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

Jan 22, 2015 • 10:30 am ET

Previous

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

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
operator

Phil Cusick, J.P. Morgan.

Analyst
Phil Cusick

I guess I'll start with my traditional question, which is what's driving the services strength? It was up even more in the fourth quarter. Can that continue then into the first quarter and what are you thinking about the rest of the year?

Executive
W. Benjamin Moreland

So we are forecasting 2015 to be essentially the same as 2014, which was a record year for us in terms of services margin, I think about $270 million or so. What's driving that frankly is a lot of application volume and we are getting extremely good at capturing the addressable market that's occurring on our towers, and that's everything from the front-end preconstruction work of permitting and zoning all the way through managing the construction of the installation or upgrade on a tower. And so that take rate has been then steadily climbing over the years and we've gotten very good at capturing that opportunity and it's turned into a very nice business that it's application driven but for us it's opportunity.

Obviously we're making money at it and it's a great way to stay close to our customers and control most fundamentally what goes on our tower and what's happening at the tower site. So we're very pleased with the business.

Analyst
Phil Cusick

Okay. And then second, can you talk to me about the land portfolio acquisition in the fourth quarter? It seemed like that was at a very high multiple. How should we be thinking about that? Is that sort of fairly typical transaction and are there more of those to do this year?

Executive
W. Benjamin Moreland

I don't think there's more to do and it was a little bit atypical. It was a portfolio of sites that are a mixture of our sites and other sites and it had some that are more relatively short dated than we would have otherwise seen. So when you price

Executive
W. Benjamin Moreland

that you have to assume you price the rent growth over time as those expiries come up, and so as a result the price is a little higher than it would have otherwise normally expected. I don't see a lot more of those to come but in this case they were attractive assets and it made sense for us to pursue it.

Analyst
Phil Cusick

Did you guys held up a little bit on that?

Executive
W. Benjamin Moreland

I don't think so. No, that's not how I would characterize it.

Operator
operator

Simon Flannery, Morgan Stanley.

Analyst
Simon Flannery

Ben, it was nice to see the organic revision higher. It's still very early in the year, you don't always do that. Can you just talk about what you're seeing that gives you the confidence to move on that, and I think you talked about expecting activity from all four players, so perhaps you can just go through what's going on there? And related to that, how should we think about AWS-3 at FirstNet, are we going to get any revenues from that this year or how do you think about it for 2016?

Executive
W. Benjamin Moreland

Sure. Simon, we finished the fourth quarter