Crown Castle(US:CCI)2024-01-25 19:39Financial Data and Key Metrics Changes - For the full year 2023, site rental revenues grew by 4%, including $212 million of core organic growth, despite a $100 million decrease in services margin year-over-year due to a slowdown in tower activity [8][19] - The 2024 outlook indicates year-over-year declines in site rental revenues of $160 million or 2%, adjusted EBITDA of $250 million or 6%, and AFFO of $270 million or 8% [9][40] - Normalized for certain impacts, site rental revenues, adjusted EBITDA, and AFFO would show year-over-year growth of 4%, 5%, and 3% respectively [9] Business Line Data and Key Metrics Changes - Tower organic growth was 5% in 2023, supported by long-term agreements with major customers, while small cell growth was 6% with 8,000 new nodes added [8] - Fiber solutions revenue remained flat in 2023, but a return to 3% organic growth is expected in 2024 [20][41] Market Data and Key Metrics Changes - The company anticipates continued strong demand for small cells driven by 5G densification, with expectations of delivering 16,000 new nodes in 2024 [40][41] - The overall market remains stable, with a forecast of 5% average tower growth through 2027, with 75% of that growth already contracted [77] Company Strategy and Development Direction - The company is focused on maximizing shareholder value through a strategic fiber review and evaluating alternatives [4][38] - Leadership changes aim to enhance focus on generating returns in each business segment, with a commitment to operational performance [5][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial and operational goals for 2024, despite challenges in the operating environment [4][15] - The company remains optimistic about growth driven by increasing data demand and network densification [22][40] Other Important Information - The company has strengthened its Board with the addition of three new directors, bringing valuable experience [37] - The CEO search committee and fiber review committee are actively working to determine the best path forward for the company [38][74] Q&A Session All Questions and Answers Question: What is the expected shape of densification and the current leasing environment? - Management indicated that the densification process is expected to be non-lumpy over time, but it is difficult to speculate on exact progress [25] Question: What is the status of discretionary CapEx and its commitment? - Most small cell CapEx is committed due to customer obligations, but the strategic review may influence future capital allocation [27] Question: How should we think about disconnected nodes in 2023 and 2024? - The company churned about 5,000 small cells in 2023, with no significant churn anticipated in 2024 [33] Question: What is the timeline for the strategic review and CEO search? - The process is underway, but no specific timeline can be provided at this point [86] Question: How does the company view capital allocation and leverage? - The target leverage is around 5x debt to EBITDA, with plans to manage capital effectively to return to this level over time [118]