Crown Castle Inc.

Good day, everyone, and welcome to the Crown Castle Q1 2021 earnings call. Today's call is being recorded. At this time, I'd like to turn the conference over to Ben Lowe. Please go ahead.

Great. Thank you, Vicki, and good morning, everyone. Thank you for joining us today as we discuss our first quarter 2021 results. With me on the call this morning are Jay Brown, Crown Castle's Chief Executive Officer, and Dan Schlanger, 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 that will be referenced throughout the call this morning. This conference call will contain forward-looking statements which are subject to certain risks, uncertainties, and assumptions, and the 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, April 22, 2021, and we assume no obligations to update any forward-looking statements. 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 in the Investors section of the company's website at crowncastle.com. Before I turn the call over to Jay, I want to mention that we will take as many questions as possible following our prepared remarks today, but we plan to limit the call to 60 minutes this morning. So with that, let me turn the call over to Jay.

Thanks, Ben, and good morning, everyone. Thanks for joining us on the call. As you saw from our first quarter results and increased full-year outlook, our consistent execution is delivering outstanding results as we support our customers' growth initiatives with their deployment of nationwide 5G in the U.S., Following a period of building excitement and anticipation, we have seen a significant increase in activity as our customers have started to upgrade their networks to 5G at scale. We expect this elevated level of activity to result in a year of outsized growth for Crown Castle, as we now anticipate 11% growth in ASFO per share for the full year 2021, meaningfully above our long-term annual target of 7% to 8%. Beyond 2021, I believe our strategy and unmatched portfolio of more than 40,000 towers, approximately 80,000 small cells on air or committed in backlog, and 80,000 route miles of fiber concentrated in the top U.S. markets have positioned Crown Castle to generate growth in cash flows and dividends per share for years to come. Our strategy is to deliver the highest risk-adjusted returns for our shareholders by growing our dividends, and investing in assets that will drive future growth. That focus has led us to invest in towers, small cells, and fiber assets that are all foundational for the development of 5G networks in the U.S. We believe the series of strategic agreements that we have announced in recent months further highlights the synergistic value our shared infrastructure provides to our customers. Building on the momentum from our recent 15-year agreement with DISH to support our nationwide 5G build-outs, and our recent long-term 5G small cell agreement with Verizon to support their network deployment. We are excited to once again expand our strategic relationship with Verizon through a recent long-term tower leasing agreement. We believe this agreement will deliver significant value for both parties as it establishes terms for leasing additional capacity on existing tower sites with a structure that is intended to make it easier to expedite the deployment of C-band equipment over the next several years. The agreement also resulted in an increase in the average remaining current contracted lease term under our Verizon site leases to approximately 10 years. Dan will discuss the expected financial impact of this agreement later in the call. Turning back to our focus on generating superior long-term returns, one of our core principles of our strategy is to remain U.S. only. Because we believe it represents the best market for wireless infrastructure ownership, since it has the most attractive growth profile and the lowest risk. And we believe this dynamic of higher growth and lower risk will continue into the future, which is why we expect our U.S.-based strategy to drive significant returns for our shareholders. Starting with the higher growth we see in the U.S., the demand for our shared infrastructure offering across towers, small cells, and fiber is tied to the robust demand for mobile data in the U.S. which continues to increase by more than 30% annually. Because the outlook is so compelling, the U.S. wireless market continues to attract a disproportionate amount of global capital investment. This is likely due in part to the fact that the durability and scale of wireless data growth in the U.S. has repeatedly outperformed expectations. I remember fielding questions from investors and analysts nearly a decade ago trying to understand why we were not expanding our tower business into less established international markets that offered the promise of outsized growth to compensate for the outsized risk. The core set of assumptions underpinning that line of questioning included a view by many that it was inevitable that US growth rates would slow, leading to a desire to augment that growth by investing in international wireless markets that hopefully would develop the same key set of fundamentals over time that has made the U.S. market so successful for decades. We didn't buy into that argument at the time, and sitting here today on the doorsteps of 5G, we reach a similar conclusion that the U.S. is still among the highest growth markets for wireless infrastructure. Importantly, in a shared infrastructure business with long-term investment horizons, we have benefited from these superior growth rates while avoiding the risks associated with investment opportunities in less established international wireless markets. These risks can have a meaningful impact on long-term returns, and many have materialized in recent years, including the outsized churn due to less favorable industry dynamics relative to the U.S., sustained foreign currency devaluation that results in revenue churn, and disruptive social or governmental environments in less developed countries. Because we believe the U.S. has both greater potential for growth and lower risk, we are focused on growing cash flows on our 40,000 towers by providing access to existing and new customers that are building 5G wireless networks. We are investing in new small cell and fiber assets that our customers need for their wireless networks, which we believe increases our ability to capitalize on the 5G growth trends in the U.S. we are developing new capabilities and offerings that will leverage our existing assets to drive innovation, and we believe will further extend our growth opportunity, such as CBRS and edge computing. I believe that Crown Castle offers shareholders an unmatched opportunity to benefit from the launch of 5G wireless networks in the U.S. In the near to medium term, we expect to deliver outsized ASFO per share growth of 11% this year, as we translate this increasing 5G activity into very attractive bottom line growth. We expect to once again deliver the highest tower revenue growth rate in the US among our public tower peers in 2021. And our customers are affirming the value we bring with our comprehensive portfolio of shared wireless infrastructure assets by entering into long term agreements to access those assets. Longer term, we believe Crown Castle provides an exciting opportunity for shareholders to potentially compound double digit total returns over a long period of time with a high quality dividend that currently yields 3% and that we expect to be able to grow 7% to 8% annually. When I consider the durability of the underlying demand trends we see in the US, that provides significant visibility into the future growth for our business. The deliberate decisions we have made to reduce the risks associated with our strategy and our history of steady execution I believe that Crown Castle stands out as a unique investment that will generate compelling returns over time. And with that, I'll turn the call over to Dan.