Crown Castle Aktie

I'm Jon Atkin with RBC. I cover the communications infrastructure stocks. And with me is Sunit Patel, Executive Vice President and Chief Financial Officer of Crown Castle. Welcome, Sunit.

Thank you.

Just a couple of [indiscernible]. So that's kind of top of mind. Anything that you're kind of seeing, what your advisers are telling you perhaps to expect in the future about the impact of AI on mobile traffic and what implications that might have for the mobile infrastructure sector?

Sure. Yes, I think we spent time with both manufacturers of antennas, radio gear, with our clients. What I would say is AI is a clear positive for mobile data demand. It will manifest in several ways. And many of you have heard about physical AI, a lot of physical AI will rest on mobile data traffic transmission. And also with AI, there's a lot more information being gathered or loaded up, if you like, for inference purposes. And so it's going to change the downlink-uplink ratio of traffic. So historically, most of the traffic, whether it's to the home or even on your mobile phones has been traffic coming in. So it's more like 80% download, 20% upload. So that ratio is expected to change. There are quite a few research reports out on that, but it could be as much as 60% download 40% upload. We're still at the beginning. So it's a really good -- I think it would be a good demand driver for mobile data traffic over the next few years. That's positive for us and mobile network operators.

And then in the network or maybe even at the equipment level, does that mean additional antenna arrays, new [indiscernible]? What's your perspective there?

Yes. So the one thing, if you look at the last 20, 30 years, as you push more and more bits out or in, it requires energy to move bits. So you need more power. More power means bigger antennas, whether it's delivering more speed, throughput volume of traffic, speed of traffic. So while in the background, there's continued to be shrinkage in radios and antennas, but the traffic growth in general has been -- when you look at our business from 10 or 20 years ago, mobile network operators generally occupy more space on our towers than they did 5, 10, 20 years ago, and I think that will continue.

Related to that, maybe edge compute -- actually going back. So in terms of footprint and kind of the uplink mix that you have just discussed, thoughts on whether that expands to the majority of the tower footprint or top 100 markets or anything around topology that you can define at this point?

Sure. I mean a lot of mobile data traffic is driven by people, directly or indirectly. It's either people or devices supporting people or infrastructure supporting people. So I think that the larger urban, suburban areas would be earlier bigger beneficiaries than more rural areas, but the opportunity is across the board.

Edge compute, what's the place of towers in the broader value chain versus, say, carrier COs or purpose-built data centers?

Yes. No, they're all distinct. There's clearly a big supply-demand gap in terms of power infrastructure needed for AI data center fabric. So whether you're playing in sort of that 100 to 1,000 megawatts range or 10 to 100 megawatts, 1 to 10 megawatts different companies are targeting. I think with us, we're focused more on the sub-1 megawatt level, but we have 40,000 towers. Each of them have fiber connection and a power connection. And we're a real estate company. We have space on our every tower location, horizontal space, not vertical space on towers. And so we can provide space or rent the space out. The way to think about it is it's having one more tenant like we have on the towers. That's sort of -- that's the way to think about it. We provide space. They pay for their own power. They pay for their own memory compute, whatever they put inside that space, whether it's on an existing shelf or containerized. But it's still early days, I think we described as a trial just to see how that's going. The applications for that low level of power and more -- different things, inference, quantum, cyber, but time will tell how that develops.

So talking about kind of the core U.S. site rental leasing outlook, industry seems to be going through a trough in leasing in 2026. Who knows what 2027 might bring? Perhaps it's broadly similar to this year. Has anything structurally changed in your view, maybe driven by the returns on incremental investments in 5G? Or how do you expect carriers to approach 6G, other mid-band and other potential drivers to think about next year and beyond?

Yes. So we said at the beginning of this year that 2026 will be a low point for us, and we expect to do better than that going forward. Clearly, we have visibility due to MLAs and what's happening with our clients.

But back to your overall industry sector question, look, we had some spectrum change hands this year. AT&T spent a lot of money to buy spectrum, both at the low-band 600 megahertz level frequency and the 3.45 gigahertz. Verizon bought some AWS spectrum earlier this year. Spectrum purchases are generally good for us. Lower frequency spectrum is better. So for example, for 600 megahertz, the radios and antennas are like 6-plus foot in height. And so we think that's -- the industry will benefit from the AT&T 600 megahertz. There will be some benefit just with the mid-band spectrum acquisitions depending on what Verizon and others want to do with that spectrum, meaning deploy to existing towers or new towers.

You have upper C-band auctions coming up next year at close to the 4 gigahertz plus or minus level, 165 megahertz. That should be concluded by July of next year. That's also a positive for us as a tower sector as that gets translated. And as you go up in spectrum, what that means is you either need more densification because the propagation is a little less or you need more powerful, bigger radio antenna structures within the existing macro tower infrastructure you have. So as you see whether it's the upper C-band and then the year after that, some of the 6G application spectrum with the 600, 700 gigahertz, that should also be a positive for us.

MLAs and you've got different arrangements with various of your customers. But broadly speaking, the MLAs in place present -- and the timing around perhaps the rollout, does that present an opportunity or an obstacle?

So I mean, generally, we have been more in the MLA front. At any point in time, you might be in or out of an MLA depending on the contract. But yes, we think our MLAs are structured in a way that generally benefit us as people occupy new towers or want to make amendments on existing towers. But it's particular depending on the client and what specific commercial parameters we've negotiated with.

Actually, if there's any questions, feel free to just make yourself visible. We have time for several. But as you think about margin expansion from this point forward, I can imagine a number of drivers, ground lease buyouts, which I think you talked about on your most recent call, transformation initiatives and just operating leverage as you grow revenues. But what are your ambitions there? And what are the most important drivers to keep in mind?

Yes. So we have fairly aggressive ambitions there that we have been executing on and feel confident we'll do well on that front over the next few years. That's in our control. At the beginning of this year, we reduced our workforce by 20% on the tower side. Last year, we started a set of initiatives to modernize our IT infrastructure. We've deployed 2 operations systems this year. Next year, we'll deploy a customer life cycle management and HRIS system. The year after that, we'll deploy an ERP system. All of those implementations will serve to both improve our efficiency, productivity, cycle time, number of people needed to get things done. So I think that -- and also how much we spend on operating costs for integrated platforms. So Mark Lennon, our CIO, is leading that. So excited about what that would do.

We also have put in place a transformation program that is covering all facets of the company from headcount, non-headcount expenses and have a lot of initiatives that we are executing on to drive further expense or margin improvement there. The other big program we have is our ground lease buyouts. We have 70% of the ground underneath our 40,000 towers. 70% of the towers have landlords underneath. So we have stepped up our initiative to buy ground leases out. Power is becoming important, as I said. So we're pushing that more aggressively. So I think that will -- when you can buy leases out well above your cost of capital, we think that's advantageous for our shareholders. So we're pushing on all 3 fronts. And I think we said we'll be able to improve our margins by 200 basis points from where we've guided to this year to 2030. So we are pushing aggressively on that.

Questions? Maybe talk about satellite use cases or maybe just more broadly non-Big 3 use cases and demand and what you've been seeing this year and what you think the future might bring?

Yes. So let's talk about satellites. I think many of you have read all kinds of research reports that have come out in this space. I think our summary, having looked at those too and doing our own research, our summary is that satellites are actually an opportunity for us. SpaceX is a good example. But if they really want to be comparable from a service provider similar to MNOs, I think that because of issues with in-building coverage or in-vehicle coverage even, I think that they will have to use macro towers, especially to target urban and suburban areas with higher population densities. They'll probably also need more spectrum over time. But we think that it will be tough to get to where most of the people live with just satellite infrastructure as currently deployed. So we actually think it's an opportunity for us over time.

Capital allocation, maybe just take us through the [indiscernible]. You have a really high dividend yield compared to even some of the carriers and kind of how does that affect your thinking?

Yes. So I mean our dividend is at $4.25 a share. The yield is very attractive right now. Our capital allocation strategy rests on a few planks. First is leverage ratio. We want to be at 6 to 6.5 investment grade, very focused and committed on that. The last quarter that we reported, our leverage was 6.3. We want to pay out dividends at a 75% to 80% coverage ratio of our AFFO. Obviously, we are above that now. But over time, as you'll see our AFFO grow, we should be able to grow our dividend at some point. And then we'll keep focused on what we can do to further enhance shareholder value, but also keeping in mind our leverage targets.

[indiscernible] and then the second question is connectivity between your towers with edge compute and AI-RAN and how does that connect between your towers as well as [indiscernible] data centers, how that -- what needs to change to enable that?

Sure. So your first question, if I understand it right, with the AI-RAN. So from a carrier perspective, there are several objectives. One is can we improve our efficiency with respect to spectrum utilization with AI. And on the way to doing those 6G standard, they're now calling it the 6G AI standard. So they want to put that in the standard with equipment providers to see how can we optimize that. I think the other part of the 6G standard, which was supposed to be with 5G is how many -- so today, compared to the number of people that live in the U.S., you want to support 10, 20, 100x number of nonhuman subscribers and do the standards accommodate that. So that's another area of focus.

Your question on network topology, generally, 40,000 towers are connected by fiber. Where does that fiber go? So usually -- so any of the fiber providers that you would think of telephone companies, cable companies, specialized fiber providers, that fiber usually connects back to some Internet access point. So it could go through a junction point. This is a business that I've been in for a long time. But to an Internet access point. And then from there, it can be routed anywhere. So once you have that fiber infrastructure coming into a tower, it has plenty of capacity to handle large bandwidth loads. You can put a lot of wavelengths of light through one strand of fiber. So I don't think that will be a constraint per se, but that does -- to your point, that does become very important, especially with some of these inference nodes and depending on what people want to do as edge.

I think that was the last question. I appreciate your time.

All right.

I am started here with the next session. So really pleased to have Kris Hinson from Crown Castle here with us today, kind of continuing -- this is nice we've actually -- we've included a lot of tower companies on the same day of the presentations. Yesterday was data center day and today is Power Day. So it's nice to continue that conversation and kind of the same questions and narrative that I know a lot of investors want to hear. So I'm going to -- well, first of all, Kris, thank you.

Thank you.

Thank you for coming. And just for the audience, I will allow about 5 minutes at the end if you have any questions. They will walk around with a microphone. So just raise your hand when I mention that, and we'll make time for you as well, please.

So back to my point, I'm going to open the same way I did with Mark earlier, where investors are, I think, very focused on trying to determine when we're going to see growth inflection positive in the tower industry. And the way I think that Crown Castle has talked about it is this being a low point for growth, right, this year because of a number of headwinds. So can you take us from that low point in growth and what factors are going to drive accelerating rent growth?

Sure. So as you mentioned, our organic growth forecast for 2026 is 3.6%, excluding the addition of Sprint, and we do expect that to be a low point. I think we will get better from there going forward. We had also, when we initially put out our guidance at the beginning of the year, talked about how we expected activity to be a little back-end loaded as we go through 2026 as well.

And when we think about what drives that, there are several things for Crown. One thing specifically, which is a little easier to point to is we have long-term contracts with our customers that provide pretty good line of sight into activity for us going forward. And so that gives us confidence that things will pick up and be better from here. But there are also some positive tailwinds as well that we see. There's the spectrum acquisitions.

So AT&T, in particular, acquiring the 600 from EchoStar. And then also as we look at spectrum auctions going out in late this year, early next as well as sort of longer term up to kind of 800 megahertz of spectrum that the FCC has talked about auctioning off. I think all of that has historically provided support for our business, and we would view that as a positive in this case as well.

Okay. And then just breaking down the piece parts then. So you mentioned the AT&T 600 megahertz. How impactful could the deployment of 600 be for Crown Castle?

Yes. We don't go into too much detail.

The way you can frame it broadly. I know you not go by cell site, but you can broadly frame what historic deployments incremental spectrum meant for Crown Castle, so we can get some?

Yes. I mean having low-band spectrum tends to be larger equipment. Also AT&T, they've spent a fair bit of money on this. And I think it's something that they are likely to want to deploy. And that activity and the equipment that's required is something I would expect to be a positive for towers and a positive for us specifically.

Okay. I guess historically, when carriers deployed similar low-band spectrum, like how many -- like what percentage of your towers was that deployed on historically?

I mean it depends a lot on the specific plans carrier by carrier. But you generally would see when spectrum is made available in new spectrum of any kind, it tends to be impactful. Obviously, it depends on where we are in the cycle and what the individual plans are for the customer. But again, I would certainly expect this one to be positive for us.

Okay. That's clear. And the C-band expectations, you probably don't get that cleared until, say, 2029, 2030. When do you think you'd expect to start seeing activity though related to C-band?

Yes, it always takes a little bit of time after one of the auctions. Obviously, there's a planning process that happens with each of our customers as they think about how to deploy spectrum that they acquire. And when you think about the tower space, we are a little farther out at the end of the value chain as well. So if you think about going from everything from equipment down to actually getting the equipment on the tower.

So it takes a little while to work through that planning process. But this is an area where we do our best to make sure that we build and maintain good relationships with the customers so that we can be involved at points where it's most helpful for them as well and try to make sure that we can engage in a way where we make the process seamless for them and also hopefully add a little bit of value along the way.

And there was some discussion in 2Q kind of broadly across tower companies and also from the builders like MasTec and Dycom about one or more carriers actually slowing activity in the first part of the year. And I think some of the comments pointed to that it might have been related to just headcount reductions at one or more carrier, and that would suggest it's a temporary slowdown, right? There's also been some thought though that maybe carriers are achieving densification more on owned fiber and with small cells, and that might be driving part of the slowdown.

So can you address that in Crown's position or view on this and how that might be contributing to your comment about better activity in the second half of the year?

Sure. There are a couple of things. I mean I think, of course, we've seen activity, we've called out the '26 is a low point. So we certainly nothing to point out for a specific customer, but we've seen lower activity in 2026 than we did in '25 and expect it to go up from here. I think there are a lot of things that come into play, and it's a combination of things that go on in the market and also the situations with individual customers and where they are in their planning processes.

One of the things that you didn't mention that I was just going to talk to is with more spectrum being made available and even with the spectrum that was purchased from EchoStar, I think it makes sense for our customers to make sure that they're optimizing around what's available and factoring all that into plans. And so it's not uncommon when you see spectrum acquisitions or auctions for that to take a second to work its way through the planning process and then also for us to ultimately see it in activity levels on the tower side.

And by that, you mean when carriers acquire any spectrum, they might actually pause their original plans to rework in or to work in the new spectrum and that could cause some dip in short-term activity. Is that your...

They could certainly. Yes. I think if something is made available, it makes sense for them to optimize around what they have. And sometimes, I have to imagine that, that factors into some of the planning.

Okay. So I used to call with the management team a week or 2 ago, and thank you guys again for doing that. And the call was large to address the talk about LEO-based service and what's required, not required on a terrestrial basis, okay? And one comment made on the call was we still have a lot of DISH equipment hanging from our towers. And if you can also remind us how much revenue historically you got from DISH, just so we have that number. But the comment was we'd be very open to talking to any LEO operator that wanted to utilize that equipment maybe for faster time to market and better coverage, more reliable network than you could ever achieve through a femtocell based terrestrial build.

So I guess, first of all, how much revenue were you receiving from DISH EchoStar? And then I guess, how far in advance of wanting to deploy a network would somebody have to approach you and start having those negotiations about utilizing equipment?

Sure. So in terms of DISH, first of all, we talked about the churn as we went into this year, we have no revenue from DISH in 2026, and the churn is a little bit in excess of $200 million. And so as far as the equipment goes, certainly, if it's something that the folks are interested in, that would be great. It's still going to take a little bit of time, I think, for -- if someone were to want to try to deploy it in order to go down that path.

And I'm sorry, I might have missed it, but historically, how far in advance of doing a new component of a build or kind of 4G or 5G, you start having those discussions with the wireless operator [indiscernible] or lead time?

For something that would be a larger deployment. I mean you might start having conversations sort of a year in or year out or so. And then we typically would have some lead time in the range of, call it, 6 to 9 months or so when decisions are made for particular sites and when we would start seeing revenue.

Okay. And historically, we all thought about things like application volumes amendment requests as being good leading indicators of the business, at least for pipeline. Are you seeing any changes in these metrics that would suggest or support acceleration in leasing activity back to your point about '26 being a low point for growth?

On services.

Yes, yes, exactly.

Yes. We've talked about this a little bit. I think we made some changes to our services business going back to 2023. We exited construction services at that time.

You're doing more consulting engineering now with what you're doing on the services side versus construction...

Yes. So we're not going out and doing structural modifications or hanging things on the tower. Instead, we're focused on things like design work, structural analysis, permitting, that sort of thing. And when we made the decision to exit the business, we looked at what our capabilities were and ultimately, what value we were adding and how profitable it was. And it's a competitive business and one where, at the end of the day, we weren't even necessarily winning a lot of business on our own sites.

So it was something where we looked at it and we said, hey, look, we're not adding value here. We're not making money on it, so we will exit. With what we have kept as well, that is a very high-margin business for us. So our margins are in the ballpark of 50% on the services business that we do, focusing on preconstruction. And I think it was actually as high as 53% in the second quarter.

So we are focused in on the work where we do uniquely add value, and we generate very strong margins as a result. We don't necessarily have an arrangement where we win all business on our sites with all customers, though. And so at the end of the day, win rate becomes a factor even on the services that we do provide when you look at the services margin numbers that we report. And when we go back and look at how -- even after we try to adjust for exiting the construction services business, when we look at what we have done in services and then what follows on the leasing side, it's just not something that has been a reliable indicator as we have.

So is the correlation lower now than not to construction? I would have thought that if you were doing more of the engineering and more of the analysis piece that would even be a better lead indicator?

I don't know that it has gotten lower. But at the end of the day, the activity, given that if the win rate fluctuates as an example, that's something that can drive a change in the services margin, but not on the leasing side. And so as I said, it's just -- we found those to be relatively disconnected. They were somewhat disconnected when we had construction services as well. It's not that it's a new problem. But I definitely don't think that you can draw a straight line from where services is or where it is trending into where leasing is going to go in the near term.

Okay. Perfect. Have you seen any change or shift in carrier conversations related to AI? There's been a lot of discussion from the carriers about AI changes the kind of the downlink uplink requirements and someone to think kind of reconfiguration or thoughts around network engineering if you're having those conversations today?

I mean I think that it's something that is not having an impact today on what we see come through the numbers. But I do think it's something that we're certainly excited about. You had mentioned downlink, uplink. I think if we look at some of the potential use cases, you're looking at uplink capacity needing to be 3x what it is today. Obviously, that takes spectrum. And that, at the end of the day, is something that would be positive for us.

I do think that while I wouldn't characterize any of this as something that in the near term is factoring into anything that you've seen in our forecast, certainly for this year, that it is an area where I mean we're optimistic, and I think it looks very promising long term. It's hard for me to imagine that if you look at just the capital that's going into the data center space and the AI space, looking at compute that isn't eventually going to come to where people are on their device.

And that obviously will make some of the changes like we talked about with uplink, but just also in terms of mobile data consumption. It's hard to imagine that this isn't going to be a favorable thing.

Yes. We would agree. That goes back to the first question, kind of predict how you get from where you are today to a bridging for faster growth, right, in the next few years. I'm curious to hear from you in particular, just about since Crown Castle is now a pure U.S. tower company and the other small cell pieces now are gone from the business. How has that changed your conversations with customers? Or hasn't it changed the conversation?

I think that it's changed the way that we approach customers. So if we take a big step back, we went through a strategic review process, which culminated in selling our fiber and small cell business, that transaction closed in May. But we saw a lot of value in operating as a pure-play U.S. tower company.

At a corporate level, we've been very focused on both organizing and structuring the business in a way that makes sense as a towers-only business. But there has been a lot of benefits that have come from just being able to focus on doing a couple of key activities and having a couple of key capabilities that we do really well and having a great set of assets. And so as we have focused on that as a corporation, I think we've shown a lot of progress in driving efficiencies through the business. We had a restructuring that we announced in the first quarter, and we have continued to make progress on the cost side as we've gone through the course of this year and expect to continue to make more progress as we go forward.

On the commercial side, since I've been in this role, I think a lot of what I've been focused on is trying to do the same thing with our commercial strategy and make some tweaks on the margins to make sure that we are aligned in a way that's going to be easier for our customers to interact with us to basically decrease the number of handoffs and touch points as we are sort of making sure that we're organized appropriately as a tower-only business.

But I also think that just being able to focus on what we do best is good. We're making sure that we're aligned and organized in a way that makes sense. And then I spent a lot of time going out trying to make sure that we are building and maintaining good relationships with the customers and having the right kinds of conversations. So I think all of that has been helpful and the focus that you have seen driven results on the cost side are also being helpful on the commercial side as well.

And what do customers tell you on how they want to purchase tower capacity, optimize their network kind of based on interface with Crown Castle and other tower companies. I mean my view is historically, it was a very traditional sales and relationship approach, right, very person to person. Are they telling you now they want to self-provision more or they want to be more online? Or how do they want to interact with a tower company like Crown Castle?

I mean I still view this very much as a relationship business. And I think there are certain things that we offer that are really big parts of our value proposition that don't have a lot to do with that. If I were to sort of prioritize things and location is extremely important in this business.

Sure.

And we have 40,000 towers, 70-plus percent of them are located in the 100 largest basic trading areas in the U.S., and we've got a good footprint and a good asset base. And obviously, that drives a lot of business for us. But a lot of the things that we do when we think about the relationships that we have, we do want to be able to find ways to create alignment and generate value for our customers and then hopefully keep a little bit of that for ourselves as well.

But we do try to find ways that we can sort of help out. And things that they look for, I think, are reliability and consistency. Nobody likes to be surprised. And so on the operations side, just making sure that we can provide accurate estimates of how long things will take and that we do what we say we're going to do are really important. And so that's what we strive for.

The relationship management part of the business is important, maybe not an area for more efficiency there, but something that was talked about a lot at least a couple of years ago is even those things like maintenance, right, which is also very human capital intensive today, the idea that you can utilize digital twins and drones and other technology to do some of that work. How much is Crown Castle integrating some of that technology to help to reduce cost?

Yes. So that what we mentioned specifically is stuff that we were doing. And I think that we're always looking for ways to improve our systems and integrate technology. And also to the extent that there are duplicate costs or things like that, that we can look at, it's always nice if you can do something good for your customer.

Yes. No, I understand. So another growth area we've talked about, and it's not new, we talked about in 2016 or '17 are edge data centers, right? Is that something that you're thinking about and talking about? And if you are, how big is the opportunity?

So yes is a short answer, but I want to be clear about how we're thinking about it. So we actually have a customer that we've talked about available infrastructure, who is looking to build out a nationwide network of neocloud data centers. They are a customer of ours. We're very much in early stages of that. And I would say that we're in a sort of trial phase on the concept of sort of going into kind of this edge space.

But when we think about that area, I don't view it as sort of a new business for us really or at least not something new that we are doing. We have 40,000 units of distributed real estate and we have power and fiber availability on virtually all those sites. What we do is we lease space. And so whether it's vertical space or horizontal space, we are a real estate company and we lease space on our assets. And so as we look at things like the edge applications, this is just a continuation of kind of using the assets that we already have and using the capabilities that we already have.

We're not looking at spending a lot of CapEx on the new. We're not looking at buying more building data centers. We're not looking at operating something that we're not operating today. We're just trying to take the assets and capabilities that we have today and apply them in ways that allow us to maximize the amount of revenue we generate from the assets that we have.

Have you surveyed your portfolio and determined how many towers would be suitable for data centers based on space and power availability?

Yes. It depends on -- primarily on power availability. But I think we talked a little bit on the earnings call and said 0.2 megawatts was kind of, I think, an average representation. And I would just say that in general, we're kind of looking at playing in a space that's in all likelihood, a megawatt or less. But we have space and power at the majority of our sites. We also have shelters on a fair number of our sites as well. And so we're trying to utilize those assets that are already there the best we can. And if somebody does want something more bespoke or to build that out, that's something there is a possibility, too. But we're not at a point where we're looking at really putting our own capital into a lot of the stuff.

And just so we don't get ahead of ourselves, how should we think about timing for edge data center and then, I guess, the size or the scope of the opportunity?

I mean that's what we're trying to figure out with the work that we're doing. So part of going through this trial is figuring out what the size of the opportunity is and what the timing looks like. And we'll learn along the way as we do this, but that's one of the things that we're working on with this trial.

Okay. And I know you just exited fiber and small cell. We're talking about, I guess, additional business opportunities or addressable markets. Are there other areas that you're exploring to expand your addressable market?

Yes. Look, I think that the way that I would characterize it is, yes, there are things that we're thinking about. I don't think that there's anything that is particularly advanced at this point. But when I think about where we should play, it really is focused around those capabilities and the assets like I talked about. And so certainly, in my first 3 months on the job, I've tried to think about what potential applications would make sense given what we do well and what we have and think about how to prioritize those opportunities and then pursue the ones that make sense vigorously. But more to come on all that.

Okay. In your conversations with the carriers, I mean, I'm always curious how these conversations evolve. But do you specifically address need for additional FWA capacity? Or do they not break down and discuss why they're trying to densify or add capacity?

It's more of the latter. From our standpoint, the exact use, whether it's FWA or mobile traffic or whatever, is not something that really comes into the conversation. And from our standpoint, anything that is needed and used to bolster the network is going to be good for us. But from our standpoint, it all sort of characterize it as looking the same.

Do you ever try to do your own research, though? Because you can -- I mean, there are websites you can go to, you can kind of calculate aggregate network capacity. You can actually see where FWA is available for each carrier, which would obviously signal that they're out of capacity, if they pulled back from an area. Do you ever do your own research to try to determine why a carrier is looking to add capacity and if it's related to FWA?

We do some of our own research, but I would say that we are primarily interested in what capacity is going to need to be added. Now as part of that, yes, sure, we'll look at maybe the rationale behind it as part of building it up. But we're sort of indifferent in terms of what the use is, but capacity adds of any kind are going to be good for our business.

Okay. And then on the most recent earnings call, AT&T noted that they're going to prioritize fiber, which is not a surprise, and they have their 60 million plus homes passed target. But it did feel at least to me like a slight shift to maybe deprioritizing FWA, right, favoring fiber, which makes sense if you're trying to protect or lock down your subscribers ahead of a potential Starlink service availability with V3 satellites. Are you sensing any pullback in activity from AT&T and FWA?

So like I said, it's not something where we're having a lot of conversations that are specific to their use case. But look, there's nothing to call out really with any of our customers in terms of changes of activity here that have had a material impact beyond what we've discussed.

Okay. I think historically, the view from the outside at least was that the carrier and tower relationship, I don't want to call it antagonistic, but that it wasn't always a great relationship, right? The carriers felt that they were spending too much like any customer does, right, of any vendor. I guess how or what is your plan for improving the carrier relationship?

Well, first of all, I think Crown has historically had good relationships with the MNOs and with our other customers as well. I think there are all sorts of reasons why we will not always be perfectly aligned on everything. I have vendors of my own. And yes, all else equal, would always like to pay less. But look, I think I mentioned before, I think a lot of this is a relationship business, and there are areas where we can find alignment and where we can do things that are mutually beneficial. And I think I've spent a lot of time early on trying to find those things and work with our customers to do things that will benefit both of us as opportunities do exist.

I also think that there's just an element of being able to execute a little bit more efficiently over time for them, which is helpful. And on the commercial side, specifically, at least make the interface as easy as it can be and not having too many handoffs and just being able to generate clarity and help them meet their objectives is always something that's going to be appreciated. But we spent a lot of time already working with customers across the board, trying to make sure that we can maintain and build those relationships, and that's going to be a key part going forward.

And do you have examples for the pain points that you found either where there wasn't good enough alignment or efficiency didn't meet expectations? Do you have examples just so we can visualize what can be improved?

I mean I think anything that we can do to improve cycle times is always helpful, making them both more reliable and shorter. And like I said, making the interfaces easier for the customers, I think, is always helpful as well.

Okay. Any conversations or even your thoughts, the potential for Starlink service to impact carrier network build, specifically in more rural or semi-suburban areas where maybe LEO might actually be a good alternative to traditional wireless?

It's pretty hard for me to imagine that it would have any impact. Look, if you go out to extremely rural areas, I think it's.

Remind me, your tower footprint, just the mix of urban and suburban and rural.

Yes, it is a mix of all 3, but we are, I think, more skewed urban and suburban.

Skew urban, yes.

70% of our towers a little more are in the 100 largest BTAs. But all that said, I think that it would only be in very marginal cases where you would see any overlap. But I mean, by and large, this will be complementary only. I don't think that there's going to be lot of competition for our large customers. I don't see satellites as anything that would be a negative for our business. I think if anything, it would be a positive.

And then in terms of new business activity, how competitive is that between you and, say, SBA and AMT? Or is it more than the carrier needs to have coverage in a specific area and you're the only tower company that has an asset there to provide coverage?

Location is a very strong determinant of network planning for our customers. But there are situations where you're going to have some jump balls. There are cases where at least there are going to be multiple options available. And so we do want to make sure when we're talking about some of the things around the relationship and making things easier for our customers that we are at least as easy to do business with as we can be and that we maintain those relationships. So when there are these situations on the margin where carriers do have decisions to make and they have options, that they prefer to go with us.

And I think one thing I know I struggle with at least is that network traffic has continued to grow by, what is it, 28%, 30% year-over-year. So a very robust traffic growth. But we maybe just haven't seen the level of activity that we would have expected to follow that level of traffic growth. So what's your assessment for why that was not a better lead indicator for carrier activity? And absent some spectrum auctions and other factors, what drives that need for densification?

Yes. So I think if you look over a long period of time, that data demand growth has led to very steady growth in our business. But organic growth for any of the tower companies has always looked different and has also bounced around if you look over short periods of time.

So year-to-year, you will see organic growth change for SBA, AMT and Crown Castle. And depending on where you are in the deployment cycle, you have historically seen higher growth rates at certain points along the way for one of the players than the others. I don't think of anything that's going on now or what we're seeing is anything that's much different than what we've seen in past cycles. And in fact, if you go back and look at low points of organic growth in the 4G era, there were years where Crown Castle was on par with where we are now.

And I think as a whole, you've seen something that's probably been comparable, if not a little bit better for 5G so far. But all that is to say, I know that this business is incredibly stable. And so when you see small fluctuations in organic growth rates, it tends to have a big impact. But if you do zoom out and look over a longer period of time and particularly over a full deployment cycle, I think, one, I wouldn't really expect the performance to be wildly different for any of the tower companies. And I don't think that we've seen anything so far that would suggest that there's been some sort of structural change in the way that activity levels will play out through the rest of 5G.

And I'll open it for questions here in a minute if there are any -- there should be a microphone and go away if anyone has any questions. But I want to go back to the 6G comment you made earlier because I think that is being looked at as the next big catalyst for spending. What does 6G mean for carrier spending in terms of equipment? We've heard some comments equipment is going to be much larger, right, greater load in the tower, so higher rent per site. So how are you in Crown Castle thinking about 6G as a driver of growth?

Yes. I mean I think that there are a lot of things to be optimistic about regarding 6G. I still think that some of the bigger potential things to come are going to be around AI adoption and new applications that we haven't thought of yet. So I think to the extent that we get to a point where there are new applications that are highly sensitive and require ultra-low latency, that's the kind of stuff that I think will ultimately will come and I think be really good for 6G and for our business.

But does that also then point toward more demand for small cells and the lower latency need? Or can you still use the macro site and achieve the latency required?

You can absolutely still -- like macros are always going to be a part of the solution...

The network.

Look, I think over time, there will be more small cells as well, but it's not something that is going to detract from the macro tower side of things. I think you're going to need both. And I think macro towers will certainly benefit and I think benefit first.

Do you anticipate any changes in contracts over the intermediate longer term? Obviously, historically, we had fairly ratable escalators in contracts and fairly standardized master lease agreements. Any notable changes you expect?

Not really. I mean at the end of the day, whether you're working on MLA, off MLA or what the flavor of the MLA is, these agreements and pricing ultimately are set by supply and demand. I don't think that as long as data demand growth continues at the rates consistent with what we've seen in kind of this 20% to 30% range, that there's going to be a significant shift in that balance. And to the extent that there's not, I don't see anything sort of structurally leading to a big change one direction or another in terms of the terms of those agreements.

There are always things that come up and that are of particular interest or there are particular pain points for network build-outs that can have some impacts on the margin. But I don't think that there's anything structurally that looks different in terms of supply and demand than what we've been seeing. And as long as data demand growth continues the way that it has, I don't see that changing in a particularly meaningful way.

Are carriers expressing though that they think that maybe being off MLA is better than being on MLA where you can do it more a la carte, especially if you're not doing a major wholesale network upgrade or build in the short term, maybe there is some value to just be a la carte make more selection versus having a holistic program in place?

I don't think there's been a lot of change there. In general, I kind of look at the MLAs as if we can provide additional value to the customers by providing the flexibility that comes with an MLA and then we get some more stability with these longer-term agreements, it's usually something that works out very well for both parties.

But in order to reach an agreement on an MLA, you sort of have to, by definition, have some sort of shared agreement on what the ultimate development plans are going to be at a high level over time. But like there is an understanding that there's going to need to be a certain amount of investment in order to meet the needs of ultimately our customers and end users. And we found that to be the case more recently because we've certainly used MLAs a lot over recent history.

So I think as long as that continues, there are real opportunities to add some value for both parties by doing them. And as long as that's the case, we will. But if for whatever reason, we see things differently or there are different objectives and it makes more sense to operate off of them, so be it.

Okay. Kris, that was great. Thank you so much.

Michael, I appreciate it.

Thank you again for coming out, appreciate it.

Great. Hello, everybody. Welcome to the Crown Castle fireside chat at the Goldman Sachs Communacopia and Technology Conference. My name is Mike Ng, and I cover Telecom Services and Infrastructure here at Goldman. I have the absolute privilege to introduce Chris Hillabrant, who is the President and CEO of Crown Castle. First and foremost, thank you so much for being out here today with us, Chris.

Thank you, Michael. It's great to be here.

I was thinking we could start off and talk about big picture overall strategy. Earlier this year, in May, Crown Castle closed on its small cell and fiber business sale, making it the only publicly traded U.S. pure-play tower company. Could you talk about your strategic priorities now following the portfolio transformation?

Yes, sure. It's obviously been a big year of change for Crown Castle. I'm coming up on my 1-year anniversary here next week. And I have to pinch myself sometimes to realize how much has gone on in that short period of time. Upon successfully closing the fiber and small cell business, we are, as you stated, the only pure-play U.S.-focused tower company, publicly traded here in the U.S.

And we are now moving into the next phase of focus for us, which is all about maximizing organic growth, finding ways to invest in the systems and processes that will allow us to be more efficient and serve our customers better. And so this is a journey, and we're now starting to see some acceleration of embracing that long-term strategy of serving our customers here.

That's great. I was wondering if you could talk about carrier activity. What are you seeing from the market? Is it accelerating? Is it stabilizing? Is it slower? Yes.

I think the year for us is unfolding very much as we anticipated. This is a slightly back half of the year loaded plan for us in leasing. And we're seeing a very traditional mix of amendments and first-time installs as we would expect from prior years.

Great. Are you seeing any pickup in amendment or colocation activity as a result of recent spectrum activity? And I'm thinking the AT&T 600 megahertz from DISH back in August, Verizon was a significant bidder in the AWS-3 designated entity auction in June. Have you seen anything yet? Do you expect to see some in over what time period?

Yes, we're sticking to the guidance that we provided earlier of a range of $60 million to $70 million in new leasing. The way to think about our business is really in 3 different time periods. There's the here and now, which is really dictated by the MLAs that we have in place with our customers where we have visibility into the amendment-based activity and the new leasing that they will be required for this year's plan of record.

Then kind of a midterm catalysts from our perspective is the recent EchoStar sale of the 600 megahertz to AT&T. If you recall, they were able to take advantage very quickly of the 3.45 gigahertz spectrum that they deployed, which was primarily software upgrades, albeit that will eventually lead with capacity to new radios being deployed as well. But the 600 megahertz is a new technology that AT&T isn't currently deploying. These antennas are quite large. I'm 6 feet 3 inches. They're a bit taller than I am. We saw the equipment at Mobile World Congress this year. And so this will be a midterm catalyst.

And then I think longer term, the 800 megahertz of 6G spectrum that's being made available, the first tranche will be the upper C-band. This will really fuel the next 5 to 10 years of growth for Crown and the industry as a whole. So we're excited about where this is headed. In general, anytime new spectrum has been made available, it's typically a good omen for the tower industry as a whole.

Yes. I mean that's a great segue into the next question. Just as you think about that 800 megahertz, I think 160 megahertz of that is going to be available through the auction for the upper C-band next year in April. How do you frame the opportunity here? How long does it take for that spectrum to actually be deployed cleared and all the things that need to happen for it to be productive?

Yes. Maybe start by just acknowledging the leadership of Chairman Carr and making the spectrum available for lobbying within the administration and the policy to actually have the 800 megahertz for 6G is very, very significant given the most recent activity in the industry. Typically, when the spectrum will come to auction, there's a couple of things that -- and once the auction is over, a couple of things come into play.

One is, many times, the spectrum is encumbered by the existing legacy users, you'll need to go and typically relocate them off that spectrum. And then in the case of upper C-band as an example, one of the things that we saw in the lower C-band in the time that this was originally deployed by both Verizon and AT&T. There were some issues with interference with some of the altimeters.

The key takeaway, I think, for investors to understand, which is where there's a will, there's a way, and the carriers have almost always found a way to clear the spectrum faster by throwing a little bit of money at the problem. And then they've been able to design engineering solutions around the issues like the altimeter. So I think 2 years max, but oftentimes, it can be quite a bit faster based on the needs of the networks and the high rate of data growth across the industry.

Great. As you think about the remainder of the 800 megahertz of spectrum that is mandated for auction by 2034, what bands beyond upper C-band do you think will be most likely auction candidates?

Yes. We've heard the 2.7 gigahertz spectrum band as one possible option, also 7 gigahertz. I think one of the things for folks to keep in mind is with the application of spectrum at much higher bands. One of the things that we learn when Verizon put out, say, ultra-wideband, which was quite a bit higher in the spectrum scale, is that it really requires not only the initial deployment across the macro network that the operators have, but it requires a significant number of densification efforts. And so the total number of colocations that Crown and others might see the potential for building new sites, both macro towers and small cells, this is one of the things that really excites us about the bands being discussed currently by the government.

Great. I was wondering if you could just expand on and share your thoughts as it relates to 6G. What are the kind of near-term opportunities for continued 5G densification? And then what are the opportunities created by the transition of 6G, just as you think about your longer-term leasing outlook and technologies that may be enabled?

Two or 3 just quick stories I'd share with you, one of which has recently had the opportunity to spend a lot of time on Capitol Hill, up at the FCC, even into the White House as part of the DISH proceedings, and I know we'll talk about that later. One of the key takeaways I heard for the first time in a long time where it didn't matter which party was the administration or the Democrats that we met with is the excitement around 6G that the government sees this as an existential arms race, if you will, with China over who will get to 6G first and that will unlock in terms of the use cases that are being discussed now as part of the 3GPP standards body that's focused in on 6G standards.

So there's an enormous push by the government to both make the spectrum available and then to get the industry mobilized to go out and to deploy that. The second thing was we are at another analyst conference recently, and we had the pleasure of sitting with the 3 CTOs from each of the operators. And what I've heard consistently is that based on the data rate growth, which has been like at a 30% CAGR over the last 5 years, this is driving both the acquisition of additional spectrum.

Again, like you look at the AT&T EchoStar, $23 billion invested in the spectrum is that there's a need for the spectrum just to keep up with the growth that it is. And then in order to make sure that the companies remain profitable, it's about lowering the cost per bit. And so the big advantage of 5G over 4G was the ability to connect to a massive number of devices, but it also significantly lowered the cost per bit served. 6G will have a similar catalyst.

What's new on top of that is that there's new -- the melding of the AI and the networks, whereby if today, 90% of the network traffic is on the download and only 10% on the upload, these CTOs were indicating that they expect that to be much closer to a 50 to 50 type of ratio. The net result of which is that new wearable devices, AI inference at the edge. These are new opportunities that 6G will represent. Robotics is another use case we've heard quite a bit of.

So we're excited as an industry for where this is headed. The fact that spectrum will be available that the -- both the regulatory agencies and the customers are looking to deploy this. We see this as a good long-term augur for the industry as a whole.

Great. Maybe just a business-related question. I was just wondering if you could talk a little bit about just leasing agreements. Philosophically, do you have a preference for more holistic agreements or a la carte agreements when you go through these customer renewals?

Yes. Well, I'd say we're in favor of whatever is in the best interest of our shareholders. And what I mean by that is a holistic MLA has some advantages and that it allows flexibility for our customers to deploy new technologies at a predetermined pricing regime as they go through the amendment process. It also will stipulate pricing for new colocations across our portfolio. So it's a useful tool for the carriers and obviously, it's predictable revenue growth for us.

But in the case of where that's not the case, then it allows us to get the real value for the sites that we have. And I'll just remind you that Crown Castle, the vast majority of our portfolio sits in the top 100 markets. And so if you look historically at the type of growth patterns that have been there, typically, Crown is amongst the earliest of the large tower companies to benefit from whole-scale technology changes just because of the quality of the portfolio that we do have across our 40,000 sites.

Great. Super interesting. Turning to services. Last quarter, Crown talked about a bit of a pullback in services activity across the 3 major carriers. What's driving that? And what could reignite that carrier activity? And then is services a leading indicator to colocation or amendment activity down the road?

Not necessarily, and I think part of what you need to understand is that even where Crown performs services today, it does not services across our entire portfolio, nor do any of the tower companies typically have a complete portfolio ownership. It's a very competitive environment.

Part of the decision that Crown has ahead of it as we look at our strategy long term around services, specifically is, today, we typically provide services in the front end of the process, think like leasing, zoning, permitting, A&E drawings and engineering structural calculations. We picked these services because they were good margin services. But we do need to compete against others in the marketplace that might be willing to accept lower margins.

Secondly is our customers have consistently asked us to consider going back to what Crown once did, which is a full-scope turnkey-based service approach where they just hand you the keys to the car and say, please deliver us back a site. In the past, we did this. We stepped away from this several years ago because it wasn't a great margin business for us, but the customer demand is there.

So for us, determining whether and how we can play more in services to the extent that it aligns with what a customer unmet need is and it's good, profitable business for Crown, I think we will continue to stay in this space. But certainly, our core businesses are renting out the space on our towers and building new towers. And so at the end of the day, it's one of those things where you really can't draw the comparison to whole-scale leasing trends and services only because it's a very large marketplace.

Great. Shifting gears a little bit. I wanted to ask about edge compute. Crown is in trial stages of edge data center applications. So what role could towers play at the edge? What do the trials entail? Do you have a view on the time line? And how meaningful can this opportunity actually become?

Yes, I'd say we're -- these are very early days. So caveat everything with the fact of like we're very much in the trial phase. And although we have, I think, over 100 sites deployed, these are still trials. And we hope to learn from this to understand, is this a scale opportunity that makes sense for us and our customers where we can provide value and ultimately lead to sustained revenue growth on a per tower basis. What's exciting about the edge compute is a couple of things. One is we're not encumbering additional space on our towers, which is a finite resource. Instead, we're using the available ground space we have.

And just to refresh everybody's memory, it's about having space, it's about having adequate power, and it's about having high-speed backhaul in the form of fiber, all of which we have. Now these are not very large data centers, I think like under 0.5 megawatt, but potentially across the 40,000 site portfolio, many of the sites which already have shelters in place that can be retrofitted to provide this. This is something that we think looks promising. But it's early days still, and I think we need to conclude these trials and come up with what makes the best sense for Crown.

But as an industry growth driver, it's exciting. Again, it's back to the AI usage of inference cases, it's robotics, it's private networks. As an example, in Houston -- in the city of Houston now, there's drone flights that are being done by the city, by the fire and police department to get out to look at fires and events and large-scale concerts and the like. You can imagine today, that's concentrated in a single location in the fire department, but this is something that can be easily distributed out. And so we think there's a lot of potential here, but it's still early days to give you a conclusive answer of how that will scale in time.

I wanted to ask about Starlink, which I think has been on the minds of many. Having recently closed the sale of your small cell business, I feel like you're in a very unique position to comment on Starlink's planned femtocell build-out. Could you remind us why did you sell the small cell business? Share your views on the viability of small cell build-out of terrestrial direct-to-consumer mobile services on -- from Starlink through femtocell?

Yes. Look, I spent half of my career designing, building and operating networks, first for Verizon predecessor and then at T-Mobile for many years. And so I have a pretty good sense of what it takes to be able to build the network at scale and the densest networks we have here in the U.S.

Femtocells are a great tool if you are an otherwise a very happy customer, but maybe you don't have in-building coverage in your home or in your place of business. They're small. They typically cover a room, say, of the size or maybe the adjacent rooms. It is not a substitute for macro coverage. And so the fact that you would build a femto-based network would basically presuppose that every single person in America in their home has a femtocell, every place of business that you go to do business has the femtocell and then you have one in your car.

Because the reality is for a satellite provider to provide terrestrial-based coverage, it just doesn't go in-building with the spectrum and the distance of the satellites today. So what's exciting for us at Crown, and I think the industry is that the narrative that was once out there that satellite was going to displace a whole bunch of rural sites that would be potentially at risk is now changed into a discussion about potential opportunity and whether Starlink or any other satellite company might go off and build a terrestrial network to provide competition is a potential positive catalyst for the industry.

So do we fear our portfolio, which just tends to be top 100 market-focused, urban, suburban from satellite? The answer is no. Will femtos be the ultimate solution or a negotiating potential for them remains to be seen. I think they'd love to get an MVNO. But whether they're an MVNO and they compete and they drive a new arms race of investment into new capability and coverage, or they decide to build a terrestrial network, it's a net win for the industry as a whole.

Right. Okay. And could you just comment a little bit about the DISH proceeding and update us on where everything stands?

Yes. So Crown has been at the forefront leading and leaning in on shareholder interest with DISH. I think we were very disappointed when DISH ultimately decided to stop paying their contracts. Very early on, we took advantage of a contractual clause and we were able to call forward the entire $3.5 billion sum into play and have worked tirelessly with the administration, and we're very pleased again at Chairman Carr's decision to set aside $2.4 billion as escrow fund for a potential payout.

And now we look at that as a potential floor for the industry is that there will be money made available to pay for the DISH obligations. We continue to pursue through the bankruptcy proceeding and are actually leading the unsecured creditors committee in terms of making sure that they don't rush through this process as I think they once sought to do. And I think we're hopeful that the bankruptcy process, if anything, will actually maybe speed up the actual process to get to a conclusion to ultimately allow us to make our claim against the escrow fund and potentially against EchoStar in this outcome.

Great. Shifting gears to capital allocation. How are you weighing new tower builds, acquisitions of tower portfolios and ground lease buyouts? Where do you see the most attractive returns and why?

Yes. So to be clear, our capital allocation priorities that I think I laid out very early on in my tenure have not changed at all. We remain committed to the dividend with a long-term payout of 75% to 80% of AFFO, and we'll grow into that over time as our revenues and EBITDA increases.

We continue to have a goal to remain IG-rated to stay between 6 and 6.5x in our debt. Where we are spending capital, and I think somewhere between maybe $100 million to $200 million, a small fraction of what it was when we had the fiber and small cell business is primarily being focused in on both process and tool improvements, which will ultimately lead to efficiency in a lower long-term cost basis, combined with really ramping up our efforts to buy land underneath our towers. This is our largest individual cost and therefore, a good use of our capital to be able to lower that cost and improve profitability over time.

And I guess just on those ground lease buyouts, I think there's a fairly meaningful gap between Crown and some of the public peers that you have in terms of ground interest owned or controlled. How aggressive do you want to be in closing that gap? And maybe you could just characterize what the market is like for ground lease buyouts?

Yes. So your point is well taken. We do have a gap to what's best-in-class in this industry. I think somewhere between 10% and 11%. Our goal is to close that gap over time, but to do it in a very thoughtful and disciplined way, making sure that every deal that we're signing is accretive and meets our internal CapEx hurdle rates.

This is something that having just gone through a similar exercise in my last role in Europe, which is it's all about putting together a strong series of processes, financial tools to be able to evaluate offers and then to just scale your ability to reach out to your customers on a regular basis. So again, this is an area of focus for us at Crown. We think this is an area where eventually we'd like to think of ourselves as best in class.

Great. So beyond ground lease buyouts, I'm sure there are a lot of operational efficiency opportunities across the entire organization. Could you talk through some of the cost opportunities that you see and talk a little bit about your kind of margin expansion outlook over the next few years?

Yes. So we publicly stated that we will deliver 200 basis points of margin expansion base year. It's being done through a number of different activities. Part of it will come from additional revenues that we're starting to see. Part of it will come from the ground lease buyouts that we just talked about.

But then the systems and tools and processes play a huge role, both in terms of driving reduced cycle time, which is good from a customer satisfaction perspective. And we continue to believe that there's a large opportunity through the use of making our company an AI-native company through automation and tool improvement, of which we've launched 2. We have another 2 coming up this year, is that we will ultimately be able to transform our cost basis in addition to the 200 basis points that we've laid out.

Great. As we kind of wrap up the session, you've often described Crown as a best-in-class tower operator. What does that mean to you? And what benchmark should investors look to as proof of your continued positioning as best-in-class?

Yes. So we try to extensively benchmark ourselves against our competition, both here in the U.S. and globally to define what is best-in-class. It could be everything around from a cycle time, in terms of the time an amendment or a new lease is received until the time that we turned it out. We're looking at customer satisfaction in terms of measuring the customer experience and what our customers tell us that we can do better and better meet their needs.

And then back to overall cost basis, it's employees per tower, revenue per employee. I think each of these are measures that we're focused in on finding a way wherever we sit today to what best-in-class looks like within the industry and then setting that as a target for us to be able to deliver on over time, many of which will be enabled by the investment we're making on the tools and the systems that we have. But I think we're confident that we'll continue to find opportunities to accelerate both the timetable and increase the scope as we get further down the path.

Great. Well, Chris, that's a great way to wrap it up. Thank you so much for participating in our conference. It's been a privilege to have you on stage here.

Thank you, Michael. It's been great. Thank you.

Thank you, sir.

All right.

Good morning to everyone again. And before we begin, disclosures are available at the registration desk. And for those of you that I haven't met, I'm Mike Rollins, and I cover communication services and infrastructure for Citi. We're pleased to welcome Kris Hinson, Chief Commercial Officer of Crown Castle. Kris, thank you so much for joining us, and congratulations on your new role. It's, I think, the first time that we're sitting down together since you took the new responsibilities.

It is. Yes, it's great to be here. Thanks a lot for having us.

Kris, maybe just to get us started, love to learn a little bit more about your new responsibilities and just to kind of set the stage for our conversation, what you're focused on for Crown Castle?

Sure. I think that both me going into this role and where I'm focused is well aligned with where Crown Castle has been focused since we announced the sale of our Fiber and Small Cell business. We are the only large publicly traded tower company that's focused exclusively on the U.S. And I think that focus has played out well. You've seen the efficiencies that we've already been able to take with the business. I think on the commercial side, my focus has been very closely related to that, which as we have made this transition to a tower-only company, we need to make sure that the commercial org is set up in a way to meet customers most effectively and efficiently as well.

And it's little things on the margin. I think we accomplished a lot with the restructuring that we announced in the first quarter, but making sure that we make things as easy as we can for the customers, having fewer points of contact, making that process easier. And then also just ensuring that we are out building and maintaining great relationships not just with our large customers, but that we're set up in a way to capture new opportunities that come up as well.

And so as you think about this transformation for Crown Castle becoming a U.S. tower pure play, how is the management team looking at the business, the strategy, capital allocation maybe differently than the starting point a few years ago?

Yes. I think the starting point probably matters there. I think that there has not been a change in any significant way from what we laid out when we announced the Fiber and Small Cell sale. The capital allocation priorities have remained unchanged. And I think the approach and the focus has remained unchanged. If you go back further, obviously, there have been some shifts. And the thing that I would say that we have continued to refine even as we have gone further along in this journey is making sure that we clearly define what we do and what we don't do.

And I sort of think of that on the commercial side as going a little further into what is our business ultimately. And I look at it very much, and this applies even to the edge opportunities that we've talked about a little bit. But we are a real estate company that has 40,000 units of distributed real estate with tower and fiber availability.

And what we do and what we are set up to do well is use those assets and manage those assets to lease out space. And whether that's vertical space or horizontal space, we are doing effectively the same thing. And we want to make sure that we do those things well, that we manage those assets well and that we stay focused in a place where we think that we are going to be very competitive and well set up to win.

And so when you then look going forward at the things that you get excited about, the team gets excited about at Crown Castle, what's -- what are you finding is underappreciated by the market?

I do think that we continue to find ways to do things better on the margin as we continue through the journey as a U.S.-only tower company. And I think we've seen good progress, as I said, but I think there are still more opportunities out there. And I think that being particularly clear both internally and with customers about what we can do and being able to execute that well is going to be really helpful. I also think as we look at applying that, like I said, to some of these areas where it is exactly the same business, but a slightly new application and a new customer set and really being set up to go out and pursue that business vigorously is something that I'm excited about certainly in my role.

And so we drill down on the U.S. market because, of course, that's where you're focused. But in terms of Crown versus your competitors, how does Crown differentiate its tower business?

I think location is extremely important in our business, and we have a great asset base. A little bit more than 70% of our towers are located in the 100 largest basic trading areas in the U.S. And being where people are is a good thing, all else equal. And so I think that, that is something that has been very helpful historically. It also, as we look at some of these new opportunities, I think, is a good place to be.

The things that we are working on, particularly on the commercial side, is being able to make things a little bit easier and a little bit better for the customers in places where we can and finding ways to create a little bit of value and then hopefully keep a little bit of it as well for our shareholders. I am keenly focused on, at the end of the day, organic growth. I think it's not lost on anyone at Crown Castle, how important that is. And one of the reasons that I'm in this role is to be able to focus on that exclusively and find new ways to extract as much as we can out of the assets that we have.

So with your mix of sites, where they're located, how they're structured, do you kind of view Crown within the tower business as like tip of the spear, you're going to see things first before your competitors?

I think it depends on what part of the cycle you're in. But I think if you look back historically, we have tended to see, and if you just look at organic growth as kind of the metric, we have seen relatively faster growth at the beginning of deployment cycle. So as new spectrum is made available and that is first deployed, I think all else equal, being closer to more people is marginally helpful.

All of the tower companies have good assets. There is -- as you go through the cycle, you'll see this. At any point in time, one of the TowerCos may be sort of in the lead over the other. But the idea from my standpoint is to set up Crown Castle that's over the course of a full deployment cycle that we are getting at least our fair share.

You mentioned the important focus on organic growth. How is U.S. leasing pacing year-to-date? And maybe you can give us an update on how the second half is trending. I think originally, you guided to a back half loaded year for leasing.

Yes, that's right. So our organic growth forecast addition Sprint is 3.6% for the year. And when we initially released our guide early in the year, we said that we expected that to be back-end loaded. We still expect that to be the case. And we did reaffirm our guide in the second quarter. If you look at organic growth, I think it's $135 million at the midpoint, new leasing activity, $60 to $70 sort of as you look at what that means in order to get there, it would take back-end loading. We still expect that to be the case.

And when you look at that, what are the things that drive like timing for Crown, like in a year? Are there specific carrier activities or MLA structures? For you guys, what's influencing that? And does every year now look similar where it's become just back half loaded? Or did this cadence change year-to-year?

It doesn't necessarily have to look the same year-to-year, but it has historically tended to be back-end loaded. There are several things that impact it, but the 2 big buckets are going to be what we have contracted. I think of it in terms of contracted and uncontracted activity. And we've mentioned as we just look at 2026 being the low point going forward, one of the reasons why we think that things will be better in '27 and beyond is in large part due to the visibility that our contracts give us.

And so when you look at sort of what we sort of see coming, obviously, the contracted piece is always going to be a big element of it. And just to give you kind of a rough kind of framework, at the beginning of 2026, we had 80% of organic growth contracted. And so, the other piece where you're going to see fluctuations, which I would say are less easy to see, or the timing of that is going to be less easy to see at any point in time, is going to be the uncontracted piece.

And so if you kind of go through the year, we've seen this year what we expected to see where the level of contracted activity as we sign up business has increased from 80% at the beginning, 90% at the midpoint. So kind of what we expected to see. But that will always have an impact on sort of where things land. But we see a lot of things longer term and even, I'd say, nearer term at this point that give us a pretty good confidence that we'll be able to show higher growth coming out of 2026.

And when you think about from a definition perspective, so if '26 is the trough, is that leasing dollars? Or is that the year-over-year growth rate, like so the 3.6% gets better in '27?

Yes. So it should be both. And so, let me walk through a little bit about how I would think about it. So 2026 specifically, 3.6% organic growth. We really have 4 components -- 3 sort of 4. So, the big ones are going to be new leasing activity. So that's contributing about 180 basis points to the 3.6%. We have escalators, which right now are at 2.7%. And then that's offset by about 80 basis points of churn.

We also have this other billings category, which is basically just customer credits or back billing. So it is stuff that doesn't happen in the current period, but ultimately is cash revenue, and so we end up making an adjustment for it as we find these things. But if you look at those components, we would expect over time to see a little bit of improvement in the escalator. We've talked about the sort of tail of Sprint churn that we have, so about $20 million a year through 2034.

That amount does not escalate. It's just -- it's a flat amount. So as that rolls off, we would expect to see a little bit of improvement there. But I think it is safe to assume that the majority of the improvement that we would expect to see going forward is going to be from that new leasing activity piece.

Great. So one of the questions that we've talked about before, and I know has come up before is this question around leasing dollars. So you have a similar size portfolio to your largest competitor. Your leasing dollars on that portfolio is less. What's causing that variance?

Sure. There are a lot of things that go into that. And I think vintage of towers, specific locations, agreements struck over time. There are a lot of things that go into where you land. But at the end of the day, I really do believe this market is like any other and supply and demand set the price and really on a site-by-site basis. There are a bunch of things over shorter periods of time that impact that.

And to the extent that you have a business that is characterized by very long-term agreements, obviously, wherever you are at a point in time and what you structured at that point in time is going to matter. But over long periods, it is ultimately supply and demand that sets that. So I don't think that there's really any difference between this market and others. It's just we have these very long-term contracts, and you'll see this play out. But yes, I think absolutely, over time, you would expect supply and demand to play out.

So as I think about the conversation around Crown Castle as a real estate company and as a REIT, one of the things that we've learned about real estate over the years is this whole construct of mark-to-market. And is it fair to say that just based on the deals that were structured at the time you did these acquisitions, is it fair to conclude that there might be a significant amount of your leases that are below market? And if that's the case, what are the potential catalysts to, as you mentioned, supply/demand work their way out, supply really hasn't changed that much, right? So maybe walk us through like what are the opportunities to maybe benefit from that mark-to-market opportunity?

Sure. I mean I think that with the way that I just characterized supply and demand driving things, like at a very high level, yes, there's always an opportunity to get that into balance when you're renegotiating, whether it's an individual tower or a deal. I don't want to make it seem like the opportunity to, when you say mark-to-market, to dramatically swing things is so great because I mean, a couple of things.

I don't think that -- I wouldn't characterize where we are as somehow dramatically off of market across the board. But we're, of course, going to be looking for opportunities where, look, if there is -- if there are towers that are in high demand, which we have some, and we absolutely want to make sure that we are competitive and maximizing the revenue that we can get.

And when you look at the capital now that you're generating, you have a dividend policy, you have cash flow extra, call it, cash AFFO, EBITDA growth can also give you more financial capacity. How do you think about investing that and what the build-to-suit opportunity looks like?

Sure. So just really quick, the capital allocation priorities that we have, which are unchanged, but just to run through them for everybody, is committed to the dividend, pay $4.25 a share annually. That is -- we have a target of 75% to 80% of AFFO less amortization of prepaid rent. And so, as we've worked through the DISH churn and we will grow into that sort of 75% to 80% range and then resume dividend growth from there after we get to the range.

So committed to the dividend. We also have CapEx this year target and kind of looking out a little ways of around $150 million to $250 million. A lot of that is focused on ground lease buyouts, but some of it on the build-to-suit opportunity, which I'll come back to. The third piece of it is, we are committed to maintain investment grade. And we believe 6 to 6.5x leverage is the range that allows us to do that. And so we'll make sure that we maintain that.

And then to the extent that we -- as we grow, we build leverage capacity, we'll look at other opportunities and at the end of the day, buybacks in order to keep that leverage target where it should be. When you look at the CapEx bucket, which in the grand scheme of things is not large for a company of our size, we have the GBOs. We make some investments in systems to make things more efficient. And then we also build a few towers.

The opportunity on -- really on any of the CapEx that we spend, but as you look at build-to-suit specifically, it is an economic decision. We are happy to do it and participate in it, but we have to make sure that we are generating an attractive return in order to do so. And looking back over recent history, this isn't some place where we've been particularly active, and it is because we've been disciplined with how we spend our money, and we have, at the end of the day, better opportunities elsewhere. Ground lease buyouts being the primary one at the moment. But if we can't generate the return, it's not something we're going to do.

Very helpful. When I think about the -- just the opportunities for growth, coming back to that for a moment. We have another spectrum cycle potentially coming up. You and the team have talked about it, upper C-band auction next year. If you look back over time, do you see carriers slow or pause spending in front of an auction because of uncertainty? And what are you seeing now in terms of like just the general activity level, as you mentioned earlier, the opportunity to push leasing higher?

Yes. I don't know that I would characterize -- first of all, maybe good to distinguish between history and kind of maybe how -- what we're seeing now. It's a little bit different in a couple of ways. But I would say that historically, no, I wouldn't necessarily characterize like in advance of spectrum auctions, there being necessarily a slowdown because of the spectrum auctions. There are a bunch of things that influence that. So I wouldn't necessarily say that you can draw an exact correlation between the 2.

I think if you look at this -- the market that we're in now, and I think we've made some comments about this, talked about it on our last earnings call, I think that when new spectrum is acquired or made available, it is inevitably going to need to be factored into deployment plans. And so I think there's a little bit of difference between anticipating a spectrum auction and then, "Oh, I've acquired spectrum." And of course, our customers are always going to do the reasonable thing, which is as things change, like let's work that into plans and make sure that we are deploying not only the new spectrum, but anything that we are going to invest in the network as efficiently as possible.

The services business, I feel like has gone through like a significant transformation for you guys, and there's been this habit of looking at what happens in services as like a leading indicator for leasing activity. What is the status of the services business? What does it basically do today differently than maybe in the last few years? And should we still be looking at this as an indicator for future leasing?

Yes. So in 2023, we made the decision to get out of the construction services piece. So we have remained in what we call preconstruction services, which is practically is going to be things like zoning and permitting, structural analysis, design work. What we're not doing is actually going out and physically modifying or hanging equipment on a tower. And we made that decision in 2023 as there was -- it was at a time that coincided with a dip in activity levels.

But at the end of the day, as we look at that business, we want to make sure that whatever we do is a place where we can, in fact, add value independently for customers. And it also has to be something that makes us money. And so the construction piece has always been one where margins have been much thinner. And it was something where I would say, as we looked at our skill set, it wasn't something that we necessarily did significantly better than anyone else, and so we made the decision to exit it.

As we move forward, there are a couple of things that I would say are important to keep in mind. One, we've kept the piece of the business that is high margin where we do add value. I mean our margins on the services business that we have today are in the range of 50%. And I think they were even as high as 53% in the second quarter. And so we're really focused on places where, "Hey, we can clearly add value and we can make a significant margin."

The reason why it is difficult to draw a straight line between the 2, I wouldn't even necessarily say it is so much at least exclusively because we changed the mix of the business, but it's just there are a lot of things that go into the services piece that are not necessarily going to be directly related to leasing. And the thing that is easiest, I think, to conceptualize is just, look, not all of our customers have to use us for all services. And so at the end of the day, like the win rate or whatever you want to look at is going to have an impact on what that is.

And there are also lags and other things that go into it, but it is difficult as we look back at it to draw a straight line between here's what services did or the change in services, and then what you can expect to see from leasing, which is why we sort of deemphasize it a little bit because it just -- we have not found it as we go back and look at it to be a particularly good indicator of where leasing will go.

Maybe switching over to DISH for a moment. So a number of filings in the bankruptcy court. Can you share the financial -- the amount of the financial recovery that you're pursuing? And any details on the process and what it means for the timing and the opportunity for Crown to recover what was previously contractually committed to your company?

Sure. So we're still pursuing the $3.5 billion. The rest of my answer is probably going to be a little less satisfying than you like. I think that there's still a wide range of outcomes here, but we are absolutely continuing to vigorously pursue what we think DISH owes us. I do think that there is a little bit of a silver lining with this -- in the bankruptcy process.

I think that the timeline for resolution has been pulled forward at this point versus something that was going to be purely litigation. So I think that part is a positive. It's also -- and we've talked about this, but having the $2.4 billion set aside in escrow by the FCC also very, very, very helpful from that perspective.

But that only would be a portion.

Yes. So certainly, there are multiple claimants. And so -- but having that money set aside as part of a condition of the close of the spectrum sale, certainly a very positive thing from our standpoint.

And in terms of then like maybe just closing out this topic. So, is the opportunity that the bankruptcy court needs to figure out what the liabilities for towers for Crown Castle specifically is going to be before anything can get finalized? So that's the opportunity of kind of pulling this forward?

Well, I think in terms of pulling it forward, it really is just compared to the litigation approach. Look, I think how things play out in bankruptcy remains to be seen. But we do think that the resolution will be faster this way than it would have been in the alternative case.

So maybe going over to some of the adjacencies. Like we hear about, right, the edge opportunity. We hear about -- I know in the past, we've talked drones. What are -- help us walk through like what the monetization opportunity from some of these adjacencies are and the timing of when it can become a material contributor to leasing dollars?

Part of that is what we are trying to determine with this trial phase that we're going through. I've been in the role now for about 3 months, and this has been certainly a focus area. And it's one that we're excited about, but I think we have work to do to determine things like exact size and timing. But that's part of this trial phase that we've talked about. I will say -- and maybe it's just to clarify a little bit as we mentioned drones as well.

I really do think of these opportunities as needing to fit within the context of the asset base that we have and the capabilities that we have. And so, we're not looking at something that is going to be requiring CapEx, certainly not in any significant portions at all, nothing material. It needs to be something that really fits within the leasing space, whether it's vertical or horizontal on our existing sites. Not looking to operate something that we don't operate today or start building data centers as an example. It really is sticking with what we already do well and really trying to maximize the value that we can get out of the assets that we have.

Do the trials themselves present anything meaningful? Or is it just like immaterial at this point?

In terms of results, there's something that you can see flow through the results. This is not a big contributor at this point. Hoping to change that. But no, there's -- it's not something that's really moving the needle now. I think that part of this though, too, is going through a process where we can learn what is important for some of these different applications and then sort of further hone like where it is that we should be playing and what opportunities we should pursue.

And I think for -- like I said, my primary focus is driving organic growth and an opportunity to use the assets and skills that we have in place are a great way to do that. So we're trying to make sure that we go out and figure out what are the best applications for our specific asset set, and we're going to pursue those opportunities vigorously.

When you look at the portfolio, I feel like over decades, right, it's all been about growing the tower portfolio in the United States. But I recall like the pie chart you guys used to produce of like tenancy by the slices, right, like the number -- percent of towers for each tenancy. And there's the notable less than 2 that was always like a piece of the pie and -- a significant piece of the pie.

And so as you look at the opportunities to maximize return on capital for shareholders, is there an optimization of the portfolio that you could do in some way to -- whether it's enhanced colocation, this is something in Europe that was done for years with other -- between other tower companies or to say, "Hey, like some of these are just never going to get to where they need to be and there's a better use of capital." Like are there some tuning opportunities that maybe are underappreciated from us to just kind of look at the portfolio grow over time?

Yes. I mean things change over time, and I think there are always opportunities on the margin to do some of that. I mean it's something that we are always looking at. We want to make sure at one extreme, if you were to have a negative margin site that we're making the right go-forward decisions to optimize around that.

And then to the extent that there are opportunities to either cut costs on things that are marginal or lease out additional space, of course, that's something that we're always going to try to optimize. We're always going to find some opportunities in that space, too. Like I said, things change over time, but it is something that we're certainly always going to be focused on and trying to optimize around.

Are you seeing any new tenancy opportunities, whether it's the utilities that are doing their own private networks or whether it's cable or the exploration of Starlink wanting to potentially be a direct mobile competitor? Can you share like what you're seeing on that front?

Sure. I think we have customers across the board, and I think that there are opportunities in all of those areas. I think as we look at the size of those opportunities, obviously, they're different. On the satellite side, we see satellites as being a great complement to the terrestrial network. And to the extent that, that's something that takes off, I certainly see more opportunity there than downside. I think it's something that will either be neutral or positive going forward. But certainly, potential for something, I think, more significant there compared to the other 2.

So what's the opportunity, just thinking about evolution of AI? Like is this a significant help to your business? Either the indirect, because it's going to just drive more traffic and capacity needs from your carrier customers or internally because you could be more efficient or do things differently?

Yes. So the last part of that first. I think the way that we are using AI now, and this is still something that is in the early phases of the journey for Crown Castle, but it really is to increase effectiveness. So some of the things that you were talking around site optimization and things like that. The goal is to be able to provide people with tools that simplify lower value-added work so they can spend more time focusing at the end of the day on, "Hey, how do we make more money with what we've got?"

And so I think that there's a lot of opportunity there, but it's stuff that's going to be on the margin. Bigger picture, it's hard for me to imagine that if AI takes off in the way that different parts of the ecosystem suggests they are by valuations and activity and everything that you see, the amount of CapEx that's pouring into it. I don't know how that doesn't end up on your device.

Like I don't see how that data does not end up getting consumed [indiscernible] the way that so much of the data is consumed. And so I think while it's not something that I would say we are seeing show up in the numbers that we're reporting today, hard for me to imagine that that's not something that will be at least a significant driver of data demand growth at minimum going forward.

So maybe to bring it all together, I guess it always comes back to the growth algorithm for towers. So if you can grow top line organically improving from this 3.6%. I'd be curious, is it still a mid-single-digit viewpoint from Crown and what that can mean for profitability vis-a-vis AFFO per share growth over time?

Sure. We don't have a forecast out beyond '26. Only that '26 is the low point, which we continue to reiterate and feel good about. But I think there's a big piece of what you mentioned that is very much in our control, and we've done a good job with so far and continue to make improvements on the efficiency side.

And as we look at where we kind of expect to land in '26 going out to 2030, I've said that we expect 200 basis points plus of margin expansion, cash EBITDA. Still certainly, I expect that to be the case, and that's something that we will continue to pursue. And I think our -- both have processes in place that have made it easy to replicate capturing those improvements, and it's going to continue to be a focus area for us.

Is there something just given -- just take a step back, market kind of reaction to tower stocks over the past couple of years. What is the market underappreciating that investors should spend more time on as it relates to towers?

I'm a very simple person, and I look at this in a very basic way, which is that if you go out to the end of the value chain, people consume more and more data on their mobile device every year in large amounts. That's not looking to change anytime soon. And if you have consumers that are using the end product in the value chain and they are willing to pay for it and even better willing to pay more for it over time, at the end of the day, that requires a lot of investment on a regular basis in infrastructure and what we provide in order to deliver that end product.

And so as long as there is money to be made and an end use that continues to grow, it's hard for me to imagine that this business is one that will not also continue to grow along with it. And I think that, that opportunity is both large, but also sometimes over short periods of time, a bit underappreciated.

So you see durable demand. What about restrained supply? Any change to where towers are getting easier to build or get up there?

I don't think that there has been much change in sort of new tower builds. If you look at new tower builds as a portion of the market, it remains relatively small, but demand does continue to grow.

It's great to spend time with you. Thank you so much.

Good to see you, Mike. Thank you.

Good day, and welcome to the Q2 2026 Crown Castle Earnings Conference Call. [Operator Instructions] Please note these note this event is being recorded.

I would now like to turn the conference over to Hamilton West, Vice President of Corporate Finance and Treasurer. Please go ahead.

Thank you, Nick, and good afternoon, everyone. Thank you for joining us today as we discuss our second quarter 2026 results. With me on the call this afternoon are Chris Hillabrant, Crown Castle's President and Chief Executive Officer; and Sunit Patel, Ground Castle's Chief Financial Officer.

To aid the discussion, we have posted supplemental materials in the Investors section of our website at crowncastle.com, that will be referenced throughout the call.

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 Factors section of the company's SEC filings. Our statements are made today as of July 22, 2026, 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 Investors section of the company's website at crowncastle.com.

With that, let me turn the call over to Chris.

Thank you, Hamilton, and good afternoon, everyone. We delivered solid second quarter results, increased our guidance for full year 2026 AFFO and continue to execute against our best-in-class U.S. tower strategy.

On May 1, we completed an important milestone for Crown Castle and became the only publicly traded pure-play U.S. tower operator by successfully closing the sale of our small cell and fiber businesses.

I want to thank our Crown Castle teammates for the determination and resilience they have shown as we quickly completed this transition and began the next phase of transforming Crown Castle into a best-in-class U.S. tower operator. Your hard work is making a difference. We now expect to drive additional cost savings this year as we continue to drive operational excellence.

Longer term, we will continue to transform Crown Castle, enhancing our operational efficiency and effectiveness by focusing on the following areas: First, we continue to increase land ownership purchases under our towers, which improves margins, increases operational control of our assets and allows us to deliver more quickly for our customers.

Second, we are investing in systems that streamline and automate processes, enabling our teammates to make better and faster business decisions.

Third, we continue to improve cycle times and our customer experience.

In the quarter, we also made progress towards recovering the remaining payments owed under our original DISH agreement. In May, the FCC approved the EchoStar Spectrum sale transaction to AT&T and SpaceX, but made the transactions contingent on the implementation of a $2.4 billion escrow account for the benefit of its vendors. We applaud Chairman Carr for his efforts to advance spectrum policy to maintain U.S. global telecom leadership while implementing protections for U.S. wireless infrastructure providers.

Now the DISH Wireless has filed for bankruptcy, we will be pursuing our $3.5 billion contractual claim in the bankruptcy court. The bankruptcy remote escrow account provides a source of funding that is not subject to the normal bankruptcy estate waterfall and is intended to satisfy network-related obligations, including certain infrastructure claims.

As I step back and look at the discussions we are having with our customers, I am excited about the multiple demand drivers that we will expect will benefit Crown Castle's future growth, including increasing deployment of edge compute infrastructure, continued growth in mobile data demand and additional spectrum coming to market.

As I mentioned last quarter, we have initiated several trials with edge data center providers and continue to see growing interest in how our portfolio can support distributed compute deployments. We believe the edge opportunity is gaining momentum as demand for storage and compute continues to accelerate, while many large data center deployments face multiyear construction and power delivery delays.

Crown Castle is positioned well to serve this demand in a capital-efficient manner through its nationwide network of tower sites, each with existing power and broadband connectivity and can provide distributed move-in ready locations for deployments reclining less than 0.2 megawatts.

We are seeing interest from businesses seeking to deploy scale distributed infrastructure to support inference workloads and other high value-add applications, including cybersecurity, fraud detection and real-time data processing.

Additionally, the industry continues to see strong growth in mobile data demand. According to Ericsson, U.S. mobile data consumption for smartphone is expected to more than double over the next 5 years from 25 to 52 gigabits per month, driven in part by AI-enabled applications and a projected threefold increase in uplink traffic as devices increasingly transmit video, sensor and telemetry data to the cloud. We believe the industry will benefit from an infrastructure demand cycle as Chairman Carr and the FCC advance what has been described as the largest spectrum pipeline to date with at least 800 megahertz of additional spectrum slated to be made available for commercial wireless use over the coming years.

In addition to the recently announced EchoStar Spectrum transactions, the FCC has announced its plan to auction at least 165 megahertz between 2026 and 2027.

Shifting to a topic that has been top of mind for many investors lately, satellites is a potential alternative to terrestrial networks. Let me summarize the key reasons why we believe that terrestrial networks will continue to be an essential for mobile phone service based on reports available on the WIA website and analysis from sell-side research.

First, satellite services generally require a clear line of sight to the sky and provide weaker indoor coverage, which is significant given approximately 90% of mobile usage occurs indoors or in vehicles. Because satellite signals travel hundreds of miles farther than the terrestrial connections, their signal strength is approximately 10,000x weaker, challenging performance in dense environments where buildings, obstructions and interference can further degrade the signal. To compensate for the weaker signal, phones must operate at higher transmit power levels, increasing battery consumption.

Second, satellite operators have access to significantly less spectrum. Direct-to-device satellite services generally have access to only tens of megahertz of spectrum, while each major U.S. wireless carrier controls hundreds of megahertz.

Third, a typical satellite beam covers approximately 100 to 600 square miles versus roughly 3 to 20 square miles for a terrestrial cell site, requiring substantially more users to share the same spectrum resources. This means that for every megahertz of spectrum, terrestrial cell sites can support 30x more users.

More importantly, as satellite operators seek to improve capacity, mobility and indoor performance, we believe terrestrial infrastructure will become an increasingly important complement to satellite networks.

We believe the long-term outlook for our industry remains bright, given continued mobile data demand growth, upcoming spectrum auctions and the momentum in edge data infrastructure. We believe our clear strategy, aggressive grade balance sheet and capital allocation framework position Crown Castle to maximize long-term shareholder value.

With that, I'll turn it over to Sunit to walk us through the details of the quarter.

Thank you, Chris, and good afternoon, everyone. We delivered solid second quarter results as we successfully completed the small cell and fiber cell transaction. Starting on Page 3. Second quarter organic growth, excluding the impact of Sprint cancellations and DISH terminations was 3.9% or $38 million and included a $5 million increase in other billings. Second quarter organic growth increases to 4.2% if DISH revenues are excluded from prior year's site rental billings. Excluding the increase in other billings, organic growth was 3.6%. This growth was more than offset at site central -- rental revenues by $5 million of Sprint cancellations, $49 million of DISH terminations and a $25 million decrease in noncash straight-line revenues and amortization of prepayment.

Second quarter selling, general and administrative costs included a onetime $7 million increase in stock-based compensation expense which is not expected to recur and does not impact adjusted EBITDA and AFFO.

AFFO in the quarter benefited from a year-over-year $35 million decrease in interest expense and $14 million increase in interest income due to the receipt of $8.4 billion in net proceeds from the sale transaction closing on May 1. We do not expect a higher level of interest income to recur in the second half of 2026.

Turning to Page 4. We are increasing our full year 2026 outlook for site rental revenues by $5 million at the midpoint and maintaining our adjusted EBITDA outlook as the increase in revenue and a $15 million reduction in costs are expected to be offset by a $20 million decrease in services contribution driven by lower services activity, primarily in the third quarter. We also expect a $5 million decrease to interest expense, resulting in a $5 million increase to our full year 2026 outlook for AFFO. The higher site rental revenues are driven by a $5 million increase to other billings, resulting in 3.4% full year 2026 organic growth, excluding the impact of Sprint cancellations and DISH terminations compared to our prior guide of 3.3%.

Full year 2026 organic growth increases to 3.6% if DISH revenues are excluded from prior year site rental billings, which compares to our prior guide of 3.5%. We continue to expect 2026 to mark the low point for organic growth.

As of the end of the second quarter, more than 90% of our full year 2026 organic growth, excluding the impact of Sprint cancellations and DISH terminations was contracted compared to approximately 80% at the beginning of the year. Our full year outlook for straight-line revenues remains unchanged at negative $60 million at the midpoint as we continue to expect a decrease in the second half of the year.

The expected $15 million cost reduction consists of a $10 million decrease in site rental cost of operations and a $5 million decrease in selling, general and administrative expense excluding the impact of stock-based compensation expense, as we are seeing success with our ground list by our program and continue to drive operational efficiencies across business. We also expect a $10 million decrease in full year 2026 stock-based compensation expense at the midpoint, which does not impact adjusted EBITDA and AFFO. We remain on track to deliver our outlook for the second half of 2026 and first half of 2027 AFFO of $2.1 billion at the midpoint.

Turning to the balance sheet. We ended the quarter with a leverage at 6.3x net debt to EBITDA, which compares to our target investment-grade leverage range of 6 to 6.5x net debt to EBITDA. On May 1, we received $8.4 billion in sale transaction net proceeds, which we used to repurchase $1 billion in shares and repay more than $7 billion in debt in line with our previously announced capital allocation framework. We completed the $1 billion in share repurchases in the second quarter at an average per share price of $88.66 allowing us to retire more than 11 million shares and lowering our annual dividend obligation by $47 million. Since last quarter, we repaid approximately $7.2 billion in debt, including approximately $5 billion of floating rate debt across our commercial paper program, revolving credit facility and term loan, $500 million in open market debt repurchases, $750 million in unsecured notes maturing on June 15 and $1 billion of unsecured notes maturing on July 15.

In connection with the sale of the small cell and fiber businesses, we decreased the capacity of our revolving credit facility from $7 billion to $4.5 billion to better align with becoming a stand-alone tower business.

Lastly, our outlook for discretionary CapEx remains unchanged at $200 million or $160 million net of $40 million of prepaid rent received at the midpoint.

To wrap up, we believe we have an opportunity to generate attractive long-term shareholder returns with our investment-grade balance sheet, disciplined capital allocation framework and goal of becoming a best-in-class U.S. tower operator.

With that, operator, I'd like to open the line for questions.

[Operator Instructions] The first question will come from Michael Rollins with Citi.

I was curious if you could discuss a little bit more details around the lower services activity that you're now expecting for the third quarter, does that affect the leasing activity that you're seeing from your customers? And then just finally, you mentioned that 2026 to be the low point for organic -- I think there's growth or organic activity. If you could maybe frame that a little bit more and share maybe some of the things that are giving you the conviction on the opportunities to improve organic growth going into 2027?

Yes. Great. Mike, thanks for the question. We'll start with the first one, which is that the lower services activity, there isn't a straight line that you can draw just between the service levels and the leasing activity. And so we kept the guide for leasing unchanged with a range of $60 million to $70 million. If you look at our progress over the course of the year, we started off the year with about 80% of our organic growth was contracted, we're now at 90%. So we made progress there throughout the course of the year.

In terms of the -- is this why we're saying this is the low point for organic growth. I think there's a number of factors that I'd share with you. I kind of frame these in my mind in short, medium term and long term. In the short term, as we've stated previously, we do have MLAs in place that give us strong visibility into the future contracted activity. And then as you look at the midterm, you look at the Spectrum acquisition that AT&T has with the 600 megahertz, I think I read this morning in the release, that's expected to close later this month. And once that transaction closes, I think that's a midterm driver potentially for that 600 megahertz to be deployed. We're seeing additional activity in new products for us that I mentioned in my comments here around edge infrastructure in that ecosystem, which currently is in the trial phase, but I think we have hopes that this could be something more significant over time. Then as you start to look from the mid- to long term, there's the mobile data demand that continues to grow. I think it's expected to double over the next 5 years and the -- that's supported by the emergence of new AI-enabled applications that drive increases in uplink traffic, think across smartphones, think across smart glasses, wearables, the Agentic AI assistance, again, that the operators are talking about to drive that demand. And then longer term, the FCC is me the 800 megahertz of spectrum that's starting to be auctioned in 2027. It's the combination of all of these activities, which have led us to be able to make that statement that we believe this, in fact, is the low watermark in terms of that growth.

The next question will come from Michael Ng with Goldman Sachs.

I just have 2. First, just on network activity. I was just wondering if you could comment on what you're seeing from a network densification and kind of FWA driven densification this quarter?

And then second, I was just wondering if you could comment a little bit about the $240 million combined DISH and Sprint headwind for the full year, pacing a bit below that through the first half, anything that would drive the incremental headwind in the second half?

Yes. I think the activity levels have been much in line with what we forecasted, hence the progress we've made on leasing in the first half of the year. This has pretty much played out as expected. From our perspective, I think more broadly across all 3 MNOs, there's been some pullback in the services activity that obviously showed in the results. What's driving that? We think it's a combination of some of the leadership and strategy changes that have occurred across those companies. But again, we kept our leasing guide unchanged for the year.

Yes. I think on the DISH thing, it's just timing. I think we've talked about it previously was the timing was more back-end loaded, and it's contracted. So that was just what we had expected. And I think we talked about it before at the beginning of the year.

The next question will come from Ric Prentiss with Raymond James.

A couple of quick questions for you. Obviously, glad to see AT&T say they can finally get the spectrum purchase over the finish line this month. Does that then trigger the contribution to the escrow account? And then we've been getting the question a lot lately, who owns the equipment that's still on your towers that DISH put there. Is that something DISH owns, but with -- the agreement termination, do you guys own that equipment, but first, does the escrow get funded with the AT&T closing? And who owns the DISH equipment? And I'll have a follow-up.

Yes. So your assumption is right. The funding of the $2.4 billion escrow is tied to the AT&T and transaction being closed. In terms of the equipment itself, and I think this is a broader context of the bankruptcy proceedings that are ongoing now, is that this will be determined along with a number of other issues related to the bankruptcy itself as to who owns that equipment. But as far as we've seen, they've abandoned it. And although we've requested for them to take it down, have not acted to this point.

And what's the process -- can you give us a time line on the bankruptcy court. We've heard some stuff might be coming up on August 10. But what do you envision kind of the time frame on the PK effort?

Yes. I think a couple of things. As we've guided on earlier calls, as we lodged our lawsuit against both DISH and EchoStar, was that the timing was less clear. We thought that it would take some time to go through the process of filing the suit and discovery. I think the good news story from the bankruptcy perspective is that this is likely to move faster than a traditional lawsuit would have. The original lawsuit by the way, has been suspended why they wait the outcome of the bankruptcy proceeding.

That said, I think DISH came in with some very aggressive attempts to speed along a prenegotiated bankruptcy filing, which we have and others have vigorously contested in court and successfully been able to slow down to be able to actually get the facts on the table for us to be able to proceed down that route as an unsecured creditor. In fact, we've been appointed to the unsecured creditor committee and believe that we will be successful in prevailing with our suit ultimately.

Great. And my follow-up question is, obviously, you talked to the Spectrum pipeline. We're glad to see the FCC get the auction authority back to start that flywheel going again. But as we look into beyond the upper C-band of what might come down the pike in the 2028, '29, '30, '34 kind of time frame. What frequency bands are you hearing about? And is it frequency bands that will actually get deployed on towers given where the range is as far as what gigahertz it might be at?

Yes. We'll start with upper C band, which I think is exciting for us, 440 megahertz of combined spectrum, I think globally, it puts us in a position to lead here in the U.S. based on the decision of the FCC to focus in on bringing that to market first. The additional spectrum bands are between -- my understanding is between the 1 gigahertz and 10 gigahertz band. So obviously, considerably higher than what has been put out up to this point in the low-band and mid-band 5G spectrum. I think as we look at this, and obviously, there's a lot of work still to be done and the strategies for each of the companies as they develop their 6G strategies to come to light. In general, the higher spectrum bands is a good thing for the industry and that it will drive greater densification of the networks in order to provide a consistent user experience. This is how we're looking at it at least initially here.

Okay. But you think it will show up on towers too, that even if you get into the 5 gig, 6 gig, 8 gig stuff, you can see deployment on towers?

Yes, Ric, I mean, I don't know to be frank on this. What I can tell you, which is what we were told when we visited the White House several months ago is that there is a strong intent by this administration, including FCC to put the U.S. as a global leader in 6G technology. They see this is how we win as a country. And therefore, all the might of the federal government working with industry, which would include both the mobile network operators and us as tower infrastructure providers, working in combination to bring the spectrum to market as soon as it's practical. I mean there's still a lot of work to be done in finalizing standards and the like. But I think ultimately, they're making this 800 megahertz available to actually put to use, which obviously is a good thing for us and the industry as a whole.

Yes, Ric, the FCC had the announcement today so but basically by bridging lower and upper sea band up to the 4.14 gigahertz level, it actually extends the life of 5G and we'll further promote densification, which means more sites needed for coverage, which should be plus for the current segment.

The next question will come from Michael Funk with Bank of America.

I had a few. So first of all, on the account -- sorry, the escrow account, can you give an estimate of the estimated recovery from escrow account for CCI, obviously, a number of claimants to the escrow accounts. Any estimate that you have?

When we've looked at this in the past, it's not clear on who will actually come forward to make claims. This is still something that's in progress. When we thought about overall the share of the pie, is that ourselves and American were the largest 2 contributors, but I think it's a little premature to say exactly what will be yielded out of this. It will be based on the number of claimants that come into it. And of course, either requires a court judgment or a negotiation with DISH ultimately to unlock those funds being dispersed. So we continue to pursue both in combination, both as a claimant on the fund and then also in court as part of the bankrupt security.

Great. And then you mentioned not straight line between lower service revenue and lease and I understand that. But any more color on where you're seeing lower services revenue, sort of geographies or any more color you can add there? And then you also noted more edge activity and wondering from whom or specifically more details and applications and timing for activity around edge?

Yes. So 1 of the things that's pretty exciting, if you look at the industry as a whole, data centers are having some of the same challenges that maybe tower companies did in the decades past, which is namely getting the leasing, zoning and permitting of these facilities, in addition to power delivery and some of the other challenges that they face. One estimate I read said there was something like a 15-year backlog of data center demand versus what the data center companies could currently actually deliver based on that demand. What that's opened up for us and I think for others in the space is here, we have sites, there are sites where we have the space. In many cases, we have shelters that are actually available for retrofit, we have power, we have backhaul connectivity and therefore, can provide these edge data center opportunities. These are early days, to be clear. I would still label this as a trial that we're doing with several companies that we're engaged with currently. But as we look at this and the ability to scale over time, combined with the demand in the data center industry as a whole, this is something that we're very interested in pursuing. And we'll attempt to accelerate as a future revenue source for the company. I think we'll have more to update you as we get a little further on the process, but things look promising in the current trial.

And any more color on the lower services revenue expected?

No. Again, I think it depends in more broadly speaking for us is that in any given time, we're not the only vendor that provides services to customers. So it's a combination of the services that individual companies require. It's our ability to provide value in the areas of where they have the need for services. And as I think you know, we had departed at 1 point, the construction management portion of the services that we deliver and therefore, have a smaller revenue pie that we're chasing overall in the industry. So it's not just related to 1 part. It's a general services reduction, is the best way I can describe it for you.

The next question will come from Cameron McVeigh with Morgan Stanley.

I just wanted to follow up on the plan to purchase ground leases. So there's a $20 million increase in land CapEx this quarter. And I'm curious on the expected annual investment pace, maybe the typical payback period you might expect on some of these investments. And then relatedly, if the competitive environment has changed at all, the planned acquisitions?

Yes. I mean on the payback and plan to spend CapEx, yes, I mean we do aim to increase this over the next few years, but in a very financially disciplined manner, making sure that the returns or paybacks translate to returns are well above our cost of capital. So I think that's the key threshold. But we feel we should have the opportunity to do better than what the company has done in the past just by a focus on it and the attention systems, resources, internal, external. So we are looking to raise that up over the next few years.

Great. And if I could just ask 1 more. I know you said that edge computing opportunity is in the early innings. But from your perspective, what do you think is the current biggest hurdle? Is that -- are there additional power requirements when you think through this inferencing and edge computing demand, this type of workloads that will be run through this opportunity. I'd be curious, just any thoughts there.

Yes, Cameron, let me frame it up. So look, we're not having to put capital to work. This is just incremental revenue that we can unlock on sites and they monetize fairly quickly. And therefore, for us, this is a new found opportunity that seems to have a great return profile, comparative. There's clearly demand for larger data centers that would have more power than what we have at a site. And where we might be able to do that easily and inexpensively, we can look to improve that over time. The reality is the hardest thing is getting the power delivered to the site to begin with. Once you have it there, there's the ability to, through transformer swaps and bringing additional leads in to increase the power over time. We are focusing on what we can execute on now, which is monetizing the assets that we have, with the power that we have, with the space that we have, but it doesn't preclude us over time if this business grows and it seems to be a good return on investment for us to look at additional investments because that demand doesn't seem to be going away anytime soon.

Yes. The only thing I'd add to that is recognized, we have a fairly distributed solution that we can offer at scale. We're talking about commercially available power that doesn't require, as Chris said, investment on our side. So if you do the math, you can get it from anywhere from 100 amps to 400 amps, 110 volts, 220 volts, you can get 3 phase power. So this -- what we offer is really makes sense for applications or installs that don't need a big power footprint. So more edge requirements, more high value-added edge for specific applications where this makes a lot of sense. And we are seeing increasing interest in this area now. As Chris said, it's still early days, but we are seeing increasing momentum.

The next question will come from Jon Atkin with RBC.

A couple of questions. The escrow payments, if you could maybe drill down a little bit around the pecking order that maybe your attorneys and consultants have told you to expect around look at first dips. So would it be the workers, the contract of crews, the tower companies? Where does Crown sit within that pecking order to the best of your estimation?

And then secondly, interested in kind of more of a medium- to longer-term question around the AT&T and T-Mobile assets that you bought many, many years ago under the sale leaseback. I think you have the option to start paying for full ownership of those sites, I think, in 1 case, in 2032. And is there any merit to the idea that you could accelerate that process given the free cash flow that you generate it helps, obviously, the cash balances of your customers and maybe helps them to play in the network faster. So any notion towards kind of fast forward in that process?

Yes. Maybe starting with the $2.4 billion escrow, I think while there is a hierarchy, until the total number of claimants are known and until people actually start either getting negotiated settlements or court findings that would allow them to start to draw on that, it's very difficult for us to really speculate and know what will go to whom. There were certain classes of claimants in terms of how they were paying. I think they looked at smaller claimants, more of the mom-and-pops that would have contributed maybe in the first tranche and then ultimately leading up to tower companies like ourselves. So it's -- again, it's just early for us to comment on that. But again, I think the flip side of that is we have probably 1 of the largest claims out there, and ultimately, therefore, depending on the total size of the claimants would be in a position to best settle in this in the end.

On your second question, yes, we have options like that they are out there a number of years away in size. I think our view is, we always look for opportunities where we can create win-win outcomes with our clients, and we'll continue to look at that. But as you pointed out, there's still out there a number of years. But we're always looking at win-win outcomes between our clients and us.

The next question will come from Richard Choe with JPMorgan.

I wanted to follow up on the new leasing guidance. I mean you're trending towards the $60 million, but you did say that 90% of the business is kind of booked for the year. So should we expect an acceleration? And can you reach that midpoint to high end? And then a clarification on maybe the edge opportunities. If you do get leasing this year in that, would that go into other billing? Or would that be a part of new leasing?

Yes. So if you do that, it'd be part of new leasing activity. And I think on the guidance in general, obviously, we'll have more to talk about it when we report the third quarter. So I think we just -- we feel comfortable with the guidance we have basically is where we are. And we made a fair bit of progress to your point from the beginning of the year to where we closed out the second quarter.

The next question will come from Nick Del Deo with MoffettNathanson.

First, Chris, circling back to the edge discussion, and I appreciate the details there. How can you come up with 0.2 megawatts as the relevant breakpoint? Is that just like what former deployments at sites with empty shelters would have previously drawn? Do you think that's something you get across all your sites? Just trying to understand how you got to that number.

Sure. I mean, as I mentioned earlier, Nick, if you were to assume 3-phase power, there will be 480 vaults. It can get commercially up to 400 amps. You multiply the power by the current by the square root of 3, you'd be at over 300 kilowatts. I think we have other clients on this site. So I think all we were trying to do is not to be precise, but more to just give a sense for anywhere in the tens of kilowatts to low hundreds of kilowatts, we could be a good avenue for people that need at scale distributed infrastructure, that's all we were trying to say.

Okay. Okay. So maybe just to put a finer point on it, you think that at your average site, you could get that as opposed to just at sites where you have empty shelters and there may have been a customer previously drawing more power than is currently being consumed?

Yes. I mean the mobile operators that have their own power meters at the sites don't draw that much power. So it just depends on the site and availability. I mean for the most part for -- we don't need 3-phase power, so applications that are in the tens of kilowatts not a problem, but yet we have 3-phase power might take a little longer. But again, it doesn't mean capital investment on our part. It's more a supply chain thing with power companies.

Okay. Okay. Makes sense. And then Chris, given your background, I thought you might be able to sort of share some thoughts on some of the tensions we're seeing between towercos and carriers in Italy and Spain. And in particular, any aspects of those disputes that may or may not be relevant as you think about the U.S. tower business?

It's now it's a distant past for me, right, 10 months into this gig. All kidding aside, I would say the European markets are highly fragmented. The number of operators and tower companies is sometimes out of balance. Spain is a good example of that. Italy, less so. But there's a dynamic tension between lease rates that have escalated over years with operators that have a much less healthy ecosystem from the MNO perspective. The ARPUs available in Europe are a fraction of what they are here. And so it's not that healthy environment. As oppose to the U.S. where based on the AT&T results today and several years of of good, solid, steady growth is we have a very healthy ecosystem where it allows the operators to actually invest in their networks, which again is why this is the best wireless market globally in my personal opinion. There's always some level of tension between MNOs and tower companies just in terms of the cost of this. But when those operators went back in time, and decided to monetize their assets and got paid billions of dollars or in this case, euros to go and invest in their networks to roll out 4G and eventually 5G technologies is this was -- this is the decision that drove the best use of capital in this case. And the ownership of towers providing them to multiple customers was a much more efficient use and purpose for the tower companies to provide. So it's -- I think it's really apples and oranges based on the market dynamics. And again, I wouldn't expect to see anything even remotely similar to that here in the U.S.

Nick, quick clarifications to one of your points of the earlier question, we do not have charters in all our sites to be clear, but I don't -- we don't think that, that is as much of a capital cost per se in the scheme of [indiscernible].

The next question will come from Eric Luebchow with Wells Fargo.

Great. Chris, maybe just a higher-level question. There's been a lot of debate and speculation in the industry about SpaceX potentially launching a StarLink mobile service and questions on how they get there, whether it's a terrestrial build, an MVNO, an acquisition. I'm curious if you've had any discussions with them at this point? And do you think it could create opportunity on your sites, particularly given that they're more urban in nature versus some of your peers?

I think it's probably way too early to tell and to speculate on what the various satellite operators might do in terms of creating a fourth competitive network. At the end of the day, I would tell you, we have space, we have power, we have backhaul at our sites and ultimately, we love all of our customers. And so if for some reason, they decide that this is something that they want to do for all the reasons that I laid out in my comments in terms of why satellite as a complementary technology would have to look at a terrestrial-based network to really cover and mimic with what the big 3 MNOs do today, we stand ready. But there's nothing I can share with you at this time that I know of in terms of what their plans are long term. But let's see where they end up.

Great. And just 1 follow-up for me. How should we think about capital allocation from here, given you exhausted the $1 billion buyback after closing on the fiber sale. Obviously, the stock has been under some pressure, so the buyback math seems to make sense, but rates are also up. So how do you think about prioritizing between buybacks, deleveraging and then some of the CapEx, such as ground lease purchases that you talked about as well?

Yes, nothing has changed with our capital allocation framework that we've talked about, and I probably beat to death after funding our dividend, which is sacrosanct and the CapEx needs that we have, which have a very good return profile. Any excess cash we have goes to target investment-grade leverage range of 6 to 6.5x and anything left over could be potentially used to purchase shares. I don't think anything has changed in the allocation, and we continue to be really, really judicious in the use of capital, making sure that we're seeing great risk-adjusted returns as a result.

The next question will come from Aryeh Klein with BMO Capital Markets.

Just a little bit on the guidance include some incremental cost savings benefit. I was hoping maybe you can talk a little bit about the broader cost savings potential you're targeting across the business? And is that opportunity larger than you previously thought? Or are you just realizing those savings maybe a little bit more quickly than previously anticipated?

Yes. So I think you've heard us say earlier that we think we can expand our margins, EBITDA margins by a couple of hundred basis points over the next year. So nothing's changed with that. The benefits really come from 2 buckets. One is the structural costs we talked about, the ground lease buyouts and the second comes from a fairly wide-ranging transformation effort to investment in systems, processes to continue to improve productivity, efficiency, but also our service levels of customer experience as measured in cycle times. So I think that's a program that we're executing on over the next couple of years that should continue to drive further margin expansion. I don't know, Chris, if you want to add anything to that?

No. I mean, look, this is part of our DNA. We won't always be able to control what our customers do and when they do it. But what we can control is having a laser-like focus here on driving efficiency and effectiveness and serving our customers. And so we will continue to look for those opportunities wherever we can. We have a very well laid out strategy of what we're attempting to do and Sunit really talked about it, it's about the investment in tools and processes that will unlock some of that value. That will take some time. If we can accelerate it, we will, but we've got a lot of work to do ahead of us. And this has been a big year of transition, which I think we've executed very well. But there's still more work to go, and we won't rest until we reach that best in class that we're talking about so much as our aspirational goal.

And then, Chris, last quarter, you talked a little bit about new tower builds. Just wondering if you had any update on that front in terms of what you're seeing out there?

Yes. Up to now, it's been fairly limited because, as I think I shared with you in the capital allocation process, we're not going to overpay for an asset, whether it's an existing tower or work in progress. Where we have been successful is identifying where there are coverage needs or potential capacity needs by multiple customers so that we can build towers for multiple clients. This is what makes sense to us versus doing something more speculative as some have done on the private side. So it's similar to the edge compute, I would say, for us, it's a work in progress. It's a trial. We would like to build more. We are a tower company, but we are only going to do it where it makes absolute financial sense for us to do so in a very disciplined approach.

The next question will come from Madison Rezaei with Bernstein.

Just a quick 1 for me. On the AT&T book, you've got roughly $774 million of annualized rent concentrated in that 2028 renewal. Clearly, those are from the leases struck in 2013 with the sale leasebacks and the escalators are pretty modest. Knowing that you're looking for win-wins to hear you all that in it. And obviously, please don't avoid the negotiation tactics, you be thinking about that conversation? Is that a mark-to-market opportunity? Is it a term extension? Are you sort of thinking about wrapping that into purchase option buyout discussion, how should we think about that looking forward?

Yes. So without getting into specifics of any clients, I mean, generally, we have long-term arrangements. And I think that, as you know, with AT&T, and if you look at the FCC language, they're looking to deploy the 600 megahertz spectrum, which we think should be a plus for us as tower operators, those radios and antennas to require favorable space. So I think we work closely with AT&T and all our clients as they think about their plans how we can help support that. So I think there's plenty there from a win-win outcome perspective for us and them.

The next question will come from Matt Niknam with Truist Securities.

Just 1 for me. I want to go back to the satellite topic. Have you seen any change to the way carriers are approaching coverage-related builds or even renewals of sites that are in more rural and remote footprints by virtue of incremental satellite coverage in some of the recently announced partnerships with satellite operators?

No. Nothing.

Okay. That was great. So if I can, I just want to squeeze in one second one. Just on transformation. I know it's only a few months since the fiber sale this formally closed. But where are you in terms of organizational transformation? I know you talked about some of the different cost opportunities. But are there incremental milestones, bigger milestones that we can anticipate over the second half of the year?

Yes. So look, I mean, this effort started right after Chris joined us last October. And I would say at this point, we have a fairly well mapped out series of transformation initiatives, both across each of our various functions and also across all of our major work streams combined with IT systems and platforms deployment to go along with that, in some cases, taking advantage of AI orchestration software and other tools like that. So I think it's well mapped out. They still including, as I told you, a goal to look at our come lease buyouts and how do we multiply that compared to the various levels of pace we had there. So it's well mapped out, some mapping to do, but I think you'll see us executing on that over the next 24 months or so. And it's fairly tangible. I don't think it's theoretical. We waited until the close of the transaction, some of that -- the planning work started last year.

The only thing I would add is, I think we're not just focusing on the organizational structure, but we're also focused in on what we can do culturally to support this best-in-class strategy. And that involves things like developing the teammates here at Crown, automating manual tasks through AI and systems and tools, making those kind of cultural changes that makes it a great place to work. And we believe that through these changes, we're going to see improvements in employee engagement and productivity and ultimately, customer satisfaction. And so that part takes a little more time and effort to get right. I mean making natural changes in the org structure was 1 piece of it. But the second piece is really investing in our employees and unleashing them so that they can really go back and hopefully delight the customers in a way that helps us win share. We want to win 100% of the jump balls. That's the way I describe it.

The next question will come from Brendan Lynch with Barclays.

Chris, maybe to follow up on that. Just in terms of cycle times and improving customer experience, how should we assess the progress you guys are making on these initiatives and the best way that we can monitor it going forward?

Yes. I think 1 of the things that we probably need to do a better job, and we've been focusing on developing these measures internally as a way of measuring our progress across the business. And creating scorecards that show the progress on things like cycle times from application to NTP and generating revenue. But we have a series of initiatives underway here, right? So there's best-in-class measures around trying to lead the organic growth. There's best-in-class measures around lowering the unitary cost of the products and services that we actually sell so that we can be more competitive in the marketplace. There's ones around having a lower land cost. As an example, we talked about the ground lease buyouts. We have roughly 11% delta between ourselves and American and SBA. We aim to close that gap over the next couple of years. So I think this is something where we're doing those internal measures now. I think as part of -- as we look forward, you guys have asked for, and I think we're looking in the future of providing a longer-term guidance than just in year, this is maybe something we can come back to and say, here are those internal benchmarks that we've set that we believe will show that we're best-in-class on the things that matter most to customers.

Yes, that would be great. We look forward to that. And maybe also on the service offering, you mentioned that you're going after a more narrow set of opportunities. Do you have any interest in expanding the services offering again in the future to kind of capture more opportunities?

Well, here's the good news is, Brendan, is that our customers are asking us to do more for them. So that's usually a good sign when your customers say, "Hey, I want to do more business with you, particularly on the services side. we had pulled back from some of the construction services that we had offered previously. I think we're looking at that again, if it makes sense for us. We know that the customer demand is there. We know that they like the convenience of having a one-stop shop and our competitors have provided this. So it's not something we're ready to announce today on whether we would go down that path. But we're certainly looking at it. At the end, for us, we believe if we can offer value in services that are scalable, where we can drive a good value for money in terms of what we provide for the customer. This is what we aim to offer in the service portfolio. It's probably just a little bit early for me to fully define that for you on what that looks like. But these are ongoing negotiations we have with our customers to try to figure out how we can deliver the best, most optimized services that meets their needs, but also generates the returns that our shareholders expect.

The next question will come from Batya Levi with UBS.

A couple of follow-ups. First, on AFFO, the quarter came in better than expected. You started to lower the cost earlier. And -- but there was only a small raise for the year, I think, mostly on the lower interest. Can you provide more color on why that performance is not flowing through the year? Or should we just expect a higher end of that range is more reasonable? And 1 more follow-up on network services, if you don't mind. The softness versus the guidance that you gave earlier in the year. Is that change, do you think to -- due to a pause in decision-making given some management changes at the carriers? Or is it -- are you seeing some cancellation of prior projects?

I'll answer the first one. Yes, I think I had mentioned this earlier, but there's been a number of leadership changes and strategy changes at our customers. There's been large-scale waves of layoffs, which has led to some slower decision-making is how I would characterize it in my words, so take it with a grain of salt, which has led to where we are today. Again, not perfect bridge between what those services are in the leasing activity. So it's not a perfect indicator for that. But finding ways to win the services that we believe that we should win. This is a top priority for us in our services team because we like the services. It's been a good margin. We've improved margins sequentially year-over-year. So we're not looking to exit this space. But the slowdown has been a factor of, I think, the environment and the leadership changes. But Sunit, over to you.

Yes. So look, I'll break the AFFO change in -- at the EBITDA level and then between EBITDA and AFFO. I think at the EBITDA level, you're right, we have been seeing the benefits from the cost improvements, so $15 million in the cost of sales line, a lot of that in ground rent reduction, some repair and maintenance and then on the SG&A line, those are durable improvements and we hope we'll be able to drive more improvements there over time, as we've talked about. The service weakness, which takes away from those improvements, durable improvements in cost structure has to do just with the environment right now. So this is just what we are seeing currently. We think that will come back again. So that's more just the environment right now. And so at the EBITDA line, that is why the guidance is not changing.

With respect to the interest expense, you remember when we closed the transaction, we closed it 2 months ahead of at June 30 assumption. So we updated the AFFO guidance and increased it at the time. And I think this additional $5 million had to do with the timing of how we deployed the proceeds, I think we did a better job between some of the debt paydown. The share repurchase, obviously helps some because you do save in dividend obligations that result in some interest expense savings over the balance of the year. And so it's just timing of debt payments and share repurchases in the quarter. So that's why you're seeing the reduction in interest expense of $5 million, which drives the AFFO guide by $5 million.

The final question will come from David Barden with New Street Research.

Thank you for squeezing me in, I appreciate it. I guess I have kind of 2 questions. One is Chris, you kind of gave us 3 growth drivers for the business as we look ahead. Could you kind of maybe step us through the spectrum part of this? So we've got the DE spectrum auction is now closed. And as part of that, we have EchoStar has committed to either selling by 2028 or auctioning by 2029, their spectrum. And then Brendan Carr with their upper seabed option has come out and said that we might be able to deploy some of that spectrum by the end of and the balance in 2031. So if you could kind of step us through how you think these things make the growth trajectory for Crown Castle work.

And then the second piece is with the DISH bankruptcy, they are asserting that because they have a lease agreement with you that they can take 85% of the haircut from the net present value of the lease payments that they owe you where I think your counterclaim is that it's a contract that has a superior claim. If you could kind of step us through that, so we can all understand how you guys think this is supposed to work from your perspective, it would be super helpful.

Yes. Sorry, maybe with the last 1 because I think it's a quick one, which is, yes, they're attempting to say that we're -- the 15% cap would apply to us. If you recall, we canceled the contract early based on nonpayment and accelerated those payments forward. So our position is that the 15% cap under bankruptcy law does not apply because of the nature of our agreements and the claims that we have against them. Classification and size of our claim will ultimately be determined by the bankruptcy proceeding itself in terms of that. So stay tuned to that.

In terms of the spectrum, again, I think there's -- I tried to frame it earlier, and I'll try to attempt to do it again for the benefit. There's kind of the short and medium and long-term view of the spectrum and as it will impact, let's be clear. In some cases, the spectrum I'll use 1 example where AT&T was able to take the 3.45 spectrum and very quickly deploy it through a leasing agreement with DISH across a large number of sites because they already had both the equipment and the antennas that we're capable of taking advantage of that additional spectrum. That's 1 set where it has less effect overall other than if they're adding a bunch of additional radios that then breaks through the loading of our contracts, that's potentially 1 source of additional revenue. Secondly, on things like the 600 megahertz, which would be a new spectrum band, which would require a combination of the new radios or some new hybrid radios to be developed and new antennas to be deployed. Those are types of events which would drive an impact across the industry as a whole. Again, depending on the individual tower companies agreements with the customer is another source of potential growth here, let's say, over the midterm. The larger pool of the 800 megahertz, including the upper C band, which still has to find its way through there are some clearing based activities for incumbent users of that spectrum. In addition, there's the issue of some potential issues around FAA and the ultimates that might need to be upgraded. I think the FCC has actually done a pretty good job in my estimation, having been in the industry a long time of defining a process by which each of these issues can sequentially be solved. And I would just give you as an example on the lower C band, where there was an issue with deploying the lower C-band is the industry was able to move fairly quickly and put that spectrum to work very expeditiously. The longer, longer term in terms of the remainder of the spectrum, which I guess, is between 1 gigahertz and 10 gigahertz, which you heard me talk about with Rick, of what goes on, the towers and when I think, is highly speculative for us. We don't have a sense of that. The only framing again, I would give you is that the higher the spectrum the better in use for capacity and soaking up capacity because it doesn't propagate very far. Does it go into buildings very far. It would lead 1 to believe that densification would need to happen in order to have a ubiquitous customer experience with customers utilizing those new spectrums being put to use. So it's more of a capacity play than, say, like the lower band, like the 600, which is more of a coverage play. So this is how we're looking at it is short, medium and long term, 600 megahertz probably be in that nearest term driver of potential growth in the industry and then obviously, up to what's coming in the future 800 megahertz. I don't know, did that frame it for you, how you were looking for it?

No. That's great, Chris. And I know we're over time. So thank you, and we'll follow up. I appreciate it.

Thanks, David. .

This concludes our question-and-answer session as well as conference call. Thank you for attending today's presentation. You may now disconnect.

Good morning, everyone. My name is Brendan Lynch. I cover REITs at Barclays. I'm very pleased to be here today with Chris Hillabrant, CEO of Crown Castle. Chris has been with Crown Castle for about 9 months now. I think this is his first Nareit and probably the first time a lot of you are getting to put a face with the name.

So maybe just to start, Chris, you've got experience at T-Mobile and Ericsson, Samsung, Tillman, Vantage Towers. You have many different perspectives on the communications industry. What drew you to the tower business and to Crown Castle specifically?

Thanks, Brendan. Great to be here today. Nice to see everyone this morning. Yes, I've had a long 30-year-plus career in telecom, working across operators, Verizon, T-Mobile; OEMs, Samsung, Ericsson; and then been in towers now and most recently with Vantage and now leading Crown. When I look at the business overall, I think the tower space is the best place to be.

Specifically with Crown, I'd share a story with you. When I started out, I was building towers in the Texas markets for T-Mobile at the time. And when it came time to find some extra capital, I reached out to the various tower companies, which at that time were very small. And Crown was actually the first company that I did a tower deal with, selling them about 100 towers in the Austin/San Antonio market, and then later, several hundred up in Dallas and then many hundred later in Houston. So Crown has been a great partner.

As far as tower companies go, it's been a customer-focused tower company and one that I always looked at as a strategic partner versus just another vendor. And so for me to then step in and lead this company, it's been the lifetime opportunity to be able to help turn this company around and execute the strategic plan that had been put in place prior to my arrival.

Great. So you've been with Crown Castle for about 9 months now. You closed on the fiber sale. What does Crown do best? And where do you still see opportunities for improvement?

So Crown now as the sole U.S.-only focused tower company no longer has the fiber and small cells businesses that had been taking a huge use of our capital investment. We're now in a space where we can compete and focus in on becoming a best-in-class tower company. This means finding ways to partner with our customers. It is about delivering the services that they expect in order to get them on our sites as fast as possible and then finding ways to creatively work with them in new business lines as they come up. And an example of that is recently, we've started to do trials around edge compute and finding new ways to drive the revenue per tower higher. And although this is at very early stages, we look at this as kind of an inflection point and our ability within the tower industry to perhaps start to scale and take a piece of the AI fueled growth in the marketplace.

Great. Yes, that's a very interesting opportunity, and we'll come back to that in just a bit maybe just to touch on the organic growth outlook kind of in the near term, and then we can move to the longer term as well. On the first quarter call, you mentioned that the 3.5% organic growth would likely mark the low point. Has there been any acceleration in carrier applications or activity that could lead to an acceleration in the back half for organic growth?

Yes. So to reiterate, we do think this is the low watermark in terms of growth. This has been a year where everybody is taking a deep breath as an industry, I'd say, overall. But if I look across the MLAs that we have in place with our customers, and that gives us visibility into the build that they will have into the future, we see it as a low watermark and with additional upside opportunity. We're always looking for ways to drive additional revenue. And so we're currently exploring, as I said before, not only edge compute, but also individual service packages that our customers are asking for.

One of the things that I think is a hallmark of a successful company is when you go to meet with your customers, which I do on a very regular basis, and what you hear from the customers, we want to do more business with you. This is something that's somewhat unique. It's not uniform across all tower companies and something where we think we can execute as a result of that.

Can you just elaborate on what you mean by individual service packages? That's not a term I've heard.

Yes. So as an example, today, Crown has a good services business. We typically will start off at the beginning of the process where perhaps we need to change the ground lease to take additional space for a customer, or we might need to go through a zoning process in order to help get the customer onto the tower. We'll do all of those preconstruction services, which have very good margins and something that I think we've been able to offer at a good compelling price for our customers. And so that's been very successful.

What we're hearing from customers now is more of a turnkey approach that some of our competitors have adopted. And so now we're exploring whether it makes sense for us to partner with somebody to provide those services to make it more seamless for our customers, or perhaps to do a portion of those services ourselves. So that would be one specific example.

Great. In terms of the organic growth over the next 12 to 18 months or so, what are some of the leading indicators that we as analysts could be monitoring for progress on that front?

Yes. I'm probably going to disappoint some of you here in that I would tell you the single biggest analog within the industry is when you look at the growth of data and specifically data that's being fueled by new applications in AI where people are just using it from a text perspective, but now are uploading photos or even video streams to utilize AI. It's about fixed wireless, which has exploded and driven beyond just taking up the capacity within the networks, but actually driving capacity built into the networks. That data growth is the single largest indicator of where the industry is headed, and this has been at a growth rate of 30% plus over the last 3 years. In fact, if you look at the CTIA study, I think it was something like the largest individual data growth year-over-year on record was last year. So it's very encouraging.

In addition, you see the spectrum sale, which DISH has recently concluded with both Starlink and AT&T. You'll have the 600 megahertz, which AT&T will deploy, which will require larger antennas to be deployed out there. And then the commitment of the administration to have 800 megahertz of spectrum that will be auctioned starting off in 2027. This all bodes very well for the industry as a whole. And so we see 6G, even though all the use cases haven't been fully defined yet, as a huge driver for data growth into the future.

Great. In terms of the 800 megahertz of new spectrum that's going to be auctioned off starting in 2027, what is the order of magnitude of new leasing growth that, that would create for the industry?

I think it really depends on each of the carriers, what they have in place today. So what I say by that, a couple of things. One is what type of antennas do they have in place, what type of radios do they have in place. In some cases, people have been able to use software upgrades to unlock a portion of that capacity. In other cases, they actually need to go up on to the towers and increase the number of antennas and radios to take advantage of that spectrum.

There's been some talk about C-band delays. There was an altimeter issue out previously. The industry has always found a way to work around these solutions. I remember the same thing happening with AT&T and Verizon, and they found a way to deploy it in such a way that they were able to avoid having to worry about having the altimeter technology being swapped out. So we would expect that to fuel the next several years of growth. I think the first 100 megahertz is due in 2027. With the full 800 megahertz, the commitment that's there, it will have to be cleared, it will have to be deployed, it will have to be put to use. But this could fuel the next 5 to 10 years easily of growth as they look towards 6G.

What I found really impressive was I was at a meeting at the White House several months ago, meeting with one of the domestic policy staff, and they made it very clear to us that the administration is fully behind 6G. This is something that they see an opportunity for America to lead in terms of having global technology out there in the form of 6G leadership for the U.S., which again, is something that's very good for our industry as a whole.

You mentioned before about AI applications. This is certainly a source of a lot of excitement, but there isn't much tangible at present. Can you just give us any examples that you see coming in the next couple of years where we might see those applications really start to scale?

I'm going to tell you a story because I think it kind of brings to light how powerful AI is and even somebody like myself would use it in a daily thing. There was a charity golf tournament that we were invited to recently for one of our customers. And I was curious on whether I've been to this as a COO in one of my former lives in the smaller tower company. And I was like, did the CEOs show up? And of course, there's no invite list, but I went to this customer's website. I found out that they had a picture, reel, on their website of all the people that had attended.

And so with using one of the AI platforms, I was able to say, hey, did any of the wireless company CEOs show up? And the AI chatbot basically said, well, I can't do that for privacy reasons, but what I can do is I can individually load those up against the publicly available databases and LinkedIn and try to compare them for you. And so I said, yes, please do that and it did that. And I ended up loading in several of the pictures and able to do that.

The fact that I could use an AI client to basically determine if somebody had attended a golf tournament, which is a small and inane thing, involved me uploading, I don't know how many, hundreds of megabytes of photos in there. But the way that people are using AI today is not necessarily representative of how people will use AI in the future. And that ability to upload large photographs or video streams is going to fundamentally change the way that AI is used. And so that bandwidth that's now required for uploads is diametrically going to grow as a result of that. So again, as we look towards the technology evolution, we see this as one of the key drivers of data growth traffic into the future.

Great. Let's talk about some of the challenges that the industry could face. You mentioned software upgrades. That's something that we've seen more recently where maybe you wouldn't be able to generate as much revenue from carrier activity as you would have in the past. How should we think about that type of change, or even the versatility of network infrastructure increasing with dual-band radios or RAN sharing, those types of considerations?

We were at Mobile Congress in Barcelona this year, a small group of us, to look at the evolution of antennas and radios across the major OEMs that do business here in North America. And while we do see that there is a continued densification of capacity in the antennas and in the radios, there's a portion of this which is driven by physics. So if you think back to my earlier example there of 600 meg, these are very large massive MIMO antennas that are taller than I am, 7 feet tall plus. You've got to put these out there. You can't suddenly change the laws of physics that a low-band spectrum is going to go into a smaller antenna.

Now back to the software deployment in radios, while it is true where if you already have a set of radios out that are tuned to the band to deploy, that you can initially go ahead and just add those spectrum through a software upgrade. But over time, as the data grows and the capacity increases, you need to add additional radios. So irrespective of the bands that are included there, as traffic grows, you're required to put out additional radios. And anytime you're adding radios to the network, anytime you're adding antennas to the network, it is good for Crown and for the industry as a whole.

Makes sense. Maybe just one on fiber-to-the-home rollouts. We see a lot of carriers being very active on that front. That could be liberating some spectrum for cellular use, which is currently being used for fixed wireless access. How should we think about that dynamic?

Look, most of the operators have been using WiFi calling for over a decade now. And most people, myself included, typically have their WiFi turned on, whether they're at home or in the business. So that's capacity that's currently being carried by those wireless networks, the WiFi-based networks already. This isn't something that suddenly is going to pull off all the mobile traffic. And again, when I'm out there using the types of applications that are driving that growth, I'm consuming that it's not just when I'm sitting at home, it's when I'm traveling in my car, it's when I'm out and about. This is really still the arms race within the industry of providing coverage wherever a person wants to use their mobile device.

Maybe just a couple more on the industry. I'd say 5G hasn't lived up quite to the expectations that some of the industry has had over the past couple of years. How do you think 6G might be different?

Maybe start with 5G. I think there's one piece that nobody really talks about, which has been a major benefit for the industry as a whole, which is the price to deliver per bit to the customer has dramatically decreased in that time period. And while maybe some of the more science fiction applications, people talk about remote operating theaters where a doctor in India could operate on somebody in Sweden didn't come to pass.

When I walk out in my neighborhood in Houston, I see Waymo cars everywhere. Today, that technology is embedded on the car, on the vehicle itself, but it's not too great of a leap to think about in time where that will migrate out to the network. And what it excites us about is it starts to give real relevance to edge compute and the need to put out GPUs at the edge in order to have the low latency type applications of things like autonomous driving. So while not everything came through, the fact that they were able to reduce their cost significantly to keep up with the data demand is something that was really a benefit of 5G.

Looking towards 6G, and I think I said this a second ago, those applications, which will fuel 6G, include AI, there'll be different types of applications. I would expect that still one of the primary drivers of 6G will be a new way to drive additional cost out of delivering that bit. But as 6G becomes a more focus over the next 4 to 5 years, we expect that it will drive a cycle of investment that the operators will have and that the applications that are going to emerge over time. This is no different than maybe if you turn back the clocks to a couple of decades ago when there was a huge lot of fiber that had been put into the marketplace and people were like, what are we going to do here? This is never going to be consumed, only to find that new applications came out of that and the consumption accelerated. It drove that fiber-to-the-home revolution that you're talking about. I think we're poised for a similar type of innovation to be released as the technology is deployed.

Speaking of new technologies, direct-to-device has gotten a lot of attention. I think the industry, the tower industry and you and your peers have done a pretty good job explaining how it's a complementary technology to terrestrial networks. Do you see an opportunity for direct-to-device to even be an incremental growth driver for the tower industry as well?

While not going into specific talks that we're having with potential customers, I would say that if you look at the recent announcement by the MNOs here in the U.S. to not provide a virtual mobile network operator to the satellite operators, it presents a challenge. You can add value at the very extreme edge where there's no coverage today, but it has to be out in the open air. If you're in a vehicle, if you're in your home, if you're in a place of business, the satellite signal can't get into you as a mobile user.

And so ultimately, if there was a desire to build another network, there would have to be a terrestrial component. You cannot replicate the capacity of the terrestrial networks that exist today just through satellite alone, even with the additional spectrum coming in, and it doesn't solve the in-building challenge that they would face in the kind of urban, suburban areas for in-home and in-vehicle use. So it's an opportunity. Where it goes, we'll see, but we're open for business and eager to serve all customers.

Great. Let's come back to the edge data center opportunity. You mentioned that you have some trials that you're currently involved with. Can you give us any additional detail about what that entails?

Yes. I'd start by saying, just to be clear, this is something that is at a very early stage. And it needs to be borne through a series of trials that we're conducting, that this is something that makes sense, that it's scalable, and that it's a good, solid, profitable business for us to pursue. So I don't want to overexcite people in terms of what the opportunity is. That said, what we've seen at least initially here across a number of new entrants in this place is that there is some demand. And therefore, we're excited to be a part of the, let's call it the tip of the spear that's out there looking to find this.

I think I was reading the other day, there's something like a 15-year backlog in data center capacity needs. And so anybody that has space or shelters, people that have power and people that have connectivity in the form of fiber or some backhaul instantly becomes very attractive potentially for edge data center use. So this is what we're looking at. We've got several trials in place. It looks promising so far, but we will need to thoroughly make sure that this is a good, viable and scalable business before we go in headfirst.

Is this something that you're dedicating capital to? Or should we think about it more as just leasing space at your tower sites and just collecting a revenue stream?

Yes. I mean, fundamentally, we are a real estate company, which is why we're here today, right? We do have shelters on a number of sites that were some of the tower portfolios that were purchased. In many cases, these shelters are in good shape and able to be co-located in. In other cases, they may need to be either upgraded or replaced. Again, I think we're going into this as a very limited use of our capital. We have a very high bar that we have set for putting capital to use versus saying share buybacks or staying within our investment-grade 6x to 6.5x debt. So this is a business that we can, with not a whole lot of effort, scale, we're happy to take that money.

Another business that you suggested you might try to scale more relative to the past is building new towers. There's not a lot of towers that are being built in the U.S. at present. How do you think you can take share?

So every year, there's roughly 2,000 towers that are being built across the U.S. And today, it has been very much spread across much smaller tower companies, some big ones, too. But in general, the big 3 public companies have not gotten a lot of shares of towers from their customers. I think a couple of things. One is back to my earlier comments, in some cases, customers are asking us to do more and asking us if we would consider building towers for them as anchor tenants.

Where we think the sweet spot is that through some of our analytics of understanding customers' towers of where they are and they aren't where using data available of network performance, where we can find a tower that has a minimum of 2, sometimes even all 3 customers that are interested in. These are the types of opportunities that will meet our very high hurdle in terms of the use of that capital. So it's not a huge opportunity today, but it's something that fundamentally, as a tower company, along with leasing new sites and amendments, along with buying out your ground leases, building new towers is something that we're proud to do.

I think one of your past employers, Tillman, is very active on that front. Is that a network that you can still tap into to kind of accelerate this opportunity?

Look, there was a point in time where capital was very cheap, that some of these smaller tower companies were able to gain a toehold in the industry and build a high number of towers. I think it's become far more challenging. The cost to build the tower has almost doubled since the pandemic with the run-up of inflationary cost of labor, of raw materials to build the tower, steel, concrete, et cetera. I think that more than likely, the towers that get built will be increasingly built for multiple carriers where it makes sense and very few that are back in what Tillman was known for in terms of build to relocate, far fewer of those just because the economics simply don't work.

Great. Maybe to touch on the cost savings initiatives. This has been something that's been focused for quite a while now with the fiber sale. What work streams remain to be executed on going forward?

So first of all, we're incredibly proud of the fact we were able to very quickly move to execute the fiber and small cell sale, along with our litigation with DISH and fighting to preserve our rights under that contract and pleased that the FCC Chairman ultimately put a set-aside for DISH there. These were the major things on our plate, along with relaunching Crown 2.0 as a stand-alone tower company for the first 7, 8 months of my tenure here at Crown.

As we look forward, we're focused on organic growth, but more importantly, what can we do to help drive scale and efficiency. And so you've heard terms thrown around like best-in-class, best-in-class in terms of the systems and tools that we have, measuring the cycle times by the time we receive an interest to go on one of our towers to the time that we help our customers deploy that. These are all things that we can do that will both increase customer satisfaction, while at the same time, continuing to drive cost out of our business.

So we're fairly relentless. We have a good plan in place, and we're excited with the progress so far. I don't have anything to guide you to yet in terms of expectations of where they're going to lead. But as we put these systems in place, as these tools are launched, I think long term, we're excited at the potential cost savings that would be associated with the deployment of these.

Great. You mentioned DISH there. What is the range of outcomes that we should be preparing for?

Yes. I'd like to think that the recent FCC action is now somewhat of a floor that's been established, and there's work to be done there. You still need to have a judgment against DISH in order to tap into that. There's still some work being done on finalizing how that fund will be ultimately dispersed amongst the claimants. And depending on how many people ultimately show up, we will determine on how much is left there.

We still continue to aggressively pursue DISH in court and actually feel very good about our suit and that ultimately, we should be able to prevail there. But at least now there has been a floor established, and we're very appreciative of the FCC recognizing the impact on our industry and having to set aside.

Great. Maybe a few more on capital allocation. You have indicated that you're interested in purchasing more of the ground leases underneath your towers. Can you just elaborate on that opportunity and what you evaluate in terms of location, renewal risk, strategic value, et cetera?

Yes. So let's start by saying that we are behind our key competitors. They've got now somewhere 10%, 11% ahead of where we are and are already realizing the benefits of that cost reduction. We believe that through ground purchases, and we prioritize those based on those of greatest value in terms of savings for us long term, that we can go out there and lower our costs significantly over time.

Again, we apply the same types of metrics in terms of what is the multiple that we need to pay there. I think, again, we're judicious in how we apply this. The benefit is and what I saw in Vantage, where we were able to basically quadruple or quintuple the rate of land purchases over time, is that this is something that with focus, with the right internal team and vendor pool that you can go out and execute on smartly. And because we are behind our competitors, we see this as a real opportunity for us at Crown to start to close the gap.

In terms of kind of controlling your own destiny, AT&T has some very long-dated purchase options on a large amount of towers. How should we think about the opportunity for Crown Castle to buy them out of that opportunity?

Yes. I think we always look at great opportunities that are in the interest of our shareholders. So without commenting specifically on that or other types of opportunities like that, we always look to see how we can best deploy that capital for the highest return, and it may be in that case that we did.

Great. Maybe just one last one. Kris Hinson, who was formerly IR, has been named Chief Commercial Officer; and Mark Lennon as Chief Information Officer. What are the objectives that led you to create these new positions?

Yes. I think as we launched Crown 2.0, one of the things we looked at was trying to flatten the organization. We took out several layers of management in an effort to be more responsive, to be more nimble in the marketplace, and to be able to execute smartly. And then what we've been able to do, I think, in the case of Kris, who is one of our talented leaders, is kind of pull him up and give him some additional operational experience. And because organic growth is one of the key focuses of our company over the next several years, putting somebody in place that can execute smartly and having the focus on that was in the best interest.

And then on the CIO front, we realized we really needed somebody that was AI conversant, that could bring in a fresh set of eyes to help us in driving the tools into the marketplace. We have a great opportunity ahead of us with the types of platforms that we're now implementing. These are the same platforms that we had used at Vantage, and I saw the transformative effect. So by bringing Mark in, we've got somebody to help lead that team and accelerate our progress of rolling out these new systems.

Great. A lot to be excited about. Chris, thank you very much. I'll leave it there.

Yes. Thank you so much.

Good day, and welcome to the Crown Castle First Quarter 2026 Earnings Conference Call.

[Operator Instructions]

Please note this event is being recorded. I would now like to turn the conference over to Kris Hinson, Vice President of Corporate Finance and Treasurer. Please go ahead.

Thank you, Chloe, and good afternoon, everyone. Thank you for joining us today as we discuss our first quarter 2026 results. With me on the call this afternoon are Chris Hillabrant, Crown Castle's President and Chief Executive Officer; and Sunit Patel, 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 that will be referenced throughout the call. 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 Factors sections of the company's SEC filings. Our statements are made as of today, April 22, 2026, 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 Investors section of the company's website at crowncastle.com. 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 reported within Crown Castle's financial statements as discontinued operations. Consistent with last quarter, the company's full year 2026 outlook and first quarter results do not include contributions from what we previously reported under the Fiber segment, except as otherwise noted.

With that, let me turn the call over to Chris.

Thank you, Kris, and good afternoon, everyone. We delivered solid first quarter results and are reiterating our guidance for full year 2026. This is a transformative year for Crown Castle, and we believe we have an opportunity to generate attractive shareholder returns as we transition to a stand-alone tower business and pursue our goal of becoming a best-in-class U.S. tower operator. To maximize shareholder value and to reach our goal of becoming best-in-class, we are focused on 3 business priorities. Our first priority is to conclude the sale of our small cell and fiber businesses, which we believe remains on track to close in the first half of 2026. We have received almost all required approvals and have largely completed the separation of our small cell and fiber businesses.

Second, we are working diligently to preserve the value captured in our original DISH agreement from 2020. Along with the Wireless Industry Association, we have taken an active role in engaging with the relevant government authorities to ensure that DISH honors its commitments. We have also taken appropriate legal action. After DISH defaulted on its payment obligations in January, we exercised our right to terminate the agreement, and we are seeking to recover the remaining payments DISH showed for the terms of the contract. We believe we have a strong legal case against DISH and continue to vigorously pursue a legal remedy in the federal courts.

During the first quarter, we amended our pending litigation against DISH to include a claim for breach of contract alongside our request for declaratory judgment. The amendment also asserts a claim against EchoStar for their role in helping DISH evade its contractual commitments. And finally, to become a best-in-class U.S. tower operator, we are performing a thorough review of our business, looking for ways to drive improvement in our operational efficiency and effectiveness.

In the first quarter, we successfully executed a restructuring of our tower and corporate organizations, resulting in an anticipated $65 million reduction to annualized run rate cost. We have benchmarked our performance against competitors to both drive efficiency and excellence in operations. I would like to thank our Crown Castle teammates for working hard to ensure that we continue delivering for our customers during this transition period. I remain impressed by the resilience and determination along this journey. Our 2026 guidance also includes a year-over-year increase in capital expenditures as we seek to acquire more land under our towers and invest in systems and processes, which we believe will drive operational efficiency and effectiveness in the following ways.

First, we believe that acquiring land under our towers improves our margin and increases operational control of our assets, allowing us to deliver more value to the customer by meeting their needs more rapidly. Second, we believe the investments we are making to enhance, streamline and automate our systems and processes will improve the quality and accessibility of our asset information and empower the Crown Castle team to make better business decisions in a more timely manner. As I look to the future, I am excited by the opportunities in our sector, including the persistent growth in mobile data demand, the upcoming spectrum deployments by Crown Castle's customers and over 800 megahertz of new spectrum auctions beginning in 2027.

I believe our focus on becoming a best-in-class U.S. tower operator will position us to capitalize on these trends and maximize cash flow by unlocking additional organic growth and improving profitability. In summary, we believe we will generate attractive shareholder returns by focusing on the following priorities: including the sale of the small cell fiber businesses, preserving the value captured in our DISH agreement and improving our operational efficiency and effectiveness. We believe these priorities, combined with our disciplined capital allocation framework and investment-grade balance sheet will maximize shareholder value.

With that, I'll turn it over to Sunit to walk us through the details of the quarter.

Thanks, Chris, and good afternoon, everyone. We had a solid start to the year in the first quarter as we executed the previously announced restructuring. First quarter organic growth, excluding the impact of Sprint cancellations and DISH terminations was 3.1% or $30 million and included 0.3% or $3 million decrease in other billings. First quarter organic growth increases to 3.3% if DISH revenues are excluded from prior year site rental billings. Excluding the decrease in other billings, organic growth was 3.6%, this growth was more than offset at site rental revenues by $5 million of Sprint cancellations, $49 million of DISH terminations and a $26 million decrease in noncash straight-line revenues and amortization of prepaid rent. Adjusted EBITDA and AFFO in the first quarter benefited from lower repair and maintenance costs, sustaining capital expenditures and other nonlabor 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 rates. Turning to Page 4. Our full year outlook remains unchanged. When excluding DISH revenues from prior year site rental billing, our full year outlook includes 3.5% organic growth, excluding the impact of Sprint cancellations and DISH terminations, which we expect to mark the low point. At the midpoint of the range for full year 2026, we expect site rental revenues of approximately $3.9 billion, adjusted EBITDA of approximately $2.7 billion and AFFO of approximately $1.9 billion.

As a reminder, for the purposes of building our full year 2026 outlook, we'll assume the sale of the small cell and fiber businesses closes on June 30. Following the close of the transaction, we plan to allocate approximately $1 billion to share repurchases and approximately $7 billion to repay debt, allowing us to remain at our target leverage range between 6 and 6.5x. Our full year 2026 outlook positions us well to meet our unchanged range for AFFO for the 12 months following the anticipated close of the transaction of $2.1 billion at the midpoint.

Turning to the balance sheet. We ended the quarter with significant liquidity and flexibility, positioning us to efficiently maintain our investment-grade rating after the sale of the small cell and fiber businesses based on our previously announced target capital structure and capital allocation framework. Lastly, our outlook for discretionary CapEx remains unchanged at $200 million or $160 million, net of $40 million of prepaid rent received. To wrap up, we believe we have an opportunity to generate attractive shareholder returns as we transition to a stand-alone tower business and pursue our goal of becoming a best-in-class U.S. tower operator.

With that, operator, I'd like to open the line for questions.

[Operator Instructions]

The first question comes from Rick Prentiss with Raymond James.

Two questions for me. One, we had noticed at the FCC website that there's an application maybe to split the fiber small cell transaction into domestic and international to maybe try and get a May 1 closing. Can you update us as far as is that hopeful? What would be the process? And it seems to make sense. But if you could just comment on that FCC letter that's saying maybe you could split it into -- and the vast majority of the value seems to be in domestic.

Yes, Rick, maybe I'll just start by saying we continue to work towards our stated goal of closing the transaction by the end of first half. We have received the vast majority of approvals, as I mentioned in my statement, and continue to feel very positive about the direction that things are headed. While not getting into the specifics of some machinations that might be going on behind the scenes, we remain extremely confident that we will close by the end of first half or as soon as possible.

Okay. Makes sense. And so just trying to work the Washington levers given the government shutdown maybe had affected things. Okay. Second question that we get a lot is when you think about Crown's portfolio of U.S. towers and the peer group of both public and private companies out there, is there any reason systemically or fundamentally on why over a medium or long term, your growth rates should vary from the peer group, maybe it's something as simple as where we are in the 5G cycle and then heading into a 6G cycle.

Is there anything systemically or fundamentally different in your towers that is leading to the kind of lower new lease activity where we're seeing in this year's guidance?

Rick, you almost answered the question for me. So thanks for the context there. Yes, I think if you look at the full course of the 5G cycle to date, our organic growth has been roughly in line with at least one of the peers and slightly lagged the other. When you include DISH, organic growth was in line with peer and exceeded the other. So nothing systemically more a cycle of what you have if you go back in time to the beginning of the 5G cycle is the timing of when that growth occurred.

Okay. And then so you think of the 6G, you guys might exceed or be similar depending on those cycles as we look at 6G coming around someday.

I mean one of the benefits of having a portfolio that tends to skew towards urban and suburban where the PoP coverage is, is it actually drives for us earlier in the cycle. So yes, I think we're looking forward to the 800 megahertz of spectrum being released starting in 2027 in the auctions and what it might be for both Crown and the industry as a whole.

The next question comes from Matt McNaum with [indiscernible]

I will have 2 questions as well. Just first, on the 5G cycle, I'm just curious, are we at the point now where carriers are coming back to initial 5G coverage layers to add more densification? And is this any different from prior 3G, 4G cycles? And then secondly, maybe a bigger picture question. Is the dynamic of your carrier customers partnering with satellite players for connectivity in remote areas affected at all how they're approaching network and site planning in conversations with yourself?

Let's start off with the first question, which is around what the carrier behavior has been in terms of densification with 5G. You get a combination of 2 things. You have both the additional capacity where spectrum is available to add additional radios and tower loading on individual towers in which they're installed today. And then you have a continued densification where maybe they don't have the amount of spectrum that they need and/or they're looking to drive better in-building coverage in either residential or workplaces and therefore, go on incremental towers in the form of colocations.

And not really any change from past deployments and very specific to the individual customer and their spectrum portfolio. In terms of answering your second question on the satellites, again, this has been something that I think we've said repeatedly, we see as something that is ultimately a plus up for operators to go into very, very rural locations where maybe coverage is a little more sparse. There's a number of limitations around satellite in terms of in-building coverage, line of sight that doesn't make it a perfect surrogate for really rural sites, but rather something that is an additional plus up for the satellite companies and the operators to squeeze some incremental revenue opportunities in those very, very rural areas. And in terms of its impact on us as a business, it's really de minimis or inconsequential at this point.

Just if I can follow up quickly, Chris. the mix of applications you're seeing between amendments and new colos, has that evolved at all in recent periods?

Nothing specific, no.

The next question comes from Aryeh Klein with BMO Capital Markets.

I think you mentioned in the prepared remarks how you're looking at benchmarking yourself versus peers. And curious where you think kind of the biggest incremental opportunity remains on that front.

Yes. Thanks, Aryeh. I think best-in-class for us is something that we've defined across several pillars of our business. Think of it in terms of broad-based what do we do to become best-in-class towards the customer, towards our teammates here within the company, our shareholders and partners, which are to us landlords and vendors. And as just an example of the types of benchmarking we're doing, we're looking at for customer as an example, customer satisfaction and how can we dramatically improve our customer satisfaction over time. We benchmark against our other competitors and find ways to take actions to meet the unmet needs of the customers. It might be in the form of increased cycle time and delivery of an application.

It could be in terms of the products that we develop to meet that unmet demand. We look at this holistically of what we can do to drive a superior customer experience such that when there's choice of a customer between 2 tower companies that we win 100% of the jump balls. That's the way I think about it. In terms of teammates, another example might be is looking at employee engagement across the organization post the split. It's about training and developing our employees. It's about process improvement and tools and pay for performance.

So in each one of these, we've worked with outside consultants to help us to both define those goals and then to put in goals for 2026 specific to our company performance, but then also over the '27 and '28 so that we have a long-range transformation that allows us to make that claim that we're a best-in-class tower company. This is how we're approaching it and how we're implementing it in the company today.

And then if I could just follow up on the last question in relation to satellite risks. I guess if you think about your portfolio and maybe what's in a little bit more remote markets, is there an element that over the long run, whether that's 5 or 10 years, where you think maybe that piece is at risk? Are you able to quantify that if that's the case?

I mean we've got no indication from customers. In fact, if you look at most of the public related statements, both of the carriers themselves and even the satellite companies and the satellite industry association, all of them see this as a complementary technology. Now are there specific use cases in a very rural area for fixed wireless, which we think is, obviously, we see that they've had some success, providing emergency coverage, absolutely. But if I have to walk up the hill to the top of the hill in order to get a satellite signal to place a call, if I want to do anything in the form of mobility and broadband type experience in mobility, this is probably not the substitute that's going to eventually displace towers anytime soon based on all those data sources.

The next question comes from Michael Funk with Bank of America.

I have 2, if I could. So we've heard us here from a couple of the carriers that they intend to do more densification on their own fiber with small cells in 2026. And just wondering if you're hearing similar comments from your carrier customers and look to densify with 5G? And then I have one for a follow-up after.

If I understand the question correctly, Michael, it's around densification, specifically in the small cell business that we're listing as discontinued operations?

All the carriers utilizing their own fiber and then using small cell to add capacity rather than contracting with the tower companies for densification in some of the urban and suburban areas that you mentioned earlier?

I don't have any specific knowledge of that. I do know this is that we've seen continued demand of operators starting to ask us if we're interested in going back in the business of building macro cell towers for them. So I would assume that there's some need. As you know, the cost has gone up considerably in the last 6 or 7 years post pandemic in order to be able to build new sites and therefore, the business cases that we or any other builder of those types of facilities would apply, have to have an appropriate return. Based on those investments. And so that they might be going off and doing a spot small cell here or there, I wouldn't doubt it. But it certainly isn't something that we've seen a widespread impact into the business or the industry as a whole.

Okay. And any early conversations with AT&T about deploying some of the spectrum or requiring from deals office expected to close relatively soon first half of the year?

We have continuous conversations with AT&T and all of our customers. I mean I think we're very eager for that spectrum that DISH had to be put to work. It's a good thing for Crown and for the industry as a whole. And so I'll just leave it at that. We have ongoing commercial conversations with nothing to share at this time.

The next question comes from Richard Choe with JPMorgan.

I wanted to ask, Chris, a few alloy talked about looking at growth opportunities. And I was wondering, when should we expect, I guess, to see maybe the outcome of looking at those growth opportunities? Would it be after the close of the transaction and then kind of going forward? Or is that something that is happening now and something that you can implement sooner?

A couple of comments. One is you see from our guide that it is a second half loaded growth guide that we've given. And therefore, we're in the process of developing and starting to build that. In terms of like specific things I'd leave you with what I've said historically, which is the great news is when we talk to our customers, they're looking to do additional business with us and looking for ways that we can partner with them. Some of that is related to, obviously, new colocations or amendments. Some of it's related to an expanded service offering. Many folks are asking for turnkey based services versus the service model that we currently have. We are starting to talk to folks about new tower builds again, which is exciting as a tower company to build new towers.

And then other things like Power as a Service or shared generators, things that we believe will help us to ultimately build the revenue per tower and the profitability of Crown are all on the -- all being considered now. And then most recently, if you would have seen, I think, a press release, 1 of our partners recently released, which is around the exciting opportunity potentially here of edge compute and making our 40,000 odd sites available for colocation with data centers, given that many of our sites we have existing shelters that can be reutilized or repurpose for this usage. So there's a bunch of stuff in the pipeline, and I'd just say, look, as our guide has shown for this to be more of a second half or series of opportunities.

And I have to follow up with the edge data center comment, like how meaningful could that be this year and going into next year? And actually kind of follow up on that a little bit. Will you need to add more backhaul at your tower sites? Or is the current backhaul situation and most of your tower is pretty robust.

Yes. Let's start with as an opportunity. I would characterize this in the trial phase, right? So we've signed an additional partnership to test the waters here I think I mentioned in the last earnings call were in Mobile World Congress in Barcelona, we saw a lot of very interesting edge use cases, starting to develop there. So I think we're excited potentially where this could take us. But these are early days still. And our key is to utilize our existing assets and to find ways to drive new revenue streams. So we're looking at this as a very opportunistic thing for us to pursue, with very little capital required, but yet as a real estate company, fully utilizing our assets. So this is how we're thinking about it. I'd say let's stay tuned to this, and maybe this is something that we can continue to update you on through the course of the year as we start to see some of the initial results of the efforts underway.

In terms of the fiber, sorry, second part of that question, the question of the question, fiber, most of our sites do have fiber backhaul into them. So there's ample ability to scale those sites. One of the attractive things about tower companies as edge data centers is that you have ample fiber, you have ample power and you have space, which we have all the and, therefore, fairly easy in terms of speed to market for interested parties.

Next question comes from Eric Luebchow with Wells Fargo.

Great. Appreciate it. Just to follow up on Richard's question. I think you mentioned that there might be some opportunity for new tower builds. I think that's something we haven't seen a lot of among the public tower REITs in the last few years. Just curious like what form that could take, how significant it could be? And what kind of returns do you think you could get on that? I think, generally speaking, single tenant towers are not generally pretty low return business, but maybe you could elaborate a little bit on that comment.

Yes. And I certainly don't want to raise expectations that we're going into a mass power bill here. It's more a demand profile from our customers looking for partners to help them build towers. I think some of the other smaller companies have started to slow down and as the cost of capital, to your point, has become more expensive. It requires making sure that you really have potentially multiple tenants lined up in order to build these towers and to make the business cases work. So we have a very disciplined approach in place on how we look at this. It's initially going to be small volumes here.

But I think our hope is to eventually find a way to provide this as a service to our customers. as I think we're in a unique position given our size and scale to deliver this at a price that's effective and attractive in the marketplace, but allows for the returns that Sunit and his team require in order for us to put a cement in the ground.

Great. And just one follow-up. I think you've talked the last couple of quarters about kind of cost efficiencies through SG&A and gross margins and getting your margins up 300 or 400 basis points over some period of time. So I just wanted to confirm that and potentially anything you can reveal on kind of some of the cost initiatives that we'll see after the fiber and small cell deal closes that could kind of close some of the margin gap you have versus your 2 tower peers.

Yes, let me take that. It's Sunit. So we've already done a fair bit of that with that 20% reduction in staffing this last quarter. Having said that, I do think there are 2 big areas. One is what Chris talked about in his remarks, which is us buying ground leases at returns that take our cost of capital. We think that is a long-term opportunity for us, where structurally, our costs are higher than our peers because they own more of the towers underneath their -- more of their land and they need their towers than we do. So that is a good long-term opportunity for us that we're executing harder on.

And then the second is what we talked about, which is investments in platforms and systems and automation which we think will continue to drive efficiencies over the next few years. So yes, I mean, as I look at where we are in '26, let's say all the way after 2030 definitely things that we can do another, meaning in addition to the reduction we made probably another well over 200 basis points in margin improvements.

Next question comes from Nick Del Deo with MoffettNathanson.

Maybe Sunit, to continue on the land topic, you currently own land at about 30% of your towers. How high do you think that can go over some reasonable time horizon? And how would you characterize the level of competition to acquire land and like the number of opportunities that you're seeing?

Yes, it's a great question, Nick, because some of it is like how we engage with our landlords and make sure that they if they want to do something, they will prefer us. Some of it is financial returns. You're right. We might be competing against other people. We do believe our cost of capital is lower than many of those operators just focus on land purchases. So I mean, I think that you're beginning to -- you saw some benefit in the first quarter, you saw our CapEx is a little higher. But we do think this is a long-term opportunity. And where can we get to? I mean our goal is over the next handful of years get to a point where we own from 30% to as much as 40% of the land underneath our towers. So it's a long-term opportunity for us that we think we just stay focused on and turn up the dial on that and continue to execute well.

Okay. Should we think of the level of CapEx over the last couple of quarters as being reasonable prospectively? Or do you think that might even go a little higher to the extent that you can get the machine operating efficiently?

I think the guide we provided for this year, I think, is fine. And then we'll see kind of where we get to towards the end of the year from a run rate production perspective. And then see what guide we'll provide next year. But Yes, I think this year's guide should be adequate in terms of the range to get done what we think we need to get done.

Next question comes from Brendan Lynch with Barclays.

To start with the satellite deployments and Chris, I agree with your assessment that there isn't too much of a risk from direct to device to the tower business. Maybe you could comment on the fixed wireless access demand that you've had over the years and how that might be at some risk of increased competition from satellite -- from broadband satellite?

Well, let's start with the premise of the start of fixed wireless for the operators, and I spent half micron on the operator side, so a little bit of insights here was really about excess capacity being soaked up and monetized by the operators. Since that time, if you look at the current growth rate of data being on a CAGR of like 30% plus, it's now clear this is a new line of business and that is driving incremental activity in terms of densification and capacity in the 5G networks as these operators really go and push this as an opportunity to grow their topline business. Again, our portfolio tends to skew more towards suburban and urban. The hypothesis that you're going to replicate the capacity that a terrestrial network has to service that customer from a broadband perspective seems highly problematic to me, comparative to that very rural customer where you may have excess capacity. The coverage areas of the individual satellites are much larger in terms of the service areas that they provide to than, say, a terrestrial network in general. And therefore, I think we feel pretty confident that, that won't be something anytime soon where the satellite guys are going to be going after the urban customer, but rather the rural customer rather than the guy who's out on his boat somewhere and wants to have broadband available or the farmer out in their farmland. This is how I think we're looking at it and as the industry looks at it today.

Okay. That's helpful. And maybe a related question because we've also seen a lot of fiber being rolled out fiber to the home. How should we think about that as competition that might be a little bit more urban, suburban focused than the satellite capacity that might be available?

Well, if you're thinking about like voice over WiFi as an example, using VOIP. Obviously, it's been great for the operators to find a way to offload their networks, to provide that capacity using WiFi and broadband, but again, as they -- this is the same experience and that somebody is utilizing going on to WiFi outside of the home as a way of offloading. If there's a new business model there, I'm not aware of it. So in terms of threats that we look at is what could conceivably reduce the capacity requirements of our network across our portfolio, we don't see Wi-Fi beyond what is already being used as a huge disruptor in the marketplace and suddenly shifting a huge amounts of capacity off the operator networks. I think they would have done it already if they could.

Okay. And maybe just one other on the satellite front. To the extent that the satellite networks are going to need to connect to terrestrial networks, is there any upside potential from the satellite operators deploying at some terrestrial sites? .

I mean the good news is Crown Castle is open for business. So to the extent that one of the satellite operators decides to build a terrestrial network and going into the type of competition that you described previously. I think we're open for business and eager to offer our towers and rooftops to those operators. I haven't seen anything that says that they're going to do this in any publications. Maybe you know something that I don't. But again, it's an opportunity that exists if somebody would step into the breach the DISH has left in the market.

The next question comes from Madison Rezaei with Bernstein.

I appreciate the extra color on the DISH litigation guys. I know it's a little bit of a black box, and we're also sort of waiting to see, in the theoretical scenario where outcomes move in your favor, I guess, how should we think about sort of recoveries? Are we thinking this is potentially a primary like onetime cash proceeds? Do we think there could be something more structural how do we think that could ultimately flow through if we have any sort of context?

Well, let me start by reiterating what I always do, which is that we are aggressively taking every action to compel DISH to fulfill its obligations, right, both from a legal perspective from a lobbying and public interest perspective, I've certainly been getting the frequent flyer miles back and forth to D.C. meeting with members of the administration, members of Congress, the FCC and the like kind of telling the story, and I think hats off to the WIA or Wireless Industry Association. I think they've done a very good job may not compellingly why this is not in the public interest to allow DISH to walk away from their obligations without paying their bills.

And so I'm hopeful that there'll be some action taken, although we don't have any specific knowledge of how this will unfold exactly. In terms of the legal process, we feel really good about our lawsuits. I think we feel like we're in a good position, disputing the force majeure and the various suits that we filed. But I think I've always cautioned the folks on these calls that legal outcome is going to take at least a year. And so there is some time that it will take to get to a resolution there. And then any type of government intervention on our negotiated settlement would be on an ad hoc basis, and that would also take time. So there's no -- I don't have a crystal ball in front of me right now, but I would say if -- at the end of the day, I will feel very good having left it all out on the pitch that we've done everything we possibly can to try to drive to a favorable outcome for our shareholders. And I think legally, we're in a good position. But the timing of that, how it might manifest itself is still very much an unknown.

The next question comes from David Barden with New Street Research.

So I guess, I got 2 questions. So I guess, Chris, with respect to the upper C-band auction, which is going to come in 2027, it's kind of the biggest event that's going to really happen next year. Could you lay out what you believe based on your conversations with the community of carriers, the base case deployment expectation is. Because there's been a lot of reporting about the FAA altimeter interference with the 4.2 to 4.4 gigahertz. And I think it would be great to just get a sense as to whether when we get this auction done, is this going to be something that drives growth in '27 or '28 or '29 or somewhere beyond.

And the second question, if I could, please, is, there were a couple of questions earlier about the edge data center stuff, and we've been talking about this for a really long time, largely in part because of Crown Castle. And the question is, how does that business model look? Who owns the shed? What zoning do you require? How political could it be to get a data center plugged into a local community that uses X amount of power who owns the servers, who deploys -- how does it work? If you guys have had thoughts about that, it really interesting to hear like the evolved business model would be great.

Yes. I'll start out with the first half, and then I'll let Sunit opine on the second half. So in terms of the upper sea band and the spectrum that's made available. It is really hard to give you an estimate of when we think that will be put into service. I think the good news is as we have agreements in place with our customers, that drive the capacity loading ability of each of the sites is it's not going to require a lot of work for us to be able to partner with our customers in enabling that rollout and as rapid as they're willing to deploy it.

I do know this, there is a huge again, back to my more recent experience in D.C. There is a growing excitement amongst members -- senior members of Congress and the administration around emerging 6G and the spectrum that's being put into play here starting in '27 that will enable the U.S. to have a strong leadership position in 6G. Now how that manifests itself? What are the use cases? I can't tell you. I'm not sitting in the boardrooms of those companies. But there's going to be a lot of push from the government to enable this to provide funding for it, to provide spectrum for it.

And so I'm excited about what that means for the industry as a whole, as I think about long term. And potentially, that we'll find a way to have a long-term guidance that you guys will actually be happy with in our guide. But all I can say is we're very hopeful for where we're headed in that perspective. I think in terms of the second part of the question on the edge data center, you want to talk about that Sunit?

Yes. I mean the business model there is, look, we're a real estate company. So we sell a lot of vertical space. We also have horizontal space. So in this case, it's conditions charter space that people would rent that could have power. So we required power. In some cases, they might on power backup, they look at that. And then like Chris said earlier, all our dollars have fiber backhaul coming into the towers. So I think the advantage about what we have is you have a fiber connection, you have power and you can have a sort of secure conditions outer space. And we have a fair bit of that already because of prior initiatives.

And in some cases, we'd look to either improve or put in new charter space. But essentially, all we are doing is renting our real estate, which is what to do what we do as a business, mostly vertical real estate and in this case, horizontals. So we're not taking any depreciation of technology risk by deploying our own servers or anything like that.

David, the other thing just from my experience in actually building networks and sites and data centers is that there's this not in my backyard around data centers, too, about the requirement the power requirements and the cooling requirements. One of the advantages of the edge beyond the fact that you have really low latency is typically, these are much smaller installations. So you don't have the community uproar about a very, very large facility being put into place. And it provides some level of redundancy in that you have the the edge compute put out in multiple locations, and therefore, you have additional physical redundancy built into the network. So a couple of things of why, if anything, maybe it's even a smaller impediment to getting these out into place than the very large data centers that are getting some pushback in communities now.

The next question comes from Batya Levi with UBS.

Great. Looking at your renewal cycle, it looks like you have a big one coming up with one of your tenants in '28. Can you provide some guidance on when those discussions would typically begin and how you would approach such a renewal with potential competition from private companies or carrier own deployments, maybe even satellite coverage I think that would be helpful to understand what elements of a new contract would be of utmost importance for you, maybe the contract length or escalator. Some guidance around that would be helpful.

Yes. Thank you, Batya. Good Question. We typically don't get into specific customer discussions. But I would say over any 5- or 10-year period, we do have several at least to the 3 big ones, 1 or 2 of them where we are renegotiating either because it's a new agreement, which all our agreements are long term, 10 to 15 years. Or in some other cases, they want to occupy more space on our tower than they might have had given the deploying new spectrum band. So see it depends what those negotiations look like based on what they're needs are at the time. But I would just say that we have agreements with all our clients, and we generally try to work on them on a timely basis with all our clients. So that's all I can probably say at this point.

Maybe would you have a preference to do renewals in parts? Or does it typically have a sort of home in renewals?

It sort of depends on the situation and what the client or the carrier wants to do given what -- where they are. Sometimes you do the whole thing, sometimes you might do some interim arrangements while you're working on the whole thing. So it just depends.

The next question comes from Brandon Nispel with KeyBanc Capital Markets.

Yes. I was wondering if you could talk about your capital allocation and specifically your dividend framework. The payout ratio is going to be extremely high at 90%. And I think pre deal, we were probably expecting the payout ratio to be much lower and work its way up. And with where the stock is at, it seems to make a lot more sense and be more accretive if you were to actually cut your dividend and buy back stock, especially as we sort of forecast out AFFO growth next year, assuming you delever. So I was hoping you could talk about that and sort of your decision to keep the dividend at current levels.

Sure. Thank you. Yes, I mean, this question saw a lot of discussion and deliberation, both with the team and also the board and the finance committee of the Board and even back when we first announced this capital allocation framework. If you recall back then, people worried about DISH make it, for example. So some of this was talked through. And I think that where we came out is to basically reiterate that the dividend would stay where it is now. We do think that as we said previously, that we can grow our pretty well. And so we will, over the next couple of years or so get to the point where the dividend payout is within the ratio of the range. that we've talked about. And then in the short term, we are paying down a lot of debt because one of the key things for us is to remain investment grade, and we are going to be buying out $1 billion of shares, which should also help both return capital to our shareholders and also drive FFO per share growth.

So yes, we did contemplate or think through that more than a year ago. And as I said at the time, people worried about if this would be around. So that was part of our thinking.

Our final question comes from Michael Rollins with Citi.

A couple of topics, if I could. So the first one is if you were a private company, what could Crown Castle do differently, that's difficult or you wouldn't do whether it's operationally or strategically as a public company? And just curious if there's other considerations as you think about where is best for Crown to operate in public versus private markets?

And the second question I had was going back to the terms of contracts. And I know it's -- you can't talk about individual customers. But when you look at the cohorts of towers that you manage and the vintages and where they came from. Is there -- and you mentioned earlier that you're a real estate company. So I think of mark-to-market. In your portfolio, is there a significant number of towers that could either at some point have a significantly positive mark-to-market or negative mark-to-market that investors should be mindful of?

Yes. Great questions. On the private versus public, I think that the goals and objectives that Chris articulated, I don't think it changed like making sure we are customer experience, customer satisfaction, improving our cycle times, operating efficiently, driving productivity. I think those will remain in place. I think where we see opportunities to put money to work, like we talked about buying ground leases. I don't think that would change making investments in platforms and systems to drive more efficiency, productivity automation.

I don't think that would change. The only real change in a private company is, I believe, how much leverage you might take and what would you do with your cash because you're not paying dividends out, whether you pay debt down or pay to your shareholders. But from an operational perspective, I don't know that we would do anything, but I'll let Chris to jump...

I was just going to say, I just came from leading the private tower company in Europe, and there's not a lot of differences. And in fact, you still pay dividends even as a private company. So I don't know that there's any real advantages or disadvantages. I think in the end, we should always be guided by what's in the best interest of shareholders that would guide a decision like that. I think it would be very expensive possibility. But it -- look, we would do whatever is in the best interest of shareholders always. But I can assure you, in terms of running a private tower company versus a public tower company. We all face the same series of pressures to drive efficiency, a highest return on invested capital. And it's about servicing the customer. And I don't really see any advantages one way or the other only in terms of the valuation of of how they're looked at in the public and private markets that would differentiate them. No real advantages that I would see, but that's one man's opinion.

Yes. And then on your question with respect to repricing tower asset value, in terms of contracts, we have quite a few levers with clients. One is, to the extent they want more space on an existing tower beyond what they have contracted for, how would you charge for that. To the extent they want to add new dollars, what's the pricing for that? And in some cases, you might either have average cost over tower. In some cases, you might have market specific pricing. So just depending on escalators is another one. So depending on the client, the history where you are, what kind of money we might or might not be leaving on the table, competition, et cetera. what kind of commitments the clients is making the new tower or needing more space on an existing tower. We -- all of that gets factored into our commercial models to try and figure out what -- how we can craft win-win outcomes for both sides.

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

Good day, and welcome to the Crown Castle Quarter 4 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Kris Hinson, Vice President of Corporate Finance and Treasurer. Please go ahead.

Thank you, Bailey, and good afternoon, everyone. Thank you for joining us today as we discuss our fourth quarter 2025 results. With me on the call this afternoon are Chris Hillabrant, Crown Castle's President and Chief Executive Officer; and Sunit Patel, 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 that will be referenced throughout the call.

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 Factors sections of the company's SEC filings. Our statements are made as of today, February 4, 2026, and we assume no obligation to update any forward-looking statements.

In addition, today's call includes discussion 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.

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 reported within Crown Castle's financial statements as discontinued operations. Consistent with last quarter, the company's full year 2026 outlook and fourth quarter results do not include contributions from what we previously reported under the fiber segment, except as otherwise noted.

With that, let me turn the call over to Chris.

Thank you, Kris, and good afternoon, everyone. We delivered the full year 2025 guide, exceeding the midpoint across all key metrics as we focused on operational execution across our portfolio. As we turn to 2026, we are in the middle of major changes across our business as we take several actions to position Crown Castle to maximize shareholder value.

First, we remain on track to close the sale of our small cell and fiber businesses, which we anticipate will occur in the first half of 2026. We are completing the operational separation of our three businesses and executing on our transition plans. Upon the close of our small cell and fiber businesses, approximately 60% of our consolidated workforce will move with the sale as we transition to a simpler U.S.-only tower business. We have been notified that the Department of Justice has closed its Hart-Scott-Rodino review and is not requiring any action related to the transaction. We only have a handful of approvals remaining at the state and federal level.

Second, we continue to enforce our rights under the terms of our agreement with DISH. After DISH defaulted on its payment obligations back in January, Crown Castle exercised its right to terminate the agreement. As a result, we are seeking to recover in excess of $3.5 billion from DISH in remaining payments owed under the agreement.

Crown Castle is supportive of AT&T and SpaceX obtaining the announced 3.45 gigahertz, 600 megahertz, AWS-4, H-Block and unpaired AWS-3 spectrum bands, which would put this valuable public resource into active use for the wireless industry and the American people. That said, we will continue to do everything possible to enforce our rights under our contract with DISH.

Third, we are taking decisive action to maximize value for our shareholders in response to DISH's actions by announcing a restructuring plan to enhance the efficiency and effectiveness of our stand-alone U.S. tower business following the anticipated close of our small cell and fiber business sale. Due to DISH's contractual default, we have accelerated and expanded our restructuring plan to realign staffing levels consistent with the removal of all future DISH activity.

In total, we are reducing our tower and corporate workforce in continuing operations by approximately 20%, ending at about 1,250 full-time employees. In combination with other cost reductions, we expect to deliver a $65 million reduction in annualized run rate operating costs. The majority of staffing reductions will take effect in the first quarter, while the non-labor reductions will be phased in throughout the year following the anticipated close of the small cell and fiber business sale.

Finally, I would like to reaffirm our capital allocation framework and update our expected use of proceeds from the small cell and fiber business sale. First, when we reset our dividend last year, we considered the composition and risk profile of our cash flows. And as a result, we expect to maintain our dividend per share at $4.25 on an annualized basis until reaching our targeted payout ratio of 75% to 80% of AFFO, excluding the impact of amortization of prepaid rent. Thereafter, we intend to grow the dividend in line with AFFO, excluding the impact of amortization of prepaid rent.

Second, we plan to invest between $150 million to $250 million of annual net capital expenditures to add and modify our towers, to purchase land under our towers, and to invest in technology to enhance and automate our systems and processes. Third, we plan to utilize the cash flow we generate to repurchase shares while maintaining our investment-grade credit rating.

Fourth and finally, we plan to remain at a target leverage range between 6 and 6.5x, using the proceeds from the small cell and fiber business sale. As a result, we plan to allocate approximately $1 billion to share repurchases and approximately $7 billion to repay debt.

As I look forward to a full year 2026 and beyond, I'm excited by Crown Castle's opportunity as the only large publicly traded tower operator with an exclusive focus on the U.S. The U.S. tower model continues to benefit from attractive business characteristics, including long-term revenues from investment-grade customers, contracted escalators and high incremental margins. I believe that these characteristics will be supported by continued mobile data demand growth and a significant volume of spectrum being made available to motivated mobile network operators.

To maximize revenue growth and profitability, we are focusing on becoming the best operator of U.S. towers with the following strategic priorities: one, we are empowering the Crown Castle team to make the best and timely business decisions by investing in our systems to improve the quality and accessibility of asset information and improving customer experience on cycle time and their interactions with us. Two, we are strengthening our ability to meet the business' needs by streamlining and automating processes to enhance operational effectiveness. And three, we will continue to drive efficiencies across the business.

We believe that these strategic priorities, combined with our disciplined capital allocation framework, and investment-grade balance sheet will drive attractive risk-adjusted returns.

With that, I'll turn it over to Sunit to walk us through the details of the quarter and our full year 2026 outlook.

Thanks, Chris, and good afternoon, everyone. Our full year 2025 results were highlighted by 4.9% organic growth, excluding the impact of Sprint churn, as our customers continue to augment their 5G networks. Due to our outperformance and organic growth, we ended the year near the high end of the guidance range for 2025 site rental revenues. The outperformance in revenues, combined with higher-than-expected services contribution, ongoing efficiency initiatives and lower interest expense allowed us to exceed the high end of the guidance range for 2025 adjusted EBITDA and AFFO.

Turning to our 2026 outlook. At the midpoint, we are projecting site rental revenues, adjusted EBITDA and AFFO of $3.9 billion, $2.7 billion and $1.9 billion, which are meaningfully impacted by the following three items: first, due to the termination of our contract with DISH Wireless announced in January, our 2026 full year guidance does not include any contributions from DISH resulting in $220 million of churn in full year 2026.

Second, for the purposes of building our full year 2026 outlook, we have assumed the small cell and fiber business sale transaction will close on June 30. Third, as Chris mentioned, we're reducing our run rate operating cost by $65 million on an annualized basis, resulting in a $55 million impact to full year 2026 and a $10 million incremental impact to 2027 due to timing.

Moving to Page 5, our full year 2026 outlook includes organic growth at the midpoint of 3.3% or $130 million, excluding the impact of Sprint cancellations and DISH terminations in 2026. Full year 2026 organic growth is expected to be 3.5% at the midpoint if DISH revenues are excluded from prior year site rental billings. This compares to 3.8% for full year 2025 on a comparable basis, excluding DISH revenues from prior year. We expect our 2026 organic growth guide of 3.5% growth to mark the low point.

This expected growth is more than offset at site rental revenues due to the $20 million impact of Sprint cancellations, $220 million of DISH churn and a $90 million decrease in noncash straight-line revenues and amortization of prepaid rent.

Turning to Slide 6. The expected $110 million decrease to site rental billings is more than offset by the following items, resulting in an anticipated $15 million increase in 2026 AFFO compared to 2025. A $25 million reduction in expenses as the staffing and other cost reductions drive $50 million of expense savings in full year 2026, partially offset by standard increases on the remaining cost base. A $5 million increase in service contribution as service activity levels similar to 2025 are complemented by $5 million of expense savings from the workforce reduction. A $120 million decrease in interest expense, primarily from the repayment of approximately $7 billion of about 4% interest rate debt following the anticipated close of the small cell and fiber business sale, partially offset by refinancing. A $25 million decrease in other items driven primarily by a decrease in amortization of prepaid rent.

Turning to Page 7. We decreased our guidance for AFFO in the 12 months following close by $240 million to $2.1 billion at the midpoint. Our original guidance of $2.34 billion at the midpoint included a $280 million contribution from DISH in the second half of 2026 and the first half of 2027, which we have removed. This is partially offset by a $40 million reduction in interest expense from increasing the assumed debt repayment following the anticipated close of the small cell and fiber business sale by approximately $1 billion to approximately $7 billion.

Turning to Page 9, the revised guide for AFFO for the 12 months following the close of the small cell and fiber business, which includes a half year of growth compared to full year 2026, is $180 million higher and consists of $120 million of interest expense savings related to the anticipated debt repayments made with the small cell and fiber business sale proceeds, $50 million of growth in the underlying business and $10 million of cost savings related to the 2026 reduction in force.

Turning to the balance sheet. We ended the quarter with significant liquidity and flexibility, positioning us to efficiently maintain -- effectively maintain our investment-grade rating after the sale of the small cell and fiber business based on the target capital structure and capital allocation framework that Chris mentioned earlier.

In conclusion, we're pleased with our full year 2025 results and believe we are well positioned to deliver our outlook for full year 2026 and our updated range for estimated AFFO for the 12 months following the small cell and fiber business sale closing of $2.1 billion at the midpoint.

Longer term, we are excited by the opportunity for Crown Castle, and we believe we are taking the necessary actions to become a best-in-class U.S. tower operator. We believe our focus on operational execution, combined with our capital allocation framework and investment-grade balance sheet will deliver attractive long-term risk-adjusted returns for shareholders.

With that, operator, I'd like to open the line for questions.

[Operator Instructions] Our first question comes from Ric Prentiss with Raymond James.

I want to focus my questions wrapped around, obviously, DISH, but then also the fiber-small cell sale. A couple of quick ones. Maybe you can elaborate a little bit further on. Any update on the status of working with DISH? Why terminate the agreement? And what do you get out of terminating the agreement? And then I have a couple of other quick ones.

Yes, I think simply spoken, why do we terminate, DISH stopped performing under the contract. Our contract was very clear with DISH, and we're enforcing it to best protect the value of the contract.

And so terminating, you feel, gets the best kind of protective value. Obviously, we appreciate knowing what the number was, over $3.5 billion owed.

Yes. I mean at the end of the day, Ric, we had a contract with DISH. DISH has chosen not to honor it. With DISH in default, we exercised the termination rights for the agreement and can accelerate the entire obligations now. And this termination was because this is the remedy that was called for when a party defaults. And so in the end, we're vigorously enforcing our rights and trying to protect our shareholders for the terms of the agreement.

Okay. And obviously, we have taken the DISH stuff out of our model, guidance looks pretty close to what we had laid out there. I appreciate all those details.

One piece I'm wondering on is, is there any change to the purchase price of $8.5 billion for the fiber-small cell transaction because you're noting approximately $7 billion of debt paydown, which would make sense given where you want to keep leverage, cut interest costs and then stock buyback of just $1 billion. So is there any change to the fiber-small cell proceeds and how you think about using what was originally $8.5 billion and might still be?

Yes. So Ric, there's no change to the purchase price. Obviously, you have normal transaction costs and closing adjustments, those sorts of things. But -- so we just kept it at approximately $7 billion and $1 billion pending the close of the transaction. So no other reason other than that, there's no change to the $8.5 billion purchase price that we announced.

Okay. And then as far as the timing of the buyback, obviously, this deal to close, fiber-small cell, has been going on a long time. You really couldn't say much until you got closer to the deal closing. We're into February. First half isn't that far away. It sounds like a handful of state and federal approvals are left. How should we think about the execution then of a $1 billion buyback? How fast could or should that be put to work?

I think at this point, not knowing exactly when the transaction will close, we are thinking about that, and we'll have more specifics to share about that as we get through closing. So not much detail at this point, but we're clearly committed to making that happen.

Last one for me, wrapping it all together. You mentioned a handful of state and federal level approvals left. Any lessons learned from like Frontier-Verizon through California or other processes? Or where do you think the long pole in the tent might be as far as getting those final handful over the finish line?

Yes. So I think our team, together with the teams at Zayo and EQT have made pretty solid progress. As you point out, California is always a sensitive one. I think we're adequately focused on all of those, but I'm pleased with the DOJ thing happening, but I think that, yes, we hope to get all of these worked through and still stick with the original time line we have of closing in the first half. But in terms of lessons learned, I don't think there are any specific lessons learned, but we do keep up with what's going on with the other transactions.

I would just say more broadly, Ric, is I've been here 4.5 months. And what I've seen is a steady pace of progress along that time period, nothing has jumped out as unexpected. And I think our teams working collectively are doing a great job of threading the needle and getting all the approvals in place.

Our next question comes from Michael Rollins with Citi.

I'm just curious if you could provide more characterization of the leasing environment. And over the last few months, as carriers have been working their budgets, some have access to more spectrum that's readily deployable in their networks. Have you seen a shift or change in how they're approaching whether it's densification and colo, whether it's the amendment strategy in activity?

And can you maybe give a little bit more characterization of -- you mentioned, I think, in the prepared comments that 3.5% you're expecting to be kind of the low. Maybe a little bit more detail as to what can drive that higher over the next few years?

I'll start and maybe hand it over to Sunit. So thanks, Michael. I think if you think back at where we are at this point, there's a couple of headwinds, if you will, around -- it's a cyclical 5G coverage in the deployment cycle of, say, a 10-year, decade-long deployment cycle, and there's been great progress made by the operators in getting initial coverage out. You have a couple of new CEOs in the MNOs in place, which are obviously coming on strong, finding their ways and talking about overall cost reductions and focus within their businesses as they revise their strategy.

I think that's counterweighted by tailwinds, which were mentioned, which are all around the frequency bands that are becoming available, both in the last year as well as the plan for the FCC to auction off at least another 800 megahertz of spectrum beginning in 2027 is -- and the nature of the spectrum, although we don't know the exact frequencies, we see them as higher band frequencies will naturally drive a higher densification of cell site deployment. And so we do expect that, that becomes a tailwind both for the industry and for Crown as those plans come to fruition. So these are kind of the market dynamics that are shaping the industry right now. And I don't know, Sunit, if you want to talk specifically about 2026. But...

Yes. I think what I would say is just further supporting what Chris said. I mean, we think the mobile data demand continues a pace at pretty healthy terms, pretty healthy growth rates, as we talked about last quarter. All the three major MNOs have acquired spectrum in the last year. The FCC is auctioning 800 megahertz of spectrum beginning next year. So -- and then when we look at our leasing activity from -- our current leasing activity gives us some visibility into future activity. So when you put all that together, yes, we think that the 3.5% is a low point for us, and we should do better from there.

And then the other point to mention also is if you were to look at our other billings, both in terms of the guide this year and last year, it's about a $10 million swing. If you adjust for that, I think that the growth levels are about the same last year this year. So as we look forward, we think this should mark a low point, and we should do better.

Our next question comes from Jim Schneider with Goldman Sachs.

This is Josh on for Jim. Can you help us bridge the '26 leasing outlook versus what you reported in '25? We know DISH was 0 revenue a few years ago and has stepped up, but what's the best way to think about how much they've been contributing on an annual basis so we can see what's happening kind of underlying with the carriers?

And then similar to that, if we look at 2019 and 2020, before 5G deployments and before DISH and before Sprint, T-Mobile integration work, your activity -- your new leasing was about $100 million to $125 million. Can you help us think about what's changed or the moving parts to get from then to now?

Yes. Let me handle the DISH contribution. So I mean, as you can see, last year, organic growth was 4.9% on a comparable growth, excluding DISH in both periods, it's 3.8%. When you look at that difference, I think what it says is that DISH contributed about $50 million roughly to organic growth in 2025. And as we've said previously, this was all contractual, not really activity driven, including what was expected for this year.

And then on your other comment, I mean, when you look back at the 5G cycle, I mean, I think that T-Mobile upon -- while they were concluding the Sprint-T-Mobile merger, which was closed in April of 2020, there was a pretty aggressive deployment of 5G. So when you look beyond that late in the cycle, we always see people, whether it's densification, amendments, that activity continues. So I don't have the exact numbers for back then, but I think it's comparable to what we were seeing back then.

Our next question comes from Michael Funk with Bank of America.

Yes. So you have a multipronged approach with DISH. Obviously, you've sued under your rights for the termination, presumably lobbying the FCC and then also through the court. So can you update us on the process and expected timing around the different approaches that you're pursuing?

I mean, I don't think we want to go into the specifics about our legal strategy and the timing of that. I think if we kind of take a step back and say -- and recap, we've taken steps, we filed suit against DISH. We have, as an industry under the auspices of WIA, gone in to meet with the FCC commissioner to kind of make our case of why we believe that DISH should be obligated to pay for its bills. And we continue to take a number of steps, which I won't list here in details, but include all manner of activities as Crown, specifically, to be aggressive in defending our shareholder interest.

This -- unfortunately, with the courts working its way through, this could be anywhere from a year or longer until we start to see things back from the courts. And therefore, it won't be something that we'll be updating you in the short term, but we will continue to drive and defend our position against the actions that DISH has taken.

Our next question comes from Eric Luebchow with Wells Fargo.

Great. I just wanted to follow up on one of the questions earlier. I think, Sunit, you talked about how organic growth this year, you expect it to improve somewhat in '27 and beyond. And maybe you could just talk through what gives you confidence there, whether that's anything you're seeing from a densification standpoint on new billings, whether there's ways to drive steady-state churn down, particularly now that you'll just have three well-capitalized large carriers comprising the majority of revenue. Anything you could offer there would be helpful.

Well, with respect to churn, I don't think we see much change in the churn outlook we've provided previously. But I think in terms of specifics, as we said earlier, we did have the -- we do have some visibility into leasing activity. So that's helpful as we look at next year.

But I think if you look at comments made by our clients so far, I mean, they bought more spectrum, they've got to deploy more -- they want to deploy more spectrum, the data demand growth cycles continue. So we think we'll do better than where we are here. If you look at performance last couple of years, it's been a little better on the margin. So that's why we think this is a low point for us.

And specifically, I think we have a good view into our contracted leasing activity from our MLAs gives us pretty good visibility into the future activity levels, which is why we're able to say that.

Great. Appreciate that. And then just one follow-up. I know you talked about reducing, I believe, 20% of your operating expenses. Maybe you could just talk about the flow-through between SG&A and gross margin? Kind of where we're going to see the biggest impact there? And any kind of indication on where you can get cash SG&A down to the next couple of years as you go through this cost restructuring?

Yes. So I mean, we talked about $65 million of run rate operating cost savings. So in year, we'll see $55 million, most of that is through the SG&A line. So of that $55 million, $45 million roughly will hit the SG&A line. And then $5 million will come in site rental cost of sales and about $5 million on the services side.

And then from a run rate perspective for those same items, which adds to $65 million. It's about $50 million from the SG&A side, $5 million from the site rental cost of sales and $10 million from the services cost of sales. That's why I said it would be, the $65 million, we'll see $55 million in year and an incremental $10 million next year. So those are the components.

I mean I think the reality is we've started to size up the opportunity longer term. But I want to remind everybody, this is a year of transition for our company. We're executing the sale agreement. We're managing through DISH. We're putting a reorganization of the go-forward team in place. And so while we're focused on working to become a best-in-class operator and updating systems and improving operational effectiveness by streamlining and automating processes and tools, it's going to take a while.

So we accelerated our activity now as a response to the current situation with DISH, and we have good ideas of where we're going to go. But I think we'll have to guide in the future as we make progress as we really need to focus in on execution, given all that's coming at us this year. This is really a plan of execution for Crown as we become a stand-alone U.S.-focused tower company.

Our next question comes from Richard Choe with JPMorgan.

I wanted to follow up on the discretionary CapEx and the augmentation, the $150 million to $250 million. As you deploy that, how will that contribute to, I guess, new leasing revenue? Do you expect to see some of that this year? Or is it more for future years? And where could that go over time?

Yes. So I think some of that, we had the opportunity to do ground lease buyouts, which I think benefits our cash flows going forward. Some of it is for new tower builds, we see opportunities for that. So those -- and then the third component would be investments in systems and platforms, which should drive better operating effectiveness and efficiency going forward.

And as we look forward, what's the willingness for Crown to do more MLAs? And is it something the carriers still want? Or are we moving more to a pay-as-you-go type of method over the next few years?

I mean I don't think we've seen any change there. We've generally operated with MLAs with our clients. We obviously go through various phases here and there, but that's been our general approach.

In general, I would say that operators prefer having the certainty of understanding an operating agreement and being able to anticipate cost. And therefore, it's something that I think the industry as a whole prefers along with the customers.

Our next question comes from Nick Del Deo with MoffettNathanson.

First, Sunit, just a moment ago, you alluded to new tower builds as the use of CapEx and seeing opportunities. I know that Crown has done a lot from a new-build perspective, at least in a material way for a number of years. Are you able to dimension the number of new builds you're targeting or at least how it's changed versus recent years or any attributes of the towers you're looking at like initial yields?

Yes, tough to quantify it at this point. I mean, our key criteria is have the capital, willing to do it if it makes economic sense. We do know that as data demands are growing, people have needs in various areas.

One key example of this, I think, just in general, is you've seen recently, Verizon closed the Frontier deal, AT&T closed the Lumen deal, is a big move towards conversion. So when you think about the geographies of where Frontier operates or where the Lumen properties are, we think there will be opportunities as they look to provide a converged offering, which means they'll need both wireless coverage, including fiber-to-the-home. So that's just one example of an area where there might be opportunities and there are others.

So tough to quantify for you at this point in time, Nick, but I think it's just saying we're willing to look at that when it makes economic sense.

Yes, maybe to build on that. One is we've said we're going to be very selective and really only pursue opportunities that have those attractive economics that Sunit mentioned, but more importantly, if you look at the dynamics of the industry, one of the things that's happened since COVID is the price to build a new tower has gone up considerably. And so it has a headwind for the industry in terms of build overall in terms of the business case that you have to have.

And oftentimes, if -- in the past, you would build a single carrier tower and hope to get additional colocators, that's become increasingly difficult. And so for us, although our volume is not high, typically we will focus in on those towers where we have a minimum of two customers committed so that we know that the economics make sense and the return profiles are correct.

And it's something that -- if you look back historically over the last 10 years, and I know because I've worked both in the disruptive part of the tower industry and now here as a leader of the Big 3 is that traditionally, MNOs haven't always looked for the Big 3 tower companies to provide those new tower builds. But that's starting to change. And the conversations we're having with customers are that they would like a one-stop shop based on ease of doing business with and strategic partnerships with tower companies like Crown.

And so we think there's an opportunity there. We're sizing that up. We're exploring it, but we will be incredibly disciplined in the go forward because that CapEx spend has to be with the right return before we move forward in any kind of scale in this part of the industry.

Okay. Okay. That's great color. Can I ask one about the '26 leasing forecast? I guess can you share anything about the degree to which the amount you're budgeting for is locked in, whether due to MLA commitments or because you have leases that are already signed versus activity that you've estimated?

Yes. I think at this point, about 80% of our organic growth is contracted.

Our next question comes from Brandon Nispel with KeyBanc Capital Markets.

Two questions, pretty similar. On the leasing -- core leasing number, the $65 million, is that weighted more first half, second half this year? And really, is it concentrated in any one of the big three customers or more evenly split?

And then I'm not sure I heard it, but post the fiber transaction, have your thoughts around what you want your financial leverage to be changed just given the leasing levels are quite a bit lower than when you initially announced the transaction?

Yes. I mean, as we said, our framework hasn't changed in terms of our capital allocation. So we still look to keep our leverage in that 6 to 6.5 range that we've announced last March, I think. So no change there per se. And in terms of leasing activity, I think it will be a little more weighted towards the back half.

Our next question comes from Brendan Lynch with Barclays.

Maybe just to start on the longer-term outlook. I appreciate that the 3.5% is kind of a trough here in 2026. But you've previously guided to 5% growth through 2027, obviously, with DISH, that doesn't seem achievable at this point. But maybe you could give some color on what the longer-term growth rate might be either out through 2027 or if you could give even further commentary, that would be helpful.

Yes. I mean I don't think, at least from my recollection, in the last few years, we've provided any outlook beyond the current year. So I think no specifics to provide there other than I would just mention that the combination, the backdrop was sort of constant demand growth on mobile data traffic continue to grow, combined with our clients buying more spectrum and having plans to more -- deploy more spectrum and more spectrum being available. We feel pretty good about the long-term outlook, but I don't think we've provided the outlook beyond the current year, at least for the last few years that I...

Okay. And maybe just on software upgrades. Obviously, that has been a consideration more recently. Your customers are clamoring for more spectrum, nobody denies that, but maybe the potential for them to deploy more of it via software upgrade instead of new leasing might be a headwind, all else equal. Can you just give some commentary on how you think that's going to affect the industry going forward?

Maybe I'll start, and you can jump in. So I think if you're referencing as an example, AT&T's deployment of the 3.45 spectrum, specifically where they had already deployed radios that -- and antennas that could utilize that band on a portion of their portfolio, and were able to very rapidly roll out that spectrum basically with just the software to unlock those channels. That certainly does exist in some cases.

But as an example, the other spectrum that AT&T purchased the 600 megahertz, these are typically new radios and new antennas because the physics are such that you have these massive MIMO antennas for the low bands that provide -- it's called the beachfront property spectrum in terms of the spectrum goes further, it penetrates in buildings for urban and suburban-type scenarios. This is something that they don't currently have deployed and would potentially involve having new antennas and new radios deployed out at sites in order to take advantage of that spectrum.

So it really depends on the exact frequencies and whether those frequencies that have been purchased have already been predeployed on a certain number of sites, whether they're able to do that. And in the case of AT&T, as I just said a second ago, it is a portion of the sites that they had the equipment on. There's still a number of additional sites that they would have to deploy in order to take advantage of deploying frequencies. So that's a good case study, I think, hopefully, in answering your question.

Yes. And also, software upgrades are very helpful, but at the same time, remember there are limits to how much data rates can be pushed through and the power required to do that. So ultimately, like any of these things, if you look at the rate of bit growth, that's why radios and antennas have to keep getting replaced over time.

Our next question comes from David Barden with New Street Research.

It's nice to talk to you again. So my first question is -- I don't want to throw Ric under the bus, but Ric and I are probably the two oldest guys on this call. And I don't remember the last time that there was a time when a carrier decided we're not going to pay our bills.

So could you walk us through exactly what happens when the carrier doesn't pay their bills? Are you going to go send a team of guys out there and snip wires? Or are you going to like rip this stuff down and sell it to China for scrap metal? Like what does that look like? And how do you account for that? Like I just don't know. So that's question number one.

And then the second question would be, just your guys' understanding. So we've been talking a lot to governments, to the carriers about the C-band, upper C-band auction, its proximity to the radio altimeter band up at the 4.2 to 4.4 and how that could slow down deployment. And I'm wondering if you guys have a view on kind of how the next big, massive spectrum auction that's going to happen in the United States could ultimately affect the tower industry?

Yes. Well, maybe just start with the first one. I mean, we don't really want to go into a disclosure of our specific commercial agreements with a specific customer as a practice. But at the end of the day, if a customer doesn't pay and they're in default and you serve them and you terminate a contract, then there's an obligation for them to remove their equipment in a timely basis as per the terms of the contract, right? So...

It's on them? It's not you, it's them?

It's them. It's them. So -- and ultimately...

There's no way DISH is going to do that. You know DISH is not going to do that.

Yes, yes. So well, we'll see. We'll see what happens there as they approach their cure period. The contract has been terminated and they -- it's their obligation to remove the equipment.

More broadly speaking, I've been in the industry a long time as well, almost 30 years or 30 years, half of it as an operator. And I also can't remember a time since maybe before the consolidation of those regional carriers that ultimately became T-Mobile or part of AT&T or Verizon, where we had somebody just turn out the lights and walk away from obligations like they have. It's pretty amazing, actually, to have witnessed this in my lifetime.

On your second question, to try to answer it, so if you recall when the initial C-band auctions had occurred and they started to deploy, there was a number of concerns about the potential interference with the altimeters and the avionics, and it caused a bunch of headaches working with the FAA in the industry in order to come up with a plan on how they would deploy that, which has subsequently been fixed. I think there were some good lessons learned there of how the MNOs can work alongside with government to come up with solutions to be able to deploy it.

And so it's not as if this will be the first time that they had to navigate through these types of challenges. And again, while there was an initial hiccup in the deployment, they very rapidly solved it, and I think are in a much better position now overall as a result with the solution that worked for all parties.

So these will consistently be challenges as you start to auction off spectrum that has use -- is in use by others, including government entities, on figuring out how to best clear the bands and provide the use of that spectrum, putting it to work. There's clearly a huge demand by operators to have access to additional spectrum. And from what the FCC has signaled, they're in a position with that 800 megahertz that they've indicated that they intend to auction in '27 is to take rapid action to put it to use. And more importantly, that rises the tide for all boats and all tower companies as a result of that spectrum being deployed.

So we're -- we support it. We believe it's the right thing to do for public resource, which is, again, why we support ultimately DISH's sale of the spectrum to AT&T and SpaceX.

And I really appreciate that. And if I could ask one follow-up. Sunit, when Charlie fails to follow through on his obligation to remove the equipment, how long does it take before we find out? And then what happens?

Again, I hesitate to answer specifics on that because as you can imagine, these are fairly large contracts with all kinds of provisions. So I mean, I'd just leave it at that. But what I will say is we are doing everything we can within the contract in Washington, as Chris was talking about, to make sure we are enforcing our rights and being aggressive about it.

Our next question comes from Batya Levi with UBS.

Great. One more follow-up on the leasing question. The slowdown that you -- that we're potentially seeing, excluding DISH, is that across the board or maybe specific to a player?

And can you help us understand the amendment versus densification mix? Is the back half weighted more related to potential densification efforts flowing through?

And another one on the cost side. How does the $65 million lower cost outlook compare to your prior expectations given the progress you've made last year?

Yes. Thanks. I think, first of all, on the slowdown point, as I was saying, if you look at the '25 numbers and the '26 guide, if you were to adjust for the change in other billings, the growth this year is about what it was last year, in the same ZIP code. So not much change there, I would say, compared to last year. Most of it is on account for change in other billings.

And then in terms of the proportion on colo versus amendment, we haven't seen anything. It's about the same ratio as we've seen last year.

And then the -- yes, I mean, the leasing activity, as I said, is in line with what we have seen last year, excluding the impact of DISH in both periods.

And on the cost side?

On the cost side, I think that we did say upon the announcement of the transaction when we provided the guide post the close of the transaction that we are -- take some costs out. So I think what you're seeing here is in line, but I think the bigger point that we've talked about in previous calls is we think there is continued opportunity for us to make some investments in platforms and systems in the next couple of years, drive better customer experience, whether it's cycle times or interactions with customers, more efficiency, higher productivity levels.

So I think as Chris Hillabrant mentioned, we are on a pathway to pursue a series of initiatives that we think, both in terms of investments and automation that we think -- including some AI efforts that we think will continue to drive improvement on the cost side over the next couple of years.

Our final question comes from Aryeh Klein with BMO Capital Markets.

I imagine there are some legal costs associated with DISH. Is that in G&A? And is it of any significance?

And then the composition of share repurchase and debt repayments a little different than previously discussed with less repurchases. Is that largely to maintain leverage ex DISH?

Yes. So let me cover the legal costs. So yes, I mean, we've thought about it as we provided our guidance. There can always be something extreme, but I think it's factored into the guidance that we provided.

On your second question, I think that -- sorry, give me a second. Yes. I mean on your second question, I think we -- the capital allocation framework we outlined was for leverage of 6 to 6.5. So if you look through that, with the change in the DISH outlook and you look at our EBITDA and AFFO outlook, we thought it made sense to pay down more debt and stay within the range because as we said previously, the key for us is to be investment grade. So this keeps us in the leverage ratio we had outlined and continues to preserve financial flexibility and also provide good risk-adjusted returns for our shareholders.

At this time, there are no more questions. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Great. I think we're going to get started now. Thanks, everyone, for coming to our conference. I'm Batya Levi with the communications team at UBS. And our next speakers are Chris Hillabrant, President and CEO; and Sunit Patel, CFO of Crown Castle. Thank you so much for joining us.

Great.

Thanks for having us.

Thank you. You both have a long tenure in the space in infrastructure, wireless, telecom. And maybe, Chris, you could start us off with what brought you to Crown Castle? And how do you think the company is positioned as we go to the next year?

Yes. Well, first of all, let me say Crown is a great company. And so a career that spans over 30 years, first chapter of my career working in the operator space. I work for Verizon predecessor PrimeCo, later years at T-Mobile. I went in the OEM space. I worked with Ericsson, I worked with Samsung. And then over the last 6, 7 years, I've been here in the tower space. And I have to say, both as a former customer and now as CEO of Crown is, to me, Crown is one of those great telecom companies here in the U.S. So when the opportunity came up to come and apply for the job and went over the Board, it was a no-brainer for me. It's a great company with a great future ahead.

In terms of our focus areas and looking at where we're headed as a company, as you know, we're in the midst of a fairly major transaction. So the first priority for myself and Sunit and the rest of the team is really how do we execute that sale. The good news is we're well on track with our guidance of having that complete by the end of first half '26. And now that the government is back open, we're seeing good progress there.

The second is really around relaunching Crown. It's Crown 2.0, the pure-play U.S.-focused tower company that is best-in-class in the industry. And so a lot of the time and effort that we have as a leadership team is focused in on both defining that and executing it. And then I think third is about trying to figure out how we can drive additional efficiencies out of the organization. And so the good news is having recently come as a CEO of a European tower company, many of the exact same types of projects that I've been focused on in Europe are the exact types of projects that we're doing here at Crown. And the good news is that the team has already started this journey. We're well on our way, even though there's still miles and miles to go.

Sunit is pretty good at that.

Yes.

Maybe one topic that has come up more recently is one of your tenants, DISH and the litigation around that. So can you just remind us the exposure and then why you decided to litigate? And how should we think about the process from here on?

Yes, I'll start out, and then I think Sunit can add some additional details. But -- so DISH representative of approximately 5% of our overall revenues, continues to pay their bills on time, of which we're thankful, has elected to go down a route whereby they're selling their spectrum assets and attempting to perhaps get out of the obligations that they have signed. As contracts go, we feel like we have a great contract with them, and it runs through 2026.

2036.

Sorry, '36. Thank you. Thank you. Through 2036. And it's something where we think is legally defensible. We recently elected to file a lawsuit in order to fully protect our rights. And so as you would have seen from the filing, the argument around a force majeure is something that we and our legal team feels really doesn't hold water. So at the end of the day, we have a good contract. We expect them to pay for that contract. If in the future, there was an opportunity to go and have a negotiated settlement. I've heard that others have talked about this in the space. For us, it would have to be something that made good sense for ourselves and our shareholders. We're not looking to let them out of their obligations, but understand that the market would love the surety of putting this behind us ultimately.

Right. And the question comes up, 5% of your revenues in terms of the organic revenues, like has DISH been growing from '24 to '25? And throughout the contract, is there sort of like a run rate level? Or does it keep going?

Yes. So I mean, as you know, DISH started from 0 just a number of years ago. So they have been growing. But our contract with them is pretty secure in terms of the amounts that they owe us. It's not dependent on their deployment per se. So that's why it's -- from our perspective, it's a fixed payment stream, if you like, or determined payment stream. And like we have this year, when we talk about next year's guidance when we report fourth quarter, we'll talk about how much DISH revenue is there.

Makes sense. Maybe, Chris, your prior experience with some of the other tower operators and now just looking at Crown and the U.S. market, can you talk a little bit about your maybe initial findings on what are some similarities, some differences, opportunities with the U.S. tower portfolio?

You're talking about specifically Europe or my experience earlier in the U.S. at other tower companies?

A little bit of both.

Okay. So maybe start off with the differences between the European market and the U.S. market. I think it comes as no surprise to say the European telco operator market is very fragmented. Lots of very small operators and even the very large operators have recently been looking at selling off portions of their portfolio to raise additional capital to private equity. So it's a very dynamic marketplace. In some of the markets in Western Europe, it's hypercompetitive with tower companies having overbuilt other tower companies and operators seeking to leverage and to get the lowest possible price from their OpEx.

The other thing is that while this is truly a scale business, and I think the U.S. tower cos have really coalesced kind of the big 3.5 or big 4 here in the U.S., it remains very fragmented in Europe. And therefore, the need to ultimately drive scale economics in terms of how those businesses are run, supply chain, operational processes, tools, organizational structure are all still far earlier having just recently exited from being operator-owned assets in the European market.

Now if you contrast that to the American market, one that is mature, has very large players, has some very small players that are kind of playing in the new tower build arena. Here, in general, I'd say we're further along the continuum in terms of the maturity of our processes, the tools. But even still, it's representing a great opportunity for us. And again, one of the focuses that I have as a new CEO of really going with a fine-tooth comb over the organization, looking at how we do business with our customers to find ways to offer better value. And part of that includes going out to meet with our customers, hearing from them on what their unmet needs are and what role Crown can play in helping them to meet those needs.

One thing that has been consistent so far in the meetings that I've had is they're incredibly excited to have a former operator now running a tower company that understands their business and is willing to help shape a product -- series of product offerings that best meets their needs in the future.

In terms of maybe as you look at a public tower company and the types of contracts you have with the incumbent wireless operators or potential new tenants and contrasting that to some of the private tower companies, are there distinctive sort of are there distinctions that matter for the carrier that choose you versus some of the other smaller ones?

I would say the smaller and having worked previously at Tillman, having worked for a smaller tower operator is they have seized probably the lion's share of new tower development. But the types of contracts that you see and that I've seen both operating in that space and seeing others in that space tend to be a different type of model. It's a all-you-can-eat versus, say, an amendment-specific type site license on a site-by-site basis. The financial modeling that has gone into place because they don't have the scrutiny of the public markets, I think, is far more questionable in terms of whether these things make sense from the long term. And what's more is, if you look at the history, particularly over the last 10 years is that there's been a phenomenon whereby the smaller tower operators are typically building the towers and then in many cases, then turning around selling them out to the big 3 or others.

And so there is some form of market rationalization where they come back in and our average is part of a larger portfolio. But I'm not thrilled with the economics. And in the case of Crown, our intent is to have a very disciplined approach to that CapEx investment to make sure that the deals that we do make sense, that they're accretive and not dilutive to our business.

Right. I think Verizon has mentioned this that they would like to diversify their tower portfolio and potentially give new business to some of the smaller private names. In that, is the opportunity for that next level of carrier activity going away from the public tower companies to the others?

I don't think so. I think that the quality of Crown's portfolio and quite frankly, for many of the established tower operators is really good, consistent. They're located in the urban and suburban areas where most of the capacity growth and the demand for investing in incremental in-building coverage will differentiate one operator versus the other. And so I think we're excited to see the leasing activity that we've had. It's been very steady. And we have great partnerships with our customers.

That said, this is a marketplace which allows for growth outside of the big 3.5 with a lot of other companies that will fulfill other niches like maybe Verizon is looking to do here.

Right. Okay. And let's talk a little bit about the U.S. carrier activity and demand, maybe sort of like taking a view near term and a little bit of midterm. We are -- investors are concerned that with more spectrum held by the carriers, they're going to take a pause. First, maybe before that, where are we in terms of the 5G deployment? Do you expect some pause? And let's talk about if we will see an inflection.

Look, it's a good question. To be fair, we're probably in the middle of that 5G deployment cycle. If you think in terms of most of these technology waves are roughly a decade long, give or take, that the first wave of getting low-band 5G out and mid-band 5G out for capacity has occurred in many cases. But the fact of the matter is, as an example, the DISH sale of additional spectrum to AT&T, and there's a rumor that eventually, in addition to SpaceX, maybe Verizon is a player here. In general, for the industry, when more spectrum is deployed, it means that more radios are being placed out on towers, more antennas are being placed out on towers. And again, depending on the MLA with the individual operator, in general, this is a good tailwind for the industry overall in innovation.

I think the second piece of this beyond additional spectrum deployment, if you look at data growth in the industry as a whole, one of the really eye-opening stats that I read was, I think, CTIA, which is the Operator Industry Association, was something like 30% compound growth per year. In fact, just last year, it was over 32 trillion gigabytes of data growth, the all-time record in last year and on top of 30% the prior 2 years. It doesn't appear as if data demand is in any way starting to flatten out or to be lowered, which, again, is a tailwind as carriers seek to deploy that capacity to stay ahead of capacity constraints as they look at new technologies like fixed wireless as a new way to monetize that spectrum. It's a general good augur for the industry as a whole that continued demand will be in place.

The -- I guess in the past, the thought was that any time the carriers touch the tower to deploy new spectrum, it will be good for towers. And now there is maybe potentially if it's adjacent spectrum, you can just use the software upgrade and the carrier doesn't have to pay something incremental. With these holistic MLAs, maybe more of the flexibility went towards the carriers. What are your...

So the OEMs like Nokia, like Samsung, like Ericsson, they're developing radio kit, which has the ability to expand through software, the ability to activate additional spectrum, which is true. That's -- there's no dispute in that. But the reality is the more spectrum is put into play and the additional capacity as people discover, hey, before I didn't have coverage in doors, now I do or suddenly, I couldn't really download applications. Now I can do that and all-you-can-eat customer as all the -- as most of the operators' customers are in the U.S. is then it changes behaviors.

And to me, a good example to give you a parallel here is imagine if you have a morning commute every day, driving you from, say, New Jersey into New York. And every day, there's a known coverage gap, you know you're going to drop a call in a place. What do you do? You hang up the phone every single day when you get to that spot and you say, hold on, I'll call you back in a second. And so to the network operator that is looking at how that site performs, they're like, I don't see a problem. I don't have a drop call problem because the user is actively self-selecting and ending the call. But then as soon as you fix it, then suddenly people realize, oh, I can actually place a call here. I'm starting to use it. It changes the behavior of the users.

And as more spectrum is put into play, the customer experience goes from like okay to suddenly a great experience where I can download a movie or download an application. It really does change behaviors and ultimately will drive the data demand curve that we've talked about, which again, is the benefit for the industry as a whole.

And then the carriers need to keep that going, right? So as there is more usage on the network, I guess that's going to require another level of activity on the tower.

Yes. Again, and I'll let Sunit chime in here. I mean, I think the bottom line is there's an expectation. Each of the big 3 operators has a claim on we have the best network. You turn on the Sunday morning NFL game and you see an ad from one of the carriers talking about how great their network is. The bad news is when you're on the operator side, running an operations team is that if you start to fall behind in your capacity deployment, it is incredibly difficult to catch back up. And I know this because I've had this happen to me a couple of times where capital has been scarce and you tighten down the screws and you stop investing in the network.

And if at the end of the day, in a very competitive mature network for customers in the U.S., people suddenly stop spending in that capacity, it could be a very high-risk strategy in that the majority of new acquisitions are oftentimes churn from your competitor. So it becomes a very interesting dynamic, I think, in terms of the risk of not investing to keep up with capacity.

But Sunit, do you have a thought there?

Yes. I mean -- and I spent most of my time on the operator side, both wireline and wireless. And I think the simple thing is that as data demand keeps growing, you have a choice to address it and deal with it. The vectors are a little different for wireless operators. So it's network speed, network quality and network reach. And so ultimately, that's an important part of the economic proposition for all of us as buyers of the service. There's what you're paying per month, there's handset subsidy and then there's network. And ultimately, the network is the foundation. One competitor in this case, like T-Mobile has made a lot of strides in the last few years deploying mid-band spectrum and some of the others are not trying to catch up. It's a good thing for us.

I mean the other thing also is there's been massive growth in data demand in the middle of the network on the fiber side with AI and data centers. There's huge amounts of data being thrown around. As that translates into various applications, whether it's on your phone for AI or robots or drones or all kinds of IoT things, cars, et cetera, that should continue to fuel mobile data demand growth. And we're core part of facilitating that. So we're excited about what all of this means over the next number of years.

And that's a good point in terms of as you have conversations with the carriers and next stage of network planning, do you have a sense where -- which company is at what level in terms of requirements just to do some catch-up because of the drop calls or needs to do a bit more amendment, need to start the densification. You don't have to name names but do you think that there is more activity to be had and at different levels when you look at the main 3 providers?

It's all relative because I would have told you, having spent the last 2 years in Europe, as an example, European networks when GSM first rolled out were vastly superior to their American counterparts. I think all 3 operators here in the U.S. have done a really good job of building out good solid networks that have fast data speeds that are reliable. Now can they get better? They always can. Having the experience when you sit right next to a cell site and you're seeing hugely vast speeds of data and the ability to have a call and not have a drop, you have to keep served. The fact that we're here in a subterranean meeting room and the fact that I have good 5G coverage is in of itself wouldn't have been here 10 years ago, right? I mean this is relatively new.

And so again, the investments that operators need to do is it's not just one and done. You cover an area and you're fine with that. As your customer base grows and as the capacity needs for those customer bases grow, the sites inevitably shrink and you end up putting new sites in and around it to densify it. So -- the good news is I don't think their job is ever completely done. And in an environment where it's very competitive between these 3 players that have equally spent a lot of money on their networks, I think it fuels a whole new set of expectations every year just because you were great this year, the bar gets risen up every year to go that much better.

Right. Today, we heard from AT&T and T-Mobile CEOs kind of like suggested that we're at peak CapEx for wireless. What do you think that means for tower companies?

Well, I mean, I think -- so there are 2 aspects as it pertains to our business. They were spending a lot of CapEx. So peak or a little decline. The fact is they're still spending billions of dollars a year on network infrastructure. And so for us, whatever they are spending is on the margin positive for us because the -- whether they are replacing older technology radios, antennas are putting in new. Ultimately, if you believe that they're going to keep occupying more spectrum bands and dealing with more and more data throughput, it generally means you need more space on a tower, the ability to occupy more surface area or the ability to put more weight on a tower, all those things are positive for our revenue base.

So obviously -- you do see some oscillations here or there. But the fact is even if you believe they're going to spend less than peak, there's still a lot of capital they're spending to keep upgrading their networks.

We always get the question in terms of where are we in terms of amendment versus densification mix. Where are we? And are you seeing a little bit of a pickup in the densification activity?

Please jump in here but I think our demand has been fairly constant, and there hasn't been a huge shift between one and the other. The mix has been relatively similar over time. For us, I think if you think about the organization, amendment revenue is important. And obviously, we have a focus in on that. Finding ways to win new colocations on our existing towers is a huge priority for us. And so when I think about how does our sales team function, what do we do to partner with the operators to help them identify where those areas of weakness are. I gave you that example with drop calls just a few seconds ago, is we want to be very proactive because in reality, whatever it is that they put into the networks, again, that just forms the baseline of what expectations are for the next year going in.

And then with the competition in the marketplace, and it seems to be very frothy in terms of the investments in, again, that raises the stakes so more people have accessibility to 5G handsets, that drives the overall data consumption and it starts off the cycle anew. The final piece I would say is I was in Barcelona last year for the Mobile Congress, which is our big annual trade show. And I went into each of the OEMs' spaces. And at least in 2 of the 3, they do have 6G terminals. So even though the standard hasn't been finalized yet, still in work between the operators and the equipment providers is there's already a concept of where 6G might take it.

So again, if we're halfway in the development cycle of 5G and 5G deployment and so maybe they reach peak is there's the specter of 6G coming along maybe at the end of the decade or soon into the new decade as fueling the next arms race in terms of capabilities and new business models that are yet to be discovered.

Right. And within that, are you also in conversations maybe with nontraditional potential tenants on the towers? Anything you could sort of like share with us where do you think there is some information about Starlink potentially looking to do an MNO hybrid satellite, terrestrial. Do you think that could be an opportunity? I saw that you announced a private wireless network. Is that a new sort of vector that you could go into?

I think with the fact that the industry is coalescing around 3 major customers in terms of active networks is this is an area of opportunity for us that we need to go out and to get serious about and chase. One of the things I saw in Europe was a whole new series of network uses, things like everything from predicting rainfall in a given area to wildfire, early wildfire prevention and identification. It still feels like we're at the fairly early rounds of where IoT and that -- I mean, there's been a lot of hype, so I even hesitate to bring it up.

Other than to say there are other parts of the world where this part of the business is now starting to pick up. So there could be some models of where we might adopt those business opportunities. And we've continued to invest in building the capability of our -- both our product teams and our sales force to look at some of these nontraditional activities as new investment opportunities.

Okay. Maybe putting all of that together and looking at, again, 3-, 5-year outlook in terms of the building blocks to get to your organic growth. How should we think about carrier activity we talked about. I think churn is coming towards the end -- to the low end of it, given your exposure to consolidation and you have a fixed escalator. So is mid-single-digit growth attainable from here on?

Why don't you start on the financial side, and then I'll talk about the outlook.

Yes. I mean I think you summed it up well as you walk through the churn issues, we do have rent escalators, which is, as you know, being in telecom, that's a very good thing with legacy revenue that you're always dealing with in the wireline and wireless space. And as long as you believe that demand growth, mobile data demand growth of mobile data traffic will continue to grow healthily, then it means our clients will occupy more spectrum and we'll need more powerful antennas and radios to deal with more data in more places. So yes, I think your hypothesis of being able to perform at that level seems reasonable from an annual growth -- revenue growth perspective.

In terms of where I started off, which is to say we have a very focused vision of what we need to do in the short term, right, complete the sale of the fiber and small cell business, relaunch Crown 2.0 as the stand-alone best-in-class U.S.-focused tower company, look at the efficiencies that we can derive in the business that will ultimately help us to attack things like SG&A and have a better, faster, more agile business into the future. As we go into the midterm, I think there's -- we are a tower business. I think we would like to build towers in the future, certainly in greater numbers than we have here over the last few years. But again, we're going to take an incredibly disciplined approach towards only taking those deals that make sense and that are accretive and not dilutive to our business.

And then I think there's additional things that we will look at that will help to grow the AFFO, things like the underlying tower leases that we have. And we are behind today our key competitors in the U.S. marketplace. So that's an opportunity area for us to take additional cost out of the business. I think these are the midterm objectives. This business will be focused, it will be disciplined, and we will grow to the extent that we can grow. But following a path that's clearly been laid out by the Board and myself of where we're headed as a company.

Right. On the cost side, and we -- Sunit, I know that you definitely focused on how to -- you know how to optimize cost. But one thing that we hear a lot is that you've already done a very good job. So is there more opportunity to be had after the fiber sale is done? And where would that come from?

Yes. I think the short answer is yes. I think the company over the last number of years has been focused a lot on the fiber and the small cell business. So -- and I've been at the company now for 6-plus months. And as I look at the systems platform technology environment for our towers business, corporate systems, see a lot of opportunity to do several things. One, really improve our customer experience in terms of the ability to interact with us digitally and also in terms of our response times, our accuracy, billing accuracy, cycle times, how quickly we can get things done.

There's a lot of opportunity within the company to reduce the amount of duplicate effort or civil engineering, keystroke time, task time. There's a lot of opportunity for process improvements so that things are not sitting in queue for too long, inaccurate data, bringing it together, even with a very modest level of AI to significantly improve productivity and efficiency in the company. So I think we think there's a lot that we can execute on over the next 2 or 3 years beyond just the benefits of moving from running 3 businesses to 1 business. So we're quite excited about it.

Do you have a target SG&A as a percent of sales, for example, like I think that one is still a little bit more elevated than your peers. Is that the peer level is your goal? Or...

I mean we have said now for a couple of quarters, we want to be best-in-class. So we think the opportunity is to take out several percentage points as a percent of revenues over the next years.

Yes. The way I would characterize this is if this were a baseball game, we're in the third inning, right? So we've made some progress, and I want to acknowledge that we have a good team and they're focusing on trying to do the right thing. But having had the benefit of being in a small start-up disruptor tower co here in the U.S. and having worked for a large at-scale, very lean tower company in Europe, I'm convinced that this is still the early innings and the game is yet to be fully played. And so we can already see elements of where together as a team that we're going to go off and attack this. It's going to take some time, but I'm optimistic. I see what best-in-class looks like in my head, and we're going to and do our best to reach it. We're committed.

And when you look at -- you gave us a little bit of hint on how to think about '26 beyond post the fiber sale. But to think about substantial AFFO per share growth is not crazy, right?

Yes.

Okay. Maybe a couple of last minutes, just going back to capital allocation priorities. And maybe if you could just remind us where you would like to be post fiber sale. But I do also want to touch on if your appetite for M&A is just contained within the U.S.? Or do you think that there are some opportunities globally as well?

Let me answer the second part, and then I'll hand it to Sunit to reiterate what we've committed to do as a management team. But look, we will always look at the deals that are out there. It would be foolish to be ostrich with our head in the sands and not to look at deals as they come across. But we've got a lot of work to do in the short term. And we have to execute the things that I laid out for you, I think, to earn the right to be serious about any kind of M&A. So the short answer is, no, we're not looking for anything specifically. We're sure as heck not looking for anything in Europe or globally. That is not part of our strategy. So full stop on that.

But we'll look at things. And if there's a deal to be done out there, which is a good accretive deal, we would consider it. But given some of the discrepancies between the -- what I'd call -- characterize as a frothy private market compared to the public market, it may not be that any of these things make sense for us here. But we'll look at them by all means and kick the tires.

Right.

Yes. I mean just to underline what Chris said, and I'll come to capital allocation. So we've got plenty to do over the next year. Get the transaction done, streamline our costs, get the initiatives in place to take cost out over the next year. So plenty to do right there. And also, if you were to do anything on the M&A front beyond that time, it would have to be accretive with a reasonable margin of safety to our cash FFO per share. So that in itself sets a high bar. And then thirdly, just in the U.S.

In terms of capital allocation, yes, what we've said is with the proceeds of these transactions, it's an $8.5 billion sale. The goal -- our plan is to take $6 billion of that and pay down debt and the rest to a share buyback with. And then I think we've committed -- we are committed to spend 75% to 80% of our AFFO towards dividends. So as we grow that over time, we should be able to grow the dividend stream. The rest 20% to 25% of AFFO, to the extent we have the ability to buy back ground leases at decent rates of return, we'll do that. Obviously, there's limits to how much you can do that in any given year. If there might be any opportunity to build new towers that are attractive rates of return, we'd consider that.

We'll certainly make some modest investments in the scheme of our cash flow for technology platform investments. But the balance we use for share buybacks and the other foundational proposition of what investors we think are investing in with us is being investment grade. So making sure we're always investment grade, whether interest rates change or not or whatever happens, staying investment grade is critical to our value proposition to our investors.

Given where the valuations are, could you start to buy back earlier than the deal close?

I think we are set on getting to the transaction, which is not far away anymore. Government is open. We feel good about how everything is going. So yes, I think it's easier to do that as you get proceeds from a transaction. And again, we are focused on being investment grade.

And maybe one more on appetite for M&A once everything is cleared but would you like to keep it as a pure tower company? Or do you see some opportunities in other verticals that are adjacent?

I don't think so. I mean the strategy is very clear. We are a pure-play tower company. And I guess I'd expand that we have some rooftop sites but we're a tower company, first and foremost. Don't expect us to start going back into fiber small cells. or anything other than the most closest of adjacencies in the form of products and services for our customers.

Okay. Sounds good. I think we'll stop it right there. Thank you so much.

Thank you.

Good day, and welcome to the Crown Castle's Quarter 3 2025 Earnings Conference Call. [Operator Instructions] Please note the event is being recorded.

I would now like to turn the conference over to Kris Hinson, Vice President of Corporate Finance and Treasurer. Please go ahead.

Thank you, Cloe, and good afternoon, everyone. Thank you for joining us today as we discuss our third quarter 2025 results. With me on the call this afternoon are Chris Hillabrant, Crown Castle's President and Chief Executive Officer; and Sunit Patel, 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 that will be referenced throughout the call. 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 Factors sections of the company's SEC filings.

Our statements are made as of today, October 22, 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 Investors section of the company's website at crowncastle.com.

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 reported within Crown Castle's financial statements as discontinued operations. Consistent with last quarter, the company's full year 2025 outlook and third 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 third quarter results, our earnings materials include full year 2024 results on a comparable basis. As we indicated last quarter, within 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.

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 stand-alone tower company. 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.

With that, let me turn the call over to Chris.

Thank you, Kris, and good afternoon, everyone. It's an honor to address you for the first time as CEO of Crown Castle.

As you've seen from my background, I have been in the telecommunications industry for many years, and I have long admired Crown Castle and its high-quality portfolio of approximately 40,000 towers, both as a customer and as a previous competitor. In my first 40 days, I've traveled across the country to host town halls and hear from many of Crown Castle's employees and customers. and I've gained several key insights. First, I am really pleased by the high level of engagement of our employees and their excitement on our goal to become a best-in-class U.S. tower company. We believe that the fiber and small cell sale transaction remains on track to close in the first half of 2026.

Second, I believe that the U.S. wireless communications infrastructure industry is entering a period of significant opportunity, supported by solid fundamentals, continued growth and customer demand. Third, Crown Castle is uniquely positioned to drive attractive risk-adjusted returns during this period as the only large publicly traded tower operator with an exclusive focus on the U.S.

In September, CTIA, a leading wireless industry association, reported that mobile data demand in 2024 had increased by more than 30% for the third consecutive year. We believe mobile data demand is the best indicator of long-term demand for our assets as incremental network investment by our customers is required to enable higher levels of mobile data traffic. As data demand continues to grow, it will require operators to expand network capacity by both deploying new sites and adding new spectrum bands to existing sites. We're seeing this dynamic unfold in real time. Over the past year, each major mobile network operator has acquired additional spectrum despite having collectively secured approximately 700 megahertz of spectrum less than 5 years ago. The same amount of spectrum acquired in the prior 40 years combined.

Looking ahead, the FCC has said it plans to auction at least 800 megahertz of additional spectrum beginning in 2027. As we saw during the early stages of the 5G deployment cycle, spectrum acquisitions by well-capitalized carriers tends to create significant opportunities for tower operators. With this in mind, I am excited by Crown Castle's long-term value creation opportunity as the only large publicly traded tower operator with an exclusive focus on the U.S. market.

I believe we have an opportunity to generate attractive long-term, risk-adjusted shareholder returns by focusing on becoming the best operator of U.S. towers with the following strategic priorities. First, to empower the Crown Castle team to make the best and timely business decisions by investing in our systems to improve the quality and accessibility of asset information. Second, strengthen our ability to meet the business' needs by streamlining and automating processes to enhance operational flexibility. And third, as the team has already started doing, drive efficiencies across the business.

We will advance our data management and process engineering capabilities to deliver on these strategic priorities. And over the long term, we expect to maximize cash flow by unlocking additional organic growth while driving continuous improvement and profitability. This strategy is supported by our previously announced stand-alone tower capital allocation framework, which balances the predictable return of capital to shareholders with the financial flexibility to invest in our core business.

Following the close of our sale transaction, we intend to grow our dividend in line with AFFO, excluding amortization of prepaid rent by maintaining a payout ratio of 75% to 80%. Additionally, we continue to expect to spend between $150 million to $250 million of annual net capital expenditures to add and modify our towers, purchase land under our towers and invest in technology to enhance and automate our systems and processes. We believe these enhancements, which are already underway, are fundamental to our strategic priorities to improve the quality and accessibility of asset information, enhance operational flexibility and to drive further efficiencies.

Lastly, after paying our quarterly dividend and pursuing organic investment opportunities, we intend to utilize the cash flow we generate to repurchase shares while maintaining our investment-grade credit rating.

So in conclusion, I am excited by the opportunity ahead for both the U.S. wireless infrastructure industry and Crown Castle, specifically, as the only large publicly traded tower operator with an exclusive focus on the U.S. We are well positioned to deliver attractive, risk-adjusted returns over the long term with our strategy designed to maximize organic growth while enhancing profitability and our capital allocation framework, which balances the predictable return of capital to shareholders with financial flexibility.

With that, I'll turn it over to Sunit to walk us through the details of the quarter.

Thanks, Chris, and good afternoon, everyone. We delivered solid third quarter results and are increasing our full year 2025 outlook as demand for our assets remain strong and we continue to identify opportunities to operate more efficiently.

Starting on Page 4. The tower business performed well in the third quarter, highlighted by 5.2% organic growth or $52 million, which excludes the impact of Sprint cancellations and benefits from a $5 million timing-related uplift to core leasing activity in the quarter. However, this was more than offset at the site rental revenues, adjusted EBITDA and AFFO lines, largely due to an unfavorable $51 million impact from Sprint Cancellations, a $39 million reduction in noncash straight line revenues and $17 million decrease in noncash amortization of prepaid rent.

Moving to Page 5. Our updated full year 2025 outlook includes increases at the midpoint of $10 million to site rental revenues, $30 million to adjusted EBITDA and $40 million to AFFO. The higher site rental revenues are driven by continued strong demand for our assets, which we expect will result in a $10 million increase to full year straight-line revenues and fourth quarter leasing activity and nonrenewals in line with the first half 2025 results.

We also expect a $40 million increase in AFFO, consisting of a $5 million increase in services gross margin driven by higher services activity, a $15 million decrease in expenses and $5 million decrease in sustaining capital expenditures as we continue to identify opportunities for greater operational efficiency in the tower business. And finally, a $15 million decrease in interest expense, largely due to lower-than-expected floating rates and a pushout in the assumed term out of our floating debt.

Included in our updated full year 2025 outlook is a $30 million reduction in discretionary capital expenditures from spend that has been pushed into next year. Our updated outlook for 2025 discretionary CapEx is $155 million or $115 million, net of $40 million of prepaid rent received.

In conclusion, we are pleased with our third quarter results and believe we are well positioned to meet our increased outlook for full year 2025 and our range for estimated annual AFFO following the fiber business sale closing that we reiterated last quarter of $2.265 billion to $2.415 billion. Longer term, we're excited by the opportunity for Crown Castle as the only large publicly traded tower operator with an exclusive focus on the U.S. to deliver attractive risk-adjusted returns with our balanced capital allocation framework, investment-grade balance sheet and focus on operational execution.

With that, operator, I'd like to open the line for questions.

[Operator Instructions] The first question comes from Michael Rollins with Citi.

Chris, congratulations on becoming CEO of Crown Castle.

Thank you.

So a couple of questions. First, Chris, it would be great to get your perspective. You shared some of it, of course, already in terms of some of your priorities and your initial takes. But as you look at the growth opportunities for Crown, can you frame maybe in more detail, what are the opportunities to grow further with your existing customers? And how that opportunity rates relative to the efficiency gains by divesting the fiber operations and just looking for more opportunities to be more efficient and effective?

And then just a second topic, if I could. Just curious for an update on the relationship with EchoStar. Have you received any feedback in terms of what their approach to the network may be and how you look at selecting the rest of the contractual commitments that you have with that customer?

Great. Thanks, Michael. So I think four questions in one, if I counted them all correctly. Let's start with the growth one that you mentioned, I think. Look, one of the reasons why we're so excited about becoming a large public U.S. tower operator is that we believe that we can really unlock the value on both revenue and the profitability side. Fundamentally, we will be focusing in on almost back to basics to just maximize the revenue opportunities that we have within the existing portfolio overall. And I think we feel good and as recognized by the results that you just heard today.

In terms of efficiency, look, this is one of the things that we have a huge focus in on, not only in terms of what we promised to deliver as part of this, and so we need to get through, first, the actual fiber sale itself. This is our #1 priority as a management team to get this over the finish line here by the end of first half next year. But then we're already starting to focus in on those efficiency areas. And again, you saw that in the results that we're reporting this quarter is that we started to accelerate those activities where we can. And we, as a company, will spend a great deal of focus on looking for the opportunities to drive efficiency across our platforms, both through process changes and new tools but also just execution and delivering against customer expectations in what will be a best-in-class towerco.

And then finally, on the EchoStar question that you asked, look, we have a good agreement in place. It runs through 2036. And the bottom line is we expect to be paid for the terms of the agreement.

The next question comes from Benjamin Swinburne with Morgan Stanley.

And welcome to the earnings calls, Chris. Nice to hear your voice. I wanted to ask you guys a couple of questions. AT&T this morning talked about deploying [ 3.45 ] from EchoStar kind of prior to close. In fact, we talked about getting that to 2/3 of their POPs by mid-November. I'm curious, I know you can't talk about specific carriers, but as we see the EchoStar spectrum get deployed, particularly where it's simply a software upgrade. Is there any opportunity for Crown Castle from a revenue point of view? Or how do you think about this migration of spectrum from boost to the majors? And I was just wondering, if need could talk a little bit about the one-timer in the quarter. I think you said it was $5 million. Any color on sort of what drove that would be interesting.

Yes. I'll take both. Yes, I saw those remarks. Look, I think in general, what I would say because tough for us to comment on AT&T specific plans over the next years. But in general, I would say the massive investment in spectrum, which is usually followed by deployment generally, and it depends on whether they would do a software upgrade to existing coverage areas or they want to go into more coverage areas. Again, I wouldn't know. But what I would say over the long term is more spectrum bands get occupied, and as mobile data demand continues to grow, in general, that's favorable for the tower sector, and we hope will do a good job of serving AT&T for whatever its plans are. So I think that's the main point there.

On the onetime benefit, yes, it's a combination of different things happening in the third quarter with several of carrier customers. So we had a onetime benefit. As we said, we expect to revert back to the sort of activity levels we saw in the first half of the year in the fourth quarter. So these things are never linear, sometimes you can have lumpiness and that's what you saw in the third quarter.

The next question comes from Michael Funk with Bank of America.

Chris, congratulations on your new role.

Thank you, Mike. Appreciate it.

Yes. So a couple if I could sort of following on the last one, we've heard carriers talk about less densification due to spectrum that they're acquiring. And just wondering if that's filtered through to your conversations with them, either maybe pulling back on plans that they had the discussions that they were having, or if it's too early and you wouldn't necessarily already had these conversations around densification.

No, I don't think we've seen anything as you can see, leasing is a continued strong environment for us. We're seeing solid demand for our assets and no material changes at this time.

Great. And then, Sunit, a lot of discussion about efficiency efforts. Where would you say we are in that process today if you had to innings?

Yes. I mean I think we are -- you can see with our progress every quarter, we are basically taking down the execution risk on the guidance that we have provided for next year's AFFO for the period July 1 next year to June 30 of the following year. So I think where we are is we keep looking for opportunities to drive efficiencies, various automation systems implementations in a phased approach. But clearly, the big benefit comes as we simplify it from running 3 businesses to 1 business. So I think that you'll start seeing benefiting us as we get to the close of the transaction and beyond that. But meanwhile, there's plenty to do within our tower business, our corporate segments, and that's what we are focused on.

The next question comes from Rick Prentiss with Raymond James.

And Chris, yes, always nice to start on a beat and raise quarter. So good talking to you again.

Time is everything.

It is. I want to follow Mike's question earlier. On the DISH MLA, clearly, you've got a contract that's written well, you expect to get paid, putting the spectrum on the towers was really critical to make sure they kept the spectrum rights to be able to sell it. My question wants to go at it. If we look at your '24 actuals and your '25 guidance, I know you've said in the past, you're boost, DISH boost contract had some step-ups in it. How should we think about how much was in the '24 actual in the '25 guidance that was kind of related to DISH activity that we should be thinking about that's continuing to grow while the contract is in place in '26-'27? Any kind of framework you can give us even rough basis points what it might have been?

Yes, Rick. So I mean, as we've said before, DISH represents about 5% of our revenues on the tower side. And so I think as we look forward, we'll see what happens with DISH EchoStar. We feel really good about our contract. And beyond that, it's tough to get into too many specifics given the confidentiality with our clients.

Sure. Okay. Fair enough. When you think about dealing with Charlie Ergen and Hamid and the EchoStar Boost folks. Are you willing and open to saying, well, let's look at maybe an NPV basis. let's look at here's what you owe me. Can we have some kind of discussion. And I guess the extra piece of the question would be help us understand what decommissioning costs ballpark might be? Because I think the contracts also include that they're supposed to return the towers and remove the equipment?

Yes. So what I would say, tough to tell what direction when, what discussion would go and tough for me to comment on any discussions with them generally and then -- and similarly to his comment on specific contract provisions on some of the things you're talking about, just all these things are confidential, but we are -- we feel very good about the contract we have with DISH.

Rick, maybe another one to put it is that, look, our goal here as management is to maximize shareholder value, and we're always open to working with our customers to accomplish that, right?

Yes, that's right.

Maybe leave it open-ended like that.

Okay. And last one for me. You touched on it briefly to Funk's question, that famous Slide 7 from the fourth quarter deck, where you laid out kind of that pro forma second half '26, first half '27. There's that one stack bar in there that talks about SG&A stand-alone. You had mentioned, I think, previously that you'll update that slide, are we still waiting for the deal to close? Or how should we think about when do we get more granularity on that, I'll call it, my famous Slide 7 from your 4Q deck?

Good question. I think that when we report next quarter, obviously, we'll provide guidance for 2026. And I think you can expect a little more detail then.

The next question comes from Jim Schneider with Goldman Sachs.

Chris, I was just wondering if you could maybe give us a sense of, given your prior experiences, how do those inform your role at Crown Castle? And you've been very clear about the strategic goals of the company. But on the margin, are there any areas where you might look to sort of slightly shift those goals, whether they be at the operational level at the capital allocation level or otherwise relative to what's already been laid out there?

The short answer is no. We are focused on becoming the best-in-class U.S. tower operator, full stop. I think once we close the transaction, we achieved all our operational objectives, even then the bar for say, like M&A will remain high and really limited to the U.S. for the foreseeable future, right? So the fact that I have that experience is great, but the clear strategy that we've embarked on is clearly the right strategy and the winning strategy for Crown.

Great. And then just a quick follow-up. Can you maybe just comment on the impact of the T-Mobile's acquisition of U.S. Cellular on the business over the next several quarters and years?

Yes. I'll just -- and I'll just start, maybe Sunit can bring it home. But this is fairly de minimis for us from our perspective. It should be very little impact from what we see at this time.

Yes, that's correct.

The next question comes from Nick Del via with MoffettNathanson.

I want to echo others and congratulate Chris, on your appointment. I guess, Chris, you described improving Crown Castle systems and information availability as your #1 priority in your prepared remarks. I guess, how would you describe the state of the company systems today relative to those or some of the other firms that you've led and what you think best-in-class systems can offer?

Yes. It's a great question because having just literally gone through a multiyear journey at Vantage Towers, where we were focused on the exact same types of issues. The good news is that many of the same platforms that we're in the process of utilizing over there. Crown has already started in that journey to deploy those systems here.

So overall -- and I feel like we're on the right track. This will take some period of time. There's a lot of work to be done. -- defining what best-in-class looks like in terms of the cycle times on how we deliver to our customers and the efficiency in how we spend our capital and OpEx dollars so that they're the most efficient use of that money. This is really our challenge over the next year for us really to lay out what great looks like and then bringing the team along on that transformation. The good news is I've just seen how this works because I just lived through it for the last 2 years and hope to be able to bring that same level of discipline and leadership to the team here in executing those plans.

Okay. Great. That's very encouraging. Can I ask one more kind of high-level philosophical question maybe. Most of your business today is contracted under holistic master lease agreements. Some of those may roll off over the coming years. Just wondering how you think about MLAs and the puts and takes or what you find important. Just so we understand how you might think through that as deals potentially roll off over time.

I think in the end, we will always look to do good business for Crown. And so for any future MLA renegotiations or extensions, we're always going to look for a win-win with our customers on finding both long-term value creation. What we won't do is just go run after an M&A for the sake of an MLA. We'll only do it where we see value creation for the company. And ultimately, driving that customer experience, the winning combination is ultimately to have a strategic partnership with your customers.

And again, maybe something I have some fairly unique viewpoints on having been both in the operator space, in the OEM space and now here in the tower space. But in the conversations I've had with customers so far, it's been very warm and welcoming and looking for ways to partner into the future in ways that both companies can to profit. So I'm encouraged by the direction we're headed in and stay tuned to this space.

The next question comes from Richard Gill with JPMorgan.

I wanted to see if we can get a little more color on application volumes, kind of what are you seeing? And then also, I just wanted to clarify, do you expect ex the $5 million that the second half of the year is going to be the same as the first half of the year in new core leasing? Or should it be higher?

Yes. So to answer the second question, as I said, we expect the fourth quarter to be consistent with what we saw in the first half. If you look at the first 2 quarters of the first half, they were about the same. So I think that's what we meant that the third quarter was lumpy or higher, but that the fourth quarter will be consistent with what you saw in the first 2 quarters.

And then on the application levels, I think you've heard us say previously, application levels do not necessarily correlate to our leasing activity per se. But yes, we've seen healthy levels of activity, as we pointed out in the last couple of quarters, you can see the benefit of that in our service business. So -- and it was a good quarter also in the third quarter.

The next question comes from Batya Levi with UBS.

Can you provide a little bit more color on how we should think about the 5% organic growth ex print churn tracking into next year, maybe kind of the pieces in terms of the investment and leasing mix? And then how do you think about your scale in the Tier 2, 3 markets where incremental activity seems to be going right now? Like how would you approach maybe adding to your footprint either organically or through M&A? And finally, one clarification question. The new leasing activity of about $115 million this year, does that include any take-or-pay contribution from EchoStar?

Yes, let me take through that. So as far as organic growth in the next year, we'll come back to that when we report fourth quarter and provide guidance for 2026. So not much to comment there, but we'll have more to talk about that then.

On the scale, Tier 2, Tier 3, all of us have different footprints, but our general goal is to make sure that we can support our customers where we do have coverage or towers in Tier 2, Tier 3 markets, and we certainly have very active conversations with our clients on that. And two, we are open to, as Chris mentioned in his comments to add towers where it makes sense. So we continue to engage with clients to look at that.

And then I think your third question was on -- sorry, the leasing activity. Yes. I mean, I think, as we said, we didn't change guidance for that. So I think we continue to see good leasing activity in line with the guidance and the expectations we've laid out and the guidance that we provided for the year.

Yes, just to follow up on that. I think there is a bit of a confusion if EchoStar's contribution is in the base? Or is it also in the growth in the core leasing piece, 115. Is there some part of the contract that's embedded in that from EchoStar?

Yes. So I mean, generally, we don't comment on specific client contracts, but all our leasing activity includes activity from all our clients. So I'm sorry, it's tough to get into detail on specific to each of our clients contracts.

The next question comes from Brendan Lynch with Barclays.

Congrats, Chris, I look forward to working with you. In terms of -- you've laid out kind of the bull scenario where CTI data is supportive of growth, spectrum auctions are acquisitions of spectrum continue to be supportive. Maybe you could just help us frame some of the risks that exist in the industry related to additional spectrum swaps or efficiency gains via technology or spectral efficiency. It seems there's a lot of negative sentiment in the industry, and maybe you can kind of tackle some of these risks head on and think and inform us how we should think about them?

I mean, overall, the biggest risk is we don't have the detailed knowledge of what any of these new spectrum purchase owners are planning to do. And the correlation that we're drawing here is the fact that spectrum that wasn't being put into use is now being put into use is something that will generate incremental leasing for infill sites or capacity growth and/or lease-up amendment revenue is something that is, again, based on what we've seen this year seems to be in a very steady state. What could happen where the technology will go and allow for again, the customers have very defined space on the towers. And as they continue to deploy additional capacity, it represents a growth opportunity for us as a business.

Great. That's helpful. Maybe another question so very committed to the pure-play U.S. tower business as being your core. Can you talk about any ancillary services that would fall within the realm of tower exposure that you'd be willing to or interested in scaling more? I know that chronic scaled back on services, maybe there's an opportunity to expand that in the future or build-to-suits or anything that would kind of be within that realm?

Yes. Let's start with the fact of like -- our goal is to really maximize the revenue opportunity of our existing base of assets. And we think that there's room to go there, and that's what we'll be focused in on developing. Much of what I'm focusing on doing now over the next couple of months is meeting with our customers and to engage to understand where their unmet needs. And you're right, there are things that are services related. There could be things like share power systems, there's a whole slew of potential opportunities that are out there. What we need to do, I think, in a very disciplined way is to make an inventory of what those opportunities are, working with our customers and prioritizing them. And then making sure that there's good business to be done because I'm confident that there is business to be had. But I think it's probably a little bit early, at least in my tenure to be able to share with you what those specifics are. But know that this is a high priority for us. We want to really maximize the opportunity on our sites.

And again, based on the earlier question that somebody had on my experiences, I've seen what the order possible is of really providing a great partnership with your customers to be able to generate those incremental revenues.

The next question comes from Eric Luebchow with Wells Fargo.

Appreciate it. And Chris, great to connect over the phone. So I just wanted to check again on the cost efficiency program. I know it's in your pro forma AFFO guide you put for the last next -- into next year. But maybe you could talk about opportunities beyond what you've guided to. As we look at your margins relative to your 2 tower peers in the public market. Is there any reason why you can't get SG&A efficiency or gross margins to kind of similar levels? I know there's some structural differences given some of the sale leasebacks you have. I just wanted to get your perspective on how much runway you have on the cost side in the next few years.

Yes. So I think first, as it pertains to the guidance we provided, when that was provided at the announcement of the transaction, if there were efficiencies factored in going from running 3 businesses to 1 business. I think we're just executing a little earlier on that. But if you look out over the next couple of years, 2 or 3 years, there are several things. There's the implementations of systems, process automation, all of that, I think, will yield additional benefit over the next several years. there's the opportunity for us to buy out ground leases, as we talked about. I think that can help us. So vis-a-vis comparison to our peers.

So I think I think we've got quite a few things over the next couple of years, but certainly, the guidance that we provided for next year incorporated the sort of efficiencies you would expect moving from running 3 businesses to 1 business.

Got you. And I guess I know it's a little early for 2026 guide, but just wondering if you see anything that kind of takes you off the expectation that you've talked about where you can grow kind of 4% to 5% organically pretty consistently, even if we assume the EchoStar contribution continues to wane just based on everything they've announced, do you think that's still a reasonable assumption based on all the activity you have in your pipeline. And I guess related to that, is there any kind of mix shifting you're seeing between new colos and amendments as you look out into Q4 and into next year?

Yes. So on the last question, we're not seeing any big changes in the mix between those 2 items. And then again, we haven't really provided guidance for next year. So we'll come back and talk about it. There's obviously a fair number of things happening that we're excited about with our clients. But yes, we'll when we get to reporting fourth quarter, we'll have a much better sense of where we are and cover that then.

The next question comes from Brandon Nispel with KeyBanc Capital Markets.

Yes. I think the efficiency one has been asked and answered multiple times. So I'll refrain from that. I wanted to just maybe ask on the discretionary CapEx guide decrease this year. Why was that? And really, why is the right number? I think Chris, you said $150 million to $250 million. So I guess, yes, why decrease this year and then why so much going forward?

Yes, I think some of that is timing when you look at those capital expenditures there. There are several buckets. There's -- whether you're buying our ground leases, whether they are tower modifications, different things. But again, as we said, that's just more timing and it's pushed out to next year, nothing -- nothing fundamental happening per se, but just a push out to next year timing.

This concludes our question-and-answer session as well as our conference. Thank you for attending today's presentation. You may now disconnect.

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Panel. I'm pleased to -- I'm Jon Atkin with RBC, and I'm pleased to be spending the next 20 minutes of fireside with the Chief Financial Officer of Crown Castle, Sunit Patel. Welcome, Sunit.

Thank you. Glad to be here.

So you go a long way back and have an interesting perspective as both a Board member more recently, CFO but also having had important roles at T-Mobile and Lumen and going way back, other start-ups like Looking Glass Networks. But interested in just perspectives, given recent announcements and let's start with the AT&T purchase of Spectrum from EchoStar from a couple of weeks back. And just kind of any thoughts on how that affects mobile infrastructure usage and kind of spending as well as maybe how it might affect Crown specifically?

Yes. So you mentioned the time when I was at T-Mobile -- in charge of putting T-Mobile and Sprint together. That transaction resulted in T-Mobile gaining a lot of mid-band spectrum, which they've leveraged to the hilt in terms of 5G deployment. When I look at this most recent announcement of AT&T spending $23 billion to buy spectrum, I think that's a big signal because it's a big capital allocation shift. So while you hear about AT&T and Verizon doing both fiber-to-the-home, that's -- this clearly says that wireless data matters. It matters a lot whether you look at the price of the spectrum on a per megahertz pop or whether you look at the amount of money they've spent and also realizing this is just a down payment before you deploy the Spectrum.

So from our perspective, from a tower perspective, I think that's good generally because I also think that with the other carriers, they also have to think about their position in terms of their network leadership and network leadership is defined by several key elements. What's your coverage? How many towers are you on? What's the throughput? What's the speed you're providing to the consumer? What's the throughput in terms of actual bits handled per tower or network quality? All those important metrics to keep your churn low and keep going with mobile -- people that all of us our phones.

So I think probably the key takeaway, I think, is that it's good for the tower sector. And also, I think it also puts some of the other carriers on the defense of looking at their position and what they are going to do to respond. So I see it as a plus for us.

So not to get too technical, but we'll talk about AT&T, EchoStar, which we just chatted about a little bit. And then later on, I want to get a little bit into SpaceX, which is the more recent headline. But maybe taking a step back, there's been some management changes. There's some corporate events around divestitures of small cells and fiber. Tell us about the new CEO. I think this might be his second day on the job?

That's right. Chris Hillabrant joined us this Monday, so it's day 3 for him. And I would say -- we are pleased, as you know, the company has been through quite a few changes. Chris, most recently was running Vantage Towers, which is a very large tower operator in Europe. But he's got great mobile industry ecosystem experience. He's at T-Mobile for many years in charge of deploying some of their networks, mobile data networks regionally. He was at Ericsson, Samsung and now at Vantage. So we are pleased he's joined us on the board. As you know, we've been through a couple of CEO changes, so excited about it. And is that very deep operating experience.

With respect to the fiber sale in small cell business, I was on the Board early last year, I was on the fiber review committee and a couple of other committees. So we're glad to get that concluded, which then now allows us to focus on being just a U.S. dollar-only company. Obviously, Chris is aligned with that strategy. So we're excited about what it means for our investors going forward.

So strategy seems clear, the decks were cleared before he was selected. So is this role mainly around execution and delivery? Or are there other types of directions that we could see Crown going into as a pure-play mobile infrastructure company?

I think the strategy of being a U.S. tower only operator is clear. Clearly, there are some execution things ahead. We have to complete and conclude the sale of the fiber in the small cell business. We think that there are dissynergies in operating three businesses versus one business. So we think we'll continue to be able to drive some operating expense efficiencies. Finally, something we've talked about before, we think that some small investments in our platforms and systems, it will also allow us to drive to be the best-in-class operator. going beyond that over the next year or two, I think we obviously want to make sure we are focused on driving growth for our business, and we think there's a lot happening right here in the U.S. So we think there will be possibilities there, too.

And then just looking to the most recent quarter and current operating trends in your tower business, maybe just kind of refresh us on where we are on things like organic tenant billings growth, churn and what types of activity levels are starting to ramp or decelerate for that matter?