Q1 2025 Crown Castle International Corp Earnings Call

Good day and welcome to the Q1 2025 Crown Castle earnings Conference call, all participants will be in a listen only mode.

Operator: Good day and welcome to the Q1 2025 Crown Castle Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

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Kris Hinson: I would now like to turn the conference over to Mr. Kris Hinson. vice president of corporate finance and treasurer. Please go ahead. Thank you, Dorothy, and good afternoon, everyone. Thank you for joining us today as we discuss our first quarter 2025 results. With me on the call this afternoon are Dan Schlanger, Crown Castle's interim president and chief executive officer, and Suna Patel, Crown Castle's chief financial officer. To aid the discussion, we have posted supplemental materials in the investor section of our website at crowncastle.com that will be referenced throughout the call.

Chris Handsome: I would now like to turn the conference over to Mr. Chris handsome.

Vice President of corporate finance and Treasurer.

Chris Handsome: Go ahead.

Chris Handsome: Thank you Darren and good afternoon, everyone.

Speaker Change: You you for joining us today as we discuss our first quarter 2025 results with me on the call. This afternoon are Dan Schlanger Crown castle's interim President and Chief Executive Officer, and Sunil Patel Crown Castle's Chief Financial Officer.

Speaker Change: 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.

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. 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 30th, 2025, and we assume no obligation to update any forward-looking statements. In addition, today's call includes discussions of certain non-GAAP financial measures. Tables reconciling these non-GAAP financial measures are available in the supplemental information package in the investor section of the company's website at crowncastle.com.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: Our statements are made as of today April 32025, and we assume no obligation to update any forward looking statements.

Speaker Change: 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 Dot com.

Dan Schlanger: With that, let me turn the call over to Dan. Thanks, Kris, and good afternoon, everyone. Before I begin, I'd like to thank the board for placing its confidence in me to lead the company during this interim period as they work to identify the next CEO. I'm grateful to have this opportunity, and I'm excited we're on a path to becoming a pure-play U.S. Tower Company. I believe the decision to sell our fiber segment positions each of our tower, small cell, and fiber solutions businesses to be highly successful going forward. while unlocking substantial value in our tower.

Dan Schlanger: Let me turn the call over to Dan.

Dan Schlanger: Thanks, Chris and good afternoon, everyone before I begin I'd like to board, replacing its confidence in me to lead the company. During this interim period as they work to identify the next CEO.

Dan Schlanger: I'm grateful to have this opportunity and I'm excited we're on a path to becoming a pure play U S Tower company.

Dan Schlanger: I believe the decision to sell our fiber segment positions each of our tower small cell and fiber solutions businesses to be highly successful going forward, while unlocking substantial value in our tower business.

Dan Schlanger: to help realize that.

Dan Schlanger: To help realize that value well in this role my top priorities are facilitating the successful inefficient close of the small cell and fiber solution sale.

Dan Schlanger: While in this role, my top priorities are facilitating the successful and efficient close of the Small Cell and Fiber Solutions Center. delivering on the company's financial and operating objectives for 2025 and positioning the tower business to maximize value for shareholders on a stand-alone basis. We are off to a good start by delivering strong first quarter results, giving us confidence in our full year 2025 outlook. Additionally, although we are in the early phases, we are making good progress towards separating our fiber solutions and small cell businesses so that we can close the sale in the first half of 2026.

Dan Schlanger: <unk> on the company's financial and operating objectives for 2025 and positioning the tower business to maximize value for shareholders on a standalone basis.

We are off to a good start by delivering strong first quarter results, giving us confidence in our full year 2025 outlook. Additionally.

Dan Schlanger: Additionally, although we are in the early phases, we're making good progress towards separating our fiber solutions and small cell businesses. So that we can close the sale in the first half of 2026.

Dan Schlanger: Going forward, I believe we have a unique value-creation opportunity, as the only public, pure-play tower company in the U.S. focused exclusively on the U.S., which we continue to believe is the best market in the world for tower ownership. Since the early stages of 5G network deployment in 2020, Mobile data demand in the U.S. has grown substantially. To maintain network capacity and quality, our customers have invested over $35 billion annually in their networks, resulting in more than 5% average annual organic growth in our tower business from 2020 to 2025. Looking forward, we believe that continued growth and data demand will drive durable growth in our business.

Dan Schlanger: Going forward I believe we have a unique value creation opportunity as the only public pure play tower company focused exclusively on the U S, which we continue to believe is the best market in the world for tower ownership.

Dan Schlanger: Since the early stages of five she network deployment in 2020 mobile data demand in the U S has grown substantially to maintain network capacity and quality our customers have invested over $35 billion annually in their networks, resulting in more than 5% average annual organic growth in our tower business from 2020 to 2024.

Dan Schlanger: Yeah.

Dan Schlanger: Looking forward, we believe the continued growth in data demand will drive durable growth in our business.

Dan Schlanger: As you can see on page four of our earnings... History demonstrates just how durable U.S. tower demand growth has been across market cycles and macroeconomic conditions. Over the past two decades, the U.S. has experienced two recessions and 10-year treasury yields have fluctuated by almost 4%. While cash, site rental revenues in our tower business have grown consistently. Further underscoring the strength of the U.S. Tower business model and the resiliency of the demand for our assets. tariff policies do not impact our full year 2025 outlook. In addition to benefiting from the durable and healthy market dynamics we enjoy in the U.S.

Dan Schlanger: As you can see on page four of our earnings materials history demonstrates just how durable U S tower demand growth has been across market cycles and macroeconomic conditions.

Dan Schlanger: Over the past two decades, the U S has experienced two recessions and 10 year treasury yields have fluctuated by almost 4% while cash site rental revenues in our tower business have grown consistently.

Dan Schlanger: Further underscoring the strength of the U S tower business model and the resiliency of the demand for our assets tariff policies do not impact our full year 2025 outlook.

Dan Schlanger: In addition to benefiting from the durable and healthy market dynamics, we enjoy in the U S. We believe that being a pure play tower company will allow us to unlock value by focusing on customer service operational excellence and improve profitability.

Dan Schlanger: We believe that being a pure play tower company will allow us to unlike value by focusing on customer service, operational excellence, and improved profitability. We believe these areas of focus will drive both higher top and bottom line growth by positioning us to win additional revenue opportunities, improve operational efficiency, and deliver for our customers and shareholders. We're complementing the attractive cash flow profile from our U.S. tower business with a capital allocation framework that balances predictable return of capital to shareholders with financial flexibility and balance sheet strength. With limited sustaining capital expenditures, variable costs, and growth capital required to drive incremental revenues, the tower business generates significant cash flows, giving us flexibility in our capital allocation.

Dan Schlanger: We believe these areas of focus will drive both higher top and bottom line growth by positioning us to win additional revenue opportunities improve operational efficiency and deliver for our customers and shareholders.

Dan Schlanger: We are complementing the attractive cash flow profile from our tower U S tower business with a capital allocation framework that balances predictable return of capital to shareholders with financial flexibility and balance sheet strength.

Dan Schlanger: With limited sustaining capital expenditures variable costs and growth capital required to drive incremental revenues.

Dan Schlanger: Our business generates significant cash flows, giving us flexibility in our capital allocation.

Dan Schlanger: As announced last quarter, we will first look to return capital to our shareholders via a quarterly dividend set in any given year at a rate of about 75 to 80 percent of anticipated AFFO, excluding amortization of prepaid rent.

Dan Schlanger: As announced last quarter, we will first look to return capital to our shareholders via our quarterly dividend set in any given year at a rate of about 75% to 80% of anticipated <unk>, excluding amortization of prepaid rent.

Dan Schlanger: Consistent with this framework, the board has indicated that it intends to reduce our annualized dividend per share to $4.25 beginning in the second quarter of 2020. Additionally, after the close of the sale transit. We expect to spend between $150 and $250 million of annual capital expenditures net of prepaid rent received. This capital spend primarily includes modifying our towers, purchasing land under our towers, and investing in technology and systems that will enhance profitability. Lastly, we expect to repurchase shares. Currently, Crown Castle's board intends to implement a share repurchase program of approximately $3 billion in conjunction with the close of the sale of our fiber solutions and small cell business.

Dan Schlanger: Consistent with this framework the board has indicated that it intends to reduce our annualized dividend per share to $4 25, beginning in the second quarter of 2025.

Dan Schlanger: Additionally, after the close of the sale transaction, we expect to spend between 150 and $250 million of annual capital expenditures net of prepaid rent received.

Dan Schlanger: This capital spend primarily includes modifying our towers purchasing land under our towers and investing in technology and systems that will enhance profitability.

Dan Schlanger: Lastly, we expect to repurchase shares currently crown castle's board intends to implement a share repurchase program were approximately $3 billion in conjunction with the close of the sale of our fiber solutions and small cell businesses.

Dan Schlanger: To support our capital allocation framework and balance sheet strength, we plan to manage our debt balance to maintain an investment-grade credit rate. With this in mind, after closing the sale transaction, we expect to use approximately six billion dollars of cash proceeds to repay debt. We believe this balance between debt repayment and share repurchases positions us well to drive future value creation.

Dan Schlanger: To support our capital allocation framework and balance sheet strength, we plan to manage our debt balance to maintain an investment grade credit rating.

Dan Schlanger: With this in mind after closing the sale transaction, we expect to use approximately $6 billion of cash proceeds to repay debt.

Dan Schlanger: We believe this balance between debt repayment and share repurchases positions us well to drive future value creation.

Dan Schlanger: To wrap up first we're excited to be on the path to becoming a pure play tower company and we're making good progress separating our fiber solutions and small cell businesses, keeping us on track to close the sale in the first half of 2026.

Dan Schlanger: To wrap up, first, we are excited to be on the path to becoming a pure play tower company, and we are making good progress separating our fiber solutions and small cell business. keeping us on track to close the sale in the first half of 2020. Second, we are pleased by our strong first quarter results and are confident we can deliver our full year 2025 outlook. And third, we are focused on driving operational improvements while implementing our balanced and disciplined capital allocation framework to enhance shareholder returns over time.

Dan Schlanger: We are pleased by our strong first quarter results and are confident we can deliver our full year 2025 outlook and third we are focused on driving operational improvements, while implementing our balanced and disciplined capital allocation framework to enhance shareholder returns overtime.

Dan Schlanger: Finally, I'd like to welcome Suna Patel, who started as Chief Financial Officer at the beginning of April. Soon it brings extensive industry and leadership experience. Although he has only been CFO here for a short time, Sooner has already provided great insights that have helped me tremendously in my interim role. It's great to have him on the Crown Castle team.

Speaker Change: Finally, I'd like to welcome Sunil Patel, who started this chief financial officer at the beginning of April soon.

Speaker Change: Soon it brings extensive industry and leadership experience.

Speaker Change: Although he has only been CFO here for a short time sooner has already provided great insights that have helped me tremendously in my interim role it's great to have him on the Crown Castle team.

Suna Patel: And with that, I'll turn it over to Suna to walk us through the details. Thanks, Dan, and good afternoon, everyone. Thank you for the warm welcome. I'm excited to be here, and I look forward to working together to deliver for our customers and shareholders. As Dan mentioned, our focus right now is on closing the sale of the fiber business and positioning the tower business to maximize shareholder value on a standalone basis as we aim to deliver on our financial and operating objectives for the year.

Speaker Change: And with that I'll turn it over to sooner to walk us through the details of the quarter.

Speaker Change: Thanks, Dan and good afternoon, everyone. Thank you for the warm welcome I am excited to be here and I look forward to working together to deliver for our customers and shareholders.

Speaker Change: As Dan mentioned, our focus right now is on closing the sale of the fiber business and positioning the business to maximize shareholder value on a standalone basis as we aim to deliver on our financial and operating objectives for the year.

Suna Patel: Before I review the first quarter results, I would like to remind everyone that having an agreement to sell our fiber segment means that the fiber segment results are required to be operated, reported, sorry, within Crown Castle's financial statements as discontinued operations. As a result, the company's full year 2025 outlook and first quarter results do not include contributions from what we previously reported under the FIBER segment, except as otherwise noted. To aid in the review of our first quarter results, we've included in our earnings materials full year 2024 results on a comparable basis. As we indicated last quarter, within our 2025 outlook and in our quarterly results, all financing expenses are included in continuing operations and do not reflect the impact of any expected use of proceeds from the sale of our 5G.

Speaker Change: Before I review, the first quarter results I would like to remind everyone that having an agreement to sell our fiber segment means that the fiber segment results are required to be operated reported sorry within crown castle's financial statements as discontinued operations as a result, the company's full year 2025 outlook and first quarter.

Speaker Change: <unk> do not include contributions from what we previously reported under the fiber segment, except as otherwise noted.

Speaker Change: And the review of our first quarter results will be included in our earnings materials full year 'twenty 'twenty four results on a comparable basis.

Speaker Change: As we indicated last quarter.

Speaker Change: Our 2025 outlook and in our quarterly results. All financing expenses are included in continuing operations and do not reflect the impact of any expected use of proceeds from the sale of our fiber business.

Suna Patel: Additionally, SG&A has been allocated between continuing and discontinued operations to develop our operations. However, these allocations may not represent the run rate SG&A for Crown Castle as a standalone tower.

Speaker Change: Additionally, SG&A has been allocated between continuing and discontinued operations to develop our outlook. However, these allocations may not represent the run rate SG&A for Crown Castle as a Standalone company as a result, adjusted EBITDA. It's F O N S F O.

Suna Patel: As a result, adjusted EBITDA, AFFO and AFFO per share in our 2025 outlook and quarterly results may not be representative of the company's anticipated performance following the close of the sale. Turning to our results on page 5 of our earnings materials, you can see that we had a solid start to our year in the first quarter. Site rental revenues included 5.1% dollar organic growth, excluding the impact of sprint cancellation. This growth benefited from a $3 million contribution from other billings primarily related to intercompany back billings that is not expected to recur going forward. site rental revenues also included $19 million of straight-line revenues.

Speaker Change: <unk> per share in 2025 outflow and quarterly results may not be representative of the company's anticipated performance following the close of the sale.

Speaker Change: Turning to our results on page five of our earnings materials, you can see that we had a solid start to our year in the first quarter.

Speaker Change: Site rental revenues included five 1% dollar organic growth, excluding the impact of sprint cancellations.

Speaker Change: This growth benefited from a $3 million contribution from other billings primarily related to intercompany back billings that is not expected to recur going forward.

Speaker Change: Site rental revenues also included $19 million of straight line revenues. Please keep in mind that we expect a straight lined revenues to turn negative consistent with our full year 2025 outlook of zero.

Suna Patel: Please keep in mind that we expect our straight-line revenues to turn negative, consistent with our full year 2025 outlook of zero. adjusted EBITDA, and FFFO in the first quarter benefited from lower repair and maintenance costs, sustaining capital expenditures, and other non-worker costs. These lower costs were largely due to timing and seasonality, so we expect them to occur later in the year. We also experienced a modest decrease in quarterly interest expense due to lower-than-anticipated short-term borrowing.

Speaker Change: Adjusted EBITDA in F. F F O in the first quarter benefited from lower repair and maintenance costs sustaining capital expenditures and other non core costs. These lower costs were largely due to timing and seasonality. So we expect them to occur later in the year.

Speaker Change: We also experienced a modest decrease in quarterly interest expense due to lower than anticipated short term borrowing rates.

Suna Patel: Turning to page six, our four-year outlook remains unchanged. Our four-year outlook includes 4.5% organic growth, excluding the impact of sprint cancellation. adjusted EBITDA of approximately $2.8 billion and AFO of approximately $1.8 billion.

Speaker Change: Turning to page six our full year outlook remains unchanged.

Speaker Change: Full year outlook includes four 5% organic growth, excluding the impact of sprint cancellations.

Speaker Change: Adjusted EBITDA of approximately $2 8 billion and if all but approximately $1 8 billion.

Suna Patel: Additionally, we still expect to see $250 million of free cash flow from our discontinued operations in the full year 2020. In the first quarter, we generated $53 million of free cash flow from our discontinued operations, or $75 million, excluding a $22 million increase in net working capital. We do not expect working capital to be a significant use of cash for the remainder of 2025.

Speaker Change: Additionally, we still expect to see $250 million of free cash flow from our discontinued operations and the full year 2025 and.

Speaker Change: In the first quarter, we generated $53 million of free cash flow from discontinued operations or 75 million, excluding a $22 million increase in net working capital.

Speaker Change: We do not expect working capital to be a significant use of cash for the remainder of 2025 moving.

Suna Patel: Moving to page eight, our full year outlook positions us well to meet our range for expected annual AFFO following the anticipated close of the transaction of $2.3 to $2.4 billion, which remains unchanged. Turning to the balance sheet, we entered the quarter with significant liquidity and flexibility, and we are well-positioned to maintain our investment-grade rating after the sale of the fiber business. We ended the quarter with an average maturity of over six years, 89% fixed rate debt, approximately $5.3 billion of availability under our revolving credit. and $2.1 billion of debt maturities over the next while.

Speaker Change: Moving to page eight our full year outlook positions us well to meet our range for expected annual F. F. O. Following the anticipated close of the transaction of two three to $2 4 billion, which remains unchanged.

Speaker Change: Turning to the balance sheet, we ended the quarter with significant liquidity and flexibility and we are well positioned to maintain our investment grade rating. After the sale of the fiber business. We ended the quarter with an average maturity of over six years, 89% fixed rate debt approximately $5 3 billion.

Speaker Change: Availability under our revolving credit facility and $2 1 billion of debt maturities over the next 12 months.

Suna Patel: Lastly, our outlook for discretionary CapEx remains unchanged at $185 million or $145 million net of $40 million of prepaid grant receipts. To wrap up, we had a strong start to the year, and we've made good progress separating the fiber business and positioning the tar business to maximize shareholder value on a stand-alone basis.

Speaker Change: Lastly, our outlook for discretionary Capex remains unchanged at $185 million or $145 million net of $40 million or prepaid rent received.

Speaker Change: To wrap up we had a strong start to the year and we've made good progress separating the fiber business and positioning the business to maximize shareholder value on a standalone basis longer term. We believe we have a unique value creation opportunity as the only public tower company exclusively focused on the U S. The best.

Suna Patel: Longer term, we believe we have a unique value creation opportunity as the only public tower company exclusively focused on the U.S., the best market in the world for wireless infrastructure ownership.

Speaker Change: Market in the world for wireless infrastructure ownership.

Operator: With that, Darcy, I'd like to open the line for questions. Thank you.

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

Speaker Change: Yeah.

Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you are using a speakerphone. Please pick up your handset before pressing the case.

Operator: 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 are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star then two.

Speaker Change: If at any time your question has been addressed and he would like to withdraw your question. Please press Star then two.

Operator: At this time, we will pause momentarily to assemble our roster.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Jonathan Atkin: Your first question today comes from Jonathan Atkin from RBC Capital Markets. Please go ahead. Thank you.

Speaker Change: Your first question today comes from Jonathan Atkin from RBC capital markets.

Speaker Change: Please go ahead.

Speaker Change: Thank you two questions. It's been a very eventful year when it comes to kind of your executive range was the dams movement now acting CEO seats and then as soon as you are getting hired on.

Dan Schlanger: Two questions. It's been a very eventful year when it comes to kind of the executive range with Dan's movement now into the acting CEO seat, and then soon you're getting hired on. And I wonder if you could shed a little bit of light as to what happened since the last earnings call that led to this sort of sequence of events. And then secondly, you outlined kind of the strategy going forward around capital return to shareholders, U.S. only. And within the context of that, any further thoughts relative to what was shared on the last call around bill disputes or external growth through tuck-in M&A and so forth?

Speaker Change: And I Wonder if you could shed a little bit of light as to what happened since the last earnings call that led to the sort of sequence of events.

Speaker Change: And then secondly.

Speaker Change: You outlined.

Speaker Change: Kind of the strategy going forward around capital return to shareholders U S only and within the context of that.

Speaker Change: Any further thoughts relative to what we shared on our last call around build to suits.

Speaker Change: Or external growth through tuck in M&A and so forth. Thank you.

Dan Schlanger: Thank you. John, thanks for the question. I really can't speak for what happened with Steven specifically, other than to say you can just refer back to the press release the board put out about what happened there. What I can say is that I'm excited to be a part of this company still. I think that the strategy that we are going under, as we talked about, is one that I think will create significant value for shareholders over time, and I'm excited to be a part of it. I think we can get the separation of our fiber and small cell businesses done effectively, and it's something that I'm focused on.

Speaker Change: Yeah, John Thanks for the question.

Speaker Change: I really can't speak for what happened with Stephens specifically other than to say you can just refer back to the press release the board put out about what happened there what I can say is that.

Speaker Change: Im excited to be a part of this company is still I think that.

Speaker Change: Strategy that we are going under as we talked about is one that I think will create significant value for shareholders over time.

Speaker Change: And I'm excited to be part of it.

Speaker Change: We can get a the separation of our fiber and small cell business is done effectively.

Speaker Change: And it's something that I'm focused on.

Speaker Change: And having seen it here with all of his experience both in the industry as well as doing significant M&A transactions through his career I believe will help us get that transaction done as efficiently as possible and as quickly as possible.

Dan Schlanger: Having Sunit here, with all of his experience both in the industry as well as doing significant M&A transactions through his career, I believe will help us get that transaction done as efficiently as possible and as quickly as possible. So what I can say is whatever's happened has led us to this point where I think we're really well positioned going forward and excited that we have a story that is focused on the US tower market only because I think it's a great market and It simplifies our story and allows us to focus on the things that are most important to us, which are creating more value through growing our revenues and reducing our costs, which is what we're To that, you may have further thoughts on what our strategy looks like.

Speaker Change: So what I can say is whatever has happened has led us to this point, where I think we're really well positioned going forward and I'm excited that we have a story that is focus on the U S tower market only because I think it's a great market and it simplifies our story and allows us to focus on the things that are most important to us which are creating more value through.

Speaker Change: Growing our revenues and reducing our costs, which is what we're focused on.

Speaker Change: To that you made.

Speaker Change: What are the thoughts on what our strategy looks like.

Speaker Change: Right.

Dan Schlanger: I think given where we are with a major sale transaction going on, M&A for us in the short term is unlikely. We have a lot of focus on getting done what is most important to us, which is separating the fiber and small cell business. So I don't I don't think there's gonna be a lot of M&A from us in the short term. Build the suit, however, absolutely would be interested in as long as the returns are good and investing organically in our business is something that we're very interested in because we think that the tower business is a great business that will generate great returns over time and the more of it we can we can invest into we would like to do.

Speaker Change: I think given the given where we are with it with a major sale transaction going on M&A for us in the short term is unlikely we have a lot of focus on getting done what is most important to us which is separating our fiber and small cell business.

Speaker Change: So I don't I don't think there's going be a lot of M&A from us.

Speaker Change: In the short term build to suit however, absolutely would be interested in as long as the returns are good and investing organically in our business is something that we're very interested in because we think that the tower business is a great business that will generate great returns over time and the more of it. We can we can invest into we would like to do.

Operator: Thank you.

Speaker Change: Thank you.

Rick Prentiss: Your next question comes from Rick Prentiss from Raymond James. Please go ahead. Thanks. Good afternoon. Thanks. Good afternoon, everybody. Hey Rick. Hey. Welcome. Looking forward to working with you and seeing you.

Speaker Change: Your next question comes from Ric Prentiss from Raymond James.

Speaker Change: Please go ahead good afternoon.

Thanks, Good afternoon everybody.

Speaker Change: Hey, Rick.

Speaker Change: Hey.

Speaker Change: Looking forward to.

Speaker Change: Working with you and seeing you.

Speaker Change: Thank you.

Suna Patel: I want to start with one with Senator, if I could, obviously you've been on the board of Crown for a while. What appealed to you and what kind of triggered your thoughts of, let's move from a board role to a CFO role, and what do you think you then bring to that role? Yeah, look, I think, one, I really like the team at Crown, you know, very long term capability in the tower business. I'm excited about The entire business and the prospects, having been at T-Mobile for a few years, I think there's continued demand. infrastructure.

Speaker Change: Let's start with one was just wondering if I could.

Speaker Change: Obviously, you've been on the board of Crown for a while what appealed to you about what kind of triggered your thoughts so let's move from a board role to our CFO wallet and what do you think you then bring to that role.

Speaker Change: Yeah look I think one.

Speaker Change: I really liked the team.

Speaker Change: At Crown.

Speaker Change: Very long term capability in the tower business I'm excited about that.

Speaker Change: Our tower business and the prospects, having been a T mobile for a few years.

Speaker Change: I think there is continued demand for infrastructure and thirdly, I do think that as a pure.

Dan Schlanger: And thirdly, I do think that as a pure tower only company, that singular focus on that business, you know, will allow us to look at other things with respect to automation and system and platform investments that will continue to drive not just efficiency, but better customer experience and over time, better top I'm glad to be here and being on the board.

Speaker Change: All the company that singular focus on that business will allow us to look at other things with respect to automation system and platform investments that will continue to drive not just efficiency, but better customer experience and overtime better topline performance.

Speaker Change: The black line and.

Speaker Change: And being on the board right.

Speaker Change: To get to know.

Dan Schlanger: And Dan, you mentioned a couple of times, top priority, key focus, get the deal done. Walk us through kind of where you're at in the process, it was only announced shortly ago, but what are the difficulties of getting this deal over the finish line? Is it particular states or where you're at in the process? But obviously, key focus, what are the difficulties? Yeah, I wouldn't call them difficulties. I think the reason that the transaction is going to take until the first half of 2026 to close is for regulatory approvals, because we have to get approvals in all the states in which we operate, as well as from the federal government.

Dan Schlanger: Yeah and Dan.

Dan Schlanger: You mentioned a couple of times top priority key focus get the deal done.

Speaker Change: Walk us through kind of where you're at in the process of only announced shortly ago, but what are the difficulties of getting this deal over the finish line.

Speaker Change: Is it particular states or where you're at in the process, but obviously the key focus what are the difficulties.

Speaker Change: Yeah, I wouldn't call them difficulties I think.

Speaker Change: The reason that the transaction is going to take until the first quarter first half of 2026 to close as for regulatory approvals because we have to get approvals in all the states in which we operate as well as from the federal government and those things just take time I don't think that I would call them difficult I would just say there are time consuming.

Dan Schlanger: And those things just take time. I don't think that I would call them difficult. I would just say they're time consuming. It's a while for us to put together all the information we have to put together, and it's a while for them to review that information. We're going to work very closely with our counterparties and with our outside councils to make sure we get through that process as quickly as we possibly can. But as you know, it really is going to be up to those governmental agencies. There's nothing we can do to force them into anything.

Speaker Change: While for us to put together all the information we have to put together and it's a while for them to review that information, we're going to work very closely with our counterparties and with our outside counsels.

Speaker Change: To make sure we get through that process as quickly as we possibly can but as you know it really is going to be up to those governmental agencies theres nothing we can do to force them into anything. So we're just going to work with them and be as good of a counterparty to them as we possibly can to try to get this deal done.

Dan Schlanger: So we're just going to work with them and be as good a counterparty to them as we possibly can to try to get this deal done. So I'm I wouldn't say I'm concerned about anything. Where we are is that we're starting that process. We're starting all those filings. We're starting those conversations with the governmental agencies.

Speaker Change: So.

Speaker Change: I wouldn't say I'm concerned about anything where we are is that we're starting that process. We're starting all of those filings we're starting those conversations.

Speaker Change: Conversations with governmental agencies.

Dan Schlanger: And we're starting to separate the businesses because we also have to deliver to each of our buyers a business that operates, and we need to separate those businesses from our underlying tower business. And so we're starting that process and have started that process and believe we're making really good progress and have worked really well with both SAO and EQT to make that happen. Right.

Speaker Change: And we're starting to separate the businesses because we also have to deliver to each of our buyers a business that operates in.

And we need to separate those businesses from our our underlying tower business.

Speaker Change: So we're starting that process and have started that process.

Speaker Change: And believe we're making really good progress and have worked really well with both Seo and EQT to make that happen.

Rick Prentiss: Last one for me is obviously first quarter was pretty good. Very good. Had the three million backfilling intercompany primarily.

Speaker Change: Great last one for me is obviously first quarter was pretty good very good.

Speaker Change: Had the 3 million back filling intercompany primarily.

Rick Prentiss: You touched on a couple of things that might be positive or negatives, but seems like your confidence is well-founded, should I say.

Speaker Change: You touched on a couple of things that might be positive or negative but.

Speaker Change: Like.

Speaker Change: Your confidence is well founded shall I say.

Rick Prentiss: Also, you just gave the guidance, you know, a month and a half ago, but walk us through maybe what the pacing for new lease activity should look like in 25 and kind of how we from the outside should think about the ability or desire maybe at some point to say, we can now... adjust our guidance. Yeah, as we talked about it, when we gave the guidance, we thought that the activity levels in the in our business would likely be consistent over the course of 2025 and 2024. And if you look at what we had, in terms of core new leasing, for the first quarter, it is consistent with the fourth quarter.

Speaker Change: Also just gave the guidance.

Speaker Change: A month and a half or walk us through maybe what the pacing for new lease activity should look like in 'twenty, five and kind of how are we from the outside should think about.

Speaker Change: The ability or desire or maybe at some point to say we can now.

Speaker Change: Adjust our guidance.

Speaker Change: Yeah, as we talked about when we gave the guidance we thought that the activity levels in our business would likely be consistent over the course of 2025 in 2024, and if you look at what we had in terms of core new leasing for the first quarter. It is consistent with the fourth quarter and so we don't see a.

Dan Schlanger: And so we don't see a significant move up or down from those numbers. But as you know, it's never going to be exactly the same every quarter. So what we see is if we look out over the course of the rest of 2025, we believe for new leasing activity and ultimately organic growth, we'll be in the ranges that we provided as part of our guide of somewhere between 105 and $115 million of leasing activity and then the growth of about four and a half percent. Obviously, in the first quarter, we did better than that. And if we can continue to do a little bit better on new leasing activity and a little bit better on churn, which is what happened in the first quarter, as we got through the year and saw those things with more clarity through the back half of the year, I think we will feel comfortable talking about either being at the high end of the range or, if it's even better than that, expanding the range.

A significant move up or down from those numbers, but as you know it's never going to be exactly the same every quarter. So what we see is if we look out over the course of the rest of 2025, we believe for new leasing activity and ultimately organic growth will be in the ranges that we provided as part of our guide of somewhere between 105 hundred $15 million of leasing activity.

Speaker Change: <unk> and then the growth of about four 5%.

Speaker Change: Obviously in the first quarter, we did better than that and if we can continue to do a little bit better on new leasing activity and a little bit better on churn, which is what happened in the first quarter.

Speaker Change: As we got through the year and solve those things with more clarity through the back half of the year I think we will feel comfortable.

Speaker Change: Talking about either being at the high end the range or if it's even better than that expanding the range, but we're just not there yet as you said, we gave guidance seven weeks ago.

Dan Schlanger: But we're just not there yet. As you said, we gave guidance seven weeks ago. We still believe in our guidance. We still believe we will be in the ranges we provided. But we're happy with where we are.

Speaker Change: We still believe in our guidance, we still believe we will be in the ranges we provided.

Speaker Change: But we're happy with where we are that it's better to start with the first quarter being really good and explaining that it is.

Dan Schlanger: It's better to start with the first quarter being really good and explaining that it's, you know, why isn't it going to be that good all the time, as opposed to starting with it bad and saying everything's going to get better. So we're happy with that.

Speaker Change: Why is it going to be that good all the time as opposed to starting with it bad and saying everything is going to get better. So we're happy with that.

Dan Schlanger: And then on the cost side, there were some things that happened in the quarter that were acceleration or where we didn't spend money we thought we were going to spend that's just going to happen in the rest of the year. But there's also some that we just we've spent a lot of time and effort trying to control our costs. And you saw that over the course of the last couple of years with significant reductions in the number of people here and a significant focus on cost control. And you're seeing the impacts of that cost control coming into our numbers.

Speaker Change: And then on the cost side.

Speaker Change: There were some things that happened in the quarter that were acceleration or where we didnt spend money. We thought we were going to spend it is just going to happen in the rest of the year, but theres also some that we just we've spent a lot of time and effort trying to control our costs and you saw that over the course of the last couple of years with significant reductions in the number of people here and a.

Speaker Change: <unk> focus on cost control and Youre seeing the impacts of that cost control coming into our numbers and we're hopeful we can continue that going through 2025, but again, we're just too early to see through the year in order to to feel really certain about that quite yet.

Dan Schlanger: And we're hopeful we can continue that going through 2025. But again, we're just too early to see through the year in order to feel really certain about that quite yet.

Operator: Excellent. Thanks, guys. Thank you.

Speaker Change: Makes sense thanks, guys.

Michael Rollins: Thank you. Your next question comes from Michael Rollins from Citi.

Michael Rollins: Your next question comes from Michael Rollins from Citi. Please go ahead. Thanks and good afternoon and also welcome to SUNYT. Two questions if I could.

Speaker Change: Please go ahead.

Michael Rollins: Thanks, and good afternoon, and also welcome to soon it.

Two questions if I could first just.

Michael Rollins: You know, first, just maybe going back to some of the comments on activity that you're just describing, can you frame a little bit in terms of what you're seeing on the COLO side of the equation versus the amendment side of the equation? And within that context, you know, any changes in the carrier conversations have been progressing.

Michael Rollins: Maybe going back to some of the comments on activity that you were just describing.

Michael Rollins: Can you frame a little bit in terms of what youre seeing on the.

Michael Rollins: The Colo side of the equation versus the amendment side of the equation and and within that context.

Michael Rollins: Changes in the way.

Michael Rollins: The carrier conversations have been progressing and then second.

Michael Rollins: And then second, on the last call, you talked about the tale of churn. from the merger, the Sprint merger, that's going to start in 26 and continue for a few years. And just curious if there is any creative ways to try to remediate that or try to, you know, created an additional comprehensive relationship where you could try to address that and kind of clean that up in a way that's good for you and good for the customer. Thanks, Mike. On the first question on COLO versus amendment, we have not seen a significant shift in the mix in our business between COLO and amendment.

Michael Rollins: On the last call you talked about the detail of churn.

Michael Rollins: From.

Michael Rollins: The merger the sprint merger.

It's going to start in 'twenty six and continue for a few years and just curious if there was any creative ways to try to remediate that or try to you know.

Michael Rollins: Create an additional comprehensive relationship where you can try to address that in any kind of clean that up in a way that for you and good for the customer.

Mike: Thanks, Mike.

Speaker Change: On the first question on Colo versus amendment, we have not seen a significant shift in the mix in our business between Colo and amendment, we've just seen a continuation of a very good activity level and as that activity level has grown in 2024 from from 2023 and continued good activity in 2025, we've seen more of each amendments and co locations.

Dan Schlanger: We've just seen a continuation of a very good activity level. And as that activity level has grown in 2024 from from 2023 and continued good activity in 2025, we've seen more of each amendments and colocations. and the conversations with our carrier customers. have been very good. We have those conversations all the time. I think that they are very focused on making sure that their networks are competing well on quality. And as we see their announcements over the course of the last week or so, the competitive pressure among our customers has increased. And we think that, generally speaking, that's good for tower companies.

Speaker Change: And in the conversations with our carrier customers have been very good we have those conversations all the time I think that they are very focused on making sure that their networks are competing well on quality and as we see their announcements over the course of the last week or so.

Speaker Change: The competitive pressure among our customers has increased and we think that generally speaking that's good for tower companies competitive pressure leads to pressure on network quality, which leads to investment in towers over a period of time, but when that increase in activity would happen is very difficult to predict and whether it would be over and above what we see today or just the <unk>.

Dan Schlanger: Competitive pressure leads to pressure on network quality, which leads to investment in towers over a longer period of time. But when that increase in activity would happen is very difficult to predict. And whether it would be over and above what we see today or just a continuation for a longer period of time is very difficult to predict. But we feel good about that competitive pressure increasing and ultimately being good for us in our business. And in the conversations we're having with our customers, I think we're seeing some signs of that desire to increase the quality of the network.

Speaker Change: Continuation for a longer period of time is very difficult to predict.

Speaker Change: But we feel good about that competitive pressure, increasing and ultimately being good for us in our in our business and in the conversations we're having with our customers I think.

Speaker Change: Where we're seeing some signs of that are of that desire to increase the quality of the network.

Dan Schlanger: On the tale of Sprint Churn going out, as you pointed out, we do have Sprint Churn that is beyond the amount that hits in 2025, which has been explained a lot. on a yearly basis. Of course, if we could do something that would be good for us and our customer and clean up that churn, we would do so. The question becomes, what does that mean, be good for us and our customer? And how would we get to that that conclusion? So we will we will have conversations and try to come up with something that makes sense.

Speaker Change: On the tail of sprint churn going out as you pointed out we do have sprint churn that is beyond the amount that hits in 2025, which has been explained a lot.

Speaker Change: And.

Speaker Change: On a yearly basis.

Speaker Change: Of course, if we could do something that would be good for us and our customer and and cleanup that churn we would do so.

Speaker Change: The question becomes what does that mean be good for us and our customer and how do we get to that that conclusion. So we will we will have conversations.

Speaker Change: And try to come up with something that makes sense, but having churn is not bad in our business beyond the fact that it's just generally bad to have churn but.

Michael Rollins: But having churn is not bad in our business beyond the fact that it's just generally bad to have churn. But even including that sprint churn, what we had talked about is true is that our churn is going to be in the normal range of one to two percent over a long period of time. inclusive of that Sprint churn. And that has been what we've seen over the course of our history. So I would not say that living with that churn is a bad outcome. But if we could make it better somehow, we absolutely Thanks very much.

Speaker Change: Even including that sprint churn, what we had talked about is true is that our churn is going to be in the normal range of 1% to 2% over a long period of time inclusive of that sprint churn and that has been what we've seen over over the course of our history.

Speaker Change: So I would not say that living with that churn is it bad outcome, but if we could make it better somehow we absolutely would.

Speaker Change: Thanks very much.

Speaker Change: Yeah.

Operator: Thank you.

Speaker Change: Thank you. Your next question will come from Jim Schneider from Goldman Sachs.

Jim Schneider: Your next question comes from Jim Schneider from Goldman Sachs. Please go ahead. Good afternoon. Thanks for taking my question.

Speaker Change: Please go ahead.

Jim Schneider: Good afternoon, Thanks for taking my question.

Dan Schlanger: Maybe just to ask the management question in a different way, Dan, can you maybe share with us the board's thinking about sort of what they may be looking for in a CEO this time around with a more streamlined company rather than what they were, as opposed to what they were looking for back 18 months ago when they were considering Steven's candidacy? Sure. Thanks, Jim. Yeah, I think from my conversation with the board, what they're looking is really somebody who has the leadership skills to drive this company forward as a tower-only company and make us a best-in-class operator across the board.

Speaker Change: Maybe just to ask the management question different way can you maybe share with us the board's thinking about.

Speaker Change: Sort of what they may be looking for and as CEO. This time round with a more streamlined company rather than what they were.

Speaker Change: Most of what they're looking for back 18 months ago, when they're considering Stevens candidacy.

Jim Schneider: Sure. Thanks, Jim.

Speaker Change: Yeah I think.

Speaker Change: From my conversations with the board what Theyre looking for.

Speaker Change: It was really somebody who has the leadership skills to drive this company forward as a tower only company and make us a best in class operator across the board as soon as said both in terms of of <unk>.

Dan Schlanger: As Sunich said, both in terms of reducing costs but also improving the customer experience and therefore trying to improve our revenue take. And somebody who has the experience to do that, in many cases, might have prior public company experience and has had experience in driving those types of improvements. And is also on board with the strategy that has been outlined by the board of being a U.S. tower-focused company that has capital to spend in order to grow that business within the constraint of making sure that we abide through the capital allocation framework we talked about earlier of having a dividend, having a share repurchase, maintaining our investment grade debt profile, but also investing in the business.

Speaker Change: Reducing costs, but also improving the customer experience and therefore trying to improve our revenue take.

Speaker Change: And somebody who has the experience to do that.

Speaker Change: In many cases might have prior public company experience and has had.

Speaker Change: Experience in driving those types of improvements.

Speaker Change: And it's also on board with the strategy that has been outlined by the board of being a U S tower focused company that has capital to spend in order to grow that business.

Speaker Change: Within the constraint of making sure that we buy through the capital allocation framework, we talked about earlier, having a dividend having a share repurchase keeping.

Speaker Change: Maintaining our investment grade debt profile, but also investing in the business and I think the board is looking for somebody who can manage all of that balance all of those things and come out the other side the best tower business, we possibly can be.

Dan Schlanger: And I think the board is looking for somebody who can manage all of that, balance all of those things, and come out the other side the best tower business we possibly can.

Operator: Very helpful. Thanks so much. Thank you.

Speaker Change: Very helpful. Thanks, so much.

Speaker Change: Thank you. Your next question will come from Alex Waters from Bank of America.

Alex Waters: Your next question comes from Alex Waters from Bank of America. Please go ahead. Hi, Dan and Sunit. Thanks so much for taking my questions and welcome, Sunit.

Speaker Change: Please go ahead.

Alex Waters: Hi, Dan Senate. Thanks, so much for taking my questions and welcome soon it maybe.

Suna Patel: Maybe first for you, Sunit, could you maybe just talk about some of the kind of strategic priorities you have coming in as CFO and kind of your preference between leverage reduction, programmatic or opportunistic buybacks. And then secondly.

Alex Waters: Maybe first for you said it could you maybe just talk about some of the kind of strategic priorities you have it coming in as CFO and kind of your preference between leverage leverage reductions.

Alex Waters: Gramatica or opportunistic buybacks and then secondly.

Dan Schlanger: Could you guys maybe just talk a little bit about the services side of the business, both your competitors, that they're seeing pretty good demand from customers on that. Thanks. Thank you, Alex. I'll start with the first part of your question. I mean, you know, look, the key priority for us right now, for the course of this year, is to get this approved. focused on that as the top, top priority. Beyond that, as we talked about, you know, how do we position a U.S. tower-only company, we are starting. think through that in terms of things we need to do operationally, system-wise, platform-wise, process-wise.

Alex Waters: Could you guys, maybe just talk a little bit about the services side of the business both of your competitors.

Alex Waters: Got it that they're seeing pretty good demand from customers on that thanks.

Speaker Change: Thank you Alex I'll start with the first part of your question I mean look the key priority for US right over the course of this year is to get this separation and this transaction closed. So we are all focused on that as the top top priority.

Speaker Change: Beyond that as we talked about you know how do we position our U S. Dollar only company. We are starting to think through that in terms of things that we need to do operationally system wise platform wise process wise, so at least beginning to think about that.

Suna Patel: So at least beginning to think about that and what's the right, you know, cost structure we want to operate on, what sort of things we want to do better.

Speaker Change: And what's the right.

Speaker Change: You know cost structure.

Speaker Change: To operate on what sort of things, we want to do better for customers.

Suna Patel: So really, those are the key things. On the leverage and the buyback, I think we've been very clear, you know, having been on the board too, on the Finance Committee, in terms of our capital allocation framework. So whatever Dan said and I said, I think essentially the goal is to be investment-grade, to pay down debt for the sale, as we talked about, return capital to our shareholders through a buyback in the dividend. And at the same time, I think that given that it's 75 to 80 percent of our FFO, we do have some degrees of freedom where we see the opportunity to put money to work in terms of investments to drive top-line growth.

Speaker Change: So really those are the key things on the on the.

Speaker Change: Leveraging the buyback I think we've been very clear.

Speaker Change: <unk> been on the board to the Finance Committee in terms of our capital allocation framework. So whatever Dan said and I said I think essentially the goal is to be investment grade.

Speaker Change: Two.

Speaker Change: Pay down debt with the sale as we've talked about a return capital to our shareholders through buyback and the dividend and and at the same time I think that given that it's 75% to 80% of fire for a while we do have some degrees of freedom are where we see the opportunity to put money to work in terms of investments to drive.

Speaker Change: Topline growth so in essence, I mean, it's a that's the framework and that's what we're sticking to.

Suna Patel: So in essence, I mean, that's the framework and that's what we've done.

Dan Schlanger: Yeah, I'll take the second question on services. We are seeing good demand from from our customers on the services business. I would like to point out, though, and I think you know this, Alex, is that we got out of the construction services business and no longer have that as part of our offering. And I think a lot of what I heard from some of our peers and what they said was that some of the construction services were driving an increase in activity. What we're seeing is really good activity that we've seen, like I said earlier, that's a continuation both in our services and our leasing businesses.

Speaker Change: Yeah, and I'll take the second question on services.

Speaker Change: We're seeing good demand from our customers on the services business I would like to point out, though and I think you know this Alex is that we got out of the construction services business and no longer have that as part of our offering.

Speaker Change: I think a lot of what I heard from some of our peers and what they said was that some of the construction services we're driving.

Speaker Change: An increase in activity what we're seeing is really good activity that we've seen like I said earlier, that's a continuation both in our services and our leasing businesses.

Dan Schlanger: But we are seeing an uptick in some of the services activity we had. I'll just remind you that some of our services in 2024 were one time in nature, so we need to make up for those in order just to remain flat. We think we will do so, and that speaks to an increasing level of activity. Thank you both. Thank you.

Speaker Change: But we are seeing in.

Speaker Change: An uptick in some of the services activity, we had I'll just remind you that some of our services in 2020 four were onetime in nature. So we need to make up for those in order just to remain flat. We think we will do so and that speaks to an increasing level of activity.

Beth: Thank you Beth.

Yeah.

Speaker Change: Thank you. Your next question will come from Benjamin Swinburne from Morgan Stanley.

Benjamin Swinburne: Your next question comes from Benjamin Swinburne from Morgan Stanley. Please go ahead. Thanks. Good afternoon. Dan, you touched on it a little bit earlier, but I just wanted to come back to the expense side of the business this year. A very strong margin quarter in Q1, a couple hundred basis points, I think, ahead of expectations. And I think if we were to annualize the first quarter EBITDA, you'd be ahead of the full year range. Can you talk a little bit about sort of the phasing of costs through the year? And maybe it's simply the straight line revenue putting downward pressure on EBITDA the rest of the year, but any color would be appreciated.

Beth: Please go ahead.

Speaker Change: Thanks, Good afternoon.

Speaker Change: Dan you touched on it a little bit earlier, but just wanted to come back to the expense side of the business. This year, a very strong margin quarter in Q1, a couple of hundred basis points. I think ahead of expectations and I think if we were to annualize the first quarter EBITDA you'd be ahead of the full year range can you talk a little bit about sort of the phasing of costs.

Speaker Change: Through the year and maybe it's simply that the straight line revenue putting downward pressure on EBITDA the rest of the year, but any color would be appreciated.

Benjamin Swinburne: And then I don't think this was discussed last call on the fiber small cell sale, but any tax implications, either tax, you know, cash tax liabilities tied to the sale or any other tax implications for the company as you close the pending sale next year that we should be thinking about. Thanks so much. Yeah, thanks, Ben.

Speaker Change: And then.

Speaker Change: I don't think this was discussed last call on the AR on the fiber small cell sale, but any tax implications either tax cash.

Speaker Change: Cash tax liabilities is tied to the sale or any other tax implications for the company as you close.

Speaker Change: The pending sale next year that we should be thinking about thanks, so much.

Dan Schlanger: I'm going to take them in reverse, because the second question is easy. There are no tax implications you should be considering as part of the sale. Got it. We won't have a tax On the expense side, you're right. The first quarter was very strong margins, but as Sunej said in our prepared remarks, Some of that reduction or lower expense was due to... Seasonality and timing, where we think that some of it will be, a lot of it will be incurred, a lot of that expense will be incurred the rest of the year. But, as I had mentioned, we also have been very focused on cost control, so we're hopeful that we can maintain some of that lower cost structure going forward, it's just we're not yet at the position where we feel comfortable enough to talk about that as being sustainable.

Speaker Change: Thanks, Ben I'm going to take them in reverse because the second question's easy there are no tax implications you should be considering as part of the sale.

Speaker Change: Got it and we won't have a tax impact.

Speaker Change: On the expense side, you're right.

Speaker Change: The first quarter was very strong margins, but as soon as I said in our prepared remarks.

Speaker Change: Some of that.

Speaker Change: Reduction or lower expense was due to.

Speaker Change: Seasonality and timing, where we think that some of it will be a lot of it will be incurred a lot of that expense will be incurred the rest of the year.

But as I had mentioned we also have been very focused on cost control. So we're hopeful that we can maintain some of that lower cost structure going forward. It's just we're not we're not yet at a position where we feel comfortable enough to talk about that as being sustainable.

Dan Schlanger: But like I said earlier on the leasing side, it's great to start out significantly below on the expense line because it gives us a lot of visibility and comfort in our current. And I would also just, you mentioned the straight line, the reason that we talked about it a bit was straight line does turn negative by the end of the year as part of our, as you could just, math shows you that if it's positive now and our guide is for zero, it has to turn negative in the back half of the year. And that does put pressure on our EBITDA, which is why we mentioned it, is that annualizing fourth quarter is, I mean, first quarter is not an appropriate way to look at the full year because of that and other impacts.

Speaker Change: But like I said earlier on the on the leasing side, it's great to start out significantly below on the expense line.

Speaker Change: It gives us a lot of visibility and comfort in our current guide.

Speaker Change:

Speaker Change: And.

Speaker Change: I would also just you mentioned the straight line that the reason that we talked about it a bit was straight line does turn negative by the end of the year as part of our as you can just math shows you that if it's positive now.

Speaker Change: Guidance for zero it hasn't turned negative in the back half of the year and that does put pressure on our EBITDA, which is why we mentioned it is that Annualizing fourth quarter is I mean first quarter is not an appropriate way to look at the full year because of that alright, and other impacts yeah that makes sense great. Thanks for the color.

Operator: Yeah, that makes sense. Great. Thanks for the call. Thank you.

Speaker Change: Thank you. Your next question comes from Nick del Deo from market licensing.

Nick Del Dio: The next question comes from Nick Del Dio from Moffitt Maintenance. Please go ahead.

Speaker Change: Please go ahead.

Dan Schlanger: All right, thanks for answering my question, and Dan and Susan, congratulations to both of you on the appointments. I think, I think you had initiated or were studying a number of, you know, operational improvement or efficiency projects under Steven, kind of with the expectation that that work might pick up with when the strategic review had wrapped up. I was wondering if you could update us on, like, what's underway and in motion versus things that might be on pause, you know, either for SUNIT or the new CEO to kind of review them and have an opportunity to apply their standpoint.

Speaker Change: Alright, Thanks, taking my question.

Michael Rollins: And Dan Congratulations to both of you on the appointments.

Speaker Change: Thank.

Speaker Change: I think you had initiated or we're studying a number of.

Speaker Change: Operational improvement or efficiency projects under Stephen.

Speaker Change: Kind of with your expectation that that work might pick up when the strategic review had wrapped up I was wondering if you could update us on like what's underway and in motion versus things that might be on pause.

Speaker Change: Either for soon after the new CEO to kind of review them and have an opportunity to apply their stamp.

Dan Schlanger: Yeah, the things that Steven discussed are still on our radar, and we are executing against them. We are not waiting for a new CEO. We know that there are some things we need to do to make our tower business better, and we do not believe that a new CEO would have a different view of that and would be very happy to inherit something that is in a better shape than it is today. So we are still working through automation of our process. We're still working through implementation of systems upgrades and implementations of systems changes that we think will make our process more streamlined and our customer experience And we're looking at ways to digitize our assets and ensure that we are both getting paid everything we need to get paid and we have the right amount of marketable asset space that we can go talk to our customers about.

Speaker Change: Yeah, the things that Steven discussed are still on our radar and we are executing against them, we're not waiting for a new CEO.

Speaker Change: We know that there are some things we need to do to make our tower business better and we do not believe that a new CEO would have a different view of that and would be very happy to inherit as something that is in a better shape than it is today. So we are still working through automation of our process. We're still looking at working through implementation of systems upgrades and implementations of.

Speaker Change: <unk>.

Speaker Change: Systems changes that we think will make our process more streamlined and our customer experience.

Speaker Change: Easier.

Speaker Change: And we're looking at ways to digitize our assets and ensure that we are both getting paid everything we need to get paid and we have the right amount of.

Speaker Change: Of marketable asset base that we can go talk to our customers about we're doing all those things and hoping that they get done very quickly.

Dan Schlanger: We're doing all those things and hoping that they get done very quickly. And if that happens before a new CEO, then more power to us and to that person because I think that would be better for everybody involved. And then we'll find new things to go do because we have a lot to do.

Speaker Change: If that happens before a new CEO, then more power to Austin to that person because I think that'll be better for everybody involved and then we will find new things to go do because we are we have a lot to do and I think the benefit one of the bits of of streamlining our business into a tower only business is that we can focus all of our attention on getting better at tower.

Dan Schlanger: And I think the benefit, one of the benefits of streamlining our business into a tower only business is that we can focus all of our attention on getting better at towers and we believe that will lead to improvements over time. Terrific. Thanks, Dan. Sure. Thank you.

Speaker Change: And we believe that will lead to improvements overtime.

Dan Schlanger: Alright, perfect. Thanks, Dan.

Dan Schlanger: Sure. Thanks, Nick.

Speaker Change: Thank you. Your next question comes from Richard Choe from Jpmorgan.

Richard Cho: The next question comes from Richard Cho from J.P. Morgan. Please go ahead. Hi, I just wanted to follow up on the new core new leasing. Was this from a particular carrier or is it across the board? And then can we get a sense of maybe what your backlog of business looks like for the rest of the year from your carrier customers? Yeah, like I said, it's a continuation of the activity level we had seen, and so it was across the board. There is no specific carrier we would point to. And I'm not sure how to talk about our backlog of business.

Dan Schlanger: Please go ahead.

Richard Choe: Hi, I just wanted to follow up on the core new leasing.

Richard Choe: Was this from a particular carrier or is it across the board and then can we get a sense of maybe what your backlog of business looks like for the rest of the year.

Richard Choe: From your carrier customers.

Richard Choe: Yeah like I said, it's a continuation of the activity level, we had seen and so it was across the board. There is no specific carrier we would point to.

Richard Choe: And I'm not sure how to talk about our backlog of business not a business that's not something that we talk about it I would just say that we are comfortable with the amount of activity that we see coming in from our customers that we will be able to meet.

Dan Schlanger: That's not something that we talk about. I would just say that we are comfortable with the amount of activity that we see coming in from our customers, that we'll be able to meet our guidance and believe that the activity levels around the industry, as our customers continue to deploy 5G and hopefully start to densify more in areas where they don't have coverage, that that will continue to drive really good demand for our towers over the course of 2025 and beyond.

Richard Choe: Meet our guidance and believe that the activity levels around the industry as our customers continue to deploy <unk> and hopefully start to densify more on in areas, where they don't have coverage that that will continue to drive really good demand for our towers over the course of 2025 and beyond.

Richard Choe: Great. Thank you.

Operator: Thank you.

Berkshire Levy: Thank you. Your next question comes from Berkshire Levy from UBS.

Batya Levi: Your next question comes from Batya Levi from UBS. Please go ahead. Great. Thanks a lot. Great to talk to you soon again. And I had a few questions. First on the SG&A side, can you provide some color on the guidelines you use to allocate SG&A between segments? And to the event that there is some more allocated back to the tower business, is there a rough percentage that we could think about? And as you make more progress on cost savings, should we expect that the annual AFFO growth that you provided, that range 250 to 370, could be potentially narrowed or updated as you pull forward some of those savings?

Speaker Change: Please go ahead.

Berkshire Levy: Thanks, a lot great to talk to you soon again.

Speaker Change: I had a few questions first on the SG&A side can you provide some color on the guidelines do you use to allocate SG&A between segments.

And to the event that there is some more allocated back to the tower business is there a rough percentage that we could think about as you make more progress on cost savings should we expect that the <unk> growth that you provided that range $2 50 to $3 70.

Speaker Change: Could be.

Speaker Change: Essentially narrowed our updated as you pull forward some of those savings.

Batya Levi: And maybe just a quick one on the regulatory front. Should we expect that the approval process will be a holistic review of both small cell and fiber businesses and close at the same time?

Speaker Change: And maybe just a quick one on the regulatory front.

Speaker Change: Should we expect that the approval process will be a holistically view, both small cell and fiber businesses and closed at the same time. Thank you.

Suna Patel: Thank you. Yeah, thanks, Batya. Try to get all of those. But if we missed something, just let me know. The way that we allocate SG&A between segments is, according to the accounting rules... that anybody and any cost that is directly related to our fiber solution and small cell business is allocated to discontinued operations, which leaves some shared costs in the RemainCo of the tower business and Crown Castle. And the way that that will work, and as we've talked about, is we do not believe that that is necessarily representative of what the cost structure will be for a tower-only company when we close the deal, which is why we provided a view of the run rate AFFO at the time of close, assuming the time of close is mid-2026.

Speaker Change: Yeah, Thanks, Bob to you.

Speaker Change: Try to get all of those but if we miss something just let me know.

Speaker Change: The way that we allocate SG&A between segments is according to the accounting rules.

Speaker Change: That anybody and any cost that is directly related to our fiber solutions and small cell business is allocated to discontinued operations, which leaves some shared costs.

Speaker Change: In the remain co of the tower business and Crown castle's towers.

Speaker Change: And.

Speaker Change: The the way that that will work and as we've talked about is we do not believe that that is necessarily representative of what the cost structure will be for a tower only company. When we close the deal which is why we provided a view of the run rate <unk> at the time of close assuming the time it closes is.

Speaker Change: Mid 2026, we provided that look so that you can see that there is some some benefit that we think we can see in terms of.

Suna Patel: We provided that look so that you can see that there is some benefit that we think we can see in terms of the full run rate cost structure at that time not being as high as it is today. as part of our continuing operation. And therefore, on the second question you said on the cost savings, I think it's true across the board that as we get further into the year, and we see what our performance is both on cost and on revenues, we will be able to either narrow the range or change the range according to what those results will be, but we believe we will get more confidence in the ranges that we have.

Speaker Change: The full run rate cost structure at that time.

Speaker Change: Not being as high as it is today.

Speaker Change: As part of our as part of our continuing operations.

Speaker Change: And therefore on the second question you said around the cost savings I think it's true across the board that as we get further into the year end.

Speaker Change: And we see what our performance is both on cost both on cost and on revenues, we will be able to either narrow the range or change the range. According to what those results will be but we believe we will get more confidence in the ranges that we have going forward.

Suna Patel: But I'm not sure that that's going to push all the way to the AFFO at the time of close, because there are a lot of different things that need to happen in order for us to get to that level. So I'm not sure we'll narrow that band of the AFFO at the time of close until we're much closer to close. And the last question you asked is on the regulatory and closing. We will close this transaction as one transaction, as a sale to two different buyers, but the regulatory looks are for each of those buyers because they're each buying different assets.

Speaker Change: But I'm not sure that that's going to push all the way to the <unk> at the time of close because there are a lot of different things that need to happen in order for us to get to that level. So I'm not sure we'll narrow that band of the F O to trying to close until we're much closer to closing.

Speaker Change: And the last question you asked is on the regulatory and in closing we will close this transaction as one transaction is a sale of the two different buyers.

Speaker Change: But the regulatory looks are for each of those buyers because they're each buying different assets. So they will close together, but I wouldn't say, there's necessarily that the regulatory review is holistic among both of them and it will happen at the same time.

Suna Patel: So they will close together, but I wouldn't say that it's necessarily that the regulatory review is holistic among both of them.

Suna Patel: It will happen at the same time, but they're two businesses being sold to two different buyers.

Speaker Change: But there are two businesses being sold to two different buyers.

Operator: Thank you.

Speaker Change: Got it thank you.

Speaker Change: Thank you. Your next question will come from Jonathan Chaplin from New Street Research.

Jonathan Chaplin: Your next question comes from Jonathan Chaplin from New Street Research. Please go ahead. Great, thanks.

Speaker Change: Please go ahead.

Speaker Change: Great. Thanks.

Suna Patel: Suna, great to have you back in the fold in the industry. Quick question, just following up on Batya's question on the shared costs that stay in SG&A that have the potential to come out. Can you give us sort of any quantification around the magnitude of opportunity there?

Speaker Change: Great to have you back in the fold in the industry.

Speaker Change: Quick question just following up on <unk> question on the slab cost.

Speaker Change: And as you know that have the potential to come out can you give us sort of any quantification around the magnitude of.

Suna Patel: And then on the share repurchase program, the $3 billion that follows the closing of the deal, can you give us some context for the timing of that? Is it going to be sort of programmatic? Spread out over a number of quarters or will it be an accelerated share repurchase program sort of executed with a bank that will be reflected in the share count instantly. Yeah, we're not in a position to talk about the quantification of the costs and any type of reductions that might happen at this point. The reason we gave the big buckets is because there's a lot of moving parts there, and we will update what we believe the run rate AFFO to be as a standalone business as we get closer to close.

Speaker Change: Of opportunity there and then on the share repurchase program.

Speaker Change: Billion that follows the closing of the deal could.

Speaker Change: Could you give us some context for the timing of that is it going to be sort of programmatic.

Speaker Change: Spread out over a number of quarters or will it be an accelerated share repurchase program executed with a bank debt.

Speaker Change: That'll be reflected in the share count.

Sidney: Sidney Thanks.

Sidney: Yeah.

Speaker Change: We're not in a position to talk about the quantification of the of the cost and any type of reductions that might happen at this point that the reason we gave the big buckets is because theres a lot of moving parts there and we will update what we believe the run rate <unk> to be as a standalone business as we get closer to close.

Suna Patel: But just, we're not in a position to... providing any additional color at this time.

Sidney: But we're not in a position.

Speaker Change: Providing any additional color at this point.

Dan Schlanger: And on the share repurchase, it's a similar answer, and I'm sorry, Jonathan, it's just we're too far away to have the answers to all those questions. We believe that we will have significant capital to be able to repurchase shares. How we do so and when we do so will likely be based on the current market conditions at the time of close and the view we have of what our stock price is and the view that we have of what we think we want to do with our capital at the time. But it's very important to us to repurchase shares with the proceeds from this transaction that are beyond what we think is, as we talked about, about $6 billion of debt repayment.

Speaker Change: And on the share repurchase its a similar answer and I'm sorry, Jonathan.

Speaker Change: We're too far away to have the answers all those questions. We believe that we will have significant capital to be able to repurchase shares how we do so and when we do so well likely be.

Speaker Change: Based on the current market conditions at the time of close.

Speaker Change: And.

Speaker Change: The.

Speaker Change: The view, we have of what our stock price is and the view that we have of what we think we want to do with our capital at the time, but it's very important to us to repurchase shares with the proceeds from this transaction that are beyond what we think is as we talked about about $6 billion of.

Speaker Change: Of that repayment, we will use the remainder to buy back shares and we'll try to do it quickly it'll just depend on what the market conditions are at the time that close happens to know how quickly that will be and how quickly it'll be reflected in our share price and our share count.

Dan Schlanger: We will use the remainder to buy back shares, and we'll try to do it quickly. It'll just depend on what the market conditions are at the time that close happens to know how quickly that will be and how quickly it'll be reflected in our share price, in our share Great.

Speaker Change: Great I'm sorry, Dan can you just remind me what your target leverage will be following the deal following yeah.

Dan Schlanger: I'm sorry, Dan, can you just remind me what your target leverage will be following the deal? Yeah, so we think, as Suna pointed out, and I talked about, we want to maintain our investment-grade rating. We have done some preliminary analysis and believe that we can, due to the significant stability of the cash flow profile of a U.S.-only tower business, that we will be able to maintain that investment grade rating at six to six and a half times EBIT. Awesome. Thanks, guys.

Speaker Change: Yeah. So we think as soon it pointed out and I talked about we want to maintain our investment grade rating. We have done some preliminary analysis and believe that we can do to the significant stability of the cash flow profile of the U S. Only tower business that we will be able to maintain that investment grade rating at 6% to six five times EBITDA.

Speaker Change: Awesome.

Operator: Really appreciate it.

Speaker Change: Thanks, guys really appreciate it.

Brandon Nispel: Thank you. Your next question comes from Brandon Nispel from Key Bond Capital Markets. Please go ahead. Hey guys, thanks for taking the question. You know, I wanted to ask about sort of new bookings that you signed during the quarter, not necessarily the billing that you report, but could you help us understand how power leasing bookings were during the quarter? Are they up year over year? Are they up quarter over quarter? Some comment on that would be helpful given some of your peers have called that out. Thanks. Yeah, thanks, Brandon. As we've been talking about, we see the...

Speaker Change: Thank you. Your next question comes from Brandon <unk> from Keybanc capital market.

Speaker Change: Please go ahead.

Brandon: Hey, guys. Thanks for taking my question.

Brandon: I wanted to ask about sort of new bookings that you signed during the quarter not necessarily the billing that you report.

Brandon: You can help us understand how tower lease bookings were during the quarter, our way up year over year are they up quarter over quarter. Some color on that would be helpful. In getting some of your peers have called that out right.

Brandon: Yeah.

Yeah.

Brandon: Thanks Brandon.

Brandon: As we've been talking about we see the.

Dan Schlanger: activity levels through 2025 being relatively consistent through the course of the year. and the new leasing that we have being very consistent over the course of the year. We think those are very good levels and drive four and a half percent growth, which is good for our business. We'll do everything we can to try to improve that. But there's nothing that we've seen that would make us change that expectation that over time we will be pretty consistent over the course of the year. Thanks for taking the question. Thank you.

Brandon: Activity levels through 2025 being relatively consistent through the course of the year for us.

Brandon: The new leasing that we have being very consistent over the course of the year.

Brandon: We think those are very good levels and drive for 5% growth, which is good for our business. We will do everything we can to try to improve that.

Brandon: But there's there's nothing that we've seen that would make us change that expectation that over time, we will be pretty consistent over the course of the year.

Speaker Change: Thanks for taking the question.

Speaker Change: Thank you <unk>.

Brendan Lynch: Your last question comes from Brandon Lynch.

Speaker Change: Last question comes from Brendan Lynch.

Dan Schlanger: from Barclays, please go ahead. Great, thanks for taking my question. Dan, you alluded to the transaction closing all at once. I'm curious if there's some sort of regulatory hiccup in one or two states, what would that actually mean for the deal? Yeah, first thing I would say is we do not expect any regulatory hiccups in any of the states. We would have to see what exactly they are. And the buyers are aware that if something like that were to happen, we still are going to likely close the deal. But the question becomes a hypothetical one of how big the hiccup is you're talking about.

Speaker Change: From Barclay Great. Please go ahead.

Brendan Lynch: Great. Thanks for taking my question, Dan you alluded to the transaction closing all at once.

Brendan Lynch: I'm curious if there's some sort of regulatory hiccup in one or two states what would that actually mean for the deal.

Brendan Lynch: Yeah.

Brendan Lynch: First thing I would say is we do not expect any regulatory hiccups in any of the states.

Brendan Lynch: We would have to see what exactly they are in.

Brendan Lynch: And the buyers are.

Brendan Lynch: Aware that if something like that were to happen, we still really will likely close the deal but the question becomes a hypothetical one of how big the hiccup is youre talking about we just we don't see a big hiccup coming so we are not concerned about closing this transaction in the first quarter of 2026.

Dan Schlanger: We don't see a big hiccup coming. So we are not concerned about closing this transaction in the first quarter.

Operator: Let me first, I have 20 minutes. Sorry. Okay, that's fair.

Speaker Change: I mean first half 'twenty.

Brendan Lynch: Sorry.

Brendan Lynch: Okay, that's fair.

Dan Schlanger: I mean, just one on your MLAs. Can you quantify even if broadly how much of the growth you are reporting is stemming from MLAs versus demand that is above and beyond what the carriers have already contracted? I would say that about 90% of our growth for 2025 is already contracted, which leads us to the 10% that we need to make happen, which is a great place to be. It's always great for business to be able to look out as far as we're able to look out and understand where our growth is coming from. And, you know, it's one of the great things about the tower business.

Brendan Lynch: Just one on your MLA is can you quantify even if broadly how much of the growth you are reporting is stemming from <unk> versus demand that is above and beyond what the carriers have already contracted.

Brendan Lynch: Yes, I would say that about 90% of our growth through 2025 has already contracted with leaves us to the 10% that we need to make happen.

Brendan Lynch: As a great place to be it's always great for our business to be able to look out as far as we are able to look out and understand where our growth is coming from and as you know.

Brendan Lynch: It's one of the great things about the tower business is a really good business, partly because the visibility is so great and we're.

Dan Schlanger: It's a really good business, partly because the visibility is so great. And we're excited to be where we are, the activity levels are good. And we have a lot of comfort in being able to deliver our 2025. And if the carriers were able or interested in increasing the pace of their deployment, would that generally fall within the MLAs that you have, or would that be outside and kind of increase the mix of extra MLA contributions? It really depends on how the MLA itself is structured. And we're not going to get into how we do that with each customer here.

Brendan Lynch: We're excited to be where we are the activity levels are good and we have a lot of.

Brendan Lynch: Comfort in being able to deliver our 2025 results.

Speaker Change: And if the carriers were able or interested in increasing the pace of their deployment would that generally fall within the MLP is that you have or would that be outside and kind of increase the mix of extra MLA contribution.

Speaker Change: It really depends on how the MLA itself is structured and we're not going to get into how we do that with each customer here, but there there are.

Dan Schlanger: But there there are both Portions of activity that are already contracted an MLA, and portions of activity that would be incremental to the MLA. It really depends on how each customer acts, and what is included in each MLA that we have. We believe we have upside to what is already contracted, and we believe we have a lot of stability based on that.

Speaker Change: Both.

Speaker Change: Portions of activity that are already contracted and Emily and portions of activity that would be incremental to the MLA. It really depends on how each customer acts and what is included in each MLA that we have we believe we have upside.

Speaker Change: To what is already contracted and we believe we have a lot of stability based on what is contracted.

Operator: Great, thank you very much. Thank you.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Thank you.

Operator: That does conclude our question and answer session. And with that, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect. © The Ultimate Parody Site!

Speaker Change: It does conclude our question and answer session.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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