that manner? type them just how you when assets of be, at might in will years So you point and this soon monetize in terms it think of it do or start utilize your

Jay Brown

cells and own revenue believe is broadest small and in the flow it are in are that, both assets. that revenue the describe assets would important we connective and flow those growth drive can over to much tissue fiber that cells time are broad comments described and we aim as growth cash sense, small I as towers and I that connects to towers our important is to my to cash every across we and at the opportunity off of gain we looking

things comfortable underwriting we are term of that Some based we near the that investments look are on.

describe investments see and my we applications we just more currently As than view the but the has time. I one come. to consumers flow infrastructure returns of areas revenue a that believe underwrote runway a and of what have growth the all mentioned XG comments there's edge of made as over that we the our also to current to cash as from using as growth provide applications we extends computing on mobile that would long in of I upsides today potential well we based the period

deployment So I my it's that the comments are directly many XG. in as tied is to that of just one of – mentioned opportunities

positioning from. we XX a in near-term likely dated not not benefit the and are XX longer to eye up results. activity if It's it's our that going on and So ourselves keeping to show probably not

Jonathan Atkin

small there you kind any increments? ballpark these on cell And is of way

Jay Brown

up for breaking you are you Jon, Can ask again? question. your it

Daniel Schlanger

queue. onto let's Gina, can we move Hi question put John back and then in the the next

Operator

Okay.

from Amir Our Barclays. is next from Rozwadowski question

Amir Rozwadowski

you're would the giving but continually I type I if point. on you may, talk is in activity side of Two can't of holistically specific and plan the carrier levels if the much at activity at of your good that reaction know listing we be seeing a sort levels us initiatives Can healthy what color in of mentioned activity you're you about that like it I initiatives the very improved moment macro is a data the that's FirstNet marketplace. to this included you of that seems this obviously think some that you the have Any about unlimited seen about folks. mean to we see outlook. sort talk from operators site Thanks questions not morning just helpful?

Jay Brown

splitting through co-locations already increasing densifying seeing are the additional installations networks we that on the capacity in both in existing of combination as of some capacity their where each provide additional are spectrum network on so seeing cases of well they speed amending new are on network. the and work We and carriers the of the are to going or back network band self as sites the

it's what it. to in frankly similar of just So the we seen more past

Amir Rozwadowski

we those and to we tissue, bolster potentially about initiatives your of sort sort if order can then have in growth sort longer-term over you the should process densification if and current this the of inorganic clearly footprint, we could activities cell we think How of do that think footprint seem side mean are going fiber areas other and going How about thinking footprint think additional additional owning guys initiatives the does you small I evolution there to bolstered how there position fiber? forward? helpful thought driving you connectivity about for longer-term to where about other be about that's very initiatives? the building fiber company Are sort your fiber shift gears forward. That's of Jay

Jay Brown

I say things that about of Amir. Couple would

assets U.S. top markets of fiber. in getting The XX total the First places have to are notes relate my of of the the fiber all some what the building fiber. build we in building that additional more notes fiber. we additional where primarily in constructing comments dense are as XX in are top are be is of in about we mentioned that we a fiber terms of I primarily build earlier those cases we constructed additional so vast pipeline markets majority to in XX% from portfolio in That the

assets the fiber are two to as we small the that obviously term digest inorganic that very across on of the transaction as side. us extent revenue take and to sizable both and solutions is portfolio fullest fullest articulated the it. where to they for in going the and did Lightower should utilized a we as focus the scale it's fiber bring they've synergies certainly it into the to assets to we so to transaction not us to We the we time returns for both not as has been when companies fiber expand you of some that that On bring anything that there look the on the do side opportunity its integrating to believe asset significant been beginning sets integrate the near well utilized from cell

we a the So gaining the drive period it's on returns and assets there because time. to are revenue we those revenue way see synergies going think long be over of we to the on focused best synergies

through to a same at acquire over towards need the term our transactions got So that back long drive looking turn add we returns. has our to Those the to assets. additive small cells it grow ability our have we will rate and be put and call we believe them will that opportunity order go and to through may that the the FiberNet the growth significant on to filter and and those in time eyes assets Lightower other dividend but opportunities increase over to

Amir Rozwadowski

for the incremental color. Thanks much very

Operator

the Philip from will next we Morgan. take question And from Cusick JP

Unidentified Analyst

this Phil. for Richard is Hi

Just it by get for solutions steady cells the on backend for year fire the more loaded each growth revenue they more small piecing the wanted and of or the towers, color differ might segments be category? should the and through is to in of

Jay Brown

the these they are you Richard is year. business through any of go to backend loaded pass if the course similar

if to be about second at the Obviously you the the back but half in year the half the of of you're probably of XX% just see – about someone the out of totality growth in neighborhood about the of results roughly evenly so you first looking and bet growth think if So pretty change small the you incremental it incremental year. in only did XX% would to XX% if speaking incremental you play in the the is year. loaded XX% the would of the in would to they half XX% be about year growth the as XX%

Daniel Schlanger

into outlook. we baked the how provided already that's And

So we think that we are on EBITDA and AFFO and takes that to the next.

Unidentified Analyst

the it something else that to a now is the churns this side churn then back is higher node churn level that And year are the going non-acquired acquired to looks of there on of activity like normal or going just there? getting node on gone be

Jay Brown

year-over-year. bigger on I actually flat lower base think nominal business basically a the is basis churn a of on which is

would non-consolidation seeing for So the churn. is we to we are profile it expect that the and of small portion churn what be cells on towers our

Unidentified Analyst

final the business. the is else some masterpieces parts asset actually then don't of pretty for escalators base the is and have but escalated the escalator year-over-year dollar the question it other bigger or something same there of on that much Got is and acquisitions because going of is down numbers the that there that coming

Jay Brown

which we escalators is we in the think going fiber it have what now we right portion we it No is part in of escalator typically the bringing some already of There come It's a are is where on but that were you're don't effect solutions over as businesses XX escalator there but historically. is coming forward going seeing lot understood basis down. in in has by is core had similar the normal so a continued and pull that very down everybody our are we business was that towers that percentage did XX off of portion down and XX then escalator small at think bit and in the holistic in little trends the revenue add I therefore side. roll the MLA and been a what consistently and it what cell the a but pricing not had that in

Unidentified Analyst

thank Great, you.

Operator

we take MoffettNathanson. from question our Del Deo will Nick And of next

Nick Del Deo

Hey thanks my taking questions. for

rents can and can First the in amortization your recent for quantify XX contributes segment? prepaid to you your much versus XXXX XX by how expectations changes that in forecast

Jay Brown

is it to it's new from the laid towers trends cell I when cash. way way in It think we and are about and so neighborhood what of of that across representative so include small we get that XX or to we all on is it's The leasing prepaid the the XX, just we and in activities rent be consistent very of that going thought terms growth the think depends it was out exclude cash. fiber the prepaid whether the you same rent

good generating that return over think cash And is long-term the about so business. investments we are on way making cash the are which we

think numbers talked new that leasing the leasing those think activity what earlier business. I we about the the So are in terms growth in or we new that of

Daniel Schlanger

air. loaded stepping up because reason small the the or backend when side tuned the is of kind only the cell as is And not start installs are on

Jay Brown

turn increasing. is that I would say is said but you reason What not

talked that just is anything about. I increasing think that business the overall would it trajectory the growth change or we that not the

Nick Del Deo

in seem case have in or has in back XXXX your you Maybe cell some of your I the QX small I in cell one reading that more correctly, get call XXXX, can, might I that small up your you with fall too be the much XX it your half most said of it turned but if XXXX functional would than was in remain if in your more some does is second you remember expectation words suggested the got the backlog earlier been comment pushed of some? to growth into not it of XXXX? necessarily

Jay Brown

a we being about think I up as as it when it earlier said XXXX. talked XXXX we We step was the XXXX Nick, thought not big year, Yes being this event.

we seeing turn our in timing not are we So previously, nodes in obviously from step increase from which when thought was we on that's these we an of XXXX. saw of has growth in on will small function revenue view what changed the XXXX the activity we a about up that want cell

Nick Del Deo

it. Got your Okay. Thanks for color.

Operator

next and take question Colby our Cowen Company. Synesael will we from from And

Colby Synesael

million what's been fiber color about each so acquisition technical OSS Thank what's – far intention being could done, talk little is discretionary to color And have have may, thus provide questions so integration. from you first bit coming in are break last done now on XXXX the then would billing to you a you. and of XX $XX question example on are what's lot was able spending the done the the I of if $XX perspectives year. on you what from if a systems, helpful? out combining I you Two the Lightower Thank some intention give was be business? Is to just integrate standalone secondly XXXX your those for if combining hoping CapEx versus the over and you. wondering you the million I of

Jay Brown

Sure because The air. million that been historically cells that of from a $XXX in around what small range. are up will we we anticipate Lightower be Colby. in XX Discretionary growth putting the on CapEx step business discretionary the has CapEx big the is

XX overall over anticipate would to up $XXX we $XXX XX. CapEx So be discretionary say, I to million million

Colby Synesael

am I sorry.

sounds $XXX that So million that in for – Lightower

Jay Brown

on or And of that XXX then small putting are on because a cell the XXX base we air. business another

but lot earlier putting fiber get expertise can across to with pockets behind to operating not would will the is team doing talking bought we US Jay in On from driver we across already on synergy all the out have expertise and a the access enough solutions integrating and really drive what was be we into all of place was the then to is together that conversations are the put long companies which as recently we structure into Lightower management providing haven't have too as base platform we and that revenue trying anticipate we the new things that ago of and Young have fiber. we run we Lightower can still revenue to fiber got on think Jim get unclear all with but is then that and timing asset goal planning of about get and operating is got the integration we along it on announced with happening of same the we haven't style the a the most of because Lightower those platform oppose that the that to there closed business additional transaction, the we one overall those that

Colby Synesael

terms the in project that towards but or that So the OpEx will PBD? XXXX and of when $XX $XX in start whether gets still we million completed see to synergies actually revenue to that's million it's go

Jay Brown

revenues our on announced Lightowers of side, clear revenue fiber small but outlook put They OpEx be baked into these be not footprint. synergies be but synergies so are to the any we to will on cell fiber on determined. not the we outside synergies put the light have we tower Well, any didn't

Colby Synesael

Thank you.

Operator

will We Tim our from Horan Oppenheimer. question from next take

Timothy Horan

Thanks guys.

On fairly small there? last is couple and been years over consistent cell on fiber pricing the a that change improvements seeing or that you are the any is

Jay Brown

both the on past small Tim is and pricing seen consistent tuition we've fiber cell years. in with what

Timothy Horan

for small a carriers about cells. think carrier over has of spread this been how concentrated and demand? of it in the I out point? Great the that little past point terms the bit pretty in at Is broad's

Jay Brown

been the significant of we year in conversation we the that that what a I prior from saw on demand number has carriers seen and were of of this all across carriers we beginning getting change focused I the from where past the describe they have the We market would nodes as increase to started at the have top of maybe described the having - the have XX XX five vast would markets that the of over what top of we've on in and market XX seen months activity top moved U.S. to specifically. XX% close markets the in the the has top And the X probably activity market. occurring is outside the coming XX really last majority to focus our the

of nodes the followed that on number of the quantum So the increase and really markets multiple function volume but in has of carriers, deployed. with being focused overall are being

Timothy Horan

see there soft more partner being market going forward? you think kind it lastly partner infrastructure Do of them the with Do for looks then wireless into and bank you as Great an competitive is you is them? U.S. opportunity looking market. like guys to to

Jay Brown

open returns I funds given further of over so we per that think work why market it. am been earlier affirms to week great are put U.S. find partnership folks I a our would having into and capital Linley think think like and they it conversation time we've with a that and there surprised returns are this I and able they I business the and I period opportunities that's willing attractive their to to long that is, the desire returns announcement so in into to always firm is to come and saw the demonstrate the not are

open surprising conversation to to. have if they wanted not be So a would partnership and

Timothy Horan

you. Thank

Operator

our comes from next And question Citi. from Mike Rollins

Michael Rollins

Hi thanks for questions. taking the

level I and you your what comparable I then guidance organic if growth rate you the if First the be will us tower help cell growth can XXXX growth if with question you follow-up for versus number and fiber help percentage the so that small set get split with of midpoint take the second could. us rate would

Daniel Schlanger

we will to the do what up. given it I split think we new leasing Mike So activity try

are cells it's and leasing So said $XXX million towers, we million about give fiber from are $XX that going overall a businesses. those mentioning see from about and we – you have and growth we $XXX Jay million good where those increasing increased was each like XXXX over we small our pretty should new from sense million of so across each to about earlier of activity and $XX

Michael Rollins

– be would what so Right

Jay Brown

It would Mike that XXXX organic basis the about I the activity consolidated think was on organic think about of XXXX. XXXX. is is in leasing about we up activity to a leasing saw X% unchanged – we one that's several it in over increased say way to maybe points that's going X% basis XX we've up

Michael Rollins

Right.

for rate if so a as growth at So look if a wanted as what pieces? we towers be total growth small the and two and would rate business is take cells that – you to six those comparative you that

Daniel Schlanger

base teens percentages much towers was bit little thing for base to on business growth Yes as in of so growing year-over-year been top. the towers accelerating because talked so order is and whole much it growing in about still the a is but is X% the a be X% to the mentioning of the like lot of has that small the cells range we and towers that in as to Jay has high hat

Michael Rollins

Okay.

for So to is for the think about XXXX? six five to towers range

Daniel Schlanger

Sure.

Michael Rollins

cells didn't a that leasing look we just versus there's at when new follow-up And if but that provide difference in for suits, would look new don't a you that the in rate way in the in you builder leasing builder bridge revenue fiber the you include suits what including towers fiber look for the are you understanding suits? small the like builder at you include towers my growth is the

Daniel Schlanger

nodes in to fiber put As we will talking built. numbers Jay are XX% builds more of more through co-locations more come of building that a more we on earlier, as growth of is both and anchor XX% cells and was get but current those these growth lot the come what of including are are about just and going small co-location. it back and bigger we in the future and about to It's also and anchor bigger anticipate for what

would we look it really This as point. part if this we of the the our the We lower it's to number So the what part part suit and didn't of forward. the this doing business are at business include not of is of is be build just XX%. going at towers

the small the cell businesses in are business. that. phase a growth So including associated with and investment we There just how it's difference about in both and are the the revenues in think capital we

Michael Rollins

last carte measure search in two kind percentage are you of when bundling services that what of Well, question Is it's the like small co-location cells tracking whether are selling on basis? or there together the versus ala a rings. should deals we be tower

Daniel Schlanger

and both looking the of the cell. small carriers are Mike side folks the at macro at use

of same it's inside the carrier. the So group

So and is it's very down a having the to actually different. conversation conversations When about when things nature of them signed when two are we you there with done, get get both. those

RF small a a of traditional spot assets. map. at a that essence our on amount and of from in how it's where the goes less on carriers far is significant So those cell design that a utilize tower standpoint, There leasing there site is into of engineering

with the not the on a solution So the cell side. cookie-cutter wouldn't at happening I it's conversations it small people as same bundling describe are the because carriers. a

we on got tower have more we small conversation a need to So have the than robust to side. cell regarding

Michael Rollins

very much. Thanks

Operator

the from Piecyk take next Walter question from will we BTIG. And

Walter Piecyk

Thanks.

did back when go there closes earlier increase? or deal be won't answers, will an to you incremental the say just be So dividend going couple to of I am

Daniel Schlanger

There will not be.

Walter Piecyk

Thank what consider I XX% XXXX rates based you. as similar in for prepaid far on growth growth XX% at your guess so then XXXX XXXX that's organic rent grow looks it. would it growth – And look you reported Got like excluding prepaid looking are you on the pacing you if in, as so at

Daniel Schlanger

amount rent XX. to did similar prepaid XX is the running XX So by dollar to it than from from XX

Walter Piecyk

XXX Similar the but aiming dollar amount, for you at XXX are XXX so for are right looking then fine XXXX. prepaid year -- that’s you like if up for

Daniel Schlanger

it answered this appropriately. where specifically we follow that we We take have numbers can is this conversation the offline about it to type to form. more being the are call? make we Can just as are asking after hard talk trying to can and about numbers of to question It's talk sure you all in you the get

Walter Piecyk

guys just talking okay. growth the It you’re far rates relates about going, as but are to you

Daniel Schlanger

so hard what know -- I to you about don't you just are not really it's if like we to XXX you wanted trying to answered really talking if am I can question here go – be follow

Walter Piecyk

release XXXX? providers? in guess it's they in any think revenue it talked that you trial anything it go I from just they that us contribute proceed, How the I numbers on have an offline nontraditional if and you but and wireless are give update you can they These with your whatever. the report can how in past whatever press ended going is how to of

Daniel Schlanger

is and and are have the we talk of understand about edge will are being this have on fiber. deployed, earlier some we – for the we done. Safer estate done more would have comments us of done the components other computing with with I some and the made real we Yes that I things they opportunities to of how those networks trials describe learn

have designed affect XG C the to understand dollar and our devices. and all they in are what's They're connected us going As of for ran relatively opportunities to amount how Internet so small learn. generally we things done Things as terms going in we learning to not are those necessary to like developing XXXX more results. be are of more they much is They market the and into of get

Walter Piecyk

Got you. it, thank

Operator

from Our Batya next from question Levi UBS. comes

Batya Levi

pipeline? of to the right attachment and the we look now had can you if regulatory Thank XX year mentioned XX you. that cell small delivery for One the do beat months. How figure the get does think of on for had in XX,XXX that that about question the build, next beginning the the you federal you pipeline for you node the do month

Jay Brown

structure up as a to It's we nodes. where the to we cost structure is his G&A step we the in think to we are handle think be the sized able meaningfully the the we about see that Yes, currently. pipeline the and extent mentioned level comments continue up win Dan to a meaningful activity cost new as step not of so we around from

will back and We update you that. come give an on

time. Second question up around the was speeding federal legislation of

the With of municipality the the zoning necessity going have local federal work us outcome. planning closely legislation gives towers and are to frankly working even to and clarity the the state legislation with Small forever is and helpful of is cell requirements. it through

over but that anticipate of up meaningfully the experts the the the don't carriers deploying will infrastructure. provider then the to give we speed going municipality to period greater they So long that infrastructure ourselves activity legislative time to as of the both clarity to are path an of

likely new to extent be even it but time I If gives nodes you are where legislation the that we years state assumption get is our So that on legislation I that meaningfully. air guide we to working timeline working if towards talked the to frame clarity the two about greater that to we you our necessarily that back federal or two-year assume after think update about see on that wouldn't facts to and will get it shorten come it's does legislation. we but going what and be is do gets we

Batya Levi

you include leasing Got million based. on one XXX follow-up Correct out XXX it that organic doesn't coming the new but laid new activity. Lightower. it from also that out and growth laid to XXX that

Okay.

Daniel Schlanger

the the are Lightower to held That's acquisition the true. chart. All in right on

Batya Levi

expectations of next you of us a activity in can your to in the Lightower sense expect for the give transition churn terms show you next year? growth And year how of terms mainly up versus the

Daniel Schlanger

since included when to the per talked on we grown year and continue that about digits if so we has the talked to churn the light and what about transaction remain high a what to continue rates with revenue we so will line in Yes anticipate that the those begin single with is in be the been and single percentage tower we in also in high basis those have believe. digits

Batya Levi

Okay. you. Thank

Operator

Spencer Research. And the from Kurn Street next question New comes from

Spencer Kurn

small backlogs. your cell I Hey thanks. about wanted guys talk to

any typed dynamics pipeline sort in dynamics these future out Have the like aggressively of but do sort been have making years? main own several two out fiber both how you your we their So see next dynamic this the customers have also of seems have or throughout push year. fiber, shifted, it of in playing rolling meaningful you been more of shift the your over of

Daniel Schlanger

seen change of meaningfully the the in we which from seen quantum past is dynamic. What seen up Spencer haven't XXXX in the in what in any have we activity years. is have change we

and in self about winning of has the deployment you're network. portion small carriers half perform fiber see the cells and believe to to of Our win market. some I the that remained going the of rate the continue activity the same about

the going of of standpoint infrastructure where activity to the will not places in I I of other will provider portion be tower the certainly may economics some makes or going and market shared are shared we return shared and expect that providers of put you're a what economics then we to likely see provide I interest in there there participating small needed to in as we think not There on participate. builds and think may We infrastructure in the and the where self model. see being the because that we to available we justify it. see and we those so model where other carriers don't returns from the going a is sense cells towers continue seen model shared. in is returns the is some portion it of to where just have places can't meaningful to be provide ourselves there to fiber an such be capital you'll it by other performed a likely in and places though unlikely and think Similar

Spencer Kurn

it. Got

Jay Brown

ahead Go Spence.

Daniel Schlanger

Wrap up. it

it You up can wrap sir.

Jay Brown

time have for question. more We one

Jay Brown

one have will Spencer follow-up go a if had more you you we – take ahead.

Spencer Kurn

– might and sorry aren't sound in also I similar either though deploying fiber wanted even are overall customers backlog great is you to down like you're volume modestly win where that for should even ramp that just I next capturing years. to losing magnitude is XX% of but are go rate of today, your doesn’t if share clarify I still guess markets there, so message the they you're so the then just couple of the your carrier continue

Daniel Schlanger

markets same same. regards the markets. with the in the not just areas some market may think the of I Yes, They are to themselves be of those

could in the and to same market I over in coming associated in it's total front inside amount our our continue longer of deployed have actual of in small therefore cells though activity world number So increase even the that of we be rate think result markets, could is term to we based and the could is very be that but coming rate of time same not required be the revenue is with believe win the that growth area to on well where we in us down down. the fiber going win

XG kind So towards I going the of that. as of that market the move providers to in need environment be cells significant do needed market number going different they multiple capital to to required to to enough the are are the be believe are that the we order in in provide small

Spencer Kurn

thanks it Got again.

Operator

question will Markets. Nispel Brandon we our from take from last Capital And Keybanc

Brandon Nispel

in you build place have are you cell the the it think the that route out think that us of thanks $X.X on do where quarter in. go two number And I called guys small in was and in how billion, squeezing where what's fiber on one of you of in you miles ratio planning are period. guess to me the could first towers year Hey you macro terms then cells can that you the to remind many seeing process in market small and in where that Thanks. for today I you're CapEx systems building?

Daniel Schlanger

per a X On mile cells be they it's at you it mile of the about in It's but if fiber. that be a towards and X that fiber think What cell pretty take so about towers. be would cell, the small Brandon that guess is of about deploying and to will across the highly we building to X.X may not ratio density are small of quantum about small better think it would marketing small of the very, first tower. look towers that we question small small we good is roughly to would cells a would of very see the something to it typically we that cells see of way weighted compare market if the

Daniel Schlanger

the part take billion to XX. to of we're have We XXXX $X.X we addition that midst about we to the XX,XXX those discussing of going currently. earlier in Jay still on get of the our It an that that On X.X was air – on we that we to said, from is are talking money nodes like billion so spending of was about I pipeline. now going will in increase spend had capital to to what but we some is that believe in XXXX XXXX are about

Jay Brown

for Obviously our based certainly would this in earlier lastly the everyday that the go revenue I echo joining to like are and thank Dan across into the as about optimistic things would we excited business XXXX activity all something and businesses I call how call is just increased we of morning. on like to mentioned delivering performing to hard terrific air significant worked job then our hard networks the assets. my the they to with last, through over and to appreciation some hard hurricanes. certainly dealing months maintain really really last appreciate like of on to customers done get for who and express have a have the have incredibly back They employees worked we couple how I

everybody our joining all folks, thanks this So, thanks morning. for to

Operator

This concludes you for today's participation. your call. Thank

You may disconnect. now

Crown Castle (CCI) 19 Oct 172017 Q3 Earnings call transcript