Q1 2024 Crown Castle International Corp Earnings Call

Operator: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad, and to withdraw from the question queue, you may press star, then two. As a reminder, this conference is being recorded. I would now like to hand the call to Kris Hinson, Vice President, Corporate Finance, and Treasurer. Please go ahead.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw from the question queue. You May Press Star then two.

As a reminder, this conference is being recorded.

I would now like to hand, the call to Chris Hinson, Vice President corporate Finance and Treasurer. Please go ahead.

Kris Hinson: Thank you, M.J., and good afternoon, everyone. Thank you for joining us today as we discuss our first quarter 2024 results. With me on the call are Rob Bartolo, Crown Castle's board chairperson, Steve Moskowitz, Crown Castle's recently appointed president and chief executive officer, Tony Malone, Crown Castle's former interim president and chief executive officer, and Dan Schlanger, Crown Castle's chief financial officer. To aid the discussion, we have posted supplemental materials on the investor section of our website at crowncastle.com that will be referenced throughout the call this

Kris Hinson: Thank you Jay and good afternoon, everyone.

Kris Hinson: Thank you for joining us today as we discuss our first quarter 2024 results with me on the call are Rob Bartolo Crown Castle as Board Chair, Steve Moskowitz Crown Castle was recently appointed President and Chief Executive Officer, Tony Malone Crown castle's, former interim President and Chief Executive Officer, and Dan Schlanger Crown Castle's Chief Financial Officer.

Kris Hinson: To aid the discussion we have posted supplemental materials in the investors section of our website at Crown Castle Dot com that will be referenced throughout the call. This afternoon.

Kris Hinson: This conference call will contain forward-looking statements that 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 filing. Our statements are made as of today, April 17th, 2024, and we assume no obligation to update any forward-looking statements. In addition, today's call includes discussions of certain non-GAAP financial matters. 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.

Kris Hinson: 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.

Kris Hinson: Information about potential factors, which could affect our results is available in the press release and the risk factors sections of the company's SEC filings.

Kris Hinson: Our statements are made as of today April 17th 2024, and we assume no obligation to update any forward looking statements.

Kris Hinson: 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 Crown Castle Dotcom with.

Kris Hinson: With that, let me turn the call over to Rob.

Kris Hinson: Let me turn the call over to Rob.

Rob: Thanks, Kris, and good morning everyone. Thank you for joining us.

Rob Bartolo: Thanks, Chris and good morning, everyone. Thank you for joining us I would like to start by welcoming our new CEO Stephen Moskowitz as you know the CEO search committee along with the full board has been actively engaged in a robust process to find our next leader.

Rob: I would like to start by welcoming our new CEO, Steven Moskowitz. As you know, the CEO Search Committee, along with the full board, has been actively engaged in a robust process to find our next leader. We worked with Russell Reynolds and evaluated a number of talented and highly qualified candidates.

Rob Bartolo: We worked with Russell Reynolds and evaluated a number of talented and highly qualified candidates.

Rob: Ideally, we were looking for someone with strong operating experience in the tower industry, a track record of strategic capital allocation and value creation, as well as prior CEO experience. This process has resulted in the unanimous view of both the CEO search committee and the full board that Stephen is the ideal person to lead Crown Castle going forward. A 25-year industry veteran, Steven is a proven executive with deep tower operating experience. He spent 12 years at American Tower, including the last 7 years as EVP and President of the U.S. Tower Business. During his tenure, American Tower's U.S. operations became the largest and most profitable U.S. wireless infrastructure company, tripling in size to more than 20,000 cell phones.

Rob Bartolo: Ideally, we're looking for someone with strong operating experience in the tower industry, a track record of strategic capital allocation and value creation as well as prior CEO experience.

Rob Bartolo: This process has resulted in a unanimous view of both the CEO search committee and the full board. Its even is the ideal person to lead Crown castle going forward.

Rob Bartolo: 25 year industry veteran Stephen is a proven executive with deep tower operating experience. Stephen spent 12 years at American tower, including the last seven years as EVP and president of the U S tower business.

Rob Bartolo: During his tenure American tower's U S operations became the largest and most profitable U S wireless infrastructure company tripling in size to more than 20000 cell sites.

Rob: After American Tower, Stephen served as the CEO of NextG Networks, a provider of fiber-based small cell solutions. At NextG, Stephen produced market-leading returns on invested capital while increasing the asset base to approximately 10,000 nodes. Most recently, Stephen served as CEO of Centennial Towers, where he created a leading provider of build-to-suit cell sites in Brazil, Colombia, and Mexico by focusing on prudent capital allocation and operational access. As I've gotten to know Stephen, it's clear that his experience and capabilities in the areas of operational efficiency, process improvement, capital allocation, and his proven ability to build strong leadership teams will serve our customers, shareholders, and employees extremely well

Rob Bartolo: After American tower, Steven served as the CEO of next Gen networks, a provider of fiber based small cell solutions.

Rob Bartolo: Next G. Stephen produce market, leading returns on invested capital, while increasing the asset base to approximately 10000 nodes. Most recently Steven served as CEO of Centennial towers, where he created a leading provider of build to suit cell sites in Brazil, Colombia, and Mexico by focusing on prudent capital allocation.

Rob Bartolo: Operational excellence.

Speaker Change: As I've gotten to know Stephen it's clear that his experience and capabilities in the areas of operational efficiency process improvement capital allocation and has proven ability to build strong leadership teams will serve our customers shareholders and employees extremely well.

Rob: We are excited to welcome Stephen and believe his leadership will enable Crown Castle to effectively execute on its strategic and operating plans and grow value for all shareholders. I would also like to thank Tony Malone for serving as our interim CEO for the past three months. With the help of Tony's leadership, the company remains on track to meet its 2024 financial and operating goals and is well prepared for a seamless transition to Stephen as the company's next CEO.

Speaker Change: We are excited to welcome Stephen and believe his leadership will enable crown castle to effectively execute on our strategic and operating plans and grow value for all shareholders.

Speaker Change: I would also like to thank Tony Malone for serving as our interim CEO for the past three months.

Speaker Change: With the help of Tonys leadership the company remains on track to meet its 2024 financial and operating goals and is well prepared for a seamless transition to Stephen as the company's next CEO.

Rob: I'm going to turn the call over to Stephen in a few minutes to introduce himself and say a few words, but as you can imagine, after starting his job late last week, he won't be in a position to take your questions at this time.

I'm going to turn the call over to Steven or in a few minutes to introduce himself and say a few words, but as you can imagine after starting the job late last week he won't be in a position to take your questions. At this time, but before I turn the call over to Stephen I would like to provide an interim update on our fiber review process.

Rob: But before I turn the call over to Stephen, I would like to provide an interim update on our fiber review process. As you know, in January, the board created a committee to direct a strategic and operating review of the company's fiber business, with the goal of enhancing and unlocking shareholder value. The Board engaged financial advisors Morgan Stanley and Bank of America, as well as strategic and operating advisors Altman Salon and another leading management consulting firm, to assess our business's core capabilities, competitive positioning, and organizational structure, and also to perform market analysis and operational benchmarking.

Steven: As you know in January the board created a committee to direct our strategic and operating review of the Companys fiber business with the goal of enhancing and unlocking shareholder value.

Steven: The board engaged financial Advisors, Morgan Stanley and Bank of America, as well as strategic and operating and advisors open Salon as well as another leading management consulting firm to assess our business is core capabilities competitive positioning and organizational structure and also to perform market analysis and all.

Steven: Operational benchmarking.

Rob: The goal of these assessments was to determine how to optimize the company's enterprise fiber and small cell businesses and determine the fit, value, and synergies both inside and outside of Crown Castle. As it relates to the overarching conclusion, this review confirmed that we have premier assets in attractive markets throughout the U.S. The next step was to determine the optimal path to maximizing the value of these assets, both within and or outside of Crown Castle.

The goal of these assessments was to determine how to optimize the company's enterprise fiber and small cell businesses and determined the fit value and synergies both inside and outside of Crown Castle.

Steven: As it relates to the overarching conclusion. This review confirmed that we have premier assets in attractive markets throughout the U S.

Steven: The next step was to determine the optimal path to maximizing the value of these assets, both within and or outside of Crown Castle.

Rob: To help assess potential value creation opportunities, we have recently engaged with multiple parties who have expressed interest in a potential transaction involving all or part of our fiber business. These discussions are ongoing. While we will not comment further on these discussions during the call, we are excited to have Stephen on board to help us think through our strategic alternatives. We believe his extensive experience in the digital infrastructure sector will be extremely beneficial throughout this process. Regarding our operational review, we have concluded our work with our external consultants.

Steven: To help assess the potential value creation opportunities. We have recently engaged with multiple parties, who have expressed interest in a potential transaction involving all or part of our fiber business. These discussions are ongoing.

Steven: While we will not comment further on these discussions during the call. We are excited to have Stephen on board to help us think through our strategic alternatives. We believe his extensive experience in the digital infrastructure sector will be extremely beneficial throughout this process.

Steven: Regarding our operational review, we have concluded our work with our external consultants.

Rob: The main conclusion is that they believe there are opportunities for operational improvement in both our enterprise fiber and small cell businesses regardless of the outcome of our strategic review. We have begun sharing these insights with Stephen, who will work with the board and the executive team to develop a revised operating plan that he will share with investors when appropriate. I speak on behalf of the board by saying how pleased we are to have concluded our CEO search with the appointment of such a talented and proven tower executive, as well as progressed substantially on our fiber review.

Steven: The main conclusion is that they believe there are opportunities for operational improvement in both our enterprise fiber and small cell businesses, regardless of the outcome of our strategic review.

Steven: We have begun sharing these insights with Stephen who will work with the board and the executive team to develop a revised operating plan that he will share with investors when appropriate.

Speaker Change: I speak on behalf of the board by saying how pleased we are to have concluded our CEO search with the appointment of such a talented and proven tower executive as well as progressing substantially on our fiber fiber review.

Rob: We are laser focused as a board and moving rapidly yet methodically on these initiatives that we laid out in late December. To reiterate what I said earlier, we believe Stephen is the person best suited to lead Crown Castle through the next stages of our Fiber review, as well as position the company for long-term success and value creation. We look forward to providing further updates as appropriate. Before I turn the call over to Stephen, I would like to say thank you to the talented employees at Crown Castle for continuing to serve our customers and deliver on the financial results we guided to for 2024. I am impressed by your dedication and capability to stay focused, even during these times of uncertainty. With that said, let me turn it over to Stephen.

Speaker Change: We are laser focused as a board and moving rapidly yet methodically on these initiatives that we laid out in late December.

Speaker Change: To reiterate what I said earlier, we believe Stephen is the person best suited to lead Crown Castle through the next stages of our fiber review as well as position the company for long term success and value creation, we look forward to providing further updates as appropriate.

Speaker Change: Before I turn the call over to Stephen I would like to say, thank you to the talented employees at Crown Castle for continuing to serve our customers and deliver on the financial results. We guided to for 2024 I'm impressed by your dedication and capability to stay focused even during these times of uncertainty with that let me turn it over to Steven.

Stephen: Thanks, Rob. I appreciate the kind introduction, and hello, everybody. I know there are some people on the call that I know from the past, others that don't know me yet, and I look forward to getting to know all of you in the months ahead. But I want to start off by conveying how excited I am about the opportunity to lead Crown Castle and really what lies ahead for this company. As you may have seen from my background, I've been doing this for a long time.

Stephen Moskowitz: Thanks, Rob I appreciate the kind introduction and Hello, everybody.

Stephen Moskowitz: I know theres some people on the call, but I know from the past.

Stephen Moskowitz: Others that don't know me, yet and I look forward to getting to know all of you in the months ahead.

Stephen Moskowitz: To start off can Bang, how excited I am about the opportunity to lead Crown Castle and really what lies ahead for this company.

Stephen Moskowitz: As you may have seen from my background I've been at this for a long time and.

Stephen Moskowitz: And during my time I've learned that my leadership success really has been a function of a relatively simple formula it's in developing and clearly articulating a strategy that the management team and employees can align with and also execute from the onset.

Stephen: And during my time here, I've learned that my leadership success really has been a function of a relatively simple formula. It's been developing and clearly articulating a strategy that the management team and employees can align with and also execute from the onset, having a great team of managers who are trustworthy and driven and solutions-oriented and get things done, also maintaining a culture that is customer service-driven and based on values of hard work and thoroughness, thoughtfulness, and also having some fun.

Stephen Moskowitz: Having a great team of managers, who are trustworthy and driven and solutions oriented and get things done.

Stephen Moskowitz: Also maintaining a culture that is customer service driven.

Stephen Moskowitz: And based on values of hard work and thorough and S.

Stephen Moskowitz: <unk> fungus and also having some fun.

Stephen Moskowitz: Also giving employees the necessary resources and tools to make their jobs easier and operate more efficiently very very important.

Stephen: Also, giving employees the necessary resources and tools to make their jobs easier and operate more efficiently is very, very important. And, most importantly, doing these things in a way that focuses on long-term value creation for our shareholders. Now I think we should be able to apply this type of formula at Crown Castle and also apply the benefit I have of coming from the other side as a competitor of this company for many, many years. And it really provides me with knowledge and a fresh perspective.

Stephen Moskowitz: And doing these things in a way that focuses on long term value creation for our shareholders most critical.

Stephen Moskowitz: Now I think we should be able to apply this type of formula that Crown Castle and also apply the benefit I have of coming really from the other side is a competitor of this company for many many years and it really provides me with knowledge and a fresh perspective.

Stephen Moskowitz: And it's really a big part of the reason I'm here because I believe that this company has many good things to offer but also has the opportunity to be best in class in this industry.

Stephen: And it's really a big part of the reason I'm here is that I believe that this company has many good things to offer but also has the opportunity to be best in class in this industry. I'm also here because I am optimistic about the long-term future of the needs for communications infrastructure and also because I believe the U.S. market is just the best place to do business in the world, and I've had some experience in other markets outside the U.S. I've also admired Crown Castle's assets and customer service focus in the past.

Stephen Moskowitz: I'm also here because I am optimistic about the long term future of the needs for communications infrastructure and also because I believe the U S market is just the best place to do business in the world and how that I've had some experience as in other markets outside the U S.

Stephen Moskowitz: I've also admire crown castle's assets and customer service focus in the past and instinctively I believe this company is ripe for significant upside.

Speaker Change: So all that said as incoming CEO. The Companys strategic review is a top priority for me have already been digging in the last couple of days. He started analyzing whats been done by the fiber review Committee and also be collaborating with the board to finalize and execute a strategy of course that maximizes shareholder value.

Stephen: And instinctively, I believe this company is ripe for significant upside. So all that said, as the incoming CEO, the company's strategic review is a top priority for me. I've already been digging in the last couple of days, and I will start analyzing what's been done by the Fiber Review Committee and also collaborating with the board to finalize and execute a strategy, of course, that maximizes shareholder value. Beyond that, even as Rob mentioned, it's kind of too early for further comment on the approach that we're going to end up taking with fiber and small cells.

Beyond that even as Rob mentioned its kind of too early for further comments on the approach that we're going to end up taking with fiber and small cells, but there are other imperatives that I'll be focused on working with the teams of Crown castle, such as enhancing customer relationships, making sure we manage cash prudently and finding ways to operate more.

Speaker Change: So we definitely convert more new revenues to cash flows.

Speaker Change: Without a doubt this is gonna be a process that will take some time, but I know together with the employee base, we will create solutions to refreshing and reengineer the company in many different aspects of the business operations finding both some quick hits along the way for some kind of short term success and longer term changes that will make it easier for.

Stephen: But there are other imperatives that I'll be focused on working with the teams at Crown Castle, such as enhancing customer relationships, making sure we manage cash prudently, and finding ways to operate more efficiently, so we definitely convert more new revenues into cash flow. Without a doubt, this is going to be a process that will take some time, but I know, together with the employee base, we will create solutions to refresh and re-engineer the company in many different aspects of the business operations, finding both some quick hits along the way for some kind of short-term success and longer-term changes that will make it easier for employees to do their jobs and be more effective at serving our customers, which really will meaningfully enhance our So anyway, that's kind of it for now from me.

Speaker Change: The employees to do their jobs and be a more effective at serving our customers, which really will meaningfully enhance our performance is going to improve our operating margins and we'll be in a better position to capture our unfair share of new leasing business in new site development as our customers ramp back up spending on network expansion.

Speaker Change: Anyway, that's kind of it for now for me.

Speaker Change: Before I hand, it over to Dan to walk you through our first quarter results. Let me first thank Tony.

Dan Schlanger: Yes, he's been unbelievable, whose unyielding commitment to Crown castle and a great partner as an interim CEO and I also appreciate him helping me to get acclimated over the next month to ensure that we have a smooth transition.

Dan Schlanger: I'd also like to say, thanks to Rob and the board for their faith in me as the incoming CEO and of course the employees here at Crown Castle, who are continuing to perform at a high level.

Dan Schlanger: So with that I look forward to providing more details about our strategic initiatives as they unfold and I look forward to taking your questions. When I host our second quarter earnings call. So Dan I know if he.

Stephen: Before I hand it over to Dan to walk you through our first quarter results, let me first thank Tony. He's been unbelievable with his unyielding commitment to Crown Castle and a great partner as an interim CEO. And I also appreciate him helping me to get acclimated over the next month to ensure that we have a smooth transition. I'd also like to say thanks to Rob and the board for their faith in me as incoming CEO and, of course, to the employees here at Crown Castle who are continuing to perform at a high level.

Dan Schlanger: Thanks, and welcome Stephen it's great to have you here as part of Crown Castle team and look forward to working with you.

Dan Schlanger: We delivered first quarter results in line with expectations remain on track for our full year outlook as we continue to focus on executing for our customers and shareholders.

Dan Schlanger: Our first quarter results demonstrated our customers consistent and growing demand for our shared infrastructure assets.

Dan Schlanger: Leading to us generating 5% organic growth, excluding the impact of sprint cancellations.

Dan Schlanger: The 5% growth in the first quarter consisted of four 6% growth from towers.

Stephen: So, with that, I look forward to providing more details about our strategic initiatives as they unfold, and I look forward to taking your questions when I host our second quarter earnings call. So, Dan, I'll hand it over to you.

Dan Schlanger: 16% growth from small cells, which includes $5 million of higher than expected nonrecurring revenue received in the period and 2% growth from fiber solutions.

Dan Schlanger: Thanks and welcome, Stephen. It's great to have you here as part of the Crown Castle team.

Dan Schlanger: As we had anticipated the solid organic growth delivered in the quarter was offset by the following three items, leading to a year over year decrease in site rental revenues adjusted EBITDA and ask yourself.

Dan Schlanger: I look forward to working with you. We delivered first quarter results in line with expectations and remain on track for our full year outlook as we continue to focus on delivering for our customers and shareholders. Our first quarter results demonstrated our customers' consistent and growing demand for our shared infrastructure assets, leading to us generating 5% organic growth, excluding the impact of sprint cancer. The 5% growth in the first quarter consisted of 4.6% growth from towers.

Dan Schlanger: First a $50 million reduction to the site rental revenues related to the sprint cancellations.

Dan Schlanger: Second a combined $54 million reduction in two noncash items straight line revenue and prepaid rent amortization in.

Dan Schlanger: And lastly, a $26 million decrease in services margin contribution due to the combination of lower tower activity and the decision we have made and implemented last year to discontinue offering construction and installation services.

Dan Schlanger: Turning to page five of our earnings materials, our full year outlook remains unchanged and reflects a year over year decrease in site rental revenues adjusted EBITDA and <unk> due to the noncash and onetime items I just mentioned.

Dan Schlanger: 16% growth from small, which includes $5 million of higher than expected non-recurring revenue received in the period, and 2% growth from Fiverr Solutions. However, as we had anticipated, the solid, organic growth delivered in the quarter was offset by the following three items, leading to a year-over-year decrease in site rental revenues, adjusted EBITDA, and AFI. First, a $50 million reduction in site rental revenues related to the Sprint Council. Second, a combined $54 million reduction in two non-cash items, straight-line revenue and prepaid rent amortization. And lastly, a $26 million decrease in services margin due to the combination of lower tower activity and the decision we made and implemented last year to discontinue offering construction and installation services.

Dan Schlanger: On page six our expected organic contribution to full year site rental billings remains unchanged with consolidated organic growth of 2% or 5% exclusive of the impact from sprint cancellations.

Dan Schlanger: The 5% consolidated organic growth consists of four 5% growth from towers compared to 5% in 2023.

Dan Schlanger: 13% growth from small cells as we expect 16000, new billable nodes in 'twenty 'twenty four.

Dan Schlanger: Baird to 6% growth in 8000 notes in 2023.

Dan Schlanger: And 3% growth from fibers, and dilute solutions compared to flat in 2023.

Dan Schlanger: Moving to page seven.

Dan Schlanger: We continue to expect to deliver $65 million of <unk> growth at the midpoint, excluding the impact of the sprint cancellations and noncash decrease in amortization of prepaid rent.

Dan Schlanger: Turning to page 5 of our earnings, our full-year outlook remains unchanged and reflects a year-over-year decrease in site rental revenues, adjusted EBITDA, and AFFO due to the non-cash and one-time items I just mentioned. On page 6, our expected organic contribution to full-year site rental billings remains unchanged, with Consolidated Organic Growth of 2%, or 5% exclusive of the impact from Sprint's cancellation. The 5% consolidated organic growth consists of 4.5% growth from towers compared to 5% in 2023.

Dan Schlanger: Turning to the balance sheet since transitioning to investment grade in 2015, we have strengthened our balance sheet by extending our weighted average maturity from five seven years decreasing the percentage of secured debt from 47% to 6% and increasing the percentage of fixed rate debt from 68% to 90%.

Dan Schlanger: In addition, we ended the quarter with approximately $6 billion of availability under our revolving credit facility and only $2 billion of debt maturities occurring through 2025, providing us with ample liquidity to fund our business.

Dan Schlanger: The steps, we've taken to strengthen our balance sheet provide us with financial stability and flexibility as we evaluate strategic path forward.

Dan Schlanger: 13% growth from small cells as we expect 16,000 new billable nodes in 2024, compared to 6% growth and 8,000 nodes in 2020, and 3% growth from fibrous and dilute solutions compared to flat growth in 2020. Moving to page 7.

Dan Schlanger: Lastly, our 'twenty 'twenty four outlook for discretionary capital remains unchanged at one five to $1 6 billion or $1, one to $1 2 billion net of $430 million of prepaid rent received.

Dan Schlanger: To wrap up we continue to deliver good underlying growth across each of our businesses in the first quarter.

Dan Schlanger: At the same time, we made substantial progress on the strategic and operating review of our fiber business and successfully concluded our CEO search I'm excited to welcome Stephen of Crown Castle, and look forward to working together with him and the board to enhance value for all shareholders.

Dan Schlanger: We continue to expect to deliver $65 million of AFFO growth at the midpoint, excluding the impact of the sprint cancellations and non-cash decrease in amortization of prepaid funds. Turning to the balance sheet, since transitioning to investment grade in 2015, We have strengthened our balance sheet by extending our weighted average maturity from five to seven years, decreasing the percentage of secured debt from 47% to 6%, and increasing the percentage of fixed rate debt from 68% to 90%.

M J: With that M J I'd like to open the line for questions.

Speaker Change: Thank you Sir we will now begin the question and answer session.

Speaker Change: Ask a question you May press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

Speaker Change: Today's first question comes from Michael Rollins with Citi. Please go ahead.

Dan Schlanger: In addition, we ended the quarter with approximately $6 billion of availability under our revolving credit and only $2 billion of debt maturities occurring through 2025, providing us with ample liquidity to fund our business. The steps we have taken to strengthen our balance sheet provide us with financial stability and flexibility as we evaluate strategic paths. Lastly, our 2024 outlook for discretionary capital remains unchanged at $1.5 to $1.6 billion, or $1.1 to $1.2 billion net of $430 million in prepaid rent.

Michael Ian Rollins: Thanks, and good afternoon, Rob Great to have you on the call and Stephen Congratulations enjoying and Crown Castle.

Michael Ian Rollins: I have two questions. One just a clarification can you clarify the engagement.

Michael Ian Rollins: You mentioned with multiple parties you referred to the fiber segment I believe does that potentially include bulk fiber solutions.

Michael Ian Rollins: And small cells or do those engagements refer only to the fiber solutions segment.

Michael Ian Rollins: And then second.

Michael Ian Rollins: Just taking a step back can you share a bit more of what you've learned from shareholders over the last few months and the fiber strategic review that can help investors think about the direction that the board and management team I want to take this company over the next few years with respect to strategy and asset.

Dan Schlanger: To wrap up, we continue to deliver good underlying growth across each of our businesses. At the same time, we made substantial progress on the strategic and operating review of our fiber business and successfully concluded our CEO search. I'm excited to welcome Steve into Crown Castle and look forward to working together with him and the board to enhance value for all. With that, M.J., I'd like to open the line for questions.

Michael Ian Rollins: Next.

Michael Ian Rollins: Yeah.

Speaker Change: Hi, Mike Yeah, Nice nice to talk to you again, it's been a while.

Speaker Change: Let me let me take your first question I believe it was does the engagement.

Speaker Change: With the fiber business.

Mike: Contained the whole fiber business or addressed or just the enterprise portion of the fiber business and what I would say to you is there's there's different parties that are that are interested in in different parts I would say as a board as a company. We are open to whatever type of a transaction would maximize shareholder.

Operator: Thank you, sir. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then 2. Today's first question comes from Michael Rollins with Citi. Please go ahead.

Mike: So we're looking at you know different different structures different you know different formats. So so to answer your question either you know either the whole thing or are you know what I would call. The enterprise fiber business are both in play.

Michael Ian Rollins: Thanks, and good afternoon. Rob, great to have you on the call, and Stephen, congratulations on joining Crown Castle. I have two questions, one just a clarification. Can you clarify the engagement that you mentioned with multiple parties? You referred to the fiber segment, I believe. Does that potentially include both fiber solutions and Small Cells, or do those engagements refer only to the fiber solution segment?

Now remind me the second part of your question Mike.

Yeah, just taking a step back after conversations with the shareholders and then going through the fiber strategic reviews. So far.

Mike: Just what you've learned and how youre thinking about kind of optimizing strategy and go forward asset mix over a multiple year period of time.

Rob: And then second, just taking a step back, can you share a bit more of what you learned from shareholders over the last few months and the Fiverr strategic review that can help investors think about the direction that the board and management team want to take this company in over the next few years with respect to strategy and asset mix? Thanks.

Mike: Yeah that's.

Mike: That's a little more difficult to answer because there are you know there are some different views from different shareholders.

Mike: I think in general we've received positive support from shareholders in terms of our you know us.

Mike: It was conducting a strategic review of the fiber business.

Rob: Hi Mike. Yeah, nice. Nice to talk to you again. It's been a while.

Mike: It's too early to really say you know this is the this is a definitive direction. We're gonna go in so we have to complete that work and Steven is going to be a big help in and completing that work. So I would say that the the opinions are varied somewhat on shareholders, but they're all they're all excited that we are taking these steps to unlock shareholder value.

Rob: Let me take your first question. I believe it was, does the engagement with the fiber business contain the whole fiber business or just the enterprise portion of the fiber business? And what I would say to you is that there are different parties that are interested in different parts. I would say, as a board, as a company, we are open to whatever type of transaction would maximize shareholder value. So we're looking at, you know, different structures, different, you know, different formats. So to answer your question, either the whole thing or, you know, what I would call the enterprise fiber business are both important. Now, remind me of the second part of your question, Mike.

Mike: Yeah.

Mike: And just maybe lastly timing is there any timing expectations for the next update or a goal in terms of when crown wants to complete this part of the process.

Yeah, Mike as you can see from you know from our CEO search, where we're working hard and we're dedicated to you know performing for the shareholders. So in a in a manner that you know is rapid but he's also thorough so I at this point in time I can't give you a date and I wouldn't want to I wouldn't want to.

Rob: Yeah, just, you know, taking a step back after the conversations you had with the shareholders and then going through the FIBRA strategic review so far, just what you've learned and how you're thinking about kind of optimizing the strategy and go-forward asset mix over a multiple-year period of time.

Mike: You know put a put a limit on the time, it's going to take but just know that.

Mike: We've made substantial progress to get to this point in time, and only and only about three or four months of work. So so we're happy with our with the pace, it's going but I don't have a mandate for Ya.

Rob: Yeah that's, you know, that's a little more difficult to answer because there are, you know, there are some different views from different shareholders. But I think, in general, we've received positive support from shareholders in terms of, you know, us conducting the strategic review of the fiber business. It's too early to really say, you know, this is the definitive direction we're going to go in, so we have to complete that work, and Stephen's going to be a big help in completing that work. So I would say opinions have varied somewhat among shareholders, but they're all excited that we are taking these steps to unlock shareholder value.

Speaker Change: Thank you.

Speaker Change: Thank you. The next question is from Jonathan Atkin with RBC capital markets. Please go ahead, hi, good afternoon, and great great to connect again.

Jonathan Atkin: Maybe just a quick follow up to the last question and that revolves around openness.

Jonathan Atkin: You talked about maximizing shareholder value could that possibly include selling.

Jonathan Atkin: Partial stake in fiber solutions, and more and more small cells.

Jonathan Atkin: So that's maybe the follow on question and then my question would be just as we think about kind of the.

Rob: And maybe lastly, timing, is there any timing expectations for the next update or a goal in terms of when Crown wants to complete this part of the process? Yeah, Mike, as you can.

The cadence for how second half momentum might shape up in the core tower business as.

Rob: Yeah, Mike, as you can see from our CEO search, we're working hard, and we're dedicated to performing for the shareholders in a manner that is rapid but is also thorough. So at this point in time, I can't give you a date, and I wouldn't want to put a limit on the time it's going to take. But just know that we've made substantial progress to get to this point in time in only about three or four months of work. So we're happy with the pace that it's going, but I don't have an end date for you.

Jonathan Atkin: As well as in fiber solutions and small cell than anything you're seeing operationally around how to think about the next three quarters of the year or are we going to be seeing any kind of a different run rate going forward.

Yeah, Hi, Jonathan I'll take your first question in terms of.

Speaker Change: The form of a potential transaction.

Speaker Change: We're open to any form that we think does maximize shareholder value. So I think you're kind of referring to a JV structure, where you would say we would sell some portion of either either the entire the entire business or one of the two segments of the business. So I'm not going to I'm not going to rule anything out those those type of trash.

Jonathan Atkin: Thank you. The next question is from Jonathan Atkin with RBC Capital Markets. Please go ahead. Hi.

Jonathan Atkin: Hi, good afternoon, and great to connect again. Maybe just a quick follow-up to the last question, and that revolves around openness. You talked about maximizing shareholder value. Could that possibly include selling partial stakes in fiber solutions and or small cells? So that's maybe the follow-on question. And then my question would be, just as we think about kind of the cadence for how second half momentum might shape up in the core tower business as well as in fiber solutions and small cells, anything you're seeing operationally around how to think about the next three quarters of the year, and are we going to be seeing any kind of a different run rate going forward?

Speaker Change: Actions are on the menu and at this point you know I can't give you any more guidance as to what we would favor because we're still working through that but.

Speaker Change: Yeah, we're not ruling anything out in the maximization of shareholder value.

Jonathan It's Tony Oh regarding the second question is.

Speaker Change: As Dan mentioned, we grew our tower revenue four 6% and the annual guide is four 5% and while traditionally seasonality suggests that the second half activity generally is higher than the first.

Rob: Yeah. Hi Jonathan.

Speaker Change: So far what we've seen suggests that there.

Rob: I'll take your first question. In terms of the form of a potential transaction, we're open to any form that we think maximizes shareholder value. So I think you're kind of referring to a JV structure where we would sell some portion of either the entire business or one of the two segments of the business. So I'm not going to rule anything out. Those types of transactions are on the menu. And at this point, I can't give you any more guidance as to what we would favor because we're still working through that. But yeah, we're not ruling anything out in the maximization of shareholder value.

Anthony J. Melone: Theres nothing that we see that would cause us to.

Anthony J. Melone: To see something fall outside the range that we've already guided to which if you recall was a $105 million to $115 million for the year. So we still we still see see ourselves in that range.

Speaker Change: And if I could ask one more about cost cutting all because there's been some announcements in the past around the office consolidation and just what where does where do we land in that process and anything.

Speaker Change: Further to X factor of our cost optimization.

Yeah, John It's Dan.

Tony: Jonathan, it's Tony. Regarding the second question, as Dan mentioned, we grew tower revenue 4.6%, and the annual guide is 4.5%. And while traditionally, seasonality suggests that the second half of activity generally is higher than the first, so far, what we've seen suggests that there's nothing that we see that would cause us to. We see something fall outside the range that we have already guided to, which, if you recall, was $105 to $115 million for the year. So we still see ourselves in that range.

Speaker Change: We as you know in July or August of last year announced a consolidation of offices as well as a reduction in the mostly our tower force we've realized the benefits of all of those cost savings and they're coming through in our income statement. This year and had been incorporated your guide but are but are are coming true so that was greater than $100 million.

Cost savings with with additional cost savings.

Speaker Change: We're always looking to try to find ways to optimize the business and I would believe it.

Speaker Change: Steven coming in will help us think through if there are other things we might be able to do but there's no plans at this point that we would point to.

Dan Schlanger: And if I could ask one more about cost-cutting, because there have been some announcements in the past around office consolidation, and just where do we land in that process? And anything, you know, further to expect around cost optimization?

Speaker Change: Thank you.

Speaker Change: Thank you. The next question comes from Ric Prentiss with Raymond James. Please go ahead.

Richard Hamilton Prentiss: Thanks, Rob good to hear you and Stephen welcome back.

Richard Hamilton Prentiss: We agreed in the U S tower business could be maybe the best business ever.

Dan Schlanger: Yeah, John, it's Dan. We, as you know, in July or August of last year announced a consolidation of offices as well as a reduction in our tower force. We have realized the benefits of all of those cost savings, and they're coming through in our income statement this year and have been incorporated into our guide, but are coming to fruition. So that's greater than $100 million in cost savings. With additional cost savings, we're always looking to try to find ways to optimize the business, and I would believe that Stephen coming in will help us think through if there are other things we might be able to do, but there are no plans at this point that we would point to.

Richard Hamilton Prentiss: [laughter] Alright, correct, yes.

Richard Hamilton Prentiss: One question philosophical.

Richard Hamilton Prentiss: When you think about the dividend.

Richard Hamilton Prentiss: Path at Crown Castle.

Richard Hamilton Prentiss: Dividends flat from 23 to 24 previous language had been if we could grow it again beyond 25, how should we think about the puts and takes about philosophically how the board is the board decision not asking you to make this decision today.

Richard Hamilton Prentiss: Topically. However, you want to fund the dividend how do you want to grow the dividend what do you want cash payout to kind of be as you think about the strategic reviews or anything and help us kind of wrap around philosophically, how youre thinking about what the dividend might have.

Richard Hamilton Prentiss: How it might be structured into the future.

Richard Hamilton Prentiss: Thank you. The next question comes from Rick Prentiss with Raymond James. Please go ahead. Thanks. Bye.

Speaker Change: Hi, Rick Thanks for the question.

Rick: The dividend the dividend is extremely important to the to the board and the company are we we recognize that our investors many of which that's a significant component of return for the company as a REIT. We believe our our balance sheet is strong and that our.

Richard Hamilton Prentiss: Thanks Rob, good to hear from you, and Stephen; welcome back. We agree that the U.S. Tower business could be, perhaps, the best business ever. Thank you, Rick.

Rob: Yep. One question, philosophical. When you think about the dividend, the kind of path at Crown Castle, dividends flat from 23 to 24. I think the previous language was if we could grow it again beyond 25, how should we think about the puts and takes about philosophically how the board, it's a board decision, not asking you to make the decision today, but philosophically, how do you want to fund the dividend? How do you want to grow the dividend?

Rick: Earnings and our balance sheet will support the dividend.

Rick: So we're gonna have to you know as we go through and the strategic review and everything else. We're gonna have to go through that but I want to just reiterate you know our support for the dividend and it's a key part of our our our capital and our philosophy as a board.

Rick: Okay.

Rick: You guys have touched on a couple of times for.

Rick: For previous questions with Mike and Jonathan.

Rick: The fiber small cell piece, how easy is it to separate the small cell business from the fiber solutions business.

Rob: What do you want the cash payout to kind of be as you think about the strategic review? Is there anything you can help us kind of wrap around philosophically how you're thinking about what the dividend might be, how it might be structured in the future?

Rick: Just thinking through kind of how crowds genesis getting into small cells, and then expansion beyond that but how easy is that physically kind of pull those apart.

Rob: Hi Rick. Thanks for the question. The dividend, the dividend is extremely important to the board and the company. We recognize that our investors, you know, many of them. That's a significant component of return for the company as a REIT. We believe our balance sheet is strong and that our earnings and our balance sheet well support the dividend. So we're going to have to, you know, as we go through the strategic review and everything else, we're going to have to go through that. But I want to just reiterate our support for the dividend, and it's a key part of our capital and our philosophy as a board.

Speaker Change: Yes, so Rick there's a there's many theres many fiber companies and there are many small cell companies that operate without without a fiber company you know enterprise fiber companies such as ours. So I'm part of the part of the review you know one of the learnings is that those businesses can be.

Speaker Change: Separate it out.

Speaker Change: And so that that in you know increases all our alternatives and informs our view as we as we progress through this strategic review.

Rick: Okay makes sense.

Speaker Change: Tim Good luck Stephen good to hear all you guys on the call today. Thanks.

Rob: Okay, and then you guys have touched on a couple of times for previous questions with Mike and Jonathan, the fiber small cell piece. How easy is it to separate the small cell business from the fiber solutions business? Just thinking through kind of how Crown's Genesis getting into small cells and then expansion beyond that, but how easy is that to physically kind of pull those apart?

Speaker Change: Thanks, Mike Thank you thank.

Speaker Change: Thank you. The next question is from Simon Flannery with Morgan Stanley. Please go ahead.

Simon William Flannery: Great. Thank you very much and congrats Susan on the new role.

Simon William Flannery: Dan You had said before that you expected first half to be the low point in <unk> per share just wanted to get an update on that obviously, you're reiterating guidance today and.

Rob: Yeah, Rick, there are many fiber companies, and there are many small cell companies that operate without a fiber company, you know, enterprise fiber companies such as ours. So part of the review, one of the learnings is that those businesses can be separated out. And so that, you know, increases our alternatives and informs our view as we progress through the strategic review.

Simon William Flannery: And I Wonder if you could just give us an update on just carrier customer activity across the three segments and in particular, just where we are on the carriers moving onto more of a kind of densification face for five G and wrapping up the upgrades to mid band five Chi on the sites I haven't upgraded yet.

Rob: Okay, that makes sense. Again, good luck, Stephen, and good to hear all you guys on the call today. Thanks.

Richard Hamilton Prentiss: Thanks, Rick. Thank you.

Simon William Flannery: Thanks.

Speaker Change: Yeah, Simon I'll take the first one yes, we still believe in the first half will be the low point for ASP per share and believe we will grow that pressure through the course of the remainder or the second half of 2024.

Simon William Flannery: Thank you. The next question is from Simon Flannery with Morgan Stanley. Please go ahead.

Simon William Flannery: Great. Thank you very much, and congratulations to you on the new role.

Dan Schlanger: Dan, you had said before that you expected the First Half to be the low point in FFO per share. I just wanted to get an update on that. Obviously, you're reiterating guidance today, and then I wonder if you could just give us an update on just carrier or customer activity across the three segments, and in particular, just where we are with the carriers moving on to more of a densification phase for 5G and wrapping up the upgrades to mid-band 5G on the sites they haven't upgraded yet.

Speaker Change: Thank you.

Hello, Simon it's Tony.

Anthony J. Melone: Regarding slide good regarding our activity levels as I said earlier.

Anthony J. Melone: We are extremely pleased with results for the first quarter, but as I said there is.

Anthony J. Melone: There is nothing that we see right now that takes us outside of our guidance range that we previously provided.

Anthony J. Melone: What I, what I will say on the I'll reiterate what I said last quarter regarding the carriers.

Anthony J. Melone:

Anthony J. Melone: To deliver on the promise of five G.

Throughout their footprint will require a significant amount of continued densification.

Dan Schlanger: Yes, Simon, I'll take the first one. Yes, we still believe the first half will be the low point for AFO per share and believe we will grow AFO per share through the course of the remainder or the second half of 2025.

Hard for me to.

Anthony J. Melone: Predict over what period of time, but there is clearly still.

A lot of work I believe.

Anthony J. Melone: But they will do to densify their <unk> network over years to come and I think provides a great opportunity for crown and our and our tower portfolio.

Tony: Hello Simon, it's Tony. Hi Tony. How are you?

Speaker Change: Great and just maybe a quick follow up on the small cells you talked about the 16000 nodes upfront from 8000 can you just give us an update on what youre sort of year to date pacing as being that that's a big jump sequentially.

Tony: Regarding activity levels, as I said earlier, we're extremely pleased with results for the first quarter, but as I said, there's nothing that we see right now that takes us outside of our guidance range that we previously provided. What I will say on the – I'll reiterate what I said last quarter regarding the carriers. To deliver on the promise of 5G throughout their footprint will require a significant amount of continued densification.

Speaker Change: Yeah.

Speaker Change: Yes, Simon as you know, we typically provide increments.

Simon William Flannery: In 5000 ranges and so we don't have a further update on that for this quarter. What I can tell you is that the 16000 sites that we expect we continue to feel.

Tony: Hard for me to, you know, predict over what period of time, but there's clearly still a lot of work that they will do to densify their 5G network over years to come, and I think that provides a great opportunity for Crown and our tower portfolio.

Line of sight on for 2024, and as you might expect and what you saw in previous years that is.

Simon William Flannery: That is typically back end loaded.

Great. Thank you.

Speaker Change: Thank you. The next question is from Nick del Deo with Moffett Nathanson. Please go ahead.

Tony: Great. And just maybe a quick follow-up on the small cells. You talked about the 16,000 nodes, up from 8,000. Can you just give us an update on what your sort of year-to-date pacing has been as that's a big jump sequentially?

Speaker Change: Alright, Thanks for taking my questions and I want to Echo others' comments and congratulate Steven on the new role.

Tony: Yes, Simon, as you know, we typically provide increments in 5,000 ranges, and so we don't have a further update on that for this quarter. What I can tell you is that the 16,000 sites that we expect, we continue to feel, have line of sight on for 2024, and as you might expect from what you saw in previous years, that is typically back-end loaded.

Speaker Change: Yeah, I guess return to the cost efficiency topic, Rob you noted in your prepared remarks that there seem to be opportunities from the fiber segment more efficiently.

Speaker Change: You can make any comments about the efficiency with which the tower business is run.

Speaker Change: We take that to mean that you believe the tower business is run.

Simon William Flannery: Thank you. The next question is from Nick DelDeo with Moffett Knifeson. Please go ahead.

Speaker Change: And as efficiently as one can reasonably expect or is that just not been an area of focus yet.

Nicholas Ralph Del Deo: Hi, thanks for taking my questions, and I want to echo others' comments and congratulate Stephen on the new role. I guess, returning to the cost efficiency topic, you know, Rob, you noted in your prepared remarks that there seem to be opportunities to run the fiber segment more efficiently. You didn't make any comments about the efficiency with which the tower business is run. Should we take that to mean that you believe the tower business is run, you know, as efficiently as one can reasonably expect, or has that just not been an area of focus yet?

Well, here's what I would say the.

Speaker Change: Operational review is primarily focused on the on the fiber segment.

Speaker Change: So you know we didn't we didn't have a deep dive into the tower cost structure.

Speaker Change: Stephen's remarks indicated you know there are areas for operational efficiency and he's an expert at extracting those on the tower side as well so.

Speaker Change: So like I said it was it was more focused on the fiber segment, but.

Speaker Change: Hey, tuned stay tuned on the on the tower segment as well.

Rob: Well, here's what I would say. The operational review is primarily focused on the fiber segment. So, you know, we didn't do a deep dive into the tower cost structure. But, as Stephen's remarks indicated, there are areas for operational efficiency, and he's an expert at extracting those on the tower side as well. So, like I said, it was more focused on the fiber segment. But, you know, stay tuned. Stay tuned for the on the tower segment.

Speaker Change: Okay.

Speaker Change: Hey, Nick this is Steven Yeah, I, just add that again I have some ideas.

Steven: But I just don't it's too early to say anything concrete.

Steven: And my my style is typically the first brainstorm with the employees of the teams.

Steven: And kind of learn from them from their perspective, what's gone well.

Steven: And what they think needs our attention and then after that.

Stephen: Yeah, yeah, I guess I'd like to say something. Hey Nick, this is Stephen.

Steven: I'll add my thoughts and opinions and we will work together and coming up with an improvement plan.

Steven: That in plan needs to be executed well have a timeframe, we had a reasonable cost.

Stephen: Yeah, I'd just add that again, I have some ideas, but I just don't, you know, it's too early to say anything concrete. I mean, my style is typically to first brainstorm with the employees, with the teams, and kind of learn from them, from their perspective, what's gone well, and what they think needs attention. And then after that, you know, I'll add my thoughts and opinions, and we'll work together on coming up with an improvement plan.

Steven: And.

Steven: You know this type of operational efficiency movement.

Speaker Change: You know I think I think a lot of people here are eager for some change.

That will help improve our customer service and improve the ability to get their jobs done.

Speaker Change: So I'm pretty excited about it but again nothing to communicate at this point.

Speaker Change: I guess stay tuned.

Speaker Change: Okay. That's helpful. Thanks for sharing all those details and.

Stephen: And that plan needs to be, you know, executed well, have a time frame, and we have a reasonable cost for this type of operational efficiency movement. I think a lot of people here are eager for some change that will help improve our customer service and improve their ability to get their jobs done. So I'm pretty excited about it. But again, nothing to communicate at this point, so I guess stay tuned.

Maybe in a similar vein.

Speaker Change: Last quarter, I think Tony you talked about implementing a change in how the segments are run.

Speaker Change: I think it was basically giving the CLO was full P&L responsibility, which is an approach he liked.

Speaker Change: I guess, it's early but I'm wondering if you're seeing any benefits from that yet and if that sort of structure is generally consistent with.

Nicholas Ralph Del Deo: Okay, that's helpful. Thanks for sharing all those details.

Nicholas Ralph Del Deo: And, you know, maybe, in a similar vein, last quarter, Tony talked about implementing a change in how the segments are run. I think it was basically giving the COOs full P&L responsibility, which is an approach he liked. I guess it's early, but I'm wondering if you're seeing any benefits from that yet and if that sort of structure is generally consistent with how you like to run the business, Stephen.

Speaker Change: With how you'd like to run the business Steven.

Speaker Change: You know what.

Steven: I've been an observer, so give me a little bit of time to.

Speaker Change: So to kind of learn.

Speaker Change: About the different roles kind of who does what and how things are being implemented and you know.

Speaker Change: As I said in my opening remarks, you know a key focus for me is to have great people.

Speaker Change: We're all aligned on a relatively simple strategy. So.

Speaker Change: We'll be working on that but in the meantime, yes. The team has done a nice job coming out of first quarter end and this momentum. So it's good to say, yeah, Nick and I'll add to that it you know it's hard to know exactly what contributed.

Stephen: You know, I've been an observer, so give me a little bit of time to kind of learn about the different roles, kind of who does what, and how things are being implemented. And as I said in my opening remarks, the key focus for me is to have great people who are all aligned on a relatively simple strategy. So we'll be working on that. But in the meantime, yes, the team has done a nice job coming out of the first quarter, and there's some momentum. So it's good to see. Yeah, Nick, and I'll add to that.

Nick: Two our results, but I will say the fact that we were able to deliver.

Nick: Results solid results for the quarter across all lines of business. Despite the changes that were going on in the business.

Nick: Myself coming in et cetera.

Nick: Gives me comfort that the added focus was helpful, but as I said to Steve and you know.

Tony: And I'll add to that, you know, it's hard to know exactly what contributed to our results, but I will say the fact that we were able to deliver solid results for the quarter across all lines of business, despite changes that were going on in the business, myself coming in, et cetera, gives me comfort that the added focus was helpful. But as I said to Steve and you know, all these changes were made with the mind that the new CEO is certainly going to come in and provide his own influence on how the business should be run, and the team is adaptable.

Nick: All of these changes were met were made.

Nick: <unk>.

Yes.

Nick: In mind that the new CEO is certainly is going to come in and provide their own.

Nick: One influence on how the business should be run and the team is is adaptable.

Speaker Change: Okay, great well, thank you everyone.

Speaker Change: Yeah.

Speaker Change: Thank you. The next question is from David Barden with Bank of America. Please go ahead.

David William Barden: Hey, guys. Thanks, so much for taking the question.

David William Barden: I guess I asked this question last quarter, which was which would come first the CEO of the strategy.

Nicholas Ralph Del Deo: Okay. Great. Well, thank you, everyone.

And obviously, even though you are coming first so welcome and Robin it's good to hear from you again.

David William Barden: Thank you. The next question is from David Barden with Bank of America. Please go ahead.

David William Barden: Hey guys, thanks so much for taking the question. I guess I asked this question last quarter, which was, you know, which would come first, the CEO or the strategy? And obviously, Stephen, you know, you are coming first. So, welcome. And Rob, it's good to hear from you again. So, Stephen, I guess, you know, what kind of agency do you believe you have in constructing the strategy that is ultimately going to be what you're going to own on a go-forward basis? And, second, more of a detailed question, Dan, it looks like a non-Big Three renewal helped the straight-line revenue this quarter. Could you elaborate a little bit on what that was? Thanks.

David William Barden: So Stephen I guess, you know what kind of agency do you believe you have you know in constructing the strategy that is ultimately going to be what you're going to own on a go forward basis, and then I guess second more of a detailed question Dan.

David William Barden: It looks like a non big three.

Dan Schlanger: Renewal helps the straight line revenue EBITDA this quarter could you elaborate a little bit on what on what that was thanks.

Dan Schlanger: Hey, David It's Stephen I Couldnt hear part of your question, but I think you were asking how I'm thinking about.

Stephen Moskowitz: My involvement and and what the future strategy will be of the comp yes, yes.

Stephen: Hey David, Stephen, I couldn't hear part of your question, but I think you were asking how I think about my involvement in what the future strategy will be of the company. Yes.

Stephen Moskowitz: Yes.

Stephen Moskowitz: I mean part of the reason why.

Stephen Moskowitz: You know.

I came here was.

Stephen: You know, I mean, part of the reason why I came here was because I spent a lot of time with Rob, spent a lot of time with the different board members, and Tony, obviously, and felt very comfortable that there was good chemistry between the team and myself, the board members and myself. And for me, chemistry is critical. I've had it for many, many years in many different roles.

Stephen Moskowitz: Because I spent a lot of time with Rob spent a lot of time with.

The different board members.

Stephen Moskowitz: And Tony obviously and felt very comfortable.

Stephen Moskowitz: It was good chemistry between the team and myself the team of board members and myself.

Stephen Moskowitz: And for me chemistry is critical.

Stephen Moskowitz: I've had it for many many years in many different roles and it's allowed me to build trust hopefully quickly with.

Stephen: And it's allowed me to build trust, hopefully quickly, with quote, unquote, my bosses, I guess, and then implement and be empowered to implement in a way that I feel will best set the company up for future success. So I feel I'm going to be very involved, and I think, you know, that maybe there's a little bit of frustration with, hey, the Fiber Review is, you know, to some degree, you know, there's a lot of work that's been done, and, you know, Moskowitz is coming in now, and, you know, maybe there's a little bit of delay, but from my perspective, it' I'm not sure if that answers your question. I hope it does. No, it's helpful. Thank you, Steve.

Stephen Moskowitz: With critical my boss is I guess, and then implements and the empowered to implement.

Stephen Moskowitz: In a in a way that that I feel will.

Stephen Moskowitz: Well best set the company up for future success.

Stephen Moskowitz: So I I feel I'm going to be very involved in I think it maybe a little bit of frustration with.

Stephen Moskowitz: The fiber review as you know to some degree.

Stephen Moskowitz:

Stephen Moskowitz: There's a lot of work that's been done and Masters just coming in now and maybe this wasn't a delay but from my perspective.

Stephen Moskowitz: It's critical for me to really have have a lot of exposure to what's been done to provide as an influencer for the strategy and then agreeing with Rob and the board on the best way to move forward.

Stephen Moskowitz: But I'm not sure if that answers your question I hope it does that's helpful. Thank you.

Dan Schlanger: Hey Dave, um, I'm struggling with how to answer your question because I'm not exactly sure what you're looking at to conclude what you concluded. There was nothing that I would point to that is a new contract or an extension or anything that would significantly impact Straight Line, and there wasn't a big jump in Straight Line. So I'm struggling with how I can address whatever you're thinking through.

Speaker Change: Hey, Dave.

Speaker Change: Aye.

Speaker Change: I'm struggling with how to answer your question because I'm not exactly sure what youre looking at it to <unk> to conclude what you concluded there was nothing that I would point to that as a new contract or an extension or anything that would significantly impact straight lining and there wasn't a big jump in straight line.

Speaker Change: So I'm struggling with how I can address whatever you're thinking through.

David William Barden: Sorry, yeah, I was just looking at the supplemental disclosure where the contract, renewable contract revenues in 1Q last quarter were going to be about $230 million; now it's about $180 million, and it didn't show up again in the later in the schedule. It looked like something had gotten pushed out or renewed. I'm sorry if I got it wrong.

Speaker Change: Alright, Yeah, I was just looking at the supplemental disclosure where the.

Speaker Change: Contract renewable contract revenues and in <unk> last quarter was going to be about 230 million now, it's about $180 million and it didn't show up again in the later schedule it looks like something you'd gotten pushed out or renewed I'm, sorry, if I got it wrong.

Speaker Change: No there was nothing that was pushed out a renewed.

And I can't answer the question directly here, but im happy to follow up with you or anybody else who had the same question, but there was nothing that got renewed in the quarter.

Dan Schlanger: No, there was nothing that was pushed out or renewed, and I can't answer the question directly here, but I'm happy to follow up with you or anybody else who has the same question. But there was nothing that got renewed in the quarter.

Speaker Change: Thanks, Dan.

Speaker Change: Yep.

Thank you. The next question is from Richard Choe with JP Morgan. Please go ahead.

Richard Hamilton Prentiss: Hi, I just wanted to follow up and the fiber review, there's the sale or full or partial but then there's also the efficiency review how should we think about the two processes going on simultaneously.

David William Barden: Okay, great. Thanks, Ben. Thank you. The next question is from Richard Cho with J.P. Morgan. Please go ahead.

Richard Hamilton Prentiss: Yeah, So I would say.

Rob: Um, yeah, so, I would say, um... On the sale of all or part, you know, that's a strategic priority. We're, as I said earlier, engaged with third parties, so that process is ongoing. And then on the operational review, maybe I'll pass it to Tony. Richard, the work on the operational side with

Richard Hamilton Prentiss: On the on the sale of all or part.

Richard Hamilton Prentiss: That's a strategic priority, we're as I said earlier, we're engaged with third parties.

So that processes is ongoing and then on the on the operational review, maybe I'll, maybe I'll pass that to Tony Yeah essentially.

Tony: Yeah, essentially... Richard, the work on the operational side with third parties is concluded. We've done the analysis with them, and we've shared that work. Internally, we've analyzed the work, and processed it, et cetera. And now we've passed all that work we did to Stephen, and he's going to work with the management team, as we said earlier, to take that input and, obviously, add his own insight and apply that to the business. Great

Anthony J. Melone: Richard the work on the operational side with third parties is concluded.

Anthony J. Melone: We've done we've done the analysis with them and we've shared that work we internally we've analyzed the work and.

And processed it et cetera, and now we've passed that all that work, we've done to Steven and he's going to work with the management team.

Steven: As we said earlier to take that input and obviously add his own insight and and apply that to the business.

Speaker Change: Great and then with the services business are you seeing any changes with the I guess ongoing services business.

Tony: No. As we talked about, we think that the services, the contribution, the margin that we have to service in the first quarter when we talked about it last quarter, are generally going to be consistent across the quarters. So there's nothing that would have changed our view of that consistency at this point.

Speaker Change: No.

Speaker Change: As we talked about it we think that our services.

Speaker Change: The contribution of the margin that we have the service in the first quarter. When we talked about it last quarter are generally going to be consistent across the quarters.

Speaker Change: So theres nothing that would have changed our view of that consistency at this point.

Speaker Change: Yeah.

Speaker Change: Great. Thank you.

Speaker Change: Yeah.

Thank you. The next question is from Matt Mcconnell with Deutsche Bank. Please go ahead.

Matthew Niknam: Thank you. The next question is from Matt Niknam with Deutsche Bank. Please go ahead.

Matt Mcconnell: Hey, guys. Thanks, so much for taking the question.

Matthew Niknam: Hey guys, thanks so much for taking the question. Just two quick ones if I could. First, on the fiber business, how has the strategic review affected pace of bookings, any sort of customer behavior in the last several months at all, whether on the fiber solutions or on the small cell side? That's number one. And then, secondly, just any color you can provide in terms of pacing of application volumes, carrier activity on the tower side, and whether there was any meaningful change or pickup across the four carriers intra-quarter. Thanks.

Matt Mcconnell: Two quick ones, if I could first on the fiber business is the strategic review affected pace of bookings any sort of customer behavior over the last several months at all whether on the fiber solutions around the small cell hot side. That's number one and then secondly, just any color you can provide in terms of pay.

Singh of application volumes carrier activity on the tower side and whether there was any.

Matt Mcconnell: Meaningful change or pick up across the four carriers intra quarter. Thanks.

Matt Mcconnell: Yeah.

Matt Mcconnell: Yeah.

Tony: Thank you, Matt. So on the booking side, the answer to your question is that we have. We have a good line of sight, as we talked about, on the bookings for both small cells as well as the fiber solution to give us comfort in the guides we provided, both the $16,000 small cells for the year as well as the 3% growth for the year. I feel very comfortable with that. So on your second question, in terms of pacing, no, there hasn't been any material change in terms of pacing within the quarter that would be of significance to comment on.

Speaker Change: Thank you Matt.

Speaker Change: So on the bookings side the answer to your question is.

Speaker Change: So we have.

We have good line of sight as we talked about on the bookings for both small cells as well as fiber solutions that give us comfort in the in the guides we provided both the 16000.

Speaker Change:

Speaker Change: Small cells for the year as well as the 3% growth for the year or so.

Speaker Change: Feel very comfortable with that and.

Speaker Change: So on the on your second question in terms of pacing that no. There hasnt there hasnt been any evidence of any material change in terms of pacing within the quarter that would be of significance to comment on.

Speaker Change: Great. Thank you.

Tony: Thank you. The next question is from Batya Levi with UBS. Please go ahead. Great, thank you. A couple of follow-up questions.

Speaker Change: Thank you. The next question is from <unk> Levi with UBS. Please go ahead.

Levi: Great. Thank you a couple of follow ups first on the tower activity can you provide us an update on what percent of the towers have been upgraded with five key equipment now and if you're seeing any change in the carrier activity to support fixed wireless and a follow up on the discretionary.

Batya Levi: Great, thank you. There are a couple of follow-ups. First, on tower activity, can you provide us an update on what percent of the towers have been upgraded with 5G equipment now? And if you're seeing any change in carrier activity to support fixed wireless? A follow-up on the discretionary CAPEX side, can you talk about how much of that is already committed to? Can we expect that you might pull back a bit as the strategic review is ongoing? Thank you.

Levi: Capex side can you talk about how much of that is already committed to.

Levi: Can we expect that you might pull back a bit as the strategic review is ongoing thank you.

Levi: Regarding the <unk>, we think the last time, we commented on five G. We.

Tony: Regarding 5G, I think the last time we commented on 5G, we don't regularly update that number. I think it was 50%.

Levi: We don't regularly update on that number I think it was 50%.

Levi:

Tony: And we'll provide an update at some point in the future, but we have no update for you today on that. Yeah, carrier activity on fixed wireless. Really, it's... You know, it's hard for us to be active. Our activity, it's hard for us to determine whether it's being driven by fixed wireless or their general mobility services. And quite frankly, it's hard for them to determine that for themselves, just the nature of the cell site.

Levi: And we will be.

Levi: We will provide an update some point in the future, but we are we have no update for you today on that.

Levi: Okay.

Levi: Activity.

Levi: Carrier activity on fixed wireless.

Levi: Really it's.

Levi: No.

Levi: It's hard for us to be activity our activity, it's hard for us to determine whether it's being driven by fixed wireless or their general mobility services and quite frankly, it's hard for them to.

To determine that themselves just the nature of the cell site there.

Tony: Their capacity needs are dictated by both, and which one triggers that relief requirement is difficult to predict. So it's a... It's almost impossible for me to give you a feel for what's driving that and how much of it is fixed wire.

Levi: Their capacity needs as dictated by both.

Levi: And which one triggers that relief requirement.

Levi: It is difficult to predict so it's.

Levi: Almost impossible for me to give you a feel for what's driving that and how much of it is fixed wireless.

Levi: Hmm on discretionary capital and how much is committed we do as you know have long term commitments based on the contracts that we've signed with our customers.

Dan Schlanger: On discretionary capital and how much is committed, we do, as you know, have long-term commitments based on the contracts that we've signed with our customers. Those commitments, we intend to honor, and we will continue to build the small sales we need to build. We'll continue to build fiber for our fiber solutions business, and as you saw, we have not changed guidance for 2024, so we still anticipate that we'll spend that. I can't really comment on what the strategic review might do for all the reasons that have been said before. But as of now, we continue to think that we will spend the money and generate the growth that we have articulated in our outlook.

Levi: There's those commitments, we intend to honor we will continue to build the small cells, we need to build will continue to build the fiber for our fiber solutions business and as you saw we have not changed guidance for 2024. So we still anticipate that we'll spend that I can't really comment on what the strategic review might do for all the reasons I've been said before so as of.

Levi: So we continue to think that you will spend the money and generate the growth that we have.

Levi: Articulated in our outlook.

Speaker Change: Got it thank you.

Brendan James Lynch: Thank you. The next question is from Brendan Lynch with Barclays. Please go ahead.

Speaker Change: Thank you. The next question is from Brendan Lynch with Barclays. Please go ahead.

Brendan James Lynch: Great, thank you for taking my question and congratulations, Stephen, on the new role. Maybe just another one on the strategic review. Obviously, you're considering what to do with the fiber and small cell business, but is there a component of the strategic review that is also considering how to manage the remaining business if you were to sell off those assets, whether that be to expand the tower business into new markets or enter a new vertical of some sort?

Great. Thank you for taking my question and congrats Stephen on the new role.

Brendan James Lynch: Maybe just another one on the strategic review.

Brendan James Lynch:

Brendan James Lynch: Okay.

Brendan James Lynch: Obviously, you're considering what to do with the fiber and small cell business, but is there a component of the strategic review.

Brendan James Lynch: It is also considering.

Brendan James Lynch:

Brendan James Lynch: How do you manage the remaining business. If you were to sell off those assets whether that be to expand the tower business into new markets or enter a new vertical of some sort.

Rob: Yeah, this is this is Rob. Thanks for the question, Brendan. The strategic review right now is focused just on the fiber business, you know, so to answer your question directly, we're not focused at this point in time on what would happen after the strategic review and the future course and strategy of the company in terms of capital allocation in that nature. I think, you know, Stephen is going to be a huge part of that along with the board. So yeah, the strategic review is just focused on the fiber business right now.

Brendan James Lynch: Yeah. This is this is rob thanks for the question Brandon.

Rob Bartolo: The strategic review right now is focused just on the fiber business you know so.

Rob Bartolo: To answer your question directly we're not we're not focused at this point in time on you know what would happen after the strategic review and in the future course and strategy of the company in terms of capital allocation and those in those in those in that nature. I think you know Stephen it's gonna be a huge part of that along with the board.

Rob Bartolo: So yeah that the strategic review is just focus on the fiber business right now.

Speaker Change: Okay. Thank you that's helpful and maybe one follow up.

Brendan James Lynch: Okay, thank you. That's helpful.

Brendan James Lynch: And maybe one follow-up question. With the higher for longer rate environment, do you anticipate that this will affect carrier spending this year or next? Or are they primarily responding to network needs when considering their deployment basis?

Speaker Change: With the higher for longer rate environment do you anticipate that this will affect carrier spending this year or next or are they primarily responding to network needs when considering their deployment pace.

Tony: Brendan, this is Tony. Based on my experience there, there's always potential for some movement along the edges, but principally, they're responding to Capacity Needs, Quality of Service Needs, etc. So I would say the vast majority of the decision-making in the year is based on that.

Speaker Change: Brandon This is Tony I would based on my experience there.

You know, there's there's always potential for some movement, along the edges, but principally they're responding to capacity.

Brandon: Capacity needs quality of service needs et cetera. So.

I would I would say the vast majority of their decision making in year is based on that.

Tony: Okay, very good. Thank you for taking my questions.

Brandon: Okay very good thank you for taking my questions.

Brandon Lee Nispel: Thank you very much. The last question this evening is from Brandon Nispel with KeyBank Capital Markets. Please go ahead.

Brandon: Thank you very much for last question. This evening is from Brandon <unk> with Keybanc capital markets. Please go ahead.

Brandon Lee Nispel: Thanks for getting in and taking the questions. I was hoping to go back to the tower business. You obviously pointed out that your first quarter results were right in line with guidance, but, big picture, your level of leasing is well below historical levels that you've seen and much closer to a trough than any sort of peak. So I was hoping you could talk about the confidence you have in terms of reacceleration. It didn't sound like that was in the guidance for this year, but something to get back to your 5% long-term growth guidance. And I'll leave it at that. Thanks.

Brandon: Hey, Thanks for getting me in and taking the questions I was hoping to go back to the tower business. You obviously called out your first quarter results were right in line with guidance, but I think big picture.

Brandon: Leasing is well below historical levels that you've seen and much closer to trough than than any sort of peak.

Was hoping you could talk about the confidence you have in terms of Reacceleration.

Brandon: It didn't sound like that was in the guidance for this year, but something to get back to your 5% long term Brook guidance.

Speaker Change: And I'll leave it at that thanks.

Speaker Change: Yes, Brendan Thanks, It's Tony again, I think I'd, just reiterate what I had said earlier when I said last quarter.

Tony: It's Tony again. I think I'd just reiterate what I said earlier when I said last quarter, I know, I know what's needed to cover 5G at the speeds that are promised again with fixed wireless and that activity, and just overall growth in data demand in that business. That requires either more spectrum or more densification. And as you know, in the past few years, the carriers have been focused on utilizing spectrum and deploying 5G.

Speaker Change: <unk>.

Anthony J. Melone: I know I know what's needed.

Anthony J. Melone: To cover.

Anthony J. Melone: Five G at the speeds that are promised again.

Anthony J. Melone: Again with fixed wireless and that activity and just overall growth.

Anthony J. Melone: Growth in data demand in that business.

Anthony J. Melone: That requires.

Anthony J. Melone: Either more spectrum or more densification and as you know in the past few years the carriers have been focused on utilizing.

Anthony J. Melone: Spectrum and deploying five G.

Tony: And I believe at some point in the future, densification efforts will pick up. But it's very hard to predict exactly when that timing will start. But as Stephen said, I believe in the U.S. market. I believe in..., in our shared infrastructure model, and so I'm optimistic that those types of growth levels will be back at some point.

Anthony J. Melone: And I believe that some point in the future.

Densification efforts will pick up.

Anthony J. Melone: But it's very hard to predict exactly when that timing will start but.

Anthony J. Melone: As Stephen said I believe in the U S market I believe in.

Yeah.

Anthony J. Melone: Our shared infrastructure model and so I'm optimistic that those types of growth levels below will be back at some point.

Stephen: Hey Brendan, it's Stephen. I just say that there are always phases of build. All the G's that we've seen over the years, phase one is pretty much massive, you know, building over two, three years. And then there's kind of a pause, right? They still spend capital. They're still, you know, filling holes in the network and doing overlays, etc.

Anthony J. Melone: Hey, Brendan it's Stephen Yeah, I'd, just say that Theres always phases of builds.

Stephen Moskowitz: All the <unk> that we've seen over the years as one is pretty.

Stephen Moskowitz: Pretty much massive building over two three years.

Stephen Moskowitz: And then there's kind of a pause right they still spend capital Theres still you know.

Stephen Moskowitz: Filling holes in the network and doing overlays et cetera, and that takes typically you know it could take a year could take year and a half.

Stephen: And that typically takes, you know, could take a year, could take a year and a half. But in this market, maybe it's taking a little bit longer. But then phase three kicks in, and then there's a real reacceleration. And so I think what we're saying is, you know, we're kind of in phase two. And you know, I think, you know, the good news for me, at least, is that I'm coming in new here.

In this market, maybe it's taking a little bit longer, but then phase III kicks in and then there's a real XL re acceleration and so I think what we're saying is.

Stephen Moskowitz: We're kind of in that phase two.

Stephen Moskowitz: And I think.

Speaker Change: Good news for me at least is I'm coming in new here, but my goal is again to work with the team to make sure that we're exceptionally prepared so when phase III comes which we're anticipating hopefully at some point in 2025.

Stephen: But, you know, my goal is, again, to work with the team to make sure that we're exceptionally prepared when phase three comes, which, you know, we're anticipating hopefully at some point in, you know, 2025, we're able to really maximize our unfair share of business going forward.

You know that we were able to really maximize our unfair share of business going forward.

Brandon Lee Nispel: Thanks for taking the question.

Speaker Change: Thanks for taking the question.

Speaker Change: Thank you. This concludes our question and answer session I would now like to turn the call back over to Tony Malone for closing remarks.

Tony: Thank you. This concludes our question and answer session. I would now like to turn the call back over to Tony Malone for closing remarks.

Tony: Thank you, MJ. I'd like to take this opportunity to express my appreciation to the Crown Castle team throughout the country. Over the past three months, I've had the opportunity to spend time with many of you, and I've been impressed by your dedication to our customers and shareholders. You have made my time at Crown Castle something I will look back on fondly, and I thank you for all you do.

Anthony J. Melone: Thank you M J I'd like to take this opportunity to express my appreciation to the Crown castle team throughout the country.

Anthony J. Melone: Over the past three months I've had the opportunity to spend time with many of you and I've been impressed by your dedication to our customers and shareholders.

Anthony J. Melone: You have made my time at Crown Castle is something I will look back on fondly and I. Thank you for all you do.

Speaker Change: And I'd also like to say that like Rob I'm really excited to have Stephen here. When I worked at Verizon I had the benefit of being one of Stephen's largest customers and I got to see his professionalism customer focus and.

Tony: And I'd also like to say that, like Rob, I'm really excited to have Stephen here. When I worked at Verizon, I had the benefit of being one of his largest customers, and I got to see his professionalism, customer focus, and strong Operational Acumen firsthand. I believe Stephen's skills, experience, and proven track record of improving financial performance will help the great team we have across the company take advantage of the growing demand for communications infrastructure. I look forward to working with Stephen over the next month and staying actively engaged on the board. Thank you, and have a good evening.

Speaker Change: Strong operational acumen firsthand.

Speaker Change: I believe Steven skills experience and proven track record of improving financial performance will help the great team, we have across the company take advantage of the growing demand for communications infrastructure.

Speaker Change: I look forward to working with Stephen over the next month and staying actively engaged on the board.

Speaker Change: Thank you and have a good evening.

Operator: The conference is now concluded. Thank you very much for your participation. You may now disconnect your lines.

Speaker Change: Thanks, everybody.

The conference has now concluded. Thank you very much for your participation you may now disconnect your lines.

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