Crown Castle Inc.

Please stand by. We're about to begin. Good day and welcome to the Crown Castle Q1 2022 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Ben Lowe, Senior Vice President of Corporate Finance. Please go ahead, sir.

Great. Thank you, Cody, and good morning, everyone. Thank you for joining us today as we discuss our first quarter 2022 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 21st, 2022, 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 investor section of the company's website, at crowncastle.com. 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 yesterday and our increased full-year outlook, the strength of the U.S. market continues to stand out. We are seeing the benefits of a strong leasing environment as we support our customers' deployment of 5G. As a result, we expect to deliver another year of 6% organic tower revenue growth in 2022. once again leading the tower industry in the U.S. I'm also excited about the progress our team is making to scale our small cell capabilities to accelerate the pace of deployments from approximately 5,000 nodes we expect to deliver this year to more than 10,000 per year starting in 2023. Looking further out, I believe our strategy, an unmatched portfolio of more than 40,000 towers and approximately 115,000 small cells on air or under contract, and 80,000 route miles of fiber concentrated in the top US markets have positioned Crown Castle to generate 7% to 8% growth in dividends per share for years to come. Dan will discuss the financial results and increased outlook, so I'll concentrate my comments on our strategy to deliver the highest risk-adjusted returns for our shareholders by growing our dividend and investing in assets that will generate future growth. Consistent with our long-held view We remain focused on the US because we believe it represents the best market in the world for wireless infrastructure ownership when considering both growth and risk. As you can see on slide three, this strategy has produced tremendous results for shareholders with a combination of significant growth and a high quality dividend. Since the establishment of the 5G standards and the start of the associated network upgrade in 2017, we have delivered double-digit annual ASFO per share growth, which when added to our approximately 3% dividend yield over that same time period, generated returns of approximately 14% per year to our shareholders, which has led to tower industry over this time period. Our growth has been driven by our customers investing $30 to $40 billion annually in their network, with the deployment of more spectrum and cell sites to keep pace with the rapid growth and mobile data demand. Because the market fundamentals are so compelling, the U.S. market continues to attract an outsized amount of capital investment by network operators. According to industry estimates, wireless operators in North America are expected to account for more than 30% of global mobile network investment through 2025, which is staggering when you consider those same operators address less than 5% of the world's population. This outside investment in the U.S. is understandable when you look at the fundamentals in the U.S. relative to other markets. As you can see on slide four, the amount of data consumed monthly per user and the ability for wireless operators to charge for that data consumption, therefore justifying further investment, are significantly higher in the U.S. This slide illustrates the virtuous circle that has developed in the U.S. wireless market and that we believe is sustainable over the long term. Over the last couple of decades, US carriers have invested hundreds of billions of dollars to develop wireless networks, which has created a platform for innovation and ubiquitous connectivity. As a result of the quality of the network and the user experience, US consumers have used their wireless devices more and more, and they have been willing and able to pay more for that improving mobile experience. In turn, US carriers have taken the higher cash flows generated from customers and invested in their networks, and the cycle continues, as evidenced by U.S. carriers investing more than $200 billion into their networks, including Spectrum and CapEx, over the last four years. We believe we are best positioned to benefit from this virtuous cycle in the U.S. with towers, small cells, and fiber, all of which are necessary for the deployment of 5G. With the three established network operators and a new intranet scale in DISH, all upgrading and developing nationwide 5G networks, the fundamentals in the U.S. market are as positive as I can remember during my 20 plus years at Crown Castle. We have invested more than $40 billion of capital to date in towers and more recently small cells in fiber that are mission critical for wireless networks to pursue this opportunity. We are currently generating a 10% return on our total invested capital. with the opportunity to increase that return over time as we add customers on our tower and fiber assets and grow our cash flow. To that point, we are seeing significant demand for our infrastructure solutions, with our customers upgrading thousands of tower sites for 5G, while also preparing for the next phase of network densification that will require tens of thousands of small cells, as reflected in our record backlog of 60,000 small cell nodes. Importantly, we benefit from these superior growth trends while being leveraged solely to the favorable dynamics in the U.S. wireless market. As compared to international markets, we believe the U.S. not only has the best growth profile, as I just discussed, but it also has the lowest risk, resulting from a supportive market structure that incentivizes carriers to spend on improving their networks as they compete on network quality, resulting in less churn on our assets. no exposure to loss of value from foreign currencies, and social and governmental policies that are stable and supportive of improving connectivity and expanding broadband access. Because we believe the U.S. has both greater growth potential and lower risk, we are focusing our investments solely in the U.S. We have an unmatched portfolio of assets that is producing growing cash flows by providing access to existing and new customers that are building 5G networks. And 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 5G growth trends. As a result of these actions, I believe Crown Castle offers shareholders a unique opportunity to benefit from the deployment and development of wireless networks in the U.S. In the near to medium term, we expect to once again deliver the highest tower revenue growth rate in the U.S., with 6% organic growth. And we are preparing for an acceleration in small cell deployments beginning in 2023, following the recent inflection in demand from our customers. Longer term, we believe we are the only communications infrastructure company positioned for the future of 5G networks that will require network densification with small cells at scale. By continuing to invest in small cell and fiber assets, we believe we will be able to extend the runway of 7% to 8% annual growth in dividends per share. When I consider the durability of the underlying demand trends we see in the US that provide significant visibility into the anticipated 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 Crown Castle stands out as an excellent investment that will generate compelling returns over time. And with that, I'll turn the call over to Dan before we take some questions.