CCI - Earnings call transcript Q4 2018

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Operator

Good day, and welcome to the Crown Castle Q4 2018 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Ben Lowe. Please go ahead, sir.

Ben Lowe

Great. good and Brian, you, morning, everyone. Thank for fourth quarter you joining us our discuss 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; materials To section the which refer of posted call the crowncastle.com, Investors to at in throughout aid website this we've the we'll discussion, supplemental our morning. expected. forward-looking and to certain materially and assumptions, any This results subject from conference risks, are those call statements, which will vary actual contain may uncertainties, factors affect the Risk could is filings. in potential results about the Information and the which Factors available our press company's release of sections SEC

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

measures discussions certain supplemental Tables call the financial Investors today's information package includes addition, in In of at of crowncastle.com. available website are the the Company's in non-GAAP non-GAAP financial section measures. reconciling these

with me So, let that, the call Jay. to over turn

Jay Brown

everyone. call. joining and for us good Ben, the morning, on Thanks Thanks

As solid off you saw from of quarter fourth growth kept year another results. our results, we've with

where miles are allocation execution, to high three markets, fiber the of see I I route the and those for XX,XXX market capacity disciplined I'm take And want to established there well of we to believe our U.S. we and deliver an have for towers unmatched and Crown trends optimistic shareholders infrastructure the I greatest capital On communications important XX,XXX and positioned and this positive we forward, drive demand the Castle will advantage opportunity. than in returns is Through portfolio see discuss. of long-term more in call, growth for trends growth As look years assets. come. themes top

for First, Crown year Castle. successful XXXX was a

excited is getting and infrastructure small investment the of cells robust about remains XG And offering delivering long the I'm third, towers started. solutions XG is deployment Secondly, our results just of runway as we strategy growth expected. the fiber and to of

dividends increased Tower customers' strong in year supported deployed XX% the growth point, half our assets. the network sites back the cash the cells our flow the first both investing delivered all per across leasing by by XXXX, demand in share fiber infrastructure, On of growth we highlighting and as actively deploying record cell of for during in and spectrum. additional number Further, of we our major new a XXXX. small in were tower

In the added today backlog did cells small cells, to addition have our operational year. of at we significantly performance pipeline in time more in Meaning, great a installed than cell build nodes we to this small contracted we XXXX. we to small than larger last

integrating our acquisitions. delivered Importantly, fiber while team these recent results our

our multiple This networks brings expected. are small offering shared towers, the be cells the strategy to across excited and we can communication integration as me of that delivering which I customers substantially my to second solutions critical of see cell components point: focus the look and miles XX,XXX fiber. growth of dense, small fiber work route as I'm high capacity solutions potential all on complete, opportunity customers we unique results both and fiber adding is ahead With our

infrastructure two share our that time tenants. assets annual in markets that we the we scaling decades by by long-term infrastructure business a shareholders fiber by approximately and lease the networks demand. both the significant our need, Over million tremendous shared our we our revenues establish has fiber business. in over providing beyond the in our we approximately we and assets In at in our our see value to capacity frame, with where keep of customers, annual assets networks increased the prime multiple $XXX we've cost-effective years, and the cash growth Because to time to a can grow assets as tower the for flow create generating great customers value tower execution Since U.S. we've XX%, assets business of growth. from proven the leasing $X XXXX, Steady rental are across our over we've towers $XX and the to cash volume for investments drive their to wireless with XXXX. have shareholders in delivered customers performance on rate as they ability the access adding billion in provide is consistent those assets wired critical continue recent $XX site pace to approximately billion With billion locations flows top while our approximately investing last across revenue rapidly, tower growth. that data increase growing U.S. and more and than XXXX invested in of offering greatest footprints expanded and returns compound infrastructure to

new small cells Our X% solutions. capacity fiber available fiber already significant investments are and add and yielding to have

outlook, our demand assets. As levels are XXXX seeing fiber we in of you our can increasing for see

Following by a nearly to record we small in nodes. XX,XXX double deploying we to number XX,XXX the deployed, cells production of our of XXXX in year expect terms this year

started. compared we we With typically XX cell start revenue revenue, With our in fiber across of the latest put grow into traffic contracted growth sight to a expected of to new to XG business, solutions estimates and point. X% leasing revenue of nodes for expect steady growth Cisco, addition, to XG continue, to to generating from XX,XXX the cells small per about of in I that to have XX higher in all front activity to a XXXX the while networks share growth to approximately of our dividends that means expect Internet in their continue which Crown of additional technologies, meaningful see XXXX opportunity getting through about have data and in continue perspective, traffic to nodes five-fold the we growth our from in excited customers Since pace X% data In U.S. of respect line to growth in pipeline in the long XXXX. acceleration towers, levels on activity deploy I'm runway final U.S. be resulting growth just to is per to the takes in data To the keep third in from demand is with that and be towers long-term saw times the XXXX new brings Castle of it we invest and as a XXXX meaningful to existing According volume deployment in in me higher XXXX. into growth from new and traffic expected beyond in to year, to beyond. mobile XXXX. equal mobile months we air XXXX XX back leasing anticipated small is XXXX. into heavily as half put translate tower my leasing

the mobile is even While role critical expected transformation I excited the the consider sheer how our early of of when in the will staggering scale assets, are drive I we should and economy get U.S. growth infrastructure for significant and play. more infrastructure demand the digital

X% scratching just of is XXXX, X% traffic when think a I just to the of mobile for up in account expected ago. we're U.S. in you couple from the years total consider IT traffic surface

the the generation billions really infrastructure first existing potentially I existing of we investments about changed While our What way consumers, the will fiber over journey and needed applications intriguing in million the technologies, technology in mobile technologies live The the and the to network XG XXX next dramatically networks, potential emerging from support we to believe role through assets. the of find demand on from the the wireless devices they and have work. connecting tower that continue to of services people to underwrite as we our going based and for increase alter some U.S. future. fundamentally has XG connecting is generation

Some autonomous and necessary, an technologies that spectrum on cars To natural a in towers and across great assets. on on cell these device. both network at unmatched augmented small to to any come. virtual reliability the is infrastructure include From speeds achieve and time increase measured to additional meet our industrial Crown reality those with estimates require high-capacity of and require for industry provide sites that the performance position carriers anywhere any and fiber of will latency latency, more deployment in center portfolio the that and applications need decades cells And of be Castle that will perspective to emerging believe towers at of predict ten-fold speed. requirements at availability a by will we as networks those megatrends

expect an for and to shareholders, investing between that, long-term Given these we X% Dan. over And in annual long-term dividend call that able with quality to X% are we a assets on grow believe generate to paying basis. high the and while returns somewhere we will be attract I'll turn opportunities,

Dan Schlanger

Thanks everyone. Jay, and good morning,

the As solid integration Castle completed proactively commitment made solutions. mentioned, consistent our our shareholders. XX%, demand flexibility and those majority XXXX of very average where our we We in markets, while maturities significant see improving for results, our to several Jay completing investments And return fiber capital small fiber AFFO per closed Crown and another we share substantially in made acquisitions by fiber quarter year dividends fourth and upcoming cells share increased we refinancing new with of financial successful greatest increasing per recent top and across in We the by the the for with fronts. to debt. growth investments, our assets overall

on a our should that Turning items when through quarter first Slide results to few to the going outlook. XXXX fourth be prior results X, the walk considered I'm to comparing

revenues revenues, including rental the extensions $XX million, associated midpoint leasing activity. of range prior million $XX additional from resulting with by site of straight-lined First, exceeded term approximately primarily the the

are and also during expenses approximately accruals natural higher million combination of certain incentive $XX disasters occurred for lower additional that associated quarter. services that the The timing-related. impacted XXXX were with addition, by results is In of associated of the there with costs $X million contribution approximately the

that revenues, of capital AFFO. ranges lower total in the expenditures finally, are were and prior items, to which of benefited Adjusting XXXX. rental occur we a million within So contribution for in outlook provided expect EBITDA, these $XX And in results our approximately now XXXX. site AFFO impact expected in portion adjusted now for quarter, the from the by sustaining

including revenues contribution approximately rental site XXXX, increased revenues. organic growth year full to billion site XX% $X.XX rental X.X% or approximately the For in

of we approximately expenditures $X.X on approximately the billion $XXX investment for in comprised including $X.X capital and million billion of towers. to during in Moving deployed fiber activities revenue-generating billion capital expenditures year, $X.X

without this prepaid the and growth flow will year the full approximately net finance $X create, CapEx of growth or believe ended Supporting we of we spending approximately leverage rent. finance expected over to profile. Based five with leverage incremental with consistent times maintaining billion equity. $X.X For that of cash our this intent issuing gross at level we debt-to-EBITDA, turns we billion committed XXXX, business approximately investment-grade our expect belief, five our we on as just to credit can XXXX the remain capacity of

maturities more with than billion revolver of and balance $X debt flexibility. on our capacity available sheet Additionally, we're our XXXX, with comfortable no until

to rental with for site extensions increased now leasing adjusted resulting of mentioned the Turning at that approximately associated year by midpoints, our earlier. presentation, we term I the primarily outlook the higher million straight-lined EBITDA Slide revenues due full revenues, to and $XX activity X from XXXX

AFFO. AFFO you straight-lined unchanged remains share see, higher at as approximately revenue to the As $X.XX per not does can contribute guidance

million X, and growth Slide $XXX million we between site to in in now Turning XXXX. $XXX revenues expect rental of

can on the the higher straight-lined the to chart Slide, see when relates compared just in revenues outlook, impact the the to I discussed. the change prior of you As only

remain in in to revenues growth rental from contribution up X.X% organic for approximately expectations unchanged site X%, Our at XXXX.

solutions. We leasing to consistent both was expect making levels about anticipated Crown we XXXX to Castle that the another successful provide we demand, cell and to business near-term that grow discussed cells of XXXX. questions. attractive same of in to higher fiber are new Castle to Crown with in the significant expect Currently, growth To a we're trends as pace making are like growth X% think that activity Because returns from time, believe small our to data wireless year and new through provide XXXX investment. for excited Brian, allows to with the I and expected in long-term cells, this the investments seeing quality tenants the dividend for towers and the very in for our near-term we're investments small cycle investments returns will the of open wrap-up, increasing us It continue with high networks we add X% long-term which we early combination business annually. keep is At to from such customers fiber benefits call upside growth small an in position take to upside makes I'd we growth long-term Jay advantage our that And we those our believe Castle still assets. earlier. will significant Crown are

Operator

Morgan Flannery [Operator Instructions] We'll first your question Stanley. now from ahead. go from take Simon Please

open. line is Your

Simon Flannery

M&A with back comment considering? could And if comments that your the just were is of sheet, be then bit might what say that at the down broadly around opportunities the to M&A? of balance you terms on where if end you just a use any equity? in from some taking are you upper could of about there little Thanks. amend versus Coming more that might range? looking What's today? you comfortable you is leverage that more talk leverage you something So it Maybe

Dan Schlanger

a discussed right be see we create, use we're EBITDA five expected it, target expenditures flow over capital which want north internally is able to times generate maintain we we it look in been and is We the leverage is pay an when to the that year the out going there. so we cash and right our times stay believe the look around and capital at right to and to of what five ended the will believe need to what our of times capacity XXXX think around spend we past we've at capacity the in We've maintain profile, for that five our will leverage debt-to-EBITDA. we generated at lot we just course means and which that grade As incremental around debt-to-EBITDA there, credit we leverage. investment

XXXX think we where we do think that think what capital out need equity we're attractive though, if M&A To spend don't that's point don't the company see be. some or That buy that's we for that would what include more just From five would we about. times. going based us, position we we would need a to investment external tell So way something equity would because what than that through to now, why maintaining that's funded can we consistent in activity it be rating be times and for our would grade talked likely be would in buy with equity. right to and a profile and on your we I we're be five leverage, whatever see assets

to at So good feel capital we're it. it program our some our ability would when include talking about But XXXX, pretty from equity finance about we that point.

Jay Brown

coming with to we've that's dense of a on to believe Simon, more acquisitions for where building going demand front, may really but versus approach around that the be metro going to to We quarters likely more we markets is I be fiber for the be in us more high going outcome makes to tuck-in broadly several There building talked we M&A the sense is likely opportunities about on the don't we're organic an this earning that are the call. be fiber the to build. we build think meet focus capacity market ourselves scale cells. that the see strategy, think fit see it where it our buy in invest last opportunity some it, and to find our large some small

Simon Flannery

internationally? interest limited it And

Jay Brown

Yes.

in in going here world. seeing to always the the is everything to market returns here in the opportunity is the continues we've growing and U.S. learning for fastest to in that my it to investment thus certainly made based the what for the And way largest see we the believe around U.S. we open U.S. the are world best had market opportunities else in to potential the in continue U.S. infrastructure. But far on believe going opportunity we amount world. the market capital XG, communications is exist the greatest and the the and on think We on the of We're the best comments XG the think be lead I investments to in here

Operator

We'll Please of take Bank now next from ahead. David Barden America. from question our go

open. Your line is

David Barden

guess, I on follow-up one that, Dan.

quarter you the the guys the in, for business. last be Just was that gave built lead going clear interest guidance vehicle with when that expense financing you it debt was funding to the

of in of or I terms extension what kind supplement tenant kind this in about then changed one And of the clear see any through of we think it's on share could debt that the the So more the with you're color year? helpful. Thank or source second that the look all? kind thinking guys announced there really any is, us now the of color be at the whether can and there raise kind unsecured So numbers wasn't of will moving a timing give When it's you the anything flowing secured of kind really to on hard guidance of revolver kind was as incremental quarter? in the you it page you. what XX, at part you

Dan Schlanger

cost in how Sure. think business. point do guidance credit looks when around see be and trying our debt trying clarified And and possibly we possibly we that we but When we just anything about pointed for - nothing between about open to it everything. out put financing the extent of and good the makes and maintain on investment sense we and has like to terms we our because that. our out the What when see and to on lowest it the as I'll the question. any funding the we're is to or profile we grade XXXX, to first to our market assumptions want to equity and be as in revolver out Dave, we'll at just what changed want capacity source We is, nothing on opportunistic we turn and the what unsecured balance sheet now we about on the our do can. we to things changed flexibility through get hands secured look think together out, the finance how one thanks term would and could significantly you we the have other out we try has feel take had business look way we

Jay Brown

Dave did to new we a as people deal during not your do - often second new the term it quarter. question, would a

and that the adjustment speaking - So a It that was the we just customers. to deal new the the anything saw term we then new the to to leases activity. and related to with on leasing made what that of with something doesn't have we're outlook do we on that crafted activity those

know hesitant get how you that's reference we numbers. driving the what's the as in we're press So into the both of transact in and release but with to the customers specifics

David Barden

was wasn't a in So extension term quarter? something new. not And this it that the got signed

Jay Brown

It that saw be the new to term leasing was It we activity a the during no. not would quarter. did we that deal related

Operator

Prentiss question go now take will Raymond We Ric James. our from ahead. Please next from

open. is line Your

Ric Prentiss

is XXXX number? billion Appreciate remarks gross, the X.X or that for in that billion, question. then a is in the gross and Two net. number, mentioned in you The ones. X billion net XXXX taking X.X X.X the CapEx, billion your Dan the number quick XXXX prepared

Dan Schlanger

That's the a gross X.X. number,

Ric Prentiss

Okay.

X.X compared gross the we XXXX. with X.X So in the

Dan Schlanger

Yes.

Ric Prentiss

cash from renewal that seeing got Is annual to numbers like page XXXX on rent, there I don't the XX but part noticed we're extended XXX we following thing of some XXXX? question was that of what at T-Mobile I then on think renewal out And talk the as one that are that XXX Dave's to XXXX. that in went payments of specific out the - you know timeframe beyond supplement,

Dan Schlanger

periods drawing too the many as components given read see But getting out to you're would are that supplement we've in you extended. to of the that the between Ric pushed for of earlier I dates. what correctly want careful the you're supplement supplement been has connections to were later components tie the of term be I term together don't that on reading but numbers. face the about accurate revenues

Ric Prentiss

just did that to years guys think for I and their another the that life somebody trying if stays number remaining to read six that year should life? from years the seven come other year-to-year average we've is happens to and there's all or been five the how rolled think six kind And at years stayed down previous Sprint I'm at just off years, the of supplement some we what extension?

Jay Brown

to think over is I it think a good you Yes, as we've just way about crossed year. described the way the

And or closer leasing on that so site are move a on depending the the right. zero. to activity there you're see the out going given of towards and activity new terms come And is those to what to the contracts activity extent to book absent going it's

Dan Schlanger

they're I you The to that is would made rounding numbers, whole the Ric only clarify because too. thing mention there is maybe there's point

fact one crossed means period that to period at the next it. five from just extended that from hadn't doesn't one It it perspective. So, a the we rounding it over that mean stays

Ric Prentiss

feel see guys their benefits? DISH, that we but some you putting like it comments other DISH And helping IoT narrowband movement there? network on sense. starting on heard seen been to does DISH are from any from Makes Have up. Has people haven't you out the show

Jay Brown

Big of in individual we're customers. the useful would customers the a of Big tell operators. Big the that small I to don't we by wants But the there of who on is and seeing towers of network outside helping revenue infrastructure outside that's really a know growth future. and of demand deployed being comment that our X. we the both think number anyone that is a specifically cells see different deploy that of beyond that X number spectrum is and majority for like for you on is uses wireless revenue you from there's results the driven for opportunity to being The we and growth more As X

Operator

now from Goodman from Sachs. will next our Please question We Brett Feldman take go ahead.

open. is line Your

Brett Feldman

Thanks for question. the taking

scale of where X,XXX there increasing You in past pace an small what within there's be you that start up bottom-line? as relationship, be amount the you've degree conversion is your type And of growth, certain about deployment up to XX,XXX meaning in some from to or been may expenses. were at linear the revenue XX,XXX of if no going I point was ramped increase hoping there's we've Are the where as of you seen to leverage some point that your to talking right in cell to to increasing you expense? nodes has you that that capacity hit more XX,XXX. just your operating to a cells, now you'll business increase towards a increase maybe by of deploy small a your operating so, beginning your deployment see you pace dynamic going could there's Are explain the a us.

Jay Brown

To cost to say Yes, about Brett that that we're the trying growth. that that currently comments, beyond, were that, XX,XXX come we is XXXX. we that structure we in on to air to If would markets, we in rising the the the towards. expenses. towards think on more put beginning how a impact handle I we're XX,XXX go If have opportunity is it we way we're would on what even the than or would what appropriate. and exist and my that structure currently less air stable at on markets between I currently I to meaningfully that nodes is analysis we somewhere the situated new work raise thinking we'd that it extent that pipeline in, right is many are working we of beyond the the air larger operating might we our the with both in an level XXXX to terms If things of expanding get back to talk have mentioned trying have activity To to we on in XXXX that manage existing nodes that for have already go backlog expenses cost. end different then - to to and extent are that then that of contracted, see that markets beyond level based operating get increase look on now number calculus to about in of having as operating think and But think for will a have that as it sufficient in were the matter demand. growth think the is pipeline

Brett Feldman

You mind ask if I a quick follow-up.

capacity the it think factors would the deployments? for like say demand? process? we it level any is? deploy zoning your to external about Or it ability absolute the is bottleneck at that in to of what own Is your As meet given pace, you demand small cell Is it

Dan Schlanger

we'd the as an we the associated timeline of talk we of that. from if two we Well, actually away be - years today, this months nodes see XX that XX increase in were timing, revenue from benefiting to to amount terms the could in we're get them deploy contracting to deployed about months obviously, with to

and and to financial think us recent I The So obviously in deployed. path working results, would are like amount to significant get the significant. with terms it communities get and there the the is the should around to us place. something nature in timeline towards it the gives order bottleneck the biggest there their are to in is time and it regulatory of through has of hurdles the I these FCC point look deployment clarity get of gets to what good hurdles takes the order some But helped nonetheless,

is Obviously, cells know that's we we based and think that likely on So small think opportunities over seeing time. the biggest for what everything we're very probably increase around XG, to bottleneck. the we

results, to And cells so extent opportunity demand overall increase of what financial in our between on currently over get is we on is. think can small time would to when the certainly that that what cap it's opportunity air. for And takes But is the to it the timeline the it currently and contracted we that gating terms item specific a going be when it the grow.

Jay Brown

few to thing the I as that bottleneck the add that to combination the been a would scale. so a or the only capacity you continue question scale, it big really able do you is was nodes We've that time of in don't first demand And ago answer talking X,XXX we Jay Brett, to can all. nodes our XX,XXX to to will internal at how I get takes think to there. XX,XXX from about now asked, think in ultimately capability an it's years be or It's

Operator

will from ahead. Jon Please We go from RBC. take next now our Atkin question

Your line is open.

Jon Atkin

the referring to? of So sort there specifically I impact XQ? natural what were was And continued is any reference into interested disaster you

Jay Brown

expect there any don't QX. to will We flow-through be

Michael to that significant fire the Specifically, was referring what we're Hurricane happened California. in then Puerto in Southern Rico and

Jon Atkin

And then you mentioned during latency. the word the script

made we expect think if provide kind what the can operationally Vapor about of that me any potentially kind wondering So year IO. update of I'm so. next and over you could or financially

Jay Brown

to do on work edge some computing. continuing We're

portion to to small of And edge macro some compute we mobile to in networks, that for As where the in for where edge is the of the reduction places networks get designed the that a believe information but sites be of on portion sense required purposes, to my latency. is lot traffic meaningful a it to also for around, believe kept order are connected put cells. existing network, we at there get where some designed increasing of cost the continue going for network makes to to and in be very latency that the Internet-of-Things, traffic some to comments increases traffic is have of

our ground the may it's to shouldn't leasing But related you an whether and to So a having could trials But very compute. use there. XXXX to given towers continuing the of any work our to early and we're do doing another us it result that in sites we've from impact opportunity. edge or space there. we're It the be for results still number that long-term, financial expect on it's not outlook see certainly the in

Jon Atkin

on essentially? the cells, enterprise comment rate could you organic if fiber within so wondering, growth exclusive was I finally, fiber then of And small

Dan Schlanger

for business. rate cells we're that's of at growth of fiber high-single range small we be is mid-single-digit digits to Small churn. is of solutions That's fiber to comprised think in going exclusive net closer growth the and looking revenue What on solutions the the business about XX% cells. basis

think the X%. is growth around So we overall we'll get there

Operator

Please We ahead. will now from & take Synesael our go Co. question next Colby Cowen

line is Your open.

Colby Synesael

those how You've have if markets markets those you'll to at still happen of start number starting I there? that this way that organically Thanks. that something more is of see is see or tuck-ins that then was what is in opportunity. you'd And put historically you fiber, fiber point up to equipment that cell you can expanding where material like give get towers? those need And do on you're the markets it today the would wondering get you with in color there? like Based you're on about about us described? versus building that secondly, to looks you expect that a your do to many in XXXX massive type that have when out or of is on you conversations it and customers, MIMO talked you small the having don't

Jay Brown

by the small for focused of extent put top To XX if the on markets And your air cities. stands which of NFL cells the pipeline this process amount have in a or top constructing frankly we're vast that now nodes our wireless U.S. beyond point we're of that or yet, meaningful cells Yes, it. we meaningful of that, is a amount that's to so markets And the be those question contracted some as in is but plant expansion capital those not XX fiber mostly the not backlog we'll small many first those the it's that XX continues both doing Colby goes majority top markets, where so the all the in we're opportunity would the in operators the of to of currently. spend XXXX at basically the for well deploying as of and on in markets.

broad M&A in. just mentioned to the I the comments intended more that currently we're earlier, my be around than those markets working I As

And a own. acquisitions want us look of dense we're As we the end the that it. meaningful build more the as about to we of much result meaningful XX don't more to going likely the On of story. any likely top that's beyond we having MIMO markets in that investment to at XX, for type likely tenants, - are whether second the any think assessing to market. be exists your are we're in high-capacity to we that, We don't or up relevant that's and the a I urban likely fiber that see around think see We just may fiber. fiber targets to markets XX we top us, of even outcome that it's top don't more talking that frankly organically know some beyond size but that fiber seeing ultimately our of building that amount we're question

there order designing relevance us then the going demographic to the manage in they there on analysis. and to that to position deploy spectrum with - small a number in to things antennas a both for the And network. cells order different around and lot much do are network that are capacity equipment meet towers and their network, deploy for fall how more carriers order of The in into As needs. is and is need of that. it on They are design characteristics the

really but network they overall deployment the component We how at that's deploy and the activity are massive deployed, more meaningful look just a will of and of I make much MIMO seeing our antennas would don't demographics. investment the the that different on depending of the around know choices being I network that story. carriers some

Colby Synesael

spectrum, pieces I of think significant MIMO massive lower the require will for band equipment.

Some that driver point I people room your a that when what a dorm guess And as there's will result happens. by material as that to could say material that of small that growth operators that the or considering for tower hearing? revenue just the size the that is of of opportunity viewpoint a like a be a itself refrigerator. isolate is that I'm shouldn't we size type

Jay Brown

it. Exactly, using and different on spectrum depending same what types equipment of could more do the they or by bands they thing how they solve because use choose sites to

isolation, in large be wouldn't would us. assume a revenue necessarily just driver So for that I

Operator

our We from next Niknam go Matthew question will now take from Deutsche Please ahead. Bank.

is Your line open.

Matthew Niknam

taking the on for light you question. Thank towers. It's

it's cost are some update assets synergies Can new of obviously about about year to both the network enterprise I for deal. now and that over or a So add just existing fiber closed And the revenue the cell asset you that leverage then of fiber? much under I side, the cost on that fully there small in a to about you've But think ownership? you'd anything go-forward there is assets the on basis fiber Thanks. us since guess you CCI's talking on to revenue then ability existing way wasn't know integrated outlined CCI's a you on year now and multiple Lightower your synergies. having that

Jay Brown

When acquisition into gone basically have Lightower the things you're expected. Sure. we as

been integration part have all system. they of have that good and and We, have job and first with activities that how great completed pleased very that gone other as ownership. the been continue previously. the the common terrific, of of integral XXX business that the have part pleased assets about employees been had everything have today and it an the year things done to into seasoned, I'm haven't the acquired a effectively with almost of fiber on came skills run we a we've acquisition of So integration attracting benefit we've

So nodes of existing today, we on on transaction mean what's going fiber down that When the are acquired already there fiber regards are as synergies. nodes. number excited a that were revenue going about road for the we contracting to to we that some the we and look announced with us that of and

And that mostly regard is FiberNet, small amount handle and Texas And nodes. some so to those cells. Lightower there acquired markets that we markets we given significant in fiber that markets Northeast using for two those the opportunity the of we're the acquired of in with in a the

expected into deployment we cells we've the owned, So would've small days the we're months against it. really of out as terms that of early but the in pieces XX playing is fiber

Dan Schlanger

differently talking doing the we're is looking bring out to the second the thought we're standpoint, vast Jay What has - we try been about it those make to is and synergies of we what and breakup kept than knew as trying From people the operated to to and we've said, we kept to to majority cost part XXX our we're not looking any expand sure of what people meant what we've cost that synergy we're try operating past. - market. in they're

Operator

Deo question go We Del from ahead. Nick next will take Please our now from MoffettNathanson.

line open. Your is

Nick Del Deo

to systems your for enterprise years But it or do I were a revenue realized share give try cell sort small source after you like from are of also sell a to just purpose-built perhaps you given be that challenging might answer sense the fiber. an nature of us question customer can what of what very non-small share constructed? generating some few cell they a

Jay Brown

top to question for a head be I answer Nick, that number that you. know have to that off answer able I the of don't my -

seen fiber case we what where at a study it time. look and to in in and at see we own wireless particular business the investment, and more what we universities, as hospitals enterprise the areas areas do being initial And in are, that whether Chicago up, K-XX watch ends we was to fiber fiber we done you fiber and individual fiber being was it look business places some how deep it needed at a or we in the find necessary add those dive find population And on and dense, the start schools we When and being suburban fiber we've there's did studies an we markets have tend these we solutions urban, has played we if we'll studies or was up applications. when both fiber are a look are people - challenged situations, thesis then overtime or as see of dense our cells where capacity shared more are over the develop about so initial with they in talked nature In that a what we networks of how small as wireless. then at York it own case that need expected. market small business much we we we those that's As networks. ends asset Whether out which application, the the markets cells relationship in is look where people the start individual or enterprise districts. New for the downtown past, like of for initially, with

Dan Schlanger

so interested into things good - the strengths deployed high-capacity is we're the why we're of we've about the is strategy having of all fiber and really density plays that. interested of one in and of And lots fiber lots

unique markets through that same having all of through - all can those the advantage the fiber necessarily is level time the we serve well with the So of to isn't service the the capacity ability we available markets just at positions of take because a that lot so market unique really have to serve. the most us is in that

Nick Del Deo

traffic pretty you prepared exclusive drives remarks and doesn't of and and be between expected monetization outlook wireless solutions rates, clear improvements for about nature given seem how think wireless just that infrastructure wireless your strong historically there your being fiber your and to I of towers physics growth in competition. Jay the as when with talked assets in that growth the then meant ongoing And quite Medtronics in about deliveries linkage more attractive relationship of

the long-term respect to traffic about between solutions, do you think and with revenue growth? how So growth fiber specifically, relationship

Jay Brown

drives traffic think not IP the Internet because strategy that of there, the of in our all there I of question appreciate is that the towards our a that's out question sense business. traffic out heart is which there, that's Nick target

and significant businesses. of systems government don't solutions that places an going going - fiber it be some that to universities, today, of most that aiming we few target is And users run cells. fiber our so a and area, for hospitals, there that large enterprises, to that's serve mobile aim the portion of of there's portion there's we're is the in a the serve. multi-location technology on where And constraints in pipe because pipe the only market wouldn't all for be that small along and of are large to providing where a the cases users ever that's portion of demographics significant the we network providing happens time to needed our really we're The a is of that therefore lot traffic for really

why solutions is the do I to So large particularly I time that the a mobile regard of business that I of the degree revenue think our good traffic comments that on hospitals, enterprises, as with think that's correlation side, overall to that fiber connection try the traffic those the side that indication us what do made is universities, is traffic over with improvement to of a of direct in would a which in I made, to of some not opportunity indicative draw mobile solutions overall take IP front in to business I et direct the network. and think in network fiber our of our cetera. uses Internet growth growth But necessity I or is.

order that for we and be to increase pretty is spectrum mean where and to number both in the the going industrial on latency there's As go latency likely wireless but comes start in concern, reliability be XG up networks be used be are it the effective has to actually networks a reliability towers And places cells. able meaningfully down, environment of is in pretty of latency only the for significant not and increase devices deployment of a to and where upon to wireless reduction a the in today from relied the believe small uses. that

wire So to good indication best indication probably it's on our wireless traffic traffic, or the a total the for business. side pretty not I side think,

Operator

go ahead. our take Rollins Citi. next from now Michael will Please We from question

Your line is open.

Adam Ilkowitz

reason why wasn't leasing Mike. the flow I I guidance the the bit about and you. little for Ilkowitz in organic? updated came curious a you maybe can a was we're for through that, is was in if fourth This give Adam Thank quarter didn't for on that drove expecting. growth site wondering above what XXXX what

Dan Schlanger

The most activity the this of driver we it than of saw our cell will the reason be through higher the the was all we we think ranges is expected because a XXXX business what where And small what around ranges. we've didn't is little into activity given that quarter. within those and incremental levels going actually roll

dollars. moves within we time range and every is what million So reasonable a to outcomes make by the think something range. of the potential updating trying incorporate couple guidance We're don't we it is where a this expectation that anticipate falls

So it that. we're not to for update going

Adam Ilkowitz

addressing of your follow-on. Are about are the And type having cell to then you that business business relationships talk signing in overlapping, those customers contracts are the that sales Or a you in are process? for lot small tower customers separately? joint of products both think a The just products? can Thank two and continuing businesses areas about given what you. those are

Jay Brown

both carrier the handling cells. towers the would who side, On individuals deploying are network and be small

with. conversations having don't of think very we those though value. separate They're conversations in about as terms different we're groups So we that see

thereabouts deploying the colo. anchor significant amount we're a generally we speaking to and small have cells going about be to would side, the of be On related the of or XX% capital is that balance activity activity

significant total the being of of deploying XX% those XX%, in to we're XX%, systems. activity capital that activity in build order So amount anchor

is and the on capital. front So conversation invested the yield return that around that on

As of somewhere return shareholder neighborhood then multiple the in expect capital to tenants initial return and to ultimately we ultimately in deploy X% a justify yield and beyond an about a we've investments that. X% we the before, acceptable to order talked would adding to to of the get

small evaluation required the is we cells our and potential do things. what's investment So and the return other the to down based location on what side on comes think

the there we what around what tower because it's in basis different been the of that per-dollar a or the solve has a because side, agreements market exist on On that already assets conversation. that have. the need around we're is It's they the will capital needs doing the analysis capital would return for all really investment customers, made. have investment the an the of not with And

product the that they're us. same So trying that a very happens of a to but conversation it's depending it's on buy from type conversation people, different the with

Operator

will Walter Piecyk ahead. now We from Please our take go from next BTIG. question

open. is line Your

Walter Piecyk

the I about minimum just my to prepaid want talked to ask had at you XX It the looks Or top that million year, about lower Is over. What's guiding baseline acquired end there? the the were to that's for you the of like high then X.XX that for reported? at obviously XX question. what is on million Thanks. prepaid you was It for the favorite baseline increase? talk year, the maybe doing And XX. excludes for were this the XX. quarter? the issues maybe again about is to the of What's the or year? X.XX next Can

Dan Schlanger

Walt. Sure,

guidance. our bit above to that rent XX XX we - so was little activity prepaid activity in XXXX. prepaid cell little So Small first, the in bit and got for a yes prepaid a little more higher a came proceed case

That the XX above what said That's I over so for. I in think forward, think we million talked to about XX range all be is the number Going looking the and you're in would somewhere total you in. X.XX XXXX.

Walter Piecyk

guided churn X.X% churn the as then thinking is number ballpark, get assuming high for look its left what's at terms of or XX% X.X% XX% your to the And in the small the churn? probably business. let's like as churn Am right? kind a you of in when To stage. is whatever that's then your say cells business whatever And and implying kind get that's guided enterprise so disconnect that is stuff the over of business, of that's X% of far about churn, question, I makeup, to given just other early churn breakdown the for one churn properly you tower this fiber if the

Jay Brown

Yes.

think you're close. I

beyond, we we're And are think and churn XXXX. high on of going tower you side the be think years around at that as the X%. to mentioned, for end the for to X% rates XXXX I both

in small And are term it's assumption to that we range. same side, single is working to long that then level Our fiber churn. about short the on term digits. of X% don't to the cells think level, but Fair maybe the high we going X% that see say that have for quite same here in

So the outlook we've it's in think talked about X% the XXXX gave. about we fact that we in that

Walter Piecyk

you put the kind So of pretty then numbers X% then the get would range. the that of if your is to because base there conservative - now low-end to in

So that like fairly there churn guidance conservative events because sounds the right? expected the don't I macro - towers it's I exogenous guess in churn then, in XXXX is in unless no think

Jay Brown

Yes.

digits point is on trying fiber from we're we're - out then think I we the other to think give think modeling I high-single to ranges, - probably range. to X% somewhere you so and the cells. I small on to give purposes a around going and those the tower in around neighborhood, X% just in think range in the we're squeeze business side where and But you an run trying depending X%

Walter Piecyk

Got Thank it. you.

Dan Schlanger

- tower in event. of is that to We exogenous we're to the acquired churn coming that's just churn, network clarify And of through. the think the see of the do because on some going Walt, about half towers

call don't want something see sure is It's not out. call it or exogenous to not, I'm forever. So, didn't it we think you but that we that we repeats

Walter Piecyk

look dictionary. I the from that may to word up have

that it. even I what the You Thank I'm sure just answers. means. used But appreciate not you.

Operator

from now Please next our take We from Macquarie. Amy ahead. Young go question will

open. is line Your

Amy Young

view past that far in be similar just anything along your has Thank past I'm view the been that? I And how year where changed you you return our think up guess on scale. reach that's macro at to but I guess to scale? your following are was are? do on small And sites you I cells you. there previous think will question,

Jay Brown

really cells. early we're Amy, small on days

yields as initial mentioned to small our are I on X%. cells So X% around

fiber cells our look we're at small and yield invested around you the the getting Fiber segment If with capital entire on X% solutions, an about fiber.

point. as we've acquisitions So entry that we've that yield our and above the the we've we billion grown $XX the builds of done grown already kind both the - taken spent well initial as on we've there

decades two at significant number basis, we started yield over we if to tower the back our grown towers, acquired a a of first that the On acquiring roll decades. clock X% couple yield last the ago a we of have when towers and about

return and this we versus a micro tower at sense look small a on at very look on on you cell they're return what's If comparable. the system

than per expand we pace, little margin As of additional what small side slightly tenants add is, faster get the around equity of we and to if maybe we on the think we day, somewhere returns to that same the margin well returns what saw same as the tower the we a were cells, a side, about cell at the and two see cost drives over on in mention not characteristic two of long-term. above around And do business. that end tower the equivalent at lease-up we reasonable about and key asset. associated return small tower. neighborhood about with substantial return we I'll blended tenants about the On think per in is pretty share returns thing, the see of assumptions dividends the debt with are the what we that growing if the the this what over the Last is, basis, lease-up would is provide math the

that Small model X% what at look enter at have do and drives co-location been a the like we X%. about and aside. double what's to co-location anchor a X%. it's it's yield tower an tenant the the with then you see from going-in about asset and cells that long-term. But rate Historically, return So

experience lease-up pace seen on about or co-location so. twice decade of the is the we've far been leasing last happened thus the existing that that's tower of Our the what pace over has investments on has

come cases the pass third that second the in co-locating towards asset deployed tenant we've and cells as we've with as accelerated the the and along So same has use and early system. some these systems sharing small

in thesis playing scaling the is that out similar we're business to of is the same our time model at the towers So terms significantly.

the mentioned, cells had I in last double deploy growth number this As of quarter I I mentioned think we'll the that XXXX, or we think double in small we roughly XXXX.

now X% to of it's the at micro a return the our the against overall So assets going that model is on kind on that's entire when And we towers in of the X% the growth you today, right playing growth the is to the and the book the sense, look the so that it's in it size many out, grown the much investment of as move going smaller of base but because total, increase what size did investment pie. opportunity that yield just expanding it is it's look is from X%, out we take overall at initially headed opportunity. the total and X% like But plus. as yes playing yields in to the scale terms years direction of than and significantly of

Amy Young

view just And And carriers guess I think on think small or we've potentially And do shape cells is you one that, up you two just driving following what said? that that does internally. on deploy what your decision? seen I

Jay Brown

think are side we've of We we'll in just towers cells XXX% that share that some win the form a there we're that the all moment either. carriers over because - to business, to half about that therefore indication choose are small getting of market and deploying small not self-perform. them, think anticipate the the are should of see going somewhere need certain at returns we're self-performing be think that on we of I We economics I deployed we're think don't good where in winning. never a And the certainly I long-term. what's the of build there, they cells. There and of the done are don't like great carriers good see the we don't fact lease-up fact shared locations it's the the a opportunity for the neighborhood

I best to carriers So towers where And self-perform tower where for order will where companies on the not towers carriers saw be their in like long infrastructure. willing we or build in think built to view own the to time invest invest the just the to a we those side places the in capital others don't to were places capital. places continue

Operator

call next our take Street Please Spencer New from go ahead. now will Kurn Research. from We

is Your open. line

Spencer Kurn

new I'm in quarter? in annualization trying Thanks. guys $XXX million of pretty acceleration I'm to towers what gauge revenue past much the this in on to of you whether saw to just just $XXX is does wondering your compare XXXX. leasing you've that an How activity quarter? it fourth any guided million guidance assumes or to

Dan Schlanger

the to what talking about what just our about But across of activity talked what we time similar we're customers towers all being the about it's excited active and we're quarter. saw our as in Spencer, of fourth and level increasing over business. is have

So we continue do that think XXXX. through will that

Spencer Kurn

one on just have density, other I And think question in node I small cells.

per think I on got nodes around you've today two mile average.

five per was signing is, But than density? And curious, deals you question talk about many sort small per seeing And more nodes markets could the XX break node density maybe we've this deals out. conversations? that. how you are with I'm prevalent nodes you. heard node sorry not I mile of carriers of are have set actually of it for in your mile. deals of becoming sure or per then lower XX my also, Thank you it's you some to where XX nodes Sort your of cell do how mile? just distribution

Jay Brown

to just couple Spencer, Yes, of clarify a points.

about where at mile examples. count to see we that's markets node significantly by we're currently to any of cells we think little we many per and beyond could are you a going those show isolated in per dense studies, deploying over That's beyond when to the nodes the to and decide purpose closer That's get the that per four we're of beyond to fiber pretty over time, over average in in investments. when well continue deploying. per and - the we're that's underwriting nodes small terms talking terms We what in how we the cells, consistent. we small means for of density. underwriting you is when we new look these make our some specific we're neighborhood if examples to per as start six urban currently nodes case start to nodes XX building do mile don't When about of So mile or mile two think four what and between six We're examples we well it mile. just density is are XX -

our what underwriting And kind of not there at depending numbers beyond ultimately on to of I the XG, early and density some these believe at deployments the practice seen we areas the about center look happen as could we ultimately in in tell case, both and are you're of well of when is both but we've time well get as necessary find studies happens it of some districts, get we believe underwriting could we if as that that networks make we that's for that some So some talking and do look is case on will business individual investments. case suburbia, a front. and where examples. that the in But markets

adds in of one original per and back second of carriers the a additional does that comes in deploying the and A increase carrier deployment along the initially deploy out As they're somewhere similar existing and two order then two to mile. to deployment go neighborhood carriers nodes density. and comes those

both if play time co-location that's secondary back over as this density. to that end as We and out. from deployment will up in to increase the lease-up in order think So additional has you well deployment, the the going way we existing is a getting comes nodes

Operator

Please Gutman We will question next Partners. from Robert from now ahead. take our go Guggenheim

open. is line Your

Robert Gutman

at associated to being the to get to seems would at. backlog building like in just on on seems discuss you that basically on the XX% builds CapEx earlier of small timing that of this that? side. other of spent? That's is trying like be cells you're cells? of specifically generation point. and small is this specific In it organically? it's Or It revenue how a dense organic and fiber sort without It trying get to mentioned markets Is small it linked What of is is fiber words, Can you small the almost the contracts? I'm broadly cells markets specifically what that portion

Dan Schlanger

Sure.

we're continuing you think back take where think about in fiber we I demand to to trying small the significant cells. and is What for build markets in capital. that and increases step how doing tell just we we're capital see cells a small demand spending spending for

So what have take be for in will when start we're do we markets trying to small so. to where it's a conducive only And in is we contract markets ultimately going we to do cells. order think building very those

that But cells, means that cycle, support is, of I capital build new the expenditure mean, on is small come revenue where capital think to in fiber, what capital on majority and that small solutions we're be those to will because revenue will it. your when fiber is majority point the in XX it's there's that a cells is out earlier some deployment markets XX-month specific business it before in spending looks that small fiber put position interested months will really where but that, our a capital the an of for in is the include timing cells isn't cell as go since see XX-month in about which the expenditure So within But deployment well. through cells, was majority business that us will vast that we those that small hope close that that fiber we'll segment, pointing from XX - the revenue-generating the to what on after we to months come it. like, as not the fiber it come likely vast revenue the fiber to systems someday for small systems. of to of course Having said solutions we're case going Jay that to get going average be

Robert Gutman

think to XXXX X,XXX deployments to earlier you mentioned, X,XXX of call I you targeted And in prior in this cells small call nodes. the

the also XX,XXX had node backlog. You mentioned prior

today assume XX,XXX deploy node that's earlier think you I I expect would said but to XX,XXX backlog, the year. XX,XXX this of net to you

Is the that So unchanged? backlog then right? be is would conclusion

Jay Brown

Yes.

just to same So short yes, get is I answer to the points. the all sure want but make we

changed. on either nodes hasn't XX,XXX or really That number development. about under have air We

bookings. We've was a been beginning XXXX hasn't there the backlog as air than that. XXXX. put new backlog And in in with nodes than Jay we significant so and ending X,XXX air the mentioned, on move nodes higher on XXXX so put And more that around replaced the we

so Looking nodes we or XXXX have we think on XXXX, put to and forward, XXXX put that then in XX,XXX be we XX,XXX in XX,XXX air year or on beyond. will air the

is short answer a to around you're looks little color how So The changed. going just right. more trying backlog the timing hasn't that no. get The forward. really We're and

Robert Gutman

of Last it terms of small compares segment by in small fiber? the a point, tower guidance that was could final and of cells out to you outstanding leasing the light as in break sort

Jay Brown

asking Are for you XXXX?

Robert Gutman

Yes.

Jay Brown

around towers and around was for So cells XX the activity new solutions. fiber leasing around XXX for for XX small

Operator

final last go ahead. take will and JPMorgan. We question Please now Cusick from Phil our from

line open. Your is

Phil Cusick

can. please I I if guess two

is straight-lined you extensions straight-line be quarter might you've of activity years. examples particular couple what revenue and But it in unexpected why regular me a this raised drove that last as like the beyond of might think nearly way. it Can not in activity First higher about that we seems of sort guide quarter? term would those every give happen be

Jay Brown

of leases we are new length also forecast our term drive - different extension have is that It's activity. than and it's coming. what get in think maybe that activity. that to but difficult just understand sometimes that we related the incremental the the of unexpected not to can It's Yes. It's straight-line we timing predict, we

Phil Cusick

then they say to sort just like? Is come it in as fair those come that stretch you guiding you case in And what for of the extensions worst in the out look might straight-line?

Jay Brown

I hard wouldn't predict. call worst-case, to it's it but

yes. the think of so that on probably I specifically And we're side conservative assumption

Phil Cusick

pace And helps. change trends in there? change That the demand? do or Thanks. in Thanks. see churn you fiber then bookings in - enterprise what Any any

Jay Brown

haven't seen really trends there. We any

now business had for about we've the a As year.

line is in business. into expectations I it out were our think played the roughly what with going

how better changing position think perform. the our point that's ourselves how that market. will business view works I in and long-term to getting I of the understanding how anything we're to wouldn't business But at

Jay Brown

this what mean the XXXX about the of exciting given we is morning. but Obviously, term what think as towers were the and about it everyone, on the outcome XG number and a long level morning means this and it thrilled activity thanks, small call we will ahead XG the we beyond the as excited in the on talked for not joining increased with cells only leasing of around fronts opportunity also Well, to deploy look the for it carriers calendar what over into world. XXXX, year call

joining catching for forward So Look up to us soon. thanks this morning.

Crown Castle (CCI) 24 Jan 192018 Q4 Earnings call transcript