Good day and welcome to the Crown Castle International Q1 2015 Earnings Conference 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.

Great. Thank you, Hannah, and good morning, everyone. Thank you for joining us today as we review our first quarter 2015 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 website at crowncastle.com, which we will refer to throughout the call this morning. 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 Risk Factors section of the company's SEC filings. Our statements are made as of today, April 23, 2015, and we assume no obligations 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 Investors section of the company's website at crowncastle.com. With that, I'll turn the call over to Jay.

Thanks, Son and good morning, everyone. We started 2015 with a great first quarter. The US wireless carriers continue to make investments to upgrade their networks to keep pace with increasing consumer wireless demand. And we expect to see strong leasing activity throughout 2015. Turning to the first-quarter results, on slide three, site rental revenue grew 3% year-over-year from $747 million to $768 million. Organic site rental revenue grew 5% year-over-year, comprised of approximately 3% growth from cash escalations in our tenant lease contracts and approximately 6% growth from new leasing activity, net of approximately 4% from non-renewals. Moving to slide four, adjusted EBITDA and AFFO exceeded the high-end of our previously provided first quarter 2015 outlook. As mentioned in our earnings release yesterday, the outperformance during the quarter includes the timing of two items that impact first quarter 2015 results as well as our second quarter 2015 outlook. First, network services gross margin contribution was higher than our expectations for the quarter by approximately $9 million due to network services activity that was previously expected to occur during the second quarter taking place during the first quarter. Second, sustaining capital expenditures during the first quarter was lower than expected by approximately $6 million. This expected $6 million in sustaining capital expenditure is expected to be invested during the remainder of 2015. Ignoring the benefit from the timing of these two items, adjusted EBITDA and AFFO for the first quarter would be at or higher than the midpoint of our previously provided outlook for the first quarter. Turning to investment activities, as shown on slide five, during the first quarter, we invested $205 million in capital expenditures. These capital expenditures included $17 million in sustaining capital expenditures and $24 million in land purchases. During the first quarter, we completed over…

Thanks, Jay and thanks to all of you for joining us today on the call. As Jay mentioned in his remarks, we are focused on providing shareholders with an attractive total long-term return proposition. We measure long-term total returns as dividend yield plus growth in AFFO per share. I'd like to take a moment to explain the composition of the total return profile we offer to shareholders. Turning to slide eight, based on yesterday's closing stock price, we expect to deliver on average long-term total returns of approximately 10% to 11% per year. This 10% to 11% total returns is comprised of approximately 4% from our current dividend yield plus 6% to 7% from our expectation of growing AFFO per share organically. While the dividend yield ultimately will be determined by the market, we believe our business model given its growth and quality compares very favourably to some of the best in class REITs who have dividend yields of approximately 3%. Turning to our expected growth, of the 6% to 7% annual growth in AFFO organically, about half of this growth comes from our existing book of business via the cash escalations and our tenant lease contracts. For some context, we currently have approximately $22 billion of high-quality future revenues under long-term contract, primarily with the four largest US wireless carriers. The remaining 50% of expected AFFO growth comes from new leasing activity. This activity is driven by carrier network investments as the carriers deploy more equipment to add capacity and coverage either in the form of new tenant colocation on our sites or amendments to existing locations. As has been true since the early days of the wireless industry, network quality continues to be the market differentiator for carrier success. Today, the industry is seeing unprecedented data growth on…

Thank you. [Operator Instructions] And we’ll go ahead and take our first question from Simon Flannery with Morgan Stanley.

Great. Thanks very much. Good morning. Ben, can you just talk a little bit about carrier activity through the year. We saw some very low CapEx from AT&T and Verizon this first quarter. Were you seeing any impact from people waiting to see what they ended up within the AWS auctions and is there a sort of a sense that activities picking up through the year and then for Jay, you mentioned your investment grade target, you're getting pretty close now to that five times, what do you think the path and the timing is here to actually close the deal on that? Thanks.

Sure, Simon. Thanks for the question. As we look at carrier activity, it's shaping up pretty much like we thought for the year. I think on the Verizon call, they intimated a little bit back-end loaded on CapEx spending, reconfirming their guidance for the whole year. That's probably what we are seeing, little back-end loaded, but that's consistent with how we originally forecasted guidance and to just sort of think about how various carriers ebb and flow with their network enhancements and their capital spending, we've gotten to the point where we don't get really that worked up about individual carriers and individual quarters of how it shapes up. It's gotten fairly consistent across the years and sort of the inevitability of the need for cell site density and more upgrades on existing sites. We are seeing each of the carriers work on increasing network quality in their own way and they talk about it publicly and obviously with us and that's what we work on every day. So I'd say it's shaping up about like we thought and perhaps a little bit back-end loaded.

On your second questions, I'm not really able to provide you with a path or a timing necessarily on when we will get there, but what I can tell you is we've had a number of conversations with each of the rating agencies and have been engaged in an ongoing dialog on the subject for the last -- over a year around achieving the investment grade credit rating. And as you point out, rightly point out, as we are nearing the leverage target, the vast majority of our credit metrics are, if not, within very close to meeting their published criteria for achieving an investment-grade credit rating. So we’re optimistic and pleased with where we've gotten to in the approach that the agencies have taken towards upgrading the credit over the last 18 months to two years and we think we’re on the right path, just don't know the exact timing of that.

Great. Thank you.

Sure.

And we will take our next question from David Barden with Bank of America.

Hey, guys. Thanks. Thanks for the details on the small cell business, 7% of revenue, I think this is the first time that you may have shared it. It’s also 7% of the site rental margin as well, which suggests that even at this stage of development, the small-cell business is generating margins that are equivalent with the totality of the business, and I guess that’s a little surprising given that these are mostly presumably one tenant businesses thus far and they could advance from here, could you kind of elaborate a little bit on the kind of cost structure and margin opportunity that's developing in the small-cell business? Thanks.

Sure, David. That speaks to the initial yield differential between a typical tower you would acquire or a small cell system you might build. As we mentioned, across our entire cumulative investment, we're at 7% today, which is pretty staggering, given that 1 billion of that came at 4%, three years ago, as we remember with NextG. So obviously that incremental 700 million had to do pretty well. And obviously we’ve grown NextG appropriately as we would have forecasted. So it reflects that initial higher yield on invested capital and then the very high incremental margins from colocation and we are staying colocation and on a significant number of the original NextG systems, where we are adding to that existing plant as well as additional laterals off of it. So from a financial perspective, we are extremely comfortable with what we see going forward. I guess maybe to broaden your question a little bit, the challenges are around deployment. We are extremely busy, as Jay mentioned, about our backlog, we've got a lot going on, we've added a lot of people to that business, it's not all capitalized, so we've got overhead dragging that business a little bit, but we’re thrilled with what we see in terms of the opportunity and more and more, as we really dig into the engagements that we’re getting and you look at the geographies. You come to the conclusion as I mentioned in my notes, it's not a niche product, it's not and it's somewhat random actually, you're saying capacity needs in so many urban and suburban areas that you can quickly start to figure out that we're talking about a universe here, I think of hundreds of thousands of nodes over time. Obviously, we will never be able to accomplish all of that ourselves, there will be many other people in this market, but the size of the opportunity honestly reminds us a little bit of, that’s where the the early days of towers and we are going about as fast as we possibly can.

Thanks, Ben. And Jay, if I could follow up with one question just on the churn side, it looks like you trimmed a little bit the expectation for non-renewals in this year, is that on the Sprint-Nextel side or is that on the other kind of acquired carrier side and how do you kind of see the moving parts now moving for the rest of the year? Thanks.

Yeah, Dave. We really don't see much of a change from our previous expectations around churn, so for the full year, we basically expect to see about the same amount of churn as we did previously, maybe a little bit of it has been pushed out further in the year. So on a percentage basis, it’s moved a little bit, but there is nothing underlying that tenth of a basis point there that we saw moving the numbers, no real change in our expectation or actual activity to any meaningful amount.

Okay, great. Thanks, guys.

And we will go to our next question with Phil Cusick with JPMorgan.

Hey, guys, thanks. Talking about the services side, it seems like the services slowdown pretty highly correlates to the T, Verizon, probably Sprint lower CapEx. Would you anticipate a pretty quick rebound here as carriers ramp CapEx in the second half?

Yeah, Phil, we made the comments around the timing from first quarter to second quarter and it is obviously challenging for us in the business to necessarily know exactly how things are going to fall out in the year. The services business, because all of the work that we're doing is related to work that’s done on our sites, we have pretty good visibility to the balance of the year around leasing activity. And so as we went into the year and as evidenced by the fact that we increased the outlook about $15 million on an FX neutral basis for site rental revenue, from a leasing standpoint, the year is shaping up to be maybe slightly better than what we had originally expected. And so our services assumption follows that, that services for the full year are about what we had previously expected. So I wouldn't get too tied up in sequential quarter to quarter move. It has to do with how the carriers allocate their capital and when they spend it. But for the full year activity looks like it's going to be about the same as what it was in 2014, and so our services business is basically not just that.

Okay. And then as I think about, Simon mentioned the leverage getting down toward five times, with the stock trading where it is, why not be looking into to buy some of that back? Are you working on trying to get the rating agencies through before you look at that or should we look at that as being a more near-term possibility?

Well, it's always a possibility and you know we are not shy about buying stock, but as you can tell from our results, we're spending pretty much all our free cash flow and a little bit more on what we think are incredibly attractive investment opportunities as we’ve outlined on this call, it’s small cells primarily. And so I look for that to continue, I don't see a huge amount of free cash flow availability to buy stock for the near-term. And I do think that certainly as we’ve outlined, one of our core strategic objectives is to secure the investment-grade rating, which I think completely sort of maximizes the monetization of the dividend power of this business and then insulates the balance sheet going forward to a decree on just the overall cost to debt long-term. So it's something we are going to focus pretty carefully on. And I think we are on the path to that, hopefully sooner than later.

I think over the longer term, as you have seen us do for a long period of time, once we get to the targeted level of leverage, so about five times, once we're down there at that level, that will produce borrowing capacity if we're growing EBITDA in and around just for instance $100 million a year, that's creating about $500 million of investment capacity once we get down to that target level of leverage. So on the short-term I think you're going to see us focus, as Ben mentioned, on getting down to the five times level. And then once we are down there, then we create additional capacity for investment and absolutely stock purchases that are the benchmark against which we compare all the investments that we make in the business.

Okay. Thanks, Jay.

And we will go to our next question with Brett Feldman with Goldman Sachs.

Thanks for taking the question. I was hoping you can maybe give us an update on the process involving the Australian segment, and then if you do determine to close the transaction, how do you think about prioritizing the cash. And could you just remind us how you may be able to utilize the NOLs?

Sure, Brett. As we've mentioned before, and put out a press release, we are engaged in a process to evaluate the sale of our Australian business. I don't have anything to announce this morning other than to say that that is ongoing and we have a number of very highly qualified folks that we are speaking with about that. And so I don't want to predict the outcome there for you, because it's certainly not complete. If we were to elect and pursue a transaction there and complete a sale, I think we would first approach it from a leverage neutral proposition as we talked about just a moment ago on Phil’s question. So in and around $500 million of proportional debt reduction is sort of required for that. But that would still leave a significant amount of proceeds available that then we would have for investment opportunity. And just like with any proceeds or capacity we have, we would look to do what maximizes sort of long-term AFFO per share that could include buying stock, it could include buying other assets, continuing to invest around the core business. So all of that is on the table and we will seek to maximize the outcome of those proceeds. And finally to your last point, Brett, on the tax position, we have the benefit of the NOLs, so there won't be any taxes paid at the corporate level. We also believe that as a REIT, we will generate a significant capital gain inside the REIT, that will then get passed out to shareholders in the form of the next amount of dividend that we pay will be in fact capital gain treatment. So to the extent we were paying in and around $1.1 billion of dividends on an annual basis, that capital gain would go out at a lower tax rate than the ordinary income tax rate that the normal quarterly dividend receives. Then to the extent the reminder doesn’t in fact cover all the income within the REIT, that's where we could actually use the NOL to make up that gap. So the shorter answer is there is no tax paid at the corporate level and at the shareholder level, to the extent of the gain, it would be a capital-gains treatment is our best estimate today versus ordinary income. So we think that's extremely favorable.

Great, thanks for that color.

And we will go to our next question with Jonathan Schildkraut with Evercore ISI.

Hi, this is Justin in for Jonathan. Thanks for taking the question. If I could just ask further on the investment grade, and I know you said getting down to around 4.1 as your cost of debt, but I was hoping to get more color on the total cost of capital if you are able to reduce to investment grade?

Well, I think ultimately that's determined by the market. What I would tell you and based on the work that we've done, if there is meaningful benefits to the company over time we believe from achieving investment-grade credit rating, our aim as a business, as we've talked about over the long period of time, we think we can generate a significant amount of shareholder value by the way we add additional revenue to the existing assets that we own, allocate the remaining portion of the capital outside of the dividend distribution, smart investments like we've talked about this morning for small cells. And then thirdly, providing a risk profile of the business that lowers the cost of capital. And there's a lot of things that go into that. Part of it is how we allocate the capital and the percent of that capital that is distributed to shareholders in the form of basically a certain return on investment that's made. We think another component of that is capital structure so that the business regardless of the cycle that the market may be in, has a view that the business and the balance sheet are sustainable and can continue to achieve a low cost which provides additional certainty to the payment of the dividend. And so I'll leave investors to make their own judgment on where they think ultimately the cost of the equity should fall. Today, if you look at where our credit rating is and where bonds are trading and if you were to assume that we were at the low end of an investment-grade credit rating, there may be 80 to 100 basis points of a difference in where we would issue a bond, a 10-year bond investment-grade, non-investment grade. So there are certainly some debt costs associated with that and improvement in the overall cost of debt, but more broadly as we speak about this, we think there are more broad implications in terms of how the business achieves a lower overall cost of capital over the long-term and that's why we're focused on it.

Great, thank you.

And we will go to Rick Prentiss with Raymond James.

Thanks. Good morning, guys.

Hey, Rick.

Hey. Two questions, if I could. First, I think Ben you were mentioning how a lot of the services business – it might have been Jay, at your own towers, if I remember right, you guys had about 6,000 towers from Sprint back from the old Global Signal acquisition. Are you seeing any activity from a services business standpoint in your guidance for Sprint starting to activate its Spark Project, the 2.5 gigahertz stuff?

Yeah. Rick, I think we are going to probably decline to get into specifics around what a particular career is doing on our sites. You know we normally refer you back to them to talk about their own activity, that’s sort of their business. And we've talked about overall, I think to Simon's original question, overall activity we are seeing that’s consistent with what we saw at the beginning of the year and up a little bit as Jay mentioned in our guidance that we’ve trimmed up a little bit for the year of the first quarter. So probably not going to get into a whole lot of specifics there. I would actually make a comment about our services business, though, that's helpful to remind everybody. In 2014, we grew that business about 40%, which was consistent with the growth in the portfolio really over the last year or so from ‘13 as we brought on the AT&T Towers. So when we projected for 2015 that the services contribution would be similar to what we saw in ‘14, that's also consistent with the portfolio size. So that's effectively what's happening this year is that we are running, we think, pretty well flat to last year's contribution, which is consistent with the size of the portfolio and so just an observation for those that may not be paying that close attention to our history.

Okay. And then a bizarre question next. With Sprint, we understand there is a lot of discussion with vendors, equipment manufacturers about providing vendor financing to help them maybe look at deploying that Spark Project, have you ever considered offering financing to carriers for higher rent?

Let me just say this, yes, we have considered it. It has been proposed and when we’ve looked at it, we haven't found it to be an attractive proposition for us, nor a gating factor that determined whether a carrier went on a site or not. So, obviously, our objective is what we work on every day is getting carriers on our towers and we could not satisfy ourselves at providing financing or not would actually influence the buying decision whether they needed that tower or not. So, typically the carriers have access to capital for many different sources from public markets, vendor financing as you suggest and we have had it proposed a few times and it frankly did not look that compelling to us to actually sway the buying decision and so, we decided so far not to do it.

That makes sense, right. So, a lot more nice to be a tower company than an equipment company. The final question I've got for you is on the small cells, Jay, you mentioned 2,500 anchor or co-los are in backlog awarded but not in construction. How much CapEx should we think is associated with that? And then, you said one of the challenges is just deploying it. Talk to us a little bit about the gating factors there, is it money, is it people, what do we talked about there?

The 2,500 that I referenced is a combination of anchor builds as well as co-locations on existing systems. The anchor builds, typically when we’re building new anchor builds, we’re spending about $100,000 per node. The majority of that cost is associated with building the fiber, to build the system, where those notes are going to go. The amount of capital necessary as co-locate on existing systems is significantly lower than that. What I would guide you towards is, if you look at our activity in small cells and the amount of capital that we've been spending over the last several quarters, our forward look is about the level that we’ve spent over the last two quarters if you were to annualize the two to three quarters, if you were to annualize it, maybe trending upwards a little bit. Obviously, as you've heard us talk about this business over time, this is – it’s directly related to the returns that we see in the business. So, to the extent that the return stay intact as we see currently, then we’re happy to continue to pursue RFPs and other initiatives that the carriers are launching in various markets to pursue to expand and frankly invest more capital than even our run rate would suggest as long as the return expectations stay the same. So -- and I think the -- if you think then about what's the biggest hurdle, the hurdle is not necessarily around not having enough capital to pursue it, we have access to plenty of capitals continue to do it. We would be focused on where the returns appropriately reflecting what we like about the business and where we think the growth is and then frankly, do we have enough manpower to achieve and accomplish what the carriers are looking to do.

And really it's the gating factors, as you suggested Rick, are really the whole cycle of construction. It’s the designing of the systems with the carriers input, real estate permitting and then real estate rights, securing those rights and then permitting and then the construction and the longer we’re at this, the better we get, we've got a lot of folks that are extremely good at what they do and I think actually by far leading position in the industry in that capability but it hasn’t necessarily shorten us the construction cycle and I'm very convinced it's a significant barrier to entry in this business, because there is a lot to actually building on these systems and getting the carriers installed on time and on budget and we're getting pretty good at that.

If I remember right, it was about $50 million last quarter, $70 million this quarter, so may be a $120 million for the last two quarters in CapEx or may be $240 million to $250 million annual is kind of what you're thinking like?

That's our current -- that’s our current run rate and to the extent we find more opportunities, we’re happy to invest more capital than that.

Great, thanks guys.

And we’ll go to Kevin Smithen with Macquarie.

Thanks. Jay, what is the expected incremental small cell node revenue connections required to hit the midpoint, high-end and low-end of guidance? Of the 2,500 in backlog, how many will actually generate revenue by the end of December?

Very little, very little, if any. Typically once we started construction of small cells, we’re in a 15 month to 18 month cycle in most cases. So, those would likely represent activity that will come online in 2016. We have a very healthy backlog of nodes that are currently in construction. If you look at our total revenue guidance, 2014 to 2015, we’re expecting revenue growth of between $150 million and $160 million in total, and small cells would comprise about $50 million to $60 million of that growth and towers being the remainder $100 million of that growth and that's the way it falls out. Obviously, a number -- when you look at the year-over-year impact, a number of -- meaningful portion of that $50 million to $60 million of growth in small cells are nodes that we’re turning on now during the second quarter that will then produce revenue for the balance of the year.

And then, if I start to look at the 5.0% organic cash growth and 2.3% cap growth and you factor in these small cell connections straight-line and incremental churn, it appears you could see a nice bump up of cap and organic cash leasing growth in ‘16, is that the right way to think about it all else are being equal, knowing what you know today?

I think -- and we're certainly not going to give guidance this year in 2016 -- for 2016, but what I would tell you is, we've laid out a five-year forecast of how we think AFFO per share growth on an organic basis of about 6% to 7% and add to that the dividend distribution that we're going to make. Assumed in that is a level of leasing activity similar to what we saw in 2014 and saw in 2015 -- and are seeing in 2015. The change that we expect to see in 2015 to 2016 is a reduction in the impact of churn. In calendar year 2015, we’re expecting the impact of churn to be approximately $115 million and in 2016, as we've laid out our longer-term forecast for the non-renewals, we expect that number to be approximately $75 million in 2016. So, the pickup that we would expect at least based on our longer-term forecast that we’ve provided to you would be not so much a change in activity, we've assumed a similar level of activity, but in the amount of non-renewables, we’re assuming a reduction in that by about $40 million, thereby increasing the amount of AFFO, you want to think about it that way, or net organic leasing. It's about a 2% increase roughly at AFFO line if you’re comparing 2015 to what would be flowing through those assumptions in 2016 impact.

Got it. And any color on straight-line for next year?

I wouldn't give you that much -- I wouldn’t get into that much detail on this call. We’ll give 2016 outlook when we get to the third quarter. One thing that I would point it to, which can be helpful if you're looking at that, we are providing a significant amount of detail on that supplemental package and you can see what's currently on the book today and what the burn off of straight-line revenues overtime for years well beyond 2016 and those would reflect all of the leases that are currently signed and producing revenue and you can see how that flows I think out through 2022.

Great, thank you.

And next we’ll go to Amir Rozwadowski with Barclays.

Thank you very much and just following up on the prior question, sort of understanding the longevity of what seems to be a healthy investment environment, it does seem like your expectations are baking in sort of a reduction in the churn impact, which should ease moving away from 2015. I'm sort of sitting back and thinking, we've got commentary out there that Sprint seems to be focused on network densification initiatives, T-Mobile has been vocal about its A-Block spectrum build. Obviously, we just had the AWS-3 spectrum auctions and public safety, if I start to put all of those pieces together, can we find ourselves in a situation in which you have a spending environment that at least as good but potentially better when looking at all these sort of moving pieces from the carrier side?

Sure. Amir, this is Ben. Look, I think everything you just outlined is possible and longer beyond even that is the deployment of AWS-3 spectrum that was just auctioned. So -- and then, you mentioned FirstNet potentially and then the Dish spectrum. Having been at this for a long time like many of us here have, there are always ebbs and flows and sure, the leasing environment could improve in ‘16 or ’17. I would caution you though that remember, we’re adding about a $100 million of new revenue per year on the tower base today as Jay just mentioned. And so, if that were to increase by less just say, 30%, for example to take some of your upside, that's a 1% change in revenue growth or about 2% change in AFFO growth. So, we work on that every day, that's what everybody listening to this call looks at Crown is focused on, but I want to caution you and it's one of the wonderful things about this business, the inflections up or down are relatively muted and as we mentioned, out of a 10% or 11% sort of total return profile, two-thirds of that’s already on the books in the current dividend plus the contracted escalators. So, that last third, which is growth, absolutely focused on it, but maybe the up and down on that is a couple of percentage points on AFFO growth, which we’d love to see, don't get me wrong, but that's one of the wonderful things about the business is it’s not very movable to tell you the truth.

That's very helpful. And then just a follow-up question here, obviously you folks have taken a differentiated view versus some of your peers on the international arena. We’re starting to hear some I guess chatter about potential assets coming available in Europe, which is sort of a different investment profile than where we’ve seen sort of international expansion take place with some of your peers before. I was wondering what your thoughts could be around if some of those assets became available, whether or not, they would be attractive and if that would sort of change a shift in focus for you as some of those assets became available?

Sure. It's certainly something we would look at. We use to operate in the UK in a very large way. The European market has developed in a much different way than North America, so we would want to make certain that the underwriting of those assets are appropriately took into account and what the collocation opportunity was going to be over time there. I would in a positive sense, we’re marking our ability to finance locally there at a very attractive level, so to the extent, we have been looking at something there, we could certainly put an implicit hedge on the currency by financing locally. So there are a lot of attractive attributes to look into Western Europe, it would come down in my mind to what’s the underwriting on the towers and what’s the opportunity for revenue growth around the marketplace there and there are some dynamics in the Western European market that's made it a little more challenging to underwrite collocation growth and so we would want to make sure we would get that right, but I have absolutely no natural aversion to that, and think it's something that we could certainly look at.

Thank you very much for the incremental color.

You bet.

And we will go to Colby Synesael with Cowen and Company.

Colby, on your first question around total CapEx, as we gave the guidance previously, I think we would expect to consume all of the excess cash flow if you were to take AFFO, subtract out the dividend that we're – our current policy suggests for the balance of the year, I think we will spend all of that on activities, the vast majority of which is likely to be directed towards small cells. As I answered one of the earlier questions about activity and interest in expanding it, given the returns that we're seeing in small cells, we would be willing to go beyond that cash flow amount and finance opportunities to the extent they exceeded the amount of cash flow that's produced, but I think as a starting point, what I would suggest is that you assume we utilize all of the excess cash flow beyond the dividend for investment in assets and that may ebb and flow a little bit quarter to quarter depending on how many projects we complete in any given quarter.

Colby, without taking everybody through technology lessons, I'm certainly not qualified to do on the call, I will make one comment about what we’ve seen around the CWAN architecture and the possibilities there, and it’s extremely early. Essentially what it may do for us is, it may remove some of the ground space requirements at towers and so to the extent you got a tower that may have a ground space challenge, i.e. not a very big footprint, by moving those base stations offsite into sort of a base station hotel and remotely powering that through fiber is something that we look at positively over time and potentially makes the upgrade cost of some of the smaller monopoles diminished and makes them more attractive over time. So it's extremely early, but I think the trend will be if we go down that path with that kind of architecture is that it's going to add value to some of the smaller sites, but potentially would have been challenging or expensive to add additional land and that may not be required now. That's about all I have on that so far.

Okay, great. I'll take it. Thank you.

Next we will go to Batya Levi with UBS.

Great. Thanks. Couple of follow-ups. First, on the CapEx spent on the existing sites I think it was $98 million, can you talk about how much capacity that creates? And how -- if you could help us gauge what the incremental boost to revenue growth it would provide over the longer term, and if that level shifts towards more small cells and sort of like a one quarter pickup? And then if you could also provide some color on that $15 million increase in the organic growth, was that mostly coming from small cells and maybe the breakdown of activity in terms of amendments and new licenses? Thank you.

Okay, sure. On your first question, when we spend CapEx on existing sites, that's always success based as we like to say around the place. The success base means that we don't spend any of the capital until there is a tenant ready to go on to that particular site. And so in terms of increasing the capacity of our existing sites, occasionally there is some natural increase to the capacity of the site than generally the site is made ready for the tenant who is standing there ready to go on it. The impact that we have to revenues as we know oftentimes is a part of that transaction we received, some upfront prepaid rents associated with the site, and so it does benefit longer term recurring revenues as we receive some of that rent upfront rather than amortized on -- rather than receiving it on a cash basis, month-to-month. On your second question around the increase in $15 million that we increased 2015 outlook for site rental revenue, virtually all of that is related to a small cell activity. It was very little that came from towers, the vast majority of it was small cell and achieved a good portion of that in the first quarter increasing our run rate for the balance of 2015. The split of new licences and amendments, very similar to what we expected. We think full-year 2015 is pretty similar to what we saw in the quarter, is in the neighborhood of 60% to 65% new licences and the balance being amendments, that's what we saw approximately in 2014 and we expect a similar level in 2015.

Great, thank you.

Next, we will go to Michael Bowen with Pacific Crest.

Okay. Thank you very much for taking the questions, most have been asked. But I'm curious about when you talk about -- I think you said it both ways on the call, so I'm hoping you can clarify this, I believe you said AFFO, but then also AFFO per share growth over the next five years in that 6% to 7% range. So once we clear that up, under what scenarios could we possibly see rather than that staying steady. Given the spectrum allocation and more spectrum to come next year, more deployments obviously, it almost implies that you are predicting a headwind against some other growth given a backdrop of strong spectrum deployment and continued CapEx on the wireless side, so if you could talk to that, that would be helpful?

Okay, sure. Well, to clear up your first one, that’s easy, yeah, we mean per share. So AFFO per share is all we work on around here, that's all that really matters. So certainly -- and so our statement of 6% to 7% AFFO per share growth is our five-year outlook on what we can deliver. And then to the headwind comment, actually it's maybe exactly the reverse, so let me walk you through as you can tell this year our guidance is about 5% AFFO growth and I would just point out that's carrying 800 basis points of non-renewals and about 100 basis points of FX headwind, so you can -- I'm actually kind of proud of that if you look at the core growth in the business that we are able to generate that 5% net. So the 5% net number this year, if we are making a five-year statement saying 6% to 7% over five years, we will then obviously, then it has to pick up in the second through the fifth year. And I think where Jay took the previous question is kind of where I would go, which is for planning purposes, we would suggest that we capture that additional growth to get back to that 6% to 7% over five years by the reduction in non-renewals as we've laid out in the supplement. This is the peak year for non-renewals and as that tails off, we pick up a couple of hundred basis points in the next year and probably more in the following year, just on the basis of the same level of leasing. And as I was answering the question earlier, we will absolutely work on capturing additional leasing opportunities if they are there, and there is a scenario where they are…

And then a quick follow-up actually, you mentioned four carriers now we possibly might have a fifth with the announcement from Google yesterday on Project Fi, can you give some thoughts, have you had discussions with Google, have you talked to them about this and how this may impact your business?

We have actually had a number of conversations with Google, I really won’t go into the substance of those, but as you would expect, they’re extremely well-versed in wireless and wireless networks. I think what we see in their announcement yesterday is a continuation of what we've seen for a long time and that is, there is a lot of outside companies with a vested interest in having access to wireless consumers. And so, that's always been the case, and Google being the latest one. I look at it as a net positive and that it’s going to drive to the extent they’re successful, it's going to drive additional network capacity requirements into the Sprint and T-Mobile networks, which fundamentally and gives them a revenue stream to then reinvest in network capacity to accommodate that demand. And given the fact that and I don't say this lightly, given the fact where we sit, we are the most expeditious and cost-effective way to add network capacity unlike where we sit. And so, we’ll see how that develops over time, but as carriers deploy additional spectrum, as they add additional equipment and new cell sites, we as Crown and frankly the industry are the most effective cost-effective way for that to occur.

Okay. Thanks for taking those questions.

And we’ll take Spencer Kurn with New Street Research.

Hey, guys. Thanks for taking the question. Given the new AMX tower spend in Mexico, I just wanted to know if you have any thoughts on how the Mexican market compares to other international markets you looked at, whether you're more comfortable with risk profile there? Thanks.

To be honest, we haven't looked at that carefully lately. It's true that in many emerging markets, the case for wireless growth is very clear. We can all understand how consumers who may not have had access to the wireless or certainly to the Internet, now offered an affordable alternative would be high users of wireless data and a shared infrastructure model in many of these markets makes perfect sense. It all depends on our mind on -- we bring the wrong currency to any other market that we would enter by definition and so it's completely a function of initial, pricing the assets such that it reflects the risk undertaking -- we would be undertaking in terms of the currency movement and then, what the fundamental growth on the revenue per site opportunity is in terms of collocation to achieve an attractive total return on investment. And thus far, in most of those markets, frankly in all of those markets, we haven't seen that price equation come back into sort of congruity for us, but others have different views and so to me it's not a question of the business model, it's purely a reflection on price and pricing in that mismatch of currency.

Thanks. And just one more if I may on small cells. The revenue growth has been accelerating, pretty steadily for the last four or five quarters. Could you talk about you know do you have enough longevity to know to get sense for the organic contribution that you've been seeing?

I don't know how to parse that for you Spencer, there's a lot of nomenclature in that business that's not the same as towers and so, what I would say is, we have a significant amount of collocation going on, which you might say is, okay, well that's organic, I would agree with you, but every time you look at one of those, there is always typically an additional lateral or two or three that a new carrier would take that the old carrier didn't, and so that would not be organic, that would be new, if you will. So, I don't want to take with you all this on the call, but it's a hybrid, it's always a hybrid between collocation and new. And if we look at our total growth in that business, it's a significant contribution from colos and then a significant contribution from new. That's about the tightest thing you might get.

Spencer, I think one of the things just as you’re modeling the business and thinking about that you find over time is that, in the tower cases, you are building towers, the input costs as well as monthly rents and the operating costs are relatively stable and have been for a long period of time, when we look at small cells, we’re really, we’re making a financial transaction where we’re pricing the rent for the carrier, the various components of the relationship between the carrier that installs there against a very different proposition. The cost can vary per system, the number of nodes per fiber mile can vary per system, thus varying the amount of cost of fiber, some of it can be aerial, some of it can be buried, we can be in locations where it's very expensive to dig up a sidewalk for instance, in other places where the cost of laying fiber is not as high. And so, because the costs are so variable, therefore the revenue and the margin in terms of nominal dollars vary. And so, as we think about the business and allocate capital, we're always looking at it on a yield and total return basis and those conversations and systems look very different than what they do historically when we build towers. So, where we have given most of our disclosure and as we've talked about the businesses that you've heard on past calls and again this morning, we focus on how is the yield on total investment doing and as we mentioned, the largest portion of the $1.7 billion that we've invested was an asset that we bought at about 4% yield and we’ve taken the entire small cell contribution and returned on the investment that we’ve made in small cells. We've taken that entire $1.7 billion to a 7% yield today, which implies a significant amount of contribution on a -- I think as we could all call it organic basis. But as Ben mentioned, it's a blend, so it's not as clean, it’s just looking at if you own [ph] the tower yesterday and today and what portion of the revenues or cash flows came on a same tower basis, it's not as clean. So we focus more on yields and looking at yields and looking at driving total yields up on the existing total base of capital. And maybe -- hopefully that's helpful color as you think about modeling the business.

Very helpful. Thanks again.

I think we have time for maybe one more question.

And we’ll take our last question from Ana Goshko with Bank of America.

Hi, thanks very much. I will try to make it quick. I just wanted to follow-up on the earlier comments, and there is a lot of focus on the benefits of getting to an investment grade rating and the companies intend to do that in the short term, but then when you talked about the potential completion of the Australian asset sale or unit stake, you said the intend would be to leave leverage neutral and I’m wondering why isn’t that an opportunity to reduce leverage and really be the catalyst to get the company over the goal line into the investor grade rating?

Sure, Ana. I think when we say leverage neutral; we mean that on a ratio basis, not nominal dollars, so we would think about it as maintaining leverage neutral on a ratio basis. When we have looked at this and have done this over time for a long period of time, there is obviously one would call away or a path towards getting to five times that is not necessarily necessary. So we think about this and have worked on this for a number of years of letting the growth in EBITDA naturally deleverage the business towards investment grade and we don't see any impetus or need frankly to accelerate that beyond what we would see in due course. So I think in all likelihood as Ben described, if we’re ultimately successful in monetizing our Australia business unit, then you should expect us to maintain leverage ratio neutral and then invest the balance of the capital in either assets or the purchase of our own stock and we’ll naturally grow towards getting to the investment grade credit ratios that we’re aiming towards.

I mean it's a great question, I think the answer is we’re going to get there soon enough either way and so we don’t, we would use that capital for incremental growth in all likelihood.

Okay and then just as a quick follow-up, one of the issues with I think the overall rating is the company has taken advantage of the secured and securitized market, where you do get a low cost of capital, but that does put pressure on the rating. Where are you guys, I’m thinking of moving towards more of a investment grade type capital structure where you really have less secured and it does lift the pressure that the agencies put on the overall corporate rating?

You’re right and I think over time, as we get towards that investment grade credit rating and maybe even as we achieve it, you’ll see us having more simplified capital structure today, we have several entities underneath our parent that have availed themselves to securitize debt and that's enabled us to achieve a very low cost of capital even though leverage maybe outside of what would be typical be an investment grade credit. So, I think what you’ll see over time is, we’ll clean up some of the complexity in the capital structure, which will mean a lessening of our exposure to securitize debt and more of the debt move towards the holding company. But I don't think you should expect that all of it will go away, I think we’ll continue to avail ourselves of that market, it gives us some diversity of sources of capital and even once we do achieve an investment grade credit rating, I think we’ll still find that attracting some debt capital on a securitized basis with some portion of our assets makes good sense and helps to lower the overall cost of debt and capital.

Okay, great. Thank you very much.

Very good. I think that wraps us up. Thank you for staying with us. I guess we went 70 minutes. Appreciate everybody's attention and we look forward to speaking with you on next quarter’s call. Thank you.