Crown Castle Inc (CCI) 2011 Q1 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Q1 earnings conference call. During today's presentation all parties will be in a listen-only mode. (Operator Instructions) This conference is being recorded today, Thursday, April 28, 2011. I would now like to turn the conference over to Fiona McKone, Vice President of Finance. Please go ahead, ma'am.

Thanks, Mandy. Good morning, everyone, and thank you all for joining us as we review our first quarter 2011 results. With me on the call this morning are Ben Moreland, Crown Castle Chief Executive Officer, and Jay Brown, Crown Castle's Chief Financial Officer. To aid the discussion, we have posted supplemental materials in the investor section of our website at CrownCastle.com which we will discuss throughout the call this morning. This conference call will contain forward-looking statements and information based on management's current expectations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurances that such expectations will prove to have been correct. Such forward-looking statements are subject to certain risks, uncertainties, and assumptions. Information about potential factors that could affect the Company's financial results is available in the press release and in the risk factor sections of the Company's filings with the SEC. Should one or more of these or other risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ significantly from those expected. Our statements are made as of today, April 28, 2011, and we assume no obligation to update any forward-looking statements whether as the result of new information, future events or otherwise. In addition, today's call includes impressions of certain non-GAAP financial measures, including adjusted EBITDA, recurring cash flow, and recurring cash flow per share. Tables reconciling such non-GAAP financial measures are available under the investor section of the Company's website at CrownCastle.com. With that, I'll turn the call over to Jay.

Thanks, Fiona, and good morning, everyone. As you've seen from our press release and as outlined on slide three, we had a good first quarter and we're excited about the ongoing deployments of wireless data network. Also during the first quarter, we resumed our long-standing practice of purchasing our common shares, investing approximately 30% of our first quarter 2011 recurring cash flow in this activity, which we believe will enhance long-term recurring cash flow per share.

Turning to slide four, I'd like to highlight a few items from the first quarter. During the first quarter we generated site rental revenue of $456 million, up 12% from the first quarter of 2010. Site rental revenue in the first quarter benefited from $6.7 million in unexpected nonrecurring items, comprised primarily of the noncash impact from licenses that were expected to, but did not terminate as a result of carrier consolidation. And a termination fee related to a take or pay arrangement with a customer. Absent these one-timers, site rental revenue was at the high end of previously issued guidance, with 7% of the growth coming from new tenant activity, 3% coming from the existing base of business, and 2% from the aforementioned nonrecurring items. Site rental gross margin defined as site rental revenues less the cost of operations was $338 million, up 15% from the first quarter of 2010, reflecting an incremental margin of 91%. This is the 10th straight quarter that we have achieved incremental margins of greater than 90% on our growth and site rental revenue, which reflects one of the great attributes of our business, as well as our continued focus on managing our costs. Furthermore, our services business performed very well, with the contribution from services gross margin increasing year-over-year by 39%.

Adjusted EBITDA for the first quarter of 2011 was $319 million, up 16% from the first quarter of 2010. Adjusted EBITDA benefited from the aforementioned $6.7 million in nonrecurring items and $2 million due to the 11% increase in the Australian dollar to US dollar exchange rate.

As shown on slide five, recurring cash flow defined as adjusted EBITDA, less interest expense, less sustaining capital expenditures was $190 million, up 27% from the first quarter of 2010, and recurring cash flow per share was $0.66, also up 27% from the first quarter of 2010. It is important to note that these growth rates were achieved almost entirely through organic growth on assets we owned as of January 1, 2010, as growth from acquisitions was negligible.

Turning to investments in liquidity as shown on slide six, during the first quarter, we purchased approximately 42 million of our common shares and a further 10 million in April. Since 2003, we have spent $2.4 billion to purchase approximately 94 million of our common shares and potential shares, representing a third of the Company's shares at an average price of $25.86 per share. Further, during the first quarter, we spent $52 million on capital expenditures. These capital expenditures include $22 million on our land purchase program. Today, we own or control for more than 20 years the land beneath towers representing approximately 72% of our site rental gross margin, up from less than 40% in January 2007 when we completed our acquisition of Global Signal. We continue to enjoy significant success with this program, as evidenced by the fact that 35% of our US site rental gross margin is generated from towers on land that we owned, up from less than 15% in January of 2007. Further, the average remaining term on our ground leases is approximately 31 years. We also recently achieved a significant internal milestone, as we completed our 10,000th land transaction. Our internal team that works on this important effort is to be congratulated for the hard work, creativity, and effort they have put in over many years to bring us to this point.

We believe that this activity has resulted in the most secure land position in the industry based on land ownership and final ground lease expiration, and we continue to believe that this is an important long-term effort that provides a long-term benefit as it protects our margins and controls our largest operating expense. Of the remaining capital expenditures we spent $3 million on sustaining capital expenditures and $27 million on revenue generating capital expenditures. The latter consisting of $16 million on existing sites and $11 million on the construction of new sites including distributed antennae systems. Further, we have repaid $50 million of the revolving credit facility during the first quarter and an additional $15 million since April 1. We ended the first quarter 2011 with total net debt to last quarter annualized adjusted EBITDA of 5.3 times, and adjusted EBITDA to cash interest expense of 3.2 times.

Turning to our full year 2011 outlook as shown on slide seven, which is based on our current leasing activity, our visibility in the near term leasing activity and is consistent with recent announcements from the US wireless carriers. We expect site rental revenue growth in 2011 of approximately $130 million, comprised of approximately 2% growth in the existing base of business, and 6% growth from the expected additional tenant equipment to be added to our site. This outlook for revenue growth assumes the majority of our leasing activity comes from the two largest wireless operators in the US and a large number of relatively small wireless operators and also assumes that the leasing activity for the balance of 2011 remains similar to the activity that we saw in the first quarter.

As shown on slide eight, we expect to generate approximately $540 million of recurring cash flow for the balance of the year and spent approximately $200 million on discretionary capital expenditures related to the purchases of land beneath our towers, the addition of tenants to our towers, and the construction of new sites, including distributed antenna systems. The remaining portion of the recurring cash flow, ignoring our financing capacity, represents approximately $340 million of cash flow for the balance of 2011, which we could invest in activities related to our core business, including acquisitions and purchasing our common shares.

Consistent with our past practice, our 2011 outlook does not include the benefit from expected future investments such as share purchases and tower acquisitions that we expect will enhance long-term recurring cash flow per share. We believe that recurring cash flow per share is the best long-term measure of shareholder value creation. Importantly, I believe that our ongoing discretionary capital investment can add between 4% and 6% to our organic recurring cash flow per share growth rate on an annual basis.

So in summary, we had a good first quarter, as we continue to execute around our core business and we are pleased to have resumed purchasing our common shares, which we believe enhances long-term recurring cash flow per share. With that, I'm pleased to turn the call over to Ben.

Thanks, Jay. Thanks to all of you for joining us on the call this morning. We had a strong first quarter, exceeding our outlook fore site rental revenue, adjusted EBITDA, and recurring cash flow. In addition, our US services business performed very well, with services revenues up 14% and services margins up 39% compared to the first quarter last year. Further, we are pleased to be back purchasing our shares, which we believe will maximize long-term recurring cash flow per share. As Jay just mentioned, most of the growth we anticipate for the balance of the year is fueled primarily by the two largest US carriers, upgrading 3G capacity and overlaying 4G networks. In addition, there are a number of other potential 4G deployments that we believe will create additional demand for our infrastructure, although unlikely to have a material effect on our results this year.

Before I talk about potential upside opportunities, I would like to draw your attention to some of the important macro trends that continue to drive our business. The US wireless data market grew 23% year-over-year to reach $55 billion in total mobile data service revenues in 2010 and is expected to increase another 22% to $67 billion this year. Smartphones continue to drive wireless data revenue, representing over 50% of the devices sold by all the carriers in the US in 2010, which is almost twice the global average. As a result, as the end of 2010, US smartphone penetration had reached 31% in the market compared to only 23% at the end of 2009. While the average data consumption in the US at the end of 2010 was 350 megabytes per month, many of the superphones introduced in the last or second half of 2010 are consuming an average of 1 to 1.5 gigabytes per month. In fact, total 2010 US mobile data traffic was more than 2.5 times that of 2009. The significant rise in smartphone sales and usage in the market means that by the end of 2011 in the US, smartphones will consume more than data cards for the first time ever.

The US is also expected to become the number one nation globally in mobile data consumption per capita this year. To that end, smartphone sales helped drive AT&T Wireless' data revenue growth 22%, up nearly $1 billion year-over-year. AT&T had its largest first quarter smartphone sales ever, citing 5.5 million new customers comprising both upgrades and new subscriptions. The number of smartphones on its network increased by about 2.4 million in the quarter and 9 million in just the last 12 months.

Similarly at Verizon wireless, total revenue grew about $1 billion year to year, 22% year-over-year and now represents 38% of total service revenue, a key driver of data growth in 2011 is expected to be increased penetration of smartphones in the Company's retail post paid phone base. With new smartphone sales running above 60% of total sales at both major carriers, it's clear that these devices will continue to grow from current penetration levels of only 46% at AT&T and 32% at Verizon wireless. Further, in a period of less than eight weeks Verizon activated 2.2 million iPhones and in two weeks, activated 60,000 of its first 4G LTE smartphone the HTC Thunderbolt.

While the US represents less than 5% of the world's population, it accounts for over 20% of global data revenues. In fact, when measured by wireless data revenues Verizon Wireless and AT&T are two of the top three largest mobile data carriers in the world. By the end of 2013 the US market is expected to account for 25% of all global mobile data services revenue, reinforcing our thesis that as the most dominant market in terms of revenue generation for the wireless industry, the US is globally the most attractive market to capture growth in wireless services and ultimately drive our business. These statistics are why we remain focused on the US market, the largest, fastest growing, and most profitable wireless market in the world, by nearly every measure. With the demand for data services concentrated disproportionately in the major cities, we are best positioned to capture this opportunity with the highest concentration of sites among our peers in the top 100 US markets.

Moving on to where we would expect to see the impact of this activity on our business. As we mentioned, most of the activity to date this year has been from AT&T and Verizon. As you're aware, in March AT&T announced their intent to acquire T-Mobile USA. The proposed acquisition of T-Mobile by AT&T is expected to increase AT&T's incremental infrastructure investment in the US by more than $8 billion over the next seven years. AT&T has committed to a significant expansion of a robust 4G LTE deployment, 294 million POPs, 95% of the total US population reaching an additional 46 million Americans beyond their current plans.

We are seeing the benefits of the aggressive LTE rollout and other network enhancements underway at AT&T this year. The company is planning to commercially launch service midyear and plans to cover 70 million to 75 million POPs by the end of the year. Similarly, Verizon's initial LTE launch last December, which included 38 markets covering 110 million POPs, they have announced a further expansion of the company's LTE footprint to include more than 100 additional markets. By the end of the year, Verizon plans to be in about 175 markets covering more than 185 million POPs, and we are seeing significant activity toward that end.

In addition, as part of their network vision plan, Sprint intends to repurpose some of their 800 megahertz spectrum for CDMA service with expectations for the first upgraded cell sites to go live with the new equipment in eight of the largest metro areas beginning in the fall of 2011. The capital expenditures related to network vision at Sprint are expected to ramp up in the second half of 2011, with the highest levels of capital investment taking place in 2012 and 2013. With regard to some of the new emerging carriers, there have been several announcements since the last quarter. Sprint and Clearwire recently came to an agreement over wholesale pricing. Under the new deal, Clearwire will receive at least $1 billion from Sprint in 2011 and '12. Further, LightSquared has sign a long-term LTE roaming deal with Leap, notching its first major wireless operator wholesale partner shortly after it announced the similar deal with Open Range communications. The two companies said the deal will allow Leap to supplement LTE coverage it plans to deploy with roaming on LightSquared's network.

Finally, President Obama's budget included $10.7 billion to include a nationwide wireless network for emergency responders and $5 billion to help mobile access to high speed Internet service. While it appears the buildout activity of Sprint, Clearwire, LightSquared, and those that benefit from the federal government investment is unlikely to have a meaningful impact on our 2011 financial result, we anticipate beginning to see the impact in 2012 and beyond and expect that our assets will be instrumental in facilitating these and other network deployments in whatever form they should take. We are obviously very pleased with our results and believe they demonstrate the quality of our assets, combined with our ability to execute for our customers. As always, we remain disciplined and focused on maximizing long-term recurring cash flow per share through opportunistic investments, such as share repurchases, as viable alternatives to acquisitions. And at a macro level, we are incredibly excited about the trends we are seeing in wireless and our position to capture value from those trends.

So to summarize, we are focused on the US market, where the ability of the wireless carriers to make profitable investments is most apparent and barriers to entry for our business remain high. We have the best located assets in the industry, with significantly more towers in the top 100 markets than any of our peers. And our customer surveys continue to indicate that we are a highly regarded partner and enjoy the highest level of customer satisfaction in the industry.

So in closing, we had a strong first quarter and are excited about our future. I would like to add my congratulations to the team on their 10,000th land transaction, which is almost hard to even contemplate. With that, operator, I would be happy to turn the call over for questions.

(Operator Instructions) Our first question comes from the line of Jonathan Atkin with RBC Capital Markets. Please go ahead.

Yes, two questions. First of all, the one-time impacts that you identified for first quarter, the take or pay contract and the noncash impacts related to licenses, is there any of that that you're accepting for second quarter, or later in the year? And then just a picture perhaps for Ben, the impacts that you would anticipate to see what the actual consolidation work happens on the network between AT&T and T-Mobile, are you expecting that -- or how would you expect that to be similar to or different from what you saw with Cingular/AT&T?

Jon, in answer to the first question, in any given quarter, we typically expect to see between $1.5 million and $2 million of one-time items. In each of the quarters for the balance of the year, you would expect to see that and we've seen that in every quarter going backwards. So the items we're calling out here would be really in addition to anything we would normally see. There's nothing in those items that we would expect to recur in future quarters.

With regard to the consolidation between AT&T and T-Mobile, obviously it's not even early days. The transaction is just now becoming -- being considered, but as we previously disclosed, our AT&T licenses have an average of about 12 years to run and T-Mobile similarly 7 years to run. And the overlap in terms of the revenue exposure, if you will, where T-Mobile codes this or is co-located on an AT&T site that is installed is around 6% of our total revenue. So, Jon, our experience in the past with consolidation has been that we see significantly less churn than the overlap that exists, and that's been consistent in every consolidating transaction to date. I wouldn't venture a guess to say other than we would expect it to be something less than 6%, but at this point, it's just -- at this point, I think it's beneficial for us to get the facts out for you guys for everybody to appreciate the exposures and what our history has been, again, less than 100%, significantly less typically than churn on an overlap sites, but we'll have to see how that works itself out over the coming years.

Thank you. Our next question comes from the line of Simon Flannery with Morgan Stanley. Please go ahead.

Thanks very much. Good morning. Ben, I think you talked about Sprint and some of their network vision plans as well as potentially network sharing. Can you just update us on where you -- what sort of amendment activity might be. Is this a little bit like the 3G to 4G that we've seen at the big 2, and where does the sort of decommissioning of iDEN fit into that? Have you sort of squared away the contract amendments there, what the status is on that. And then one for Jay. The leverage is ticking down 5.3. It could be tipping below 5. Are you comfortable in the 4s, or would you rather continue to reinvest and keep it up in the sort of mid to high 5s over time? Thanks.

Hi, Simon. Let me address Sprint a little bit. We're certainly not going to get out in front of our customer Sprint. Particularly, on their call this morning where they were addressing their plans on network vision. We are enthusiastic supporters of them and as they go through their process of wanting to repurpose some spectrum and upgrade their equipment, we expect to be a valued partner with them. I'm not going to really get into exactly where we are in the negotiations back and forth. But as I have said, and we are -- we are in active dialogue with them and to the extent they wanted to share and host someone else on their spectrum or on -- using someone else's spectrum to host on their network, there's a way we can accomplish that, and I think it's something we would be constructive on and we could find something that would be mutually beneficial that would get more spectrum deployed in a very efficient manner. And so I'm very confident that if that's where they want to take their objectives, we can accommodate that and it will be in our mutual best interest to do so.

Simon, on your second question around leverage, I think we've been pretty vocal about the fact that in terms of the leverage target, we would expect to operate the business on most days somewhere between 4 times and 6 times debt to EBITDA. Really I would say as a target about 5 times is where most of the time we'll operate the business. And you're right, we're nearing that 5 times, that 5 times leverage level. I think as you see it finish this year and go into next year, I would expect that you'll see us begin to maintain about a 5 times leverage ratio in the business. So if we were to grow adjusted EBITDA on an annual basis over the years starting in 2012, somewhere in the neighborhood of $80 million to $100 million, which has been sort of our baseline level of growth that we've talked to you about over a long period of time, at -- pick a midpoint there of about $90 million of adjusted EBITDA growth, that would generate about $450 million of capital to invest in the business. And when you combine that with, as I made the comments about our level of discretionary capital investment that we have beyond the normal CapEx that we're doing in the business, we're approaching a number that's $900 million to $1 billion of capital to invest in and around the core business. As we go forward. And that really goes right to my point in my prepared comments about I believe that the level of capital investment that we can do around the core, around the core assets, be that acquisitions or the repurchase of our own common stock at somewhere between 400 and 600 basis points to our organic growth rate when you combine that with all of the activity that we believe we'll see top line growth from leasing activity.

Great. That's very helpful. Thanks, Jay.

Thank you. Our next question comes from the line of Jason Armstrong of Goldman Sachs. Please go ahead.

Hey, thanks. I guess I just want to follow up quickly on the last one. If the target range is 4 to 6, you've had an opportunity this year with the stock being weak on a couple of events. I think a lot of people assume that 6 could be accomplished through a leveraging event that presumably was going to be attached to a deal and most people would have pinned that to T-Mo towers. I'm just wondering with those off the block now, why don't you sort of look at the stock and say this is attractive enough to push us to the higher end of our leverage target just to accelerate buybacks? And then I guess second question is just on EBITDA guidance that you sort of left at its existing level, despite a pretty big 1Q number. If you look at 2Q and sort of take the midpoint, what you're implying for the yearly EBITDA guidance is declines in 3Q and 4Q and even at the midpoint, you're still implying declines, which given your commentary, given industry commentary, just seems pretty far fetched, so why not take that off the table at this point. Thanks.

Jason, I think in answer to your first question, as we think about managing the balance sheet, we think about managing it over a long period of time. And a lot of people have asked us the exact question that you asked around, would we take the opportunity to lever up in order to make an acquisition. And I think that's certainly an opportunity. But the range is there intentionally to give us flexibility as the cost of debt moves, the opportunity moves around both assets and where our stock is trading and our view on that. And so I would leave the flexibility that is intentional in the range that we've given and wouldn't necessarily assume that we would only borrow to make an acquisition. I think we've been pretty consistent over a long period of time describing the fact that we think of our own shares as the buyback of our own towers. It's really just a tower acquisition and no different than buying third party towers. So I would leave the range in place as I described it and I think you'll see us manage that over time. With regards to your second question, and looking at sequential moves in quarterly revenues and adjusted EBITDA for the balance of the year, there's obviously a number of things kind of moving in there that make it maybe a little more difficult than the normal easy quarter to look at our results. We tried to call out the one-time items, which in essence brings down kind of where we came out in the first quarter and becomes a base upon which we built for the balance of the calendar year. The second thing I would note is that in the second half of the year, our FX assumption is 0.9, 0.9 rather than 1.0 exchange ratio, Australian dollar to US dollar. And that's about $2 million in each of those subsequent quarters. To some degree, that creates a leveling in the back half of the year.

And then the last thing I would mention about this is as we give this outlook and affirm the outlook that we gave in the beginning, in the third quarter of 2010 for our full year 2011, it assumes that the leasing activity for the balance of this calendar year looks similar to what we saw in the first quarter of 2011. And I think for all of the -- all of the comments that both Ben and I made in our prepared remarks would suggest that there are potentially more additional tenants coming in the late part of this year or into next year. As Sprint talked about on their call this morning, network vision appears to be a fourth quarter, late 2011 event, and frankly, if that's when the activity occurs, we really won't see the benefits to that in site rental revenues until those leases or amendments are on air and paying rent, which in all likelihood means we won't see the benefit of that until the first quarter 2012. So I think at this point it's based on what we're seeing and I think it's consistent with what the carriers are seeing. And at the same time, may look a little light going into the back half of the year. We're pretty excited about what it means headed into 2012.

Okay. Thanks, Jay.

Thank you. Our next question comes from the line of James Ratcliffe with Barclays Capital. Please go ahead.

Good morning. Thanks for taking the question. Two, if I could. First of all, on DAS, you highlighted in the releases an interesting area. I wonder if you can talk about what portion of the cap next this quarter has been DAS related and how you see that evolving over time and also, if you can talk about what sort of economics or returns you're seeing on the CapEx you're deploying toward DAS deployment versus more traditional towers. And secondly, just to make sure I understood, wouldn't the change in the rate of the Aussie dollar versus US for the back half of the year, all else being equal, raise second half guidance?

You want to hit that last--?

Yes, it's the other way. We lowered the assumption. If we were to keep it at current levels, revenue growth would look higher. We're stepping it down from actual first quarter--.

Okay, okay, so you're going -- right. Understood, thanks.

On your question, James on DAS, we remain enthusiastic. We see a growing pipeline of opportunity there. This year, sort of our internal forecast on spending is in and around $50 million of CapEx. We are roughly on pace for that. I think that probably builds to the back half of this year, but we're quite pleased with the growing pipeline there of what we think are very interesting opportunities to provide sort of nontraditional coverage and capacity in areas that are challenged today, both in terms of outdoor DAS opportunities and indoor venue opportunities as well. And so we intend to continue to pursue that as much as we possibly can. But as I've said on these calls before, it's not a significant component of our business thus far, just because the size and run rate of the core business is so large. But we think it -- it could potentially add 1% to our revenue growth over time, and they are very attractive uses of capital in terms of accretive investments. It also fulfills a customer need that's out there, that provides more of the total solution that we can offer customers. So it's something we are excited and enthusiastic about. We're going to continue it. I don't think you'll see it being a hugely material contributor to the financial results, but certainly at the margin, it's accretive and positive.

Great, thank you.

Thank you. Our next question comes from the line of Ric Prentiss with Raymond James.

Thanks, good morning, guys. Couple questions for you. One, back on the Aussie exchange rate versus guidance, is that revenue and EBITDA are about the same, $2 million per quarter, or is it -- was that a revenue number?

I gave you a revenue number. The EBITDA number would be about 80% of that.

All right, okay. And actually as we look at second quarter to date, it's actually been running over 1.0. We're almost approaching 1.1. So that would obviously--?

Exactly right.

Could be even more upside on the currency basis.

Right.

Second question, and not to put you in a box on what Sprint was saying this morning, but if Sprint is going to launch eight markets in the fourth quarter, wouldn't they have been doing some work on the towers before then? Why would they be doing work after then?

I think that's a reasonable assumption, Ric. I think you will see -- if their plans ultimately come through the year as they expect, and we will certainly be a contributing factor in that, I think you'll see activity this summer related to that initial work on those sites and those markets that will need to get launched by the end of the year. But again, not a material revenue event for us for the year, if you look at the fact that those licenses would come on sort of in the back half of the year and build towards 2012, it's not going to result in a significant revenue uplift for us this year. As we go forward, we're ultimately -- their plans are to touch all their CDMA sites over three years, it can be significant and we expect it to be significant and material to our contribution towards growth in years 2012 through 2014, so it's one of the reasons we're very enthusiastic about the future 2012 to 2014 around network vision in and of itself and then all the other spectrum that's out there that ultimately will get launched. As I said in my prepared remarks, in whatever form that may take.

Sprint has talked about prospectively hosting others on their network and using their equipment. As I said, that's something we can support. And so I'm quite encouraged by network vision as it's currently defined, and if and when they decide to ultimately bring forward a share on that network, we will be constructive and participate there and I think that adds further growth to the outlook for 2012 to '14. But I do want to reiterate as we go through in remarks, those are sort of end of '11, 2012, '13 and '14. This year what we're primarily seeing is a very aggressive upgrade of 3G and 4G out of AT&T and Verizon. So from our perspective, and we never speak for our customers, but from our perspective, it appears that they are doing everything that they possibly can to meet their objectives around the LTE launches and increasing even 3G capacity on their network and there's a lot of activity going on, but I think the rest of the marketplace is poised to really be sort of, as I've described in this long-winded answer, really poised to be a 2012, '13, and '14 growth expectation that's sort of built our enthusiasm long-term.

Makes sense. Just as the Street being a very forward-looking animal, just want to make sure that Sprint hasn't made their decision yet or haven't made their announcement yet, so we get that middle of the year and then we see some services business, some design work kicking into third quarter. Maybe we see some leasing activity that we haven't seen so far this year come into the fourth quarter. But as far as an annual effect, as far as seeing a demonstrable number in 2011, it's not really there, but fourth quarter could show some revenue.

Yes, that would be our expectation and certainly we have high expectations around the services piece as well.

That makes sense. I got one more quick one. I apologize. There's a lot of discussion of what's going to happen in Sprint vision. Sprint had several meetings we've had with them at CTIA, our institutional conference have talked extensively about moving the radio up to the top of the tower, having a radio head per frequency. A lot of discussion from Sprint on moving towards the Clearwire method of back haul being very heavily microwave driven. And as you look at the net-net of stuff going from the bottom of the tower to the top of the tower, maybe fiber instead of co-ax, what's the net-net effect of using less stuff at the bottom, less stuff maybe up the tower, and then a lot more stuff on the top of the tower, do you think? Not to say in Sprint, but just in general contract.

I think where you're ultimately heading, Ric, is into specific application pricing, which is a difficult place for us to go, we're not going to really talk about that. But our expectation is what we've seen is that the loading is not significantly different. The RRUs that go up the tower are not insignificant, they do weigh quite a bit, and so almost for what you take off on co-ax you add higher on the tower in terms of loading. So there's not a, I would say a material change in loading on the tower just because you're reconfiguring the electronics. In fact, in some cases, it's actually increasing the loading on the site. But I think it's very early days and we'll just have to wait and see how that shakes out over time.

Okay, thanks.

Yes.

Thank you. Our next question comes from the line of [Michael Bohlen] with Guggenheim Partners, please go ahead.

Okay. Thank you. Couple of questions. With regards to DAS, I think you mentioned a few moments ago that it might add 1% I think you said to revenue. Can you help us understand a little bit about with regard to investment versus return on invested capital long-term, how important can DAS be incrementally as you move forward? And then secondly, with regard to tower builds and acquisitions, obviously I think there was a net two additions in the first quarter. How should we be thinking about the last three quarters of the year? Last year I think there was a net negative of around 100 towers or so. Can you give us just some thoughts on that? Thank you.

Sure, Michael. On the DAS activity, we are finding today that at the levels that we're attempting to succeed around, in and around $50 million this year's spend, to the extent we can grow that over time, we certainly will. So over a long period of time, we have high aspirations for multithousands of nodes and maybe potentially couple hundred, $300 million of investments over times. It's hard to say, it is so early days in the DAS pipeline building. Because with every passing month as capacity challenges increase, we're seeing more areas, more venues becoming DAS candidates and more and more carrier interest in covering those, whereas previously a year or two ago there was just not that same level of demand or expectation on the part of us as consumers frankly to have that level of service in all those areas. So the real answer to your question of how big can this be is we don't know. We are going to pursue it as rapidly as we can. We find these to be accretive investments. Just because it's small does not mean we don't, we don't actively go after something. I think if that were your litmus test, it would be hard to sort of get up every day, because the Company today generating, over $1.2 billion in EBITDA, you could quickly conclude, well, almost anything in isolation is immaterial. But you got to start somewhere, and we're pretty enthusiastic about what we see, as it being a contributor to accretive investment over time.

With regards to your second question about tower count, following the Global Signal acquisition that we did back at the beginning of 2007, we went through a process of really reviewing sites that had negative margin on them and I believe we've gone through most of the process where we've taken down or removed towers from the portfolio. So I wouldn't expect that you will see the levels of decommissioning of sites that we did during 2009 and 2010. We'll probably have a little bit of that going forward. But really, I think more importantly, if you're trying to figure out what the tower count is going to be in the future, it's dependent upon acquisitions. And as I mentioned in my prior comments, we value and evaluate those acquisitions against the alternative, which is buying our own towers and stock purchases. So almost impossible for me to predict where that will come out. But at least on the decommissioning side, I would expect that would be -- that that would be lower than what you've seen over the last couple of years.

Okay, great. And one final thing. I'm just trying to get my arms around, with the rapid growth obviously of mobile wireless data, how is that impacting the equipment that is being placed on your towers and is that impacting the way you price the -- the space or the throughput on your towers going forward?

Not really sure I understand your question, but generally what's happening is what has happened in really all the overlays that we've had live to date, which is carriers adding additional lines and the antenna and equipment on the sites for which we're charging consuming on the site, whether it be up the tower or ground space. The basic pricing construct has not changed and the basic need to add additional lines and antennas and equipment on the site remains intact.

Okay. Thank you very much.

Sure.

Thank you. Our next question comes from the line of Clay Moran with Benchmark. Please go ahead.

Good morning. Since we're talking about DAS, I know you said it's pretty small, but can you quantify the actual percent of revenue today? And then you included rooftops in DAS and it's not -- is there a contribution from rooftops? I really don't recall. And what the growth rate on the rooftops. And then secondly, another follow-up detail type question, but on the AT&T/Cingular merger, can you remind us in detail what the actual decommissioning percentage was of the overlap site?

Sure. On DAS, I would say we really haven't disclosed kind of the run rate. It is immaterial to the 1.8 billion run rate of the tower business today. Again, what we're focused on is the growth year-over-year and have aspirations of it being hopefully about 1% of revenue growth and that means if you're building individual nodes, that means you got to grow some to get that level of growth. That's a lot of individual contribution from construction. So that's probably as much detail as I can provide you on that. Rooftops are not included in that and are pretty much wholly insignificant to our overall run rate today. May grow over time, but for now, they are basically wholly and significant, really a -- a gnat really in our overall run rate.

Clay, your third question around the AT&T/Cingular merger that happened a number of years ago, and what ultimately we saw there. I'll just put a little bit of a disclaimer on this and mention to you that we obviously at the time of the merger did not own the Global Signal sites, which doubled the number of sites that we have in the US, but as best we can tell going back and looking at the analysis and obviously the equipment changes and amendments happen over time so it's not a perfectly static measure as you look at what they, what overlap looked like at the time of the announcement and then ultimately what they did on their sites, but we believe that number to be somewhere in the neighborhood of about 30% or thereabouts of the initial overlap activity that they had on those sites when they announced the merger and what they ultimately took off of them. Again, there's a couple of ins and outs there that would probably make that number, could even look a little better than that.

Then the last thing I would mention about it, which I think we've talked a lot about following the announcement is when we go back and look at the activity that we saw from AT&T and Cingular as stand alone parties prior to the merger, the amount of leasing that those two firms were doing independently was much less than the level of activity that we saw once they were combined, and so I've reconciled for you the decommissioning side. I think an other important other side of that is the activity we saw in the positive in terms of gross adds was much greater than what we saw when the two companies were separate. And I think that really goes to the heart, as Ben mentioned, of the additional $8 billion of capital investment that AT&T has talked about following their acquisition of T-Mobile -- or announced acquisition of T-Mobile, and that would be pretty consistent with what we've seen, not only with that merger, but with other consolidations in the past among the carriers.

Okay, thank you.

Thank you. Our next question comes from the line of [Phil Cusick] with JPMorgan. Please go ahead.

Hi, guys. Can you hear me?

Yes.

Thanks. You talked a little bit about DAS and you would ramp up the spending on that if you were able, but can you talk about your ability just to ramp CapEx from here? Seems like we have a lot of ability to spend money and T-Mobile I know has gone out and doing some things on the rural side or regional side. Is there an ability to sort of ramp up the number of builds out there, or are you sort of running at the highest possible rate that makes sense already?

Yes, Phil, I think as we look at capital spending, and again, when I think of capital spending, we start with tower augmentations or, to put it even more simply, tentative improvements, if you will, on augmenting existing towers to accommodate additional run rate revenue. And that's sort of the first thing we spend money on in the Company and the highest returning activity available to us. And we've talked about that for years. Typically it's less than a year payback on average. Next, we come onto land, as we've talked about at length. As Jay mentioned in his comments, and have aspirations this year to spend somewhere in the $100 million to $120 million range. We'll just have to see again how that goes along. We spent over $20 million this quarter alone.

And then in terms of acquisitions, we'll continue to look at acquisitions and they are hard to predict. There are some small transactions out there. Some of them look reasonable. Some of them don't honestly, looking at our relative value and the opportunity to buy shares, and so when we think about capital deployed it really all goes into one pot, which we sort of think about in terms of opportunity cost, and the way we operate the business is that every $1 is spoken for and will be spent and our objective every day is to maximize the outcome of that measured by recurring cash flow per share, as Jay was mentioning. As Jay talked about, the $340 million, the balance of this year that's unspoken for I would say that we'll continue to do what we've been doing, which is doing our best to put that to the highest and best returning activity. That will likely be some acquisitions and it will likely be some more share repurchases, and we think about this as a marathon, not a sprint, so it's an ongoing process of deploying the capital quarter to quarter and next year, as Jay mentioned, we get down to sort of the 5 times area on leverage. That capacity doubles. It's close to $1 billion, so it will be an ongoing activity to put something like in and around $250 million a quarter to work.

I think it's fair to say, Phil, that if you're trying to think about the cash flow statement for the balance of the year, I think it's unlikely that we could spend much more than about $250 million of CapEx for the balance of the year in terms of CapEx. The other item would be as Ben mentioned, would be the acquisition, the acquisition line or on the purchase of the common shares. But don't expect that capital number's going to do much beyond what we showed in the first quarter.

Okay. And then can you just give us a little more for the industry view overall, but what percent of your towers at this point are wired with fiber and is that accelerating right now, or do you expect -- what do you expect it to do over the year? Thanks.

Phil, it is absolutely accelerating. Fiber to sites is ongoing and very active. I don't have a way of really reconciling for you exactly how many of our sites are fiber today. I would be venturing a guess that something over half, but I could tell you precisely, but it's a very active process. It's something that we are assisting customers with from the services side actively. And so I would expect that over the next two or three years it approaches probably 90%, but that's probably as precise as I can be today.

Okay. Thanks, guys.

Thank you. Our next question comes from the line of Jonathan Schildkraut with Evercore. Please go ahead.

Great. Thanks for taking the questions. First, just wondering in terms of the conversations that are going on out there, we've been hearing about potential negotiations around further MLAs similar to what you had done last year and I was wondering if you could give us any color there. And then secondly on Sprint's network vision, understanding all the puts and takes of the equipment that would be deployed, it seems like it could actually create some space for you on the ground. It may take up some space on the tower. Just trying to understand how that impacts your capacity from a tower perspective, where are you, more capacity constrained, where do you generally have to spend the money on augmentations? Thanks.

Sure, Jonathan. First of all, with respect to prospective MLA negotiations or what we may enter into going forward, I'm really not going to comment on that. Probably, that's probably it on that one. On network vision in terms of capacity, I think the capacity question is a good one. It's one we're happy to address with folks and it goes to the previous answer, where we talked about tentative improvement dollars or augmentation. It is almost never occurring where we are completely capacity constrained on a site, where we cannot accommodate additional tenancy, whether that be an upgrade or an additional full array, whether that be on the tower or ground space. The network vision equipment is efficient, so it's not going to consume a lot more ground space, which is nice, but capacity is really not something that we are running out of around here and we can create it with this additional cash, capital investment tower augmentation effort that goes on here, and so if I think of the constraints in the business, capacity is not one of them.

Great. Maybe if I can get one more in here, as we think about the puts and takes of equipment that goes up and down on the towers, as network architecture evolves, should we think about the way that you price in terms of total weight, drag, cabling ground space, as the determinant of pricing, or are there some other elements that also flows in there that would prevent any kind of downward pressure on what you're getting from your customers?

Well, ultimately, typically the easiest way to think about our pricing is physical, and that's where we normally have taken the conversation with investors, because that's the easiest way to think about it. Physical lines and antennas, and loading on site. There's nothing that we see in terms of architecture today that the carriers are asking to put up that lessens that load. So we think that construct for purposes of understanding and explaining the business is probably the easiest way to go. But it's also true that what we are pricing is access to hype, vertical hype and an existing site that are tough to come by today in terms of zoning. While it's easy to think about it as a physical right, we are certainly pricing something that's a competitive, in terms of lack of competitive alternatives that is providing height, to cover a general (inaudible) and so that is absolutely implicit in the negotiations and I believe certainly provides some downward floor control on pricing to the extent you would see equipment unloaded, but that's not been our experience. I think it's still the most instructive for everyone to think about this business as physical pricing, but certainly there's an element of access to these sites that is implicit in the pricing, and frankly never changes.

Thank you very much.

Thank you. Our next question comes from the line of Batya Levi with UBS. Please go ahead.

Great, thanks a lot. Just to follow up on your comments about carrier activity, when we look out to AT&T's wireless CapEx, it actually started off lower than what we were looking for and suggest that it's going to ramp up very nicely throughout the year and probably double for 4Q. So when you look at carrier activity from them, do you still expect it to be linear across each quarter or do you think there could be upside in the second half, and I just wanted to follow up on Sprint's comments. You mentioned a lot network vision, but if we get a network hosting -- spectrum hosting deal in the next couple of weeks, how do you -- how quickly do you think that you'll see some impacts on that in your results? Thanks.

I think in answer to the first question around AT&T, there may be some puts and takes as we go through the year, but I think on balance we think it's pretty level to the level of activity that we saw in the first quarter, which as Ben and I both mentioned was a significant amount of activity from them.

On Sprint, Batya, I'm going to let them obviously announce if they choose to proceed with a hosting arrangement with a customer. As I've said, we are constructive in that dialogue. There is a way for that to occur. It will result in additional revenue for us, but I'm just not going to get into anything further than that. It's really up to them to decide how they want to utilize their network and leverage it with another spectrum owner. But it's something that I think we're constructive on and to the extent it expedites spectrum being launched, that wasn't previously launched and gets that network on the air and available to consumers, that is long-term positive to us and that's how we're looking at it.

Okay, great. Thanks.

Thank you. Our next question comes from the line of Brett Feldman with Deutsche Bank. Please go ahead.

Thanks for taking the question. A few very, very quick ones here. First, you talked about how if your expectation is that the amount of business you saw in the first quarter would persist throughout the year, if that actually comes to fruition, how would 2011 end up comparing to 2010? Would it end up being an up, down, or flat year?

It would be down in terms of level of activity from 2010.

Rough order of magnitude, a little down, 10%?

15% to 20% in terms of level of activity, and then I would say as we think about 2012, it looks like back up to the level of activity that we saw in 2010.

Okay. And then could you just remind us about the seasonality in the services business? Usually when the weather gets better, the activity increases. Does that mean that we should expect to see higher levels in 2Q and into 3Q?

Typically where we most often see seasonality is in the operating expenses, around repairs and maintenance. And typically as you saw those in sustaining capital expenditures where it hits us there as well as in the operating expense line, we spend less in the first quarter than we do in subsequent quarters and our outlook would suggest that to be the case. Order of magnitude, $1.5 million to $2 million in the sustaining capital expenditures line, higher than what we saw in the first quarter and then on the operating expense line, $1.5 million to $2.5 million roughly in subsequent periods.

All right, and one last quick one here, we had a lot of noise about light radio a couple of months ago. Have you actually seen the deployments of that or interest in your towers?

No. Brett, I want to go back to first just your question about activity, if you look -- I think it's important, even though activity levels this year again dominated, as we said earlier, around the upgrade activities in AT&T and Verizon, that is yielding without investments in the guidance about 11% year-over-year recurring cash flow growth, with investments, spending the $340 million. You get into the midteens area of recurring cash flow per share growth, which we're quite comfortable with and quite pleased with before you even get into sort of the 2012 to '14 time line of all this other spectrum being deployed or equipment repurposed. So we're actually feeling pretty comfortable that, at a level of activity this year, which may not have approached where we were last year, we're still seeing very healthy levels of growth in terms of cash flow per share and we see lots of opportunity.

Great, thanks for taking the questions.

Thank you. Our next question comes from the line of Michael Rollins with Citi Investment Research. Please go ahead.

Thanks, and good morning. Just wanted to follow up with just some questions around all the data demand that you guys had described and I think that the big question is trying to translate all of these qualitative positives of people using more data, more broadband, more devices and trying to figure out what it means for cell site deployments. And I think what we've seen with a lot of growth off very low base over the last couple of years is from the larger carriers some consistency. And I'm wondering, from your perspective, do we hit a point where the growth continues and then all of a sudden there's just a catch-up that carriers have to do to deploy more sites? Or is it just going to be more linear? And how should we think about that? Obviously you guys get to see a lot of granularity on this every day, but from a high level, what should be the right expectation for investors on how to translate all of this improvement in your increase in data usage into the site deployments? Thanks.

Michael, that is the absolute question, and as we see it today, I think the first distinction I would draw for you and for those that have been around a long time like yourself, maybe this is a little bit obvious. I would draw the distinction between a brand-new network being built where none existed prior, with brand-new installations on towers, as obviously being the most near-term impactful. Over -- to the extent you would look at the, in the first half of the Clearwire build to a large degree over the last three or four years has been that type of deployment and has had very significant contribution to incremental growth around here and I would venture to speculate at our peer companies as well. Beyond that as we've talked about this year, you have a tremendous amount of work going on that are largely amendments that add up to be real money, and a lot of activity around the established networks that are already on the air, being as we've talked about on this call, AT&T and Verizon primarily. T-Mobile as well, in prior years and continuing this year and not to the same level of contribution, but certainly adding up, doing the 3G overlay and ultimately the HSPA plus upgrade that they have been ongoing. So the two distinctions are really, whether you're talking about amendments on existing sites versus brand-new builds. And then once you get past that, the way we think about it is infill locations from self splitting, so we expect and we've been told by pretty much all our customers that you should expect to see more self splitting over time, after these initial wave of upgrades occur such that as the original 3G network all got built out we saw more cell splitting and more adds over time, you should expect to see the same in coming years with 4G, as the capacity is ultimately constrained because we're all using it in ways we hadn't contemplated before, with new devices.

You'll see more cell splitting, which again, is essentially like a new add, but that's longer term and harder to forecast as we sit here today -- still on the very, very early days of 4G deployments. And so I can't be more precise than that. I guess the tangential benefit you see would be in the DAS business that we're talking about where three years ago we couldn't sell DAS or very, very rarely could we get anyone to return our phone calls on the DAS business, and today we have a very robust and growing pipeline. Again, not that financially material today, but a whole new line of business with the nontraditional deployments that weren't available to us three years ago. And I think it really -- the way I would sum it up in terms of financial modeling is it just gives you more certainty around the continuation of growth that is hard to be a lot more specific about. Jay, do you want to add anything to that?

No, I think that's what I would say, too, Michael. My experience, having been here for 11 years, is that we always kind of look for inflection points and people are searching for the point at which the carriers need to significantly increase their capital spend and why they might do that either based on growth in subscribers or penetration levels or increases in usage and the carriers I think are making the same allocation and balancing of investment of cash flow that we make as a Company and they are balancing the return of cash to shareholders in the form of dividends or share purchases, much like what we do and a level of CapEx. And our experience has been, as Ben mentioned, it's likely to result in more years of additional growth and leasing activity rather than seeing a big inflection point in the next one or two years and then a tailing off of that activity. I think we're more likely to see a balanced level of capital spend and therefore a balanced level of leasing activity in our business.

That's very helpful. Thank you.

Thank you. Our next question comes from the line of David Barden with Bank of America Merrill Lynch. Please go ahead.

Hey, guys. Thanks for taking the questions. Good morning. I got about seven or eight follow-ups on DAS, if I could. Just kidding. Basically just three, if I could. Number one, you said that (inaudible) are really the big drivers year to date. T-Mobile before the AT&T merger announcement really laid out a game plan where it sounded like they were going to start to spend in a way more consistent than in the past. I was wondering if you could kind of just give us a sense as to whether you think that their plan is to live up to that goal or whether they are kind of being a little bit more squishy now that the AT&T deal has been announced. I guess the second one is, we talked a lot about the Sprint network vision thing that they are trying to work on, but I guess their partners in this, Clearwire and LightSquared are going to have some questionable financial strength looking ahead and how do you guys protect yourselves from a credit standpoint and from a longevity standpoint when you're talking about this topic with Sprint? And then I guess the last thing would be we also talked about leverage. The big question here for a little window there, we were thinking that the T-Mobile tower portfolio might be coming up. There was an expectation that everybody would be buckling down and trying to delever and get ready to make an aggressive bid. As you guys are thinking about your capital locations, is that, is that gone? Is that just off the table now and you're going to make decisions with what you can see right now, or are you going to hold back a little bit just in case that comes back on the table? Thanks.

Yes, we'll try to knock a few of these off pretty quickly, Dave. In terms of the T-Mobile towers, we're operating under the assumption as we've been told, that they are gone to the medium term, assuming that the transaction closes as described, obviously it will be an AT&T decision. They own a bunch of their own towers and I think it will be a longer term strategic discussion that they will want to have internally. But for the purposes of planning today, we're assuming they are off the table.

Okay.

I'm sort of going in reverse order. With your Sprint and Clearwire/LightSquared prospective credit question, we would look at the counter party who is asking. So this is hypothetical, but to the extent that Sprint would come and want to gain rights under their licenses on our towers, we would consider them to be the counter party. So that -- perhaps that answers your question.

Yes.

T-Mobile, I would -- Jay, do you want to suggest what's happening with T-Mobile?

Yes, I think we're seeing levels of activity that are similar to what we were expecting when we went into the year. And obviously when we set forth our outlook in the third quarter of the previous year that carriers having gone through the budgeting process, so we never for any carrier hit that number spot on, but it's in and around the levels that we would expect, and I think to the second part of your question about what are they going to do going forward I think you're probably going to really have to ask them about what their plans are heading into the expected-- the expected consolidation there. But the level of activity in our outlook is similar to what we thought.

All right, great. Thanks, guys.

You bet.

Thank you. Our next question comes from the line of Gray Powell with Wells Fargo. Please go ahead.

Hi, thanks for working me in. I just had a couple of quick questions. Really just wanted to follow up on a prior question in terms of leasing activity. Is the lower leasing activity that you see in 2011, is that in part a function of the AT&T master lease agreement that you did in Q3 of 2010? Which essentially booked some amendment revenue early? Or simply that carriers are doing less at cell site deployments and the business?

Gray, let me take that. First of all, as we said on the third quarter call and the fourth quarter call, we haven't disclosed the identity of the party that we did that agreement with. I really can't comment on that. But that agreement in existence is not actually a material portion of what we're talking about in terms of leasing growth. It really comes down to this. This is not -- for those of you that are close to the industry and follow this carefully, it really shouldn't be, come as much of a surprise when we say that most of the activity we're seeing this year is from AT&T and Verizon amendments. That's a fact. If you go down the list of everybody else, you can come up with a story as to generally what's going on in those networks. Some of them are not completely capitalized for further buildouts yet. Yet, we're not sure what the form of those further network builds are going to actually take. Then you have a lot of other spectrum that's yet to be deployed. You've got T-Mobile, which Jay just commented on, which is continuing to be active, but not at a significant contribution level to our overall total. That's certainly in line with what our expectations were for the year. And so when you look at a year like that, this is sort of the outlook that you get.

It reminds me of questions that we always get when we put out annual guidance, where the questions are typically, what of these new sort of insurgent carriers did you forecast in your guidance? And our answer typically has been very little, if any. That is true and that is why you see us basically looking at a year that's sort of on plan in terms of guidance, because you don't see a lot of activity that would financially impactful this year, in this calendar year around those other carriers. I think there's a lot of opportunity and activity that is going to come as -- you'll see ramping in the fourth quarter of this year on into -- frankly gives us a lot of confidence over the next three years of growth to extend that growth runway. But this year, when you think back to those questions, what did you put in your guidance around this other type of speculative growth, the answer being very little to none, and frankly that's kind of what we're seeing.

Fair enough. That makes sense. That's very helpful. And then just to switch topics, what would you say is a typical search ring for a carrier, and what percentage of your towers have competitive offerings within that ring?

Typically if you're looking at the major metro areas, those search rings are going to very, very small, eighth of a mile, quarter of a mile, something like that. Then competitive structures really depends on what carrier is looking at it and where their other sites are located. But I would say in general, the number of competitive sites whenever you're looking at it, a delivery of search rates would be somewhere in the 5% to 10% range in most cases.

Got it. Okay. That's very helpful. Thank you very much.

I think we have time for one more.

Okay. Our last question comes from the line of Tim Horan with Oppenheimer. Please go ahead.

Thanks, guys. I know you've kind of touched on this quite a bit. But on the stock buybacks, just doing the math on what you guys are saying, you could buy back anywhere between 2% and 10% of your shares outstanding. Could you maybe give a little narrower range on what you would like to do, maybe something in the 3% to 5% range and how consistent you would like to be, now that you can kind of buy back stocks?

Yes, Tim, I think the percentages that I was referring to were referencing the impact to the growth rate in recurring cash flow per share.

I know that. I was just kind of mentioning, you want to keep it 5 times EBITDA, you could borrow another $500 billion a year and use that to buy back stock, and obviously generating another couple hundred million from free cash flow you can buy back stock. I mean, theoretically, you could buy back $600 million to $800 million over a year.

Sure, and where I was going with my comment was when I talk about the impact to recurring cash flow per share, that's a measure of either acquisitions or stock buyback. So we're certainly not committing ourselves to saying that it's going to be one or the other, and I think it will move, as it has over a long period of time, depending on what's available to us. If you go back and look, and I think this is somewhat helpful, to think about what we've done over the last six years, about half of the capital that we've produced in the business and the leveraging that we've done in the business, about half of that has gone to buy back shares and the other half has gone to either acquisitions or CapEx-related activity. So it's been about 50/50. Obviously that's lumpy. If you go back and look last year, we did the DAS acquisition and that took up the majority of cash flow for a quarter and a half or so, and we didn't buy back any shares and we had done so in the quarters previous to that. This quarter, we didn't have an acquisition and so we bought share. It's going to be lumpy, but I think over a long period of time, if you want to guess, you could take a guess based on the last six years, seven years of activity--.

Right. That's helpful to think about 50/50. And then lastly, I guess on the antenna front, there's obviously a lot of changes in technology, a lot of demand. I think what you're trying to say here is you might be looking at more value-based pricing going forward than just size and weight. If someone's going to be using this for 200 megahertz of spectrum on antenna when they used to use 25 megahertz, you are still a very unique asset and you can charge appropriately. Is that a good way to think about what you're trying to say?

Well, yes. I guess you're putting a little bit of words in my mouth. I think so far, Tim, we have not seen that. We are still largely pricing on physical loading. Again, implicit in all of our pricing is access to a unique asset that ultimately has value, obviously. But as a general statement today, we are not seeing really any unloading of the tower. In fact, the contrary. We're still seeing more loading of the tower. It's still the most efficient way to get the maximum efficiency out of the spectrum that's being deployed and that's what we're seeing. So we remain sort of committed to that pricing conduct. Maybe to punctuate and end on Jay's note, around the organic growth augmented with investment and whether that's acquisitions or share purchases in the past, we're committed to basically deploying that capital in a way that augments organic growth. I think that was Jay's comment in your script, which was 200 to 600 basis points a year is kind of what we can see contribution from that activity in addition to organic. This year's level of activity, that would put us firmly in the mid teens area. Obviously we have aspirations to make that as high as we possibly can, but given what's going on in the market, we're quite comfortable with that and building long-term value in the Company.

So, thanks.

You bet, Tim. Thanks for the interest and appreciate you all staying a little long with us today. We had a long list of questions, but appreciate your interest and patience and look forward to seeing everybody on the call next quarter.

Thank you. Ladies and gentlemen, this concludes the Q1 earnings conference call. If you would like to listen to a replay of today's conference, please dial 303-590-3030. Or 1-800-406-7325, followed by a pass code of 4431675. ACT would like to thank you for your participation. You may now disconnect.