Crown Castle International Corp. (NYSE:CCI) Q4 2014 Earnings Conference Call - Final Transcript

Jan 22, 2015 • 10:30 am ET


Crown Castle International Corp. (NYSE:CCI) Q4 2014 Earnings Conference Call - Final Transcript


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Good day and welcome to the Crown Castle International Q4 2014 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Son Nguyen. Please go ahead, sir.

Son Nguyen

Thank you, Carla, and good morning everyone. Thank you for joining us today as we review our fourth quarter and full year 2014 results. With me on the call this morning are Ben Moreland, Crown Castle's Chief Executive Officer, and Jay Brown, Crown Castle's Chief Financial Officer. To aid the discussion, we have posted supplemental materials in the Investors section of our Web-site at, which we will refer to throughout the call this morning.

(Forward-Looking Cautionary Statements)

In addition, today's call includes discussions of certain non-GAAP financial measures. Tables reconciling these non-GAAP financial measures are available in the supplemental information package in the Investors section of the Company's Web-site at With that, I'll turn the call over to Ben.

W. Benjamin Moreland

Thanks, Son, and good morning everyone. Thank you for joining us on this call. As we indicated in our earnings release last night, we had another great quarter finishing 2014 on a very strong note allowing us to increase our full year 2015 outlook, which Jay will speak to shortly.

In addition to the excellent financial results, we had several major accomplishments during the year that position us very well for 2015 and beyond. First, we have successfully completed the integration of the AT&T tower portfolio with 9,700 sites and are now seeing healthy application volume on these assets.

The AT&T tower transaction represents the sixth carrier portfolio we have acquired in our Company's history. As shown on Slide 3, we have a portfolio of approximately 40,000 towers. Over time, we've accumulated a long track record of integrating and leasing our assets and delivering growth through various economic and industry cycles. We believe we are well-positioned and on our way to delivering the same results with AT&T and T-Mobile portfolios as has become our track record.

Similar to our acquisitions in the late 1990s and early 2000s, we acquired the AT&T assets and the T-Mobile assets at initial yields of approximately 5%. Long-term, we believe we can drive the yield on these recently acquired assets to similar levels as our legacy assets which currently yield approximately 15% on invested capital. The AT&T and T-Mobile assets represent approximately

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40% of our tower portfolio and provide an excellent opportunity for us to extend our runway of growth.

Second, during the year, we meaningfully increased our small cell networks portfolio and capabilities. Small cell networks have similarities to towers including the same customer base, the growth drivers and similar contractual terms. Small cells are playing an integral role in solving capacity and coverage issues in areas not traditionally served by towers. Today, our team is executing extremely well and we are focused on delivering on a growing pipeline.

Currently, a significantly majority of our small cell activity is being driven by Verizon. However, we are pleased that