Fourth Quarter 2013 Earnings Conference Call January 23, 2014

Transcription

1 Fourth Quarter 2013 Earnings Conference Call January 23, 2014

2 Cautionary Information This presentation contains forward-looking statements and information that are based on management s current expectations. Such statements may include projections, Outlook and estimates regarding (i) demand for our sites and services, (ii) site densification and leasing activity, including the impact on our results and Outlook, (iii) small cell network activity, (iv) the AT&T wer transaction, including the integration of and contribution from the AT&T wers, (v) the T-Mobile and NextG transactions, including leasing activity, growth and results of assets, (vi) capital expenditures, (vii) dividends, including our dividend plans, timing and the amount and growth of any dividends, (viii) growth opportunities and growth potential, including as may be derived from our assets and financings, (ix) our investments, including the types of such investments and the potential benefits which may be derived therefrom, (x) organic revenue growth, (xi) non-renewal of leases and the impact therefrom, (xii) the impact of the iden network decommissioning, (xiii) tenant churn, (xiv) U.S. wireless market metrics, including average revenue per user ( ARPU ), mobile data usage, and wireless carrier capital expenditures, (xv) site rental revenues, (xvi) site rental cost of operations, (xvii) site rental gross margin and services gross margin, (xviii) Adjusted EBITDA, (xix) interest expense and amortization of deferred financing costs, (xx) FFO, (xxi) AFFO, including on a per share basis, (xxii) net income (loss), including on a per share basis, (xxiii) prepaid rents, (xxiv) our common shares outstanding, including on a diluted basis and (xxv) the utility of certain financial measures in analyzing our results. The term including, and any variation thereof, means including, without limitation. Such forward-looking statements are subject certain risks, uncertainties and assumptions, including prevailing market conditions and other facrs. Should one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk facrs which could affect our results is included in our filings with the Securities and Exchange Commission. The Company assumes no obligation update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation includes certain non-gaap financial measures, including Adjusted EBITDA and AFFO. Tables reconciling such non- GAAP financial measures are available under the invesr section of Crown Castle s website at 2

3 Executive Summary Excellent 2013 produced very strong results and several accomplishments Closed on $4.85 billion AT&T wer transaction Completed integration of T-Mobile and NextG acquisitions Completed necessary procedures begin operating as a REIT on January 1, 2014 Exceeded 2013 Outlook for site rental gross margin, Adjusted EBITDA, AFFO and AFFO per share Actual Growth 18% 12% 16% 40% 21% 2013 Growth Guidance from 15% 10% 9% Jan 2013 Outlook (1) Site Rental Revenue Site Rental Gross Margin Adjusted EBITDA AFFO per Share (1) Site rental revenue, site rental gross margin, Adjusted EBITDA, and AFFO based on the midpoints of the 2013 Outlook provided on January 23,

4 Q Overview

5 Q Highlights ($ in millions) Site Rental Revenues Site Rental Gross Margin $355 13% CAGR $651 $570 14% $241 14% CAGR $464 $421 10% Increasing site densification led a more than two fold increase in new leasing activity in Q compared Q Q4'08 Q4'09 Q4'10 Q4'11 Q4'12 Q4'13 Adjusted EBITDA $468 $414 $225 13% 16% CAGR Q4'08 Q4'09 Q4'10 Q4'11 Q4'12 Q4'13 Q4'08 Q4'09 Q4'10 Q4'11 Q4'12 Q4'13 AFFO $359 $243 $147 48% 20% CAGR Q4'08 Q4'09 Q4'10 Q4'11 Q4'12 Q4'13 ~19% of cusmer installations during Q consisted of presold vs. ~70% in Q Activity on small cell networks also seeing strong activity as carriers continue focus on improving their networks 5

6 Investment and Liquidity Summary Sustaining Capex Land Purchases Q Capital Deployment ($ in millions) $20.5 $24.0 Financed the AT&T wer transaction by: Raising approximately $4 billion in net proceeds through the issuances of common and preferred sck Amending and borrowing under our credit facility Revenue Generating Capex $137.8 Raised $700 million of incremental term loans Re-priced the revolving credit facility and term loan A loans, effectively reducing interest rates by 0.50% Extended the maturity on our revolving credit facility and the vast majority of our term loans $4,905.3 As of December 31, 2013: Undrawn capacity under our revolving credit facility sod at $1.1 billion Acquisitions Total: $5,087.7 million Total outstanding debt had a weighted average cost of 4.3% and a weighted average maturity of 6 years Net debt last quarter Adjusted EBITDA and cash interest coverage ratio were 5.5x and 4.1x, respectively Note: Components may not sum due rounding 6

7 Full Year 2013 Highlights ($ in millions) Site Rental Revenues Site Rental Gross Margin $2,124 $2,504 $1,585 $1,779 $1,403 18% $946 12% 12% CAGR 13% CAGR Adjusted EBITDA AFFO $867 $1,794 $1,272 $1,553 $886 16% $533 44% 16% CAGR 19% CAGR

8 Q Outlook ($ in millions) Site Rental Revenues $615 $737 $742 Site Rental Gross Margin $438 $508 $513 $368 20% $258 17% 15% CAGR Q1'09 Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 15% CAGR Q1'09 Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 Adjusted EBITDA $441 $509 $514 AFFO $291 $370 $375 $242 16% $139 28% 16% CAGR 22% CAGR Q1'09 Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 Reported Results Q1'09 Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 Outlook Issued on January 22,

9 Full Year 2014 Outlook ($ in millions) Site Rental Revenues Site Rental Gross Margin Adjusted EBITDA $2,504 $2,972 $2,982 $1,779 $2,043 $2,053 $1,794 $2,040 $2,055 $1,543 19% $1,087 15% 14% $1,013 14% CAGR 14% CAGR 15% CAGR E E E Reported Results Outlook Issued on January 22,

10 Full Year 2014 Outlook (cont d) ($ in millions) AFFO per Share 2014 Investment Capacity $4.25 $4.49 $4.52 ~$470 Available for discretionary investments, including: Share purchases Tower / small cell builds Acquisitions Land purchases $1.54 $1,496 $1,511 ~$500 ~$600 17% CAGR ~$400 ~$ E 2014 AFFO Guidance Anticipated Dividend Initiation Projected Capex Remaining Investment Capacity Reported Results Outlook Issued on January 22,

11 Proven Track Record of Executing on Acquisitions Yields on Precedent Crown Carrier Portfolio Transactions (1) T-Mobile Portfolio Transaction 15% 16% 18% In November 2012, Crown completed its transaction acquire exclusive rights approximately 7,100 T-Mobile USA wers Outperformed estimated 2013 AFFO contribution announced at time of acquisition by 10% Based on current application volume, leasing has been accelerating ahead of our initial expectations Year Acquired Bell Atlantic / GTE Wireless ~4%-5% PowerTel Bell South 1999/ /2000 # of Towers 4, ,600 NextG Transaction In April 2012, Crown completed its acquisition of NextG Networks, Inc., the largest provider of outdoor distributed antenna systems Adjusted EBITDA contribution has more than doubled since closing of acquisition Currently on pace exceed long-term goal of growing Adjusted EBITDA by 5x-6x from time of acquisition Current Yield Initial Yield (2) For 2014, leasing is ahead by approximately 30% compared initial expectations (1) Yield calculated as wer cash flow over reported gross asset value (2) Represents approximate yield at time of acquisition 11

12 U.S. Market Represents Compelling Investment Opportunity 2013E Monthly ARPU (1) Forecasted U.S. Mobile Data Usage (2) $52.08 (petabyte per month) 1,933 $10.94 $ % CAGR Emerging Markets Developed Markets U.S E Projected U.S. Wireless Carrier Capital Expenditures ($ in billions) (3) $29.6 $33.6 $34.2 $32.2 Each of the Big 4 wireless carriers has communicated multi-year network deployment plans Potential new entrants (e.g. Dish and FirstNet) and currently undeployed spectrum create further growth opportunities E 2015E (1) Source: Wall Street research; weightings based on average wireless service revenues per country (2) Source: Cisco VNI, 2013 (3) Source: Wall Street Research ; includes AT&T, Clearwire, Leap, Metro PCS, Sprint, T-Mobile, U.S. Cellular, and Verizon 12