Crown Castle (CCI) 18 Apr 192019 Q1 Earnings call transcript

Company Profile

Participants

Ben Lowe	Vice President, Corporate Finance
Jay Brown	Chief Executive Officer
Dan Schlanger	Chief Financial Officer
Simon Flannery	Morgan Stanley
Joshua Frantz	Bank of America
Brett Feldman	Goldman Sachs
Jon Atkin	RBC
Nick Del Deo	MoffettNathanson
Ric Prentiss	Raymond James
Colby Synesael	Cowen and Company
Matthew Niknam	Deutsche Bank
Robert Gutman	Guggenheim Securities
Walter Piecyk	BTIG
Batya Levi	UBS
Tim Horan	Oppenheimer
Spencer Kurn	New Street Research

Call transcript

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Operator

Good day, and welcome to the Crown Castle Q1 2019 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

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

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

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

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

Jay Brown

everyone. financial infrastructure significant another and delivered great good Ben, and the of assets for morning, demand our terrific execution quarter team. Thanks, by the We our reflecting results, shared

are we approximately growth dividends per to route positioned into where potential flows and the and see X% share our Given of we in of data believe uniquely growth markets miles in to XX,XXX U.S. our greatest continue while see generate investing fiber dividend we towers than business we and growth, strategy are the cash XX,XXX of delivering and per towers unmatched momentum results, in to fiber share. future With the translate X% top concentrated in demand our in per demand more growth positive we year. to growth portfolio

increasing fiber flows. networks by both and by assets, As cash our grow, customers which the access turn their networks wired data of our capacity in infrastructure growth and our volume continues tower the to of to in generates leasing additional wireless delivered are

all higher activity of you As backdrop new is our in positive across XXXX of see this our resulting levels in can assets. leasing outlook,

tower more existing On densifying of and higher year, our to for in compared our year into an small a deploy to XXXX equipment to in tower expectation installing of the increase experienced demand regards continued our adding customers highlighting business, record this infrastructure, number XXXX. cells and small With improving leasing we The by nearly number we the the year. side to as on tower this in after our further back expect leasing are of for leases to has affirming half towers. and last of fiber levels of strong leases the double XXXX adding their networks cells we the new

the of dividends expanding are about has activity increasing top extending positioned investments focusing us growth excited believe our By potential this across they this advantage and wireless in opportunity. per we for to we end, the new To assets making our investment to pursue the we customers strategy small-cell are continued we Our build to we growth greatest the the as data. share. in in take cash markets by we fiber fiber where demand respond cells, are long-term significant see potential flows small high-capacity as the

dense returns our to margins are same growing upside over cost-effective tenant. With X% X% fiber, very where in add the on greatest of investments able the generate on capital playbook already seeing of the the across to second to used ability this yielding return generating over our initial the by with markets capacity in yields to by we for the to our multiple both assets as fiber for similar with utilizes across tenants high-capacity, of $XX time. value increase with to to add from These we they increase the a asset returns approximately shareholders fiber critical we capabilities as we have the high we X% need cash same strategy our date, top base, small-cell U.S. fiber capital the top of and multiple And markets cost tenant customers across with on demand attractive further to asset, continue each see with additional of first while and sharing we lease prime same asset tenants cash towers, To billion customers on By are above see flows. new fiber resulting our our for incremental that increase towers larger fiber have customer a infrastructure establish case small have cell the demand. require we the the and significant customers. the solutions significant small we long-term more and customers. in yields invested common locations to expectations, we and U.S. footprints cells are flows fiber investments investments Our that access the fiber available sharing asset in provide access leading Consistent solution solutions, time our the we as

they leader in to early from the is play. FCC customers While just data networks those the digital committed existing will the keep the economy XX% environment the our with their started. XG to in is network significantly XG networks XX% U.S. over getting investment for the transformation significantly race existing best U.S. access We the devices networks U.S. we XG demand in House millions demand billions that critical future. connecting both Recent from infrastructure the the increase moving will current communications largely the infrastructure the demand investing I from providing of tied that connecting are heavily and world be to growth world’s potentially annual more to to underscores likely market that our our of to in in the wins the at to ownership. are beyond the ensuring simply in size while operators potential believe The potential commentary technologies excited White as The XG role people pace more and has infrastructure scale. returns investment, when entrants are by new consider get great investment in I on justify of the will to the time belief well in as and of attract require even opportunity how is the

assets returns underwrite of to prologue, forward transforms based While our if change investment of are needed believe turn determined. great is and – the time. ahead. exactly that, How the demand our we suspect investments I yet continue XG underestimating XG increase existing fiber support dramatically and with believe us. infrastructure important to on the technologies, to for and way attractive time will over in from applications tower generate Castle an And the to to what over many expertise, corresponding points shareholder network networks call in anticipation we the the I Crown reminds the today’s it attract industry. for to the significant me With over past investment in truly with be we live an we looking decades of several exciting in two ways, unmatched next great asset are I’ll to is in while other role this and position also lies ongoing magnitude play Dan. benefiting chapter the a past the our as our currently in the base And industry. But opportunity and most is ultimately It in time work is of

Dan Schlanger

morning, good and everyone. Jay, Thanks,

industry As fundamentals Jay discussed, solid demand we and excited delivered for are another positive that significant creating remain we portfolio our communications unique the quarter of long-term of growth, about infrastructure.

X presentation. Slide the to of Turning

with revenues compared X%, increasing see to X% and EBITDA increasing can X% a ago. adjusted You the site had AFFO great we a when period same increasing year rental quarter

expenses, be It’s revenues, levels our to quarter, Turning attractive for balance advantage higher XXXX. X, contribution year-over-year repair financial sheet taking of rental year In certain extend midpoint, the utilizing EBITDA to maturities, X% AFFO. with Page small full to in we for able seasonal the for expense the notes maturity organic compared leasing year. lock XXXX the At quarterly rental caused This both the we expenses. during February, borrowings. to maintaining to and new towers primarily XX interest X.X% second our taxes impacts is proceeds that to expected consistent sustaining average issued a unsecured and higher the which to and second X.X of tend By this debt From watermark items flexibility. we full conditions, and improve our of weighted expected revolver site capital speaking, higher quarter adjusted we solutions. operating and with growth growth activity revenues to XX-year to with represents of respect the approximately The to repay maintenance rates approximately including billion long-term highlighting favorable historically and from relative $X to outlook XXXX are year proactively year-over-year in years. by continue outstanding the quarter year driven fiber both cash were AFFO expenditures worth represents outstanding to perspective, is contribution net growth low market from and by the first cells that site

a program by the a to of short-term source. close our flexibility the intend of paper a program tapping pool that provides another option increasing quarter, funding as our potentially to into lower cost relative revolver billion established following This commercial we Additionally, $X use we while capital.

to investment-grade of credit stated, the previously leverage turns finance approximately have five profile. to intend we commitment our with business maintaining we longer-term, consistent As our with

XXXX. first expectations, So our believe in AFFO in and in generate remain share with positioned we per approximately in were growth closing, X% well to we our quarter line results

for the out, with will further are and like call Cody, to new the the that in dividends Looking believe opportunity growth. open combination extend excited With to are generate shareholders we compelling investments I’d our questions. making we returns of that, about assets a to we long-term current

Operator

Thank take Stanley. Flannery We’ll first you. [Operator Morgan go Simon from question ahead. our Please with Instructions]

Simon Flannery

much. morning. Good Thanks very

initial achieve And to you you. build color little could on help in you the that? you Perhaps more provide the bit is to cells, the And on could of going? lease-up detail trajectory XX,XXX are into specifically you the any the this more pacing in about that to get is about the how XX,XXX Turning a Thank range. what just small you build year. where happening talked increased small-cell

Jay Brown

handle is we of on XXXX about in we’ll to Good this – did air. XXXX. this is months had activity about of the the already small the build built period put XX line of end to double double morning, pace level question, of first has that’s work course the through cells year We these such activity, ramping place XXXX, taken ongoing be about going some the lot we on that to It’s by order – so the put many to we organization past given expected. obviously, we’ve had in that think the to of of That that of that your XXXX, months, represents and number on as to to able we air XX number cells on On in air in time get able time, for been required culmination talked activity Simon. small of a what we’re this periods. be as of the

good where about we So pretty we are. feel

the that’s with cost capital that customers then continued for being able continued specifically have proof seeing it’s what see that last time, points upside Lightower built, that and as acquisitions into FiberNet tenant with those asset couple fiber of to with the talking lease-up different we’ve And the in exceed the whether other see a line our the for where assets begin that small or have expectation our to around done we’ve seen fiber of number what consistent share points we’ve second been then to we data assets cells. we’re with we’ve or over in we years, we over continuing from acquired we’re on cells, about small of On across lease-up to future. markets of lease-up,

about is assets. small a in cells see reflective the ongoing that for results, opportunities we’ve of immature significant As think this we given the building and of I assets talked invest continuation further or portion our to activity is cells the of new small capital, that’s

and we’ve in on of data And air seen yield initial We’re and putting about that pie. X% the in lease are over build on somewhere continuing to to given a these neighborhood expand opportunities up the assets X% invested going the the the to capital. at grow time we best when we’re that markets, points them those

return a new or been on scale come with assets X% capital, results, assets lower and expansion a that that frankly, in we’re quite footprint, with yield in, time. legacy for that activity X% far to margins on it’s portfolio the whether financial we’re the portfolio – the has basically mature initial of that So margin than impact expanding air constantly significant new and And more which diluting given period have maturing our to doing the lease-up does. our than

Simon Flannery

And about best expanding you existing – talked markets, opportunity to there any how going do you newer about markets, your think beyond is but markets there?

Jay Brown

markets majority the the the currently focused Well, on XX focus vast in be the That’s of the wireless of would U.S. the activity top operator.

think to markets and beyond activity we on is them for and those majority have is air capital process have and XX our of that we the in we’re vast and couple years. this both really investment XX. of would focused public would some focused continue on comments over that as that as follow vast of top our capital the Based at we’ve supporting we that It’s the markets under the are So seen, on the in XX going the markets. this building both build if stay them. in to will their the the the nodes to on go XXX and of top contract markets. point, at happy to to on have air come be based beginning But least we’re nodes we’re for that well the majority and next XX where markets, won go markets, top XX returns what the seen impactful the in be top them And top well top we – beyond

Simon Flannery

so much. Great, thanks

Dan Schlanger

Yes. Simon, Dan. it’s

small to other through we for that a a a those down up to if and to will follow build of what going to the acquisitions continue spending and on we opportunity huge continue said push see markets tuck-in organic out said invest bit that. think of markets. is acquisitions, us build our help in the majority while type see be to for there, as Just now, new we capital path. our but building But customers cells out the of that little most the see We as we’re are be will We new Jay do. returns we’ve may assets. some in own don’t

Simon Flannery

lot. Great, thanks a

Operator

David we’ll take And you. Thank from of Bank America. our next question Barden,

Joshua Frantz

Thanks Hey guys, taking for Dave. it’s in question. Josh the for

the Just in those maybe solutions I the growth a and you few, could. Can the small you’re if over there Thanks. down the any within part can break year? and the summer, growth fiber put be cells you like of? there and segment of the quarter for drivers any aware we that cell should something fiber seasonality And winter pieces then within actually then when within expecting that, small nodes up is

Dan Schlanger

between thanks. Josh, – been XX% question what historically at fiber breakdown and and cells. to fiber first the similar that has taking is it The cells quarter small about XX% revenue of So in small

between consistent is look as the course where we very similar, guidance of over out we keeping anticipate the XXXX, in $XXX and new side, $XX activity. what And million said between to consistent be is million $XX which on it’ll leasing with million, be previously. the million cells growth are we – with that in we were is we though, our $XX where small and fiber before Importantly,

average. XX end on to the out then to With on see on comes months takes small-cell what seasonality, constructed. put range XX on respect can we permitted So zones low that really deploying beyond be done when end, depends But the gets that get nothing that’s have really cells. growth we beyond as just can It – months everything there’s very to small and municipality’s XX that, the about And the when seasonal to expecting. high get when and on rates really earlier, XX of seasonable so we through pointed similar down Jay air. it nodes all been

Joshua Frantz

in drivers solutions the Is any growth there could the specifically? that you in fiber quarter Thanks. terms call side in of out

Jay Brown

No.

look Dan point will calendar business. XXXX, the mentioned, we at play as year as did the And how we I year to seasonal anything expectation we I out have wouldn’t the that in for as same previously. think

Joshua Frantz

for questions. Got the Thanks it, thanks. taking

Jay Brown

You bet.

Dan Schlanger

Thanks.

Operator

Thank to move you. Feldman Sachs. on Goldman We’ll Brett now with

Brett Feldman

Thanks.

full we obviously year you at guidance, look So be that implying acceleration. there’ll

X.X% had think provide drives we just that curious helpful. and You organic for cells. nuance, midpoint I is X%. can I on would very be at what the about would on But color in acceleration, the contributions growth probably quarter, this if year you I’m believe to ramped it small the there’s was as that, more guess average

Jay Brown

we’ve Brett. think the I business, got acceleration happening Well, across

Dan the you numbers side, more million bit by point on towers in But there’s we’re as at segment. year necessarily more, meaningful wouldn’t another look the that’s XXXX. fiber If $XX revenue And activity, beyond masked we’ve just the more the leasing to expecting but so there’s mentioned, calendar solutions talked here. a Year-over-year, our compared from about new about compared numbers, to to $XX XXXX. on fiber acquisition acceleration year-over-year, of growth activity fiber as on are I impacting cell million solutions what XXXX about small

short-term then landscape activity sustained and seeing that, don’t We where made deploy at leasing tower happening we’re of of in focus think We we the activity as going the XXXX. is what’s continuing into think of full that results, and look at and it’s the long-term to we’re towards towards end XXXX some of the XXXX, small of drive we at up data a continue saw technologies in year, be of meaningfully period of activity opportunities the elevated of my this growth we fourth as point cells. time networks. carriers in next business from the for think, elevated to we’re the in I the the levels extending growth a the As end kind is runway the see of what and XG change leg the and they’re in given do the And of think aspects horizon. on seeing least comments, we the in – are quarter in given

Brett Feldman

I could were about Got talking that you follow-up it. on If something earlier. just

a year what think I you do think of at of of in just you’re of leverage was small-cell terms for you’re this scope business sort curious, were finally rate up And you G&A that run you’re had in anymore? said doing. deployments you means logistically in I’m deployments that of not targeted operating your level small-cell capable getting the because if had some you scaling

Jay Brown

Yes.

operating if to organization scaled to think be XXXX, we’ve activity what and in able then leverage there. to were yes, do I to see benefit we’ll the similar of stay undertake level the the of we’re going to that,

and operating the to base, As the we growth a that’s we have at or margins do you would in components do of that add then asset business the the to cost a markets. I vast of the vast where the you and think as then in same directly dynamic. of tenants stable had ago our leverage, as portfolio, the the essence the In the expansion see over margin margin years steady that’s new – you base what asset quickly about majority happens new small tower The given really relatively therefore, portfolio expanding the you model don’t as on activity asset see the margin or as on in side. are amount building in to the leveraging really expansion small though of reflected that majority that’s as there we And tower the of compared we’re cells, amount that activity margins. see of structure, and the time, of you expansion case stable what base look coming of related can even from built,

we’re look of as call, see we we expand down. assets data the But quickly pockets they assumptions, on seeing our I’ve to the is discussed the continue put to business margins We’re have into new won’t fiber as continue expect. earlier in side – whether put developing to we not it for – going lots it assets initially, the growth to potential. would see Those immature as as to mix. to or points in think continue I basically margins But the as dilute test

Brett Feldman

it, thank you. Got

Jay Brown

You bet.

Operator

Jon Thank Atkin you. to now on We’ll move our RBC. question from next with

Jon Atkin

Thanks.

MLA could many for MLAs your on are So I how macro real mostly versus holistic component to how cells revenue level framework activity in sort revenue in topic, encompass of as just kind where relation And your you flexes kind if MLAs, towers, that arrangements growth quick tenant many your on of then us a agreements review Thanks. that? irrespective activity? where of of wondered of growth maybe of leasing addition is fixed maybe include small the

Jay Brown

sign Yes. first very know, are. talk the those as we kinds we contracts are customers you with part Jon, your who that the customers we on question, hesitant and about of of – to

I’m So think, off beg to of the I kind terms I’ll question, in with it. which of asking your you’re – specificity of going

at is is side driving new then is installs on activity. broadly, I the our leasing tower amendment leasing about assets of XX% think mix and activity look you that’s XX% about on new leasing activity, tower the though, as existing more

amendments, that, how on we of as component we new see our well as agreed what with around majority terms that’s is both installs portfolio, the revenue customers customers of the revenue across looks growth experiencing that look agree for side, we’re – activity the the as like. So around what activity that pricing going tower we’ve the on price From drivers. with in to price the we incremental like the standpoint, a

back varying how space would agreed the other things them But basically bands that we tower, have how spectrum would they the markets antennas base the the need of would but depending to that they’re tower assets. on So or commitment many side or all be that been as customers, they’ll they’re tell committed fee fixed. of the cover that, with of and levels much using, come and they’ve mostly using, lines related each of the has a to at us activity there on to schedule the or the pricing

have as about small by operators. Those the wireless not on talked dependent contracts, of calls, done that cost way we’ve side, the past it’s in cell On the market. we any really upon the structure asset with highly

buried where given in while with And in the the we a carrier the fiber, or the there’s of can the processes So is aerial for desire national in the the that agree to depending towers, that regulatory versus there’s, and dramatically with fees a side a is schedule can their – on market. pretty we’ve got schedule mix market national carriers, essence, small on change understand small pricing the in pricing cell get to market very granular cells. what

that pricing that So we and market-by-market national so there’s basically not a agree to way to at need easily level. basis, do go on a

Jon Atkin

of the demand? like small customer? is further the XX-XX, pipeline down a give can by to the diversity mix the later just this XX-XX? handy, corollary then it XX-XX you – and if you maybe year of between Can characterize and you what concentrated it in installs you a Is as maybe question, would indicated that can a was how how of it cell you amendments? or call it Or the recent kind but And for sense ago, new on most that you XX-XX, have quarter answer kind don’t and

Jay Brown

XX% to was pretty we can was question it steady amendments one-third over XX% On a I by a year maybe or activity and it the go about were than months – installs. being of but about back between by new amendments, XX the your could believe that amendments installs. longer number, ago, grab where two-thirds new XX% ago, months, somebody was and last really about XX% probably year XX Dan and Yes. We driven

all we’re the an significant relative in of small-cell all So by of there’s new regards the got seen from periods. pipeline, – activities the see so their underway big a operators, in activity wireless amendments what good of With we’ve varies recent we’ve is, focus a more market across bit to And to operators. continuing first-time little to four it of increase of from to mix as activity but four. the each installs

Dan Schlanger

we And at we’re the true of Jon, air last – XX,XXX last XX-XX this quarter. and quarter. just end and we It’s bit development, between disclosed about have end that again air small development. said about was under under at historically, what of on was true and moved little the on It’s as quarter from cells a

the XX,XXX Now XX,XXX development and pipeline. air under we’re on about or in

year, more As bookings not didn’t nodes bookings we given we last put and of just the they was on are quarter, had but unexpected through air that have substantial in and that sometimes this pace lumpy.

now under expectations So It’s just forward. any it and air a development. doesn’t are our right what on or shift between speak to change in activity going levels

Jon Atkin

And then me. last one for

of wondered it basically for it dependent asked. or the Is your so sounds confirm Thanks. you but kind alluded in competitive then you seasonality what’s and But think very Josh like less competitive much, I if you e-rates e-rate? question didn’t really I to the much sort dynamics see And routes? and that. highly of on can

Jay Brown

going Yes. Josh some would that. schools say do be thing be and I to seasonality. on same about in are Depending I some year. contracts next the up the needs seasonality fiber what can they those for the which to there look come at school that, at said the their seasonality timing There’s as

component. though, a really business our small of size very the that’s Given

a businesses, question, competitive true how not what is seen is space drives impact assets most in time similar answer location So financial thing having while seasonality is. your some to fiber. the it, the bit to elements in to right the statements. And of same it competitive have just of Similar little may – all of does in the I overall, think at we’ve the a the infrastructure what the on

to So our and generally urban a winning have we’re on number where who And To of routes speaking, of reflect of provide our going that high-capacity, to a market economics dense there may depending fiber it competitive where the just can appropriate the providers are likelihood some then choose of limited an fiber. return. and because high are that part the we’re a bid won’t we where don’t, business. not even not be extent is, may

Jon Atkin

Thank you.

Operator

now next Del We’ll Deo MoffettNathanson. our you. with Thank Nick question from take

Nick Del Deo

for down assume like guess for sequentially fiber To ago. solutions, reasonable there confidence that aware my it cells, the your for revenue is down and point fiber finer question, had an earlier small thanks laid here? quarter, Is not been reaffirmed, mid-single-digit can Hi, growth out beyond looks it you we more flatter taking sequentially looked describe put you on quarters share we should after flat you’ve XXXX it rate revenue be a if that’s like outlook or longer-term solutions growth questions. that? and a for which And the is two generally, correct? I but And in outlook of anything this

Dan Schlanger

timing fiber digit when about not confidence It’s of because to that But outlook that and rate rate still that for growth make on in go as we’ll It’s long-term it’s XXXX. was get nothing not – lot in XXXX, Nick, we – something the think able mentioned obviously at Yes. it’s happened rate solutions air. us beyond quarter that when There’s quarter. as the that of happen of the than growth to we have our changed the just Jay bookings gives all happen. is. that we’ll specific first a and mid-single X% still that things still or be that, what mentioned growth we fiber something concern lower think

Nick Del Deo

plans. is Sprint about XX,XXX cells then Altice’s And it. talking HFC got on having almost small deployed Okay,

and puts up. eventually other see there cable your do arrangements analogous cheap small obviously It’s rather using takes being the associated this than fiber. Now with put If you business? coax probably to we with see for other relevant cell strike operators pretty are carriers,

Jay Brown

have silo operators just laying I of coming deployment is to may we they wireless the need decade activities. today FCC going as to at amount use what well think there entrants a as spectrum that on that stepping think be board to infrastructure come of networks. broadly. we are And to as are that the deploy Nick, and into talked over both cable the going suspect in the that’s number of amount likely the to When I next look elements look in beyond across at facilities to market opportunities market owning going that about, based to order just would the and companies, operators a want back, has to I would there’s use And – the hands of significant to the other different spectrum network of need of be types spectrum. to who

in going kind so be going that or the that pie are going those our things need see to when mentioning, So I things believe happen. is of it’s like to fill order used are to that you’re think spectrum be I But one large to not the be will rates I growth of elements what the that expected rates detrimental deployment. to for growth

need somewhat to than our what that, to look the years at Wi-Fi to on people kind to it’s ago going the of remember deployment And Wi-Fi the back XG demand are were growth about when XG And the think X.XG, networks. analogous there going time, I going the the meet do lowest-cost from of on we so and to was needs. really our consumer the fears spectrum concerned offload moving towers. the was network the has are were and provision completely that for for business to resources of the deliver – lot and to to so a overcome same customers more to I growth

ways one think to deployments. what one it’s for think I supplement will But and highlighted look network be they way a I our growth that to their don’t of just component rates. will the believe you So impactful that is long-term it, of I

Dan Schlanger

And that a piggybacking on little Yes. just bit.

to the at deploy value is able and time come manner. exactly least why share our the where think we expense allow look and of we’re customers able of that among the meet asset demand our the in possible, is share as about we places the right As efficient the with bring that in most to I as look all we customers efficiently as to the inexpensively the to and most is we that – right that, way economics customers in which those so possible, network to because that’s all the future we’re over spectrum excited deploy assets efficient have that to the is increasing be

Nick Del Deo

Got it. Thanks, guys.

Operator

Thank you. Prentiss question Raymond Ric James. next We’ll from now take our with

Ric Prentiss

good guys, morning. Hey, Yes.

Jay Brown

Ric. Hey,

Ric Prentiss

me, hear you Can okay.

Jay Brown

can. we Yes,

Ric Prentiss

XXXX that Jonathan’s you couple have on Okay, Jay, you us question as mentioned framework? far Can a – want did you the Xx do good on you in much XXXX answer air. you’re back you could nodes. you to about up kind just I so that on remind nodes a of morning. questions, we did of I how thinking to think in as your want what follow

Jay Brown

about be did in XXXX, so X,XXX XX,XXX in in about expect we to ballpark We of the XXXX.

Ric Prentiss

do XQ you Dan, of usually the low because ability I cash And the appreciate great. That’s maintenance. taxes quarter seasonality, that. to mentioned and is

Some we was other services in far as services the contractual in as just really are services in didn’t contribute what guidance seasonal is would think about of we XXXX as as fall the off ones first there gross the second to change. being we quarter had strong the about or a business going it is far part Or should you that something question margins, your How should it’s conservative? on, but year? think – business? How the

Dan Schlanger

you fourth to off was we we remind there pushed that $X business, just million about to when want I due about that quarter First, services said talk timing.

can you quarter. see hit first the So that, could in that

What that guidance anticipate and tower continuation going forward, necessarily. Jay – activity mentioned, of side. slowdown that So anticipate see the as a type seen, not of we have we is we our I think on do a the we in don’t

going be to So it’s think we continuing activity.

We’re excited it, seeing is really what more than is anything. about and timing it you’re

Ric Prentiss

also Is there first run out that out Or of anything there? makes period Is little going a on corporate that rate? SG&A unusual then quarter. in there? was sense. there the a what good in spike-up was of Okay, And of – kind

Dan Schlanger

out is – we’re bit. to a a Yes. it that up course we’re of able to be There substantial in a quarter, anticipate reason so we the pushed be anticipated But that probably the we nothing to things with last way before, guidance few think maintain where had we our thought we going tick-and-tie were that is not over really were little call XXXX everything to one line what other. going so we or the

Ric Prentiss

equity for funding mentioned are buying you And and about guys rolling with think program that year, raising versus keeping where you When about I you to said think rates do raising you sheet your where excited fiber be be it’s balance how think given But versus do balanced How that debt. at? that keep as the the think this going interest last program? funding stock out might headed or your one acquisitions. about debt me. far capital you to build as price you capital is

Dan Schlanger

Yes.

rating, what at maintaining is – to leverage. takes So look we committed are which five time we think our investment-grade about we

that going we equity. that then or leverage our that’s of a can, our and cash we’ll we that, close do. it then out sufficient we capacity and debt-to-EBITDA program leverage go flows target then have excess EBITDA can So If that to do with to have which is in as capital capital we’re growth, trying cover capacity what leverage our or to growth EBITDA is and that times what five can means our if we’re grow associated program, maintain sell and

whether the capital But is that lead so trying to capital is capacity we speaking, XXXX, will the we that or to allow somewhere where that money the fund and calculus to the anticipate for or generally equity us maintain we it keeping to do get the utilize that will extent to debt sell we’re our debt us where not. possible time at need have And allow put whether is and program sell growth it times as again our that that forward just point of debt, spend come, what amount see with we we out. minimize leverage, or to requires equity because that want doesn’t headed. look some try For to and to price is leverage to growth to to we’ll number And then spend more EBITDA to will five we do change issue, we’re that though, limit price highest commitments the equity. we when shares leverage stock of capital EBITDA we’ll and the five equity the determine

Ric Prentiss

Appreciate guys. sense. Makes color good the day. a Have

Dan Schlanger

Ric. Thanks,

Operator

from next Synesael our take with question Colby and now Cowen Company. will We

Colby Synesael

CapEx. just a Great, thank item questions, may. One you. is I on Two if housekeeping

capital expense indicated $XXX year equity still that’s do assuming your $X your even I to guidance mean that if this financing all this guess with the need the million the for on and when investment, of it you expect that quarter at that billion to even of roughly focus like million, I stuff, call drive I $XXX forward point year seems and your had spend I and leverage, continuing think your then to last annualized target interest expectation. to would expense look first you’ll as quarter, guidance? debt guys curious I of assuming debt I that the that, your And look you’re turns it million the for at relates up interest a when five and you maintaining that’s think raising Thank to in $XXX I of to the commentary seems seems levels you at that on million. some guidance just to and and $XXX What take still push you. versus if good I’m that low.

Jay Brown

XX see than to invest tower months And to think are is schedule to shared are for actions so we’re we show in the build XXXX, are the come. to that about around is that how change to think what nodes that trajectory the year. changing CapEx, on not just XX around and we’ve in the meaningfully, was our still the were We trajectory pipeline let environment and because our up XXXX we’ve as we’ll we are looking On desire side. opportunities calendar fiber the on XXXX, for the in you capital of billion in question changes. outlook then many is to as $X billion think pursue capital capital the mentioned, here’s as against what both and that calendar don’t to My any there be $X about our you’ll then the would needs, on taking go. I around seeing our determine, and so Colby, make first the early of around forward to those going infrastructure to the around it’s that there we spending change built reflective If think And extent continue carriers in we’re to need long, that look be to a and trying trajectory are we for there, investing continuing were comments know could commentary where going more of that But the growth cases, and we that we the is front. you year.

Dan Schlanger

of if the I lot on be. completely, But back but a interest and forecast, revolver, missed raises, we on including jump going going it go there how Colby, interest I’m is on expense, it so your term interest got to that And into the timing out, of to expense we use it. what question, debt I Yes. sure try I’m assumptions that are what not rate to answer ask

too is like, our what tell So what it high asking best look guess why is expense interest all baked you’re low. is I And into our in of couldn’t whether and of will too or guidance. what was that is that reflected

So…

Colby Synesael

difficult of get It’s guidance, that I AFFO. $XXX expense the to at it range to million leverage, million and you did quarter your raised I million. annualize assume seems impacts you And in obviously that you $XXX to look in something for the if to your If turns million which range. maintain that, still debt around assumption million million interest to the the $XXX just $XXX five even $XXX get simply you with $XXX

Jay Brown

Yes.

Okay.

why would What we has sources will lot I for give pay for that of in say to the and that’s a think again go have be So it range funding that I that, we appropriate XXXX. a anticipate just understand our capital we your assumptions expenditures is is question. into what range. We

Colby Synesael

thank you. Okay,

Operator

Thank you.

take now from Niknam question next will Matthew Bank. our We Deutsche with

Matthew Niknam

taking Hey, you guys. question. for the Thank

the site cell business, FCC I’m the the year, is helping at order the on in talked traditional so just the small small-cell you the out that that came curious, past? if last margin you streamline timing And XX XX is about least late from On deployment for to to contribution XX XX-month this anticipate months you’d front non-traditional sort window quarter? beyond carriers you activity, secondly, do on when over Big the in on Thanks. any leasing meaningful today, just so call X the not of from shrinking wireless customers, the And leasing time? then out

Jay Brown

it on the and primarily Matthew, of it municipalities. local benefit been your first given order, around has certainty around cost navigating FCC more the has the timing beneficial because of question

helpful absolute locations front, had some by of very it markets that those prohibition has been in up been local FCC The getting where blocker an been municipalities. has an locations it of starting put was to order off particularly that So there move done. absolute on helpful in of and

front. that helpful So on it’s been

the FCC order, in past of to that cells. look to municipalities in XX right schedule a months considerably coordination a would to topic, as time though, average small to the the shorten this local happen line time that nodes nationwide small amount And the amount by line still public calls on building meaningful has that see we’ve don’t cells work not that’s I mentioned, on way. shorten of of as deployment I��ve XX Even the to anything of As significant at likely anticipate months. deploy what XX XX seen I of horizon from would I build with we there’s to with

put puts level as a of the From we’re municipalities side. that number happens. that utility that, cells activity the to amount that pragmatic regulatory doubling that assume to process of also not tremendous local the pressure would going on talked of of about I air, in nodes we’re So seeing the the we on small at standpoint, applications and

order bringing the some approvals power volume get another volume in small to cells in pole now long has for through the cases, there’s municipality just helpful, the the and on to in at in been amount of these while level FCC that application we’ve of utilities through to trying we’re terms tent So order locations sheer – and seen very air. push

local at we utility amount have necessarily So for seen the to same applications. staffed municipality process and have level not there’s the not of the activity that is – and up correlation

the overall a certainly that’s challenge So of system.

front… the On leasing

Dan Schlanger

Yes.

that non-traditional customers carriers not of other demand excited of are customers, demand continue and Big and So specifically think we from we I about. tat seeing something talk we’re to it’s we’ve try our think coming some what is driving than now, some X is and pockets said that right the the will we contribution about

Matthew Niknam

Okay, you. thank

Operator

Thank you.

will We from take now Securities. Robert with our Guggenheim Gutman question next

Robert Gutman

Hi. Thanks questions. for taking the

the of You new between the out I but the in of the don’t backlog, are it think three breakout said versus sort know I there wondering builds. $XX million quarter, second was if provided limited – new sure initial small-cell builds bookings leasing respective of was segments. the tenant I not provided of small-cell of proportion what And you’ve if was you breakout the

Dan Schlanger

Yes.

means XX,XXX into is bookings that and the won we two XX-XX number the shift of XX,XXX basically I a split remained It’s development air the speaking I’ve was – XX,XXX. about we huge on And in air, is development. air about the before, between more So small-cell on total a our what to of – and from as quarter. that nodes what about said number on being under happened that just under

bookings not changed much. there’s look and we Jay of very out As has of anticipation of said, activity the pace of a continuation lot because

And out or markets because build of into what is anchor that within part XX% markets vicinity your we’re both those same And then and because, the continuing geographic within question, to and expanding of somewhere in so that regions markets. we general XX% co-location to build the those have second versus is that co-location, it the builds anchor new like. around about we’re about about what future excited looks remained new

with what believe of over is was of stabilize. all driver that new the will talking about margin earlier is assets does be that does time about what So that provide incremental asset the we once excited Jay we’re

with a of changed happy anchor proportion really now. are we So remaining hasn’t XX%, for build XX% It while that in range. that

Jay Brown

Dan’s up earlier Robert, making around on really some the of market. is, out of new markets just to continued building in point, to pick I think, I helpful context around the was the which comments of areas things

on trying roughly, about and exactly, to in the see you the of about that cells but take that you I’m not small If pin year calendar going years X,XXX of number means down the or those backwards four neighborhood XXXX if going we XX% we happen in year air, well co-locations. the on calendar total on co-locations of we’ll to are take talking years, of go put that three nodes over the now in you’re air about If are form activity in in XXXX. half

working amount investment are leasing as the grow new so continue XXXX the growing are numbers is more But scaling have of calendar co-locations points percentage would to the large of the suggest. just amount So them. to in XXXX, and year the are we’re co-locations, increasing that assets that proof amount number talking because of you model that XX% across co-location that doesn’t about terms seeing in talk than between and that doubling of significantly, activity, the we lie as making. going percentages the breakout we’re of to legacy we expect is of to, of the far we that have continuing co-location or the about But we in

Robert Gutman

versus And the fiber number any color in Great, leasing tower the for thanks. quarter? on new micro

Dan Schlanger

Yes.

to out going We’re not break that quarter-by-quarter.

is XX cell for small on color XXX that solutions. to the and fiber on same XX at the XXXX, remains that to it XXX Just

Robert Gutman

it. Got Thank you.

Operator

Walter Thank you. question our to We’ll now move BTIG. from on Piecyk next with

Walter Piecyk

Thanks.

were that XG paying small typically if they it’s they original percentage LTE have from the or an new a the a what is an a cell? lease-up? cell small that for the at If you what’s add amendment, customer XG, and has And amendment then on

Jay Brown

and to don’t it generality this because cases it, tenant probably and the that Walter, look them like another types it of describe see mean that much like on best an to cell – on the there using The not a to so it could be way is in than where it’s full equipment like But up in expect be in likely brand-new this case, XG system. look cabinet, we would a the slot XXX%. so the would that the I answer would amendment. look speaking, entire would tenant generally result blanket small more be would

adding economics would about getting the our place talk exceeding we – way where when economically, cost so basically we’re the into that’s second generally the a tenant, And speaking. of follow, exceeding capital,

Dan Schlanger

also... And

Walter Piecyk

the slot it basically deployment was a saw, a So on that I lamppost. taking

lease. So for there be another sure, has they carrier were where was to a right? then, slot taking a So new

Jay Brown

Exactly right.

Dan Schlanger

also And another is taking it of fiber. pair

that asset the of lot we’re what’s utilizing is economics. the a being based again, the shared really fiber, it in on driving and fact with that So the capital that’s

Walter Piecyk

about What the think I of you of terms market? in of small size in early elevation, that meters to talked a the we of or number extremely when much whatever, and market exist to when larger the of basis. Jay, stage an think XX-foot then in past on And in XG, obviously, number And terms the cells, size trying it. number LTE whether cells have coverage about Got a term year. XX,XXX annual and it’s feet at trying in small will we of terms a should long a do you we’re think or

Jay Brown

how they up it’s around are lot a market tall I deployed think, can way poles, put be do by of many of local are they… different question get their what How feet of driven will the municipality. will because think area dynamics take by on things, these likely hard inside space market I that the to answer a pole, you much how

Walter Piecyk

of Jay, I reaches. not lamppost, coverage, the feet feet cell the the meant coverage of Sorry on to what feet of interrupt, small

Jay Brown

think seeing coverage. you’re in block out – would coverage a and cases maybe we’re In look in really areas, that the today Probably city covering in I streets some dense what is urban you’re getting like most something building the between buildings of it.

that. As to but deployments, suburban the use not cover of bit get limitation hundred a going little than more more That’s you cells might few yards of more you’re cover. to you small than what about a much to the

Walter Piecyk

Right.

I So that typically, sound about big you’re a about unless think block, are the in talking feet? city New right? avenues XXX about Does York,

Jay Brown

little say than be to speaking, good that’s might a longer in that suburbia. But some was just about – It’s going a it I generally pretty measure.

Walter Piecyk

And one possible a infrastructure Got from gotten question. the inquiries last just quick the In funds months, it. investment acquisition for any you company? last six of have

Jay Brown

any I’m there. not going deals to out specifically comment potential on

if things estate more our think you One a I couple seen come space. over of we’ve real towards you’ve investors seen the look at years. the is mix, several last investor

some the again, nature able I other to various estate tell attracted looked able of industry real that story think businesses, story more attracted the business as two infrastructure being peers time as to has been across the I the with public passed around and of the and two world, we’ve the they’ve public then think And has peers, funds our has tell helped money. at capital. our has

a as overall think real our it’s investors proportion I estate terms of in of capital in infrastructure firm, and So investors. grown

Walter Piecyk

Great. Thank you very much.

Operator

now move Levi next Batya with We’ll question on our to from UBS.

Batya Levi

thank Great, you.

asset. final to on fiber out First, Can one, X.X. you valuations versus what you of Is year. that that side, that? acquired more type buying available? on off And in asset you’re enterprise mentioned there? towards you this you just Is that one update that can would And networks you change a come macro lean does churns, it Thank And building you And an us color expect next can the provide per provide remind see slightly, believe or there? seeing do Anything how the you ticked much you. call churn year? down tower from tenants all rounding? I on

Dan Schlanger

in one, was buying Yes. really utilize to generally not the the anticipate to Thanks, on come Building do I believe where high and still it and just versus digits quarter. fiber, in. with fiber missed assets anything criteria if ask. has really look with lot diminished we interested valuation. out for to do meet churn, single Batya. and ability that’s we be It has Again, the bought potential we of that purchasing look that’s for to back it But because solutions that fiber when universe the we’re at the the acquisitions, over we’ve a of time

the meet many that all what criteria. those XX there a that interested we’re of density is looking So markets or – for that would XX lot in in are that not has And in just there are high-capacity top the many fiber market, be there in out that targets not we of U.S.

measure the markets acquired from very half we to fit that the churn is a more of small the of that from X% So believe churn do And this of goal – done strategic And From cells through range. of It’s in that churn. in the XXXX. be XXXX, do year. it from the in of because tenant some fiber going most then acquisitions, with we there into network about the network XXXX. putting happens per course tower rollover U.S. will be little towers. acquired churn the to our X% just will About effect that it our not through that we standpoint activity it on doesn’t to rounding. take just our But into had has it is amendments, top X% X.X, is account also real It’s on about really is macro and so a to with remind see X.X to it much of valuation you, and with great the

a seeing As up – is what the we’ve demand. activity been on measure driving our tower what talking, of with spending data of new the are is customers the activity which that leasing, And levels increasing that is better our keep to significant as business. we’re are

Batya Levi

you. Thank it. Got

Operator

from now Horan Thank you. We’ll Oppenheimer. take our next question Tim with

Tim Horan

or revenue the going that Any big kind deploying. that you’re that? Obviously, a of XG there or small bet on guess whatever pretty there’s cost some cell to incremental concern out I thoughts support to big not able be the making to the for generate going from of to here. enough kind small radiuses cell we’re be not are

Jay Brown

certain I infrastructure the think solve carriers cost-effective their going to trying in coverage challenge a capacity tower and the that of broadcast effectiveness out – areas are usage. data going are way the will at the to area for towers get terms by of across its networks. Towers of but deploy traffic to tower amount the of and across that is high inside geographic that’s them tapped spectrum, – lose coverage most those

of towers cells underlay traffic demand coverage geographic the So to the offload small to data return to order the use they tower offload to of in some full the of its some – basically effectiveness. underneath

the point. RF the towers room. and coverage isolate lamps, the of best small So building cell analogy of in the same as inside the of single where really of to inside design true the lighting think on light RF you’re cells economics to small geographic side of thing light And a is overhead inside in the misses that The balances focusing about are of a terms particular The spectrum area. of obviously balancing combination broader in putting the is general the on a area. a terms the

is the in traffic offloading some they not order sites. the cells deploy return it to order and use important small the its maximum in cell as their to frankly macro effectiveness, effectively radius so is the to as of small from most capable site cost of macro And

Tim Horan

Thank you.

Operator

you. Thank

question... take We final our will now

Jay Brown

And we have question. time one more for

Operator

So we’ll final take Street with Research. Spencer Kurn the question from New

Spencer Kurn

Hey, in. guys. me for squeezing Thanks

fiber I cells. infrastructure I’ve struck of Verizon So of it you with a fiber question to like got looks deploy and small look fiber in a Diego. municipal city. lot San your their utilize Last throughout the have math, at small to week deal a When cells on Diego San city

targeted your key So it type seems investments? activity how for sort of of do markets. returns you like Verizon achieving in you? with a concern circumventing this the of context frame Or Is this is Thanks. kind in you of fiber of your your one

Jay Brown

Yes.

of move of then going the Spencer. we based there’s to Broadly, activity deployed demand. bet, growth to the towards certainly is is – needed going cells cells small and going be are a You order what on we in U.S. We don’t sole meet be the the that of think XG be data need amount as to be small in expect we’re to significant provider all going to that’s to happen that number

majority the moment, expectation main think all XX% of somewhere is of continue small expect growth the for don’t do make we carriers that. we’re of given And about likely up and that to about XX% that of deployed. that other And would demand we that But to not the by would Castle kind share to At the the market the that we’re doing. cells going XX% being the that the activity. the in overall of any Crown we’re so market carriers neighborhood overall self-performed we have in it. will moment, at continue

have like it’s the it on I on and think done are will the you’ll the go we’ve with that way. has deals good faster. cities order And business public do or that I infrastructure right been gain do see easier certainly transactions of them of just to done – with in number front. or deal in There in only in that that, municipalities think we and way. deployments a not over that to municipalities, access time first with in order gone and That’s to where to that firms gone make worked

municipalities We’re all order the working small collaboratively cells. deploy in with to local

of when it growth So need frankly infrastructure. doesn’t market things the our overall see in returns deployment broader I But rates. we think me think are indicative or what of those I of and the our and impacting for kind terms concern it’s the of

of overall opportunity growth much it’s indicative think I market what and is. more the

Spencer Kurn

it. really Got That’s Thanks. helpful.

Jay Brown

call forward joining thanks bet. everyone quarter. appreciate for to Well, next talking to I questions You the look you morning. on the this and us

Operator

you. all Thank participation. you does for conclude That today’s Thank conference. your

You disconnect. may now

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