Crown Castle Inc.

and welcome to the Crown Castle Q4 2019 earnings call. Today's call is being recorded. At this time, I would like to turn the conference over to Ben Lowe. Sir, please go ahead.

Thank you, Katie, and good morning, everyone. Thank you for joining us today as we review our fourth quarter 2019 results. With me on the call this morning are Jay Brown, Crown Castle's Chief Executive Officer, and Dan Schlinger, Crown Castle's Chief Financial Officer. To aid the discussion, we have posted supplemental materials in the investor section of our website at crowncastle.com, which we will refer to throughout the call this morning. This conference call will contain forward-looking statements which are subject to certain risks, uncertainties, and assumptions, and actual results may vary materially from those expected. Information about potential factors which could affect our results is available in the press release and the risk factor sections of the company's SEC filings. Our statements are made as of today, February 27, 2020, and we assume no obligations to update any forward-looking statements. As you saw from our press release yesterday, we have restated our historical financials. All the financial information we discuss in this call includes the expected effect of the restatement. In addition, today's call includes discussions of certain non-GAAP financial measures. Tables reconciling these non-GAAP financial measures are available in the supplemental information package and the investor section of the company's website at crowncastle.com. So with that, let me turn the call over to Jay.

Thanks, Ben, and thank you, everyone, for joining us on the call this morning. As you saw from our results, we closed out another year of solid growth in 2019, which included generating the highest level of tower leasing activity in more than a decade. I believe our strategy and unmatched portfolio of more than 40,000 towers and approximately 80,000 route miles of fiber concentrated in the top U.S. markets, has positioned Crown Castle to generate growth in cash flows and dividends per share, both in the near term and for years to come. Dan will discuss the results for full year 2019 and the full year 2020 outlook in a bit more detail. So I want to focus my comments this morning on two key points. First, we expect 2020 to be another year of significant growth in cash flows and dividends per share. And secondly, I'm excited about the long runway of growth for Crown Castle as we are sitting on the doorstep of another investment cycle by our customers as they deploy 5G. On the first point, we expect to grow ASFO per share in 2020 by approximately 8%. supported by similar levels of growth in our tower and fiber segments when compared to 2019. We expect the elevated level of growth that we experienced in 2019 to continue with similar levels of tower leasing this year as our customers respond to the ongoing growth in mobile data demand. Uncertainty around the outcome of the pending merger between T-Mobile and Sprint caused a decrease in activity during late 2019 and early 2020. However, we believe this slowdown will ultimately prove temporary and short-lived as we anticipate a significant increase in industry activity in the second half of this year as clarity around the merger drives a ramp in 5G investments. Within our small cell and fiber businesses, 2019 was a terrific year as we succeeded successfully deployed approximately 10,000 small cell nodes, making it the highest year of production in our company's history. We expect to deploy another 10,000 small cell nodes this year as we continue to respond to the significant increase in demand from our customers, while at the same time navigating ongoing hurdles that remain challenging with many municipalities and utilities. We finished 2019 with more than 40,000 small cells on air and another approximately 30,000 in our construction pipeline as we remain the leading U.S. small cell provider in terms of scale and capability. Adding to the returns we are generating from attaching small cells to approximately 80,000 route miles of fiber, we generated 3% revenue growth from our fiber solutions business in 2019. and we anticipate similar levels of growth this year. We see a path to further improve our returns over time by sharing the same fiber asset across this larger addressable market of fiber solutions customers that require high bandwidth connectivity, including large enterprises, healthcare institutions, and government agencies. Simply put, 2019 was a great year of growth, and 2020 is shaping up to be similar albeit potentially more back-end loaded than we previously expected. And as excited as I am about 2019 and 2020, I'm even more excited about the bigger picture. We have positioned Crown Castle with the right assets in the right markets with market-leading capabilities to deliver value to our customers and generate shareholder returns for decades to come. As is often the case, the natural tendency is to overestimate what is possible in any given 12-month stretch while underestimating the dramatic change that can occur over a 10-year period. Looking back over the last decade, we have significantly expanded our tower business from approximately 22,000 towers in the U.S., generating approximately $1.5 billion in annual site rental revenue in 2009 to where we are today, with 40,000 towers generating nearly $3.5 billion in annual site rental revenue. We also established a common stock dividend during that time that provides a consistent return of capital to our shareholders, currently totaling $2 billion on an annual basis, or nearly 35% of our total revenue. Further, we have built a market-leading position in the small sales industry, and have invested approximately $15 billion of capital to establish fiber footprints and prime locations across the top US markets where we see the greatest long-term demand. While making those significant investments in assets and capabilities that we believe will expand our future growth opportunity as 5G is deployed, our equity market capitalization has increased from less than $10 billion to over $60 billion. generating a compound annual total return of greater than 18% for our shareholders during the last 10 years. And the combination of the market dynamics and our unique portfolio of assets sets us up for a long runway of continued growth as the wireless industry embarks on an investment cycle to deploy 5G. This has the potential to make the next 10 years look a lot like the last 10, The current demand environment that is generating the highest levels of tower leasing activity in more than a decade is largely tied to our customers investing heavily in their 4G networks to keep pace with the 30% to 40% annual data demand growth. On top of that continued investment, we anticipate significant long-term demand for our infrastructure as 5G becomes a reality and wireless networks expand from connecting everyone to connecting everything. Adding to my optimism, I believe recent industry developments will help to accelerate the deployment of 5G in the U.S. We believe the new T-Mobile, along with AT&T and Verizon, are in a great position to leverage their scale and valuable spectrum assets, ultimately promoting more investment across the industry. Adding to the opportunity, this is the first time in more than a decade that we have had visibility into a potential new customer entering the wireless market at scale, with DISH networks looking to deploy nearly 100 megahertz of spectrum over the next several years in order to compete with the established operators and meet significant build-out requirements. And finally, there are several large spectrum auctions on the horizon that we believe will bode well for the future tower and small cell demand. With our unmatched asset base and expertise, operating in the best market in the world for communications infrastructure ownership, I believe Crown Castle is in a great position to capture these substantial long-term opportunities and consistently deliver a return of capital to our shareholders through a high-quality dividend that we expect to grow 7% to 8% annually. And with that, I'll turn the call over to Dan to go through some of the more specifics of the quarter in the last year.