Crown Castle International Q3 2007 Earnings Call Transcript

Crown Castle International Corp. (CCI)

Q3 2007 Earnings Call

October 31, 2007 10:30 AM ET

Executives

John Kelly - President and CEO

Ben Moreland - CFO

Jay Brown - Treasurer

Analysts

Vance Edelson - Morgan Stanley

Jonathan Atkin - RBC Capital Markets

Jason Armstrong - Goldman Sachs

David Barden - Banc of America Securities

Brett Feldman - Lehman Brothers

Rick Prentiss - Raymond James and Associates

Gray Powell - Wachovia Securities

Michael Rollins - Citigroup

David Janazzo - Merrill Lynch

Presentation

Operator

Good morning ladies and gentleman, thank you for standing by. Welcome to the Crown Castle International Corp Third Quarter 2007 Earnings Call.

During today's presentation all participant are in a listen only mode. Following the presentation the conference will be open for questions. (Operator Instructions) This conference call is being recorded today Wednesday, October 31st, of 2007.

I would now like to turn the conference over to Jay Brown, Treasurer. Please go ahead, sir.

Jay Brown

Thank you. Good morning everyone. And thank you for joining us, as we review our third quarter 2007 Results.

With me on the call this morning are John Kelly, Crown Castle's Chief Executive Officer; and Ben Moreland, Crown Castle's Chief Financial Officer. This conference call will contain forward-looking statements and information based on Management's current expectation. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

Such forward-looking statements are subject to certain risks, uncertainties, and assumptions. Information about the potential risk factors that could affect the Company's financial results is available in the press release and in the "risk factors" section of the Company's filing with the SEC.

Should one or more other of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. In addition, today's call includes discussions 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 "Investors" section of the Company's website at crowncastle.com.

As you know on January 12th, 2007 we closed the merger with Global Signal. The reported results for the third quarter 2007 include the affect of the merger which is compared in certain cases to pre-merger, historical results of Crown Castle for prior period.

During the call this morning, we will refer to pro forma results for the three months ended September 30, 2006, and the nine months ended September 30th, 2006 and 2007, which are also included on page five of our third quarter earnings release that we put out last night. The pro forma results combine the results of Crown Castle and Global Signal as of the beginning of the periods presented.

With that, I'll turn the call over to Ben.

Ben Moreland

Thanks Jay and good morning everyone. As you've seen in our press release, we've reported a solid quarter of results and we are pleased to share some of those highlights with you this morning.

During the third quarter, we generated revenues of $351.7 million, which was comprised of site rental revenue of $326.8 million up $147.8 million or approximately 82.6% compared to the third quarter of 2006.

Service revenue was $24.9 million, pro forma site rental revenue growth was approximately 7.3% compared reported to third quarter 2007 results to pro forma third quarter 2006 results, exclusive of approximately $1.1 million and $6.5 million of out of run rate items in the third quarter of 2007 and the third quarter of 2006 respectively.

Gross margin from site rental revenue, defined as power revenues less cost of operations, was $214.9 million, an increase of $91.2 million or up 73.7% from $123.7 million in the third quarter of 2006. Pro forma site rental gross margin increased approximately 10% comparing the third quarter of 2007 results, to pro forma third quarter 2006 results, exclusive of the previously mentioned out of run-rate site rental revenue.

Adjusted EBITDA for the third quarter 2007 was $195.8 million, an increase of $85.5 million or up 77.5% from the third quarter 2006.

Capital expenditures during the quarter were $66.3 million, sustaining capital expenditures totaled $5.6 million, and revenue enhancing or revenue generating capital expenditures were approximately $60.7 million. This was comprised of approximately $34.7 million of land purchases, $11 million related to the addition of new tenants on existing sites, and about $15 million from new sites.

Recurring cash flow, defined as adjusted EBITDA less interest expense and sustaining capital expenditures, was $100.8 million, inclusive of approximately $18.9 million of additional interest expense on the $1.15 billion of borrowings in the fourth quarter of 2006 and the first quarter of 2007, to reduce actual and potential shares outstanding by approximately 33.7 million compared to $61.6 million in the third quarter of 2006.

Recurring cash flow per share was $0.36 per share for the third quarter 2007, again, inclusive of the negative $0.02 of dilution from the previously mentioned borrowings used to reduce the potential and actual shares outstanding, compared to $0.31 per share in the third quarter of 2006. Exclusive of the dilution I just mentioned, the current cash flow per share grew approximately 23% year-over-year.

As we’ve previously stated the additional borrowings to reduce the share count over the past year have had a short-term dilutive impact to recurring cash flow per share, we believe these actions we've taken will deliver long-term growth in this measure consistent with our long-term objectives to grow recurring cash flow 20% to 25% annually. Sequential growth and recurring cash flow per share from the first quarter of 2007 to the third quarter of 2007 was 20%, and illustrates the expected annual growth from a current cash flow per share with a static capital structure.

Turning to the balance sheet as of the end of third quarter; securitized tower revenue notes totaled $5.3 billion for the quarter and other debt totaled approximately $712 million, for total debt at the end of the quarter of approximately $6 billion. The other debt was comprised of our corporate credit facility which was strong $648 million and $64 million of our 4% convertible notes. We also hedged $313.6 million outstanding on the six-and-a-quarter convertible preferred stock outstanding as of the end of the quarter.

Total debt to latest quarter annualized adjusted EBITDA at the end of the third quarter was 7.7 times, and adjusted EBITDA at interest expense as of at the end of third quarter was 2.2 times. As you’ve seen in our previous filings, the $5.3 billion of securitized notes are not subject to interest rate fluctuations for 10 years from their respective initial issuances, due to the interest rate hedges that we have undertaken, on the anticipated refinancing dates of each of the issues.

At quarter end, we had approximately $120 million of cash, excluding restricted cash and $250 million of availability under our revolving credit facility.

Moving to the outlook for the fourth quarter of 2007, we expect site rental revenue for the fourth quarter of between $333 million and $338 million. We expect site rental gross margin for the fourth quarter of between $218 million and $223 million. And we expect adjusted EBITDA for the fourth quarter of between $202 million and $207 million, and interest expense of between $88 million and $90 million.

We expect sustaining capital expenditures to be between $6 million and $8 million, rest recurring cash flows expected to be between $106 million and $111 million for the fourth quarter.

We expect site rental revenue for the full year of 2008 to be between $1.377 billion and $1.392 billion. We expect 2008 site rental gross margin of between $930 million and $940 million. We expect 2008 adjusted EBITDA to be between $850 million and $862 million, which is approximately 14% growth in adjusted EBITDA year-over-year, and interest expense between $355 million and $360 million.

We expect sustaining capital expenditures to be between $21 million and $26 million. And this 2008 outlook translates into expected recurring cash flow for the full year of 2008 of between $474 million and $484 million or approximately a $1.70 per share based on the 282.6 million shares outstanding for the three months ended September 30, 2007.

The expected 2008 recurring cash flow per share of approximately $1.70 is the 25% increase from the expected $1.36 for the full year 2007.

Our 2008 outlook implies approximately $100 million of annual site rental revenue growth, $100 million of annual site rental gross margin growth and $100 million annual adjusted EBITDA growth.

We believe there are many variables that could potentially drive additional growth in this outlook for 2008. Its just to early to tell, but we’re pleased with the fact that our 2008 outlook, which is based on revenue growth and leasing growth, at the same rate as we expect to finish 2007, translates into approximately 25% annual growth and recurring cash flow per share or the top end of our previously stated long term goal of 20% to 25% growth in recurring cash flow per share.

Over the past few years we've made many significant investment decisions, most notably the purchase of approximately 30% of our fully diluted outstanding shares since 2003, and the acquisition of Global Signal which closed in January of this year.

Due to the solid performance of our core tower business, and the diligence we have demonstrated through refinancing our balance sheet and purchasing a substantial amount of our actual and potential shares outstanding. We have positioned ourselves to effectively translate core tower business revenue growth in to recurring cash flow per share growth.

Consistent with our past actions, we expect to continue to use our recurring cash flow, and the additional borrowing capacity we're now generating, to make investments based upon their impact on long term recurring cash flow per share. We have not included the impact of these potential investments in our outlook.

As of the third quarter 2007, our debt-to-adjusted EBITDA ratio was 7.7 times, and our interest coverage level had increased EBITDA divided by interest expense had increased to 2.2 times, implying that we are now creating borrowing capacity within our targeted leverage ratios.

As we look to the balance of 2007 and into 2008, you should expect us to continue to invest our recurring cash flow and borrowing capacity towards the high end of our leverage range six to eight times. In order to make investments based upon their long term impact recurring cash flow per share.

Although the credit market environment has been less favorable, as over the last couple of months, we continue to believe we have access to the credit markets at our targeted level of leverage, based upon the quality and predictability of our cash flows.

While credit spreads for additional debt, new debt we would take on have widen out by approximately 70 basis points to 100 basis points. We continue to believe that prudent leverage at our current levels enhances our long term expected equity returns.

Potential investment opportunities includes stock purchases, land acquisitions, tower builds, tower acquisitions, and other revenue generating investments around our core tower business.

Again, we are pleased with the results for the quarter and look forward to a strong finish in 2007.

With that, I am pleased to turn the call over to John Kelly.

John Kelly

Thanks, Ben. And thanks all of you for joining our call this morning. We had another solid quarter of results in the third quarter as we exceeded the mid point of our outlook for site rental revenue, site rental gross margin, adjusted EBITDA and recurring cash flow.

I would like to make a few comments about some recently reported wireless industry statistics and the spectrum options, both ones in 2006 and the ones coming up in 2008. And, also, give you a brief update on our integration efforts before I turn the call over for questions.

I am pleased with the third quarter performance. As Ben walked through the numbers with you, I believe we reported very solid results at the high-end of our operating targets. And the backdrop for this performance is the continued growth in the broader wireless market.

As many of you are aware CTIA has just released its summer annual wireless industry survey. I’d like to spend a few minutes to discuss some of those broader wireless industry statistics that I believe are critical because of the effect that they have on the growth in the power industry.

First one was wireless subscribers were up to approximately 243 million for the first half of 2007, as of approximately 24 million subscribers or 11% from the first half of 2006, which is in line with the consistent growth we’ve seen in recent years.

Now, more importantly than wireless subscribers increasing, wireless minutes of use exceeded 1 trillion minutes of use in the first half of 2007, an 18% increase from the first half of 2006.

In my opinion, an unbelievably large increase on a percentage basis given that the base is so large. And very interesting statistics also out with this report is that wireless data service revenues for the first half of 2007 rose depend on a $0.5 billion, which represents a 63% increase over the first half of 2006 when data revenues were $6.5 billion.

Wireless data revenues now account for 15.5% of all wireless service revenues, which is a significant increase from approximately 4% that’s wireless data revenues were of total wireless service revenues in 2004, now to 15.5%. Another staggering statistics, there were 28.8 billion text messages reported in amongst of June 2007 alone. It's almost 1 billion text message comes a day, which represents an increase of 130% over June 2006.

And then, finally, wireless subscribers sent 2.6 billion multimedia messages in the first half 2007, almost as many as were sent in all of 2006. I believe these statistics reinforce and substantiate the overarching trend we are experiencing of the migration from wireline telephony to wireless telephony, which we talked about on prior calls.

With this trend, we believe the need for towers will continue to increase as carriers continue to acquire infrastructure to build out their wireless networks to support these data-centric and bandwidth intensive applications.

I give a few specifics for expected 2008 growth. One of the big changes in 2008 from 2007 is that clearing process with the AWS spectrum that was auctioned by the SEC in 2006 is well underway. And we believe that leasing power points continue to grow for the balance of this quarter in 2007 fourth quarter, and into 2008 as a result of this AWS spectrum being deployed by companies like T-Mobile, Leap, and Metro PCS.

I believe it's likely we will start seeing the impact of fragment for revenues from these activities in the first quarter of 2008. Clearly, leasing that occurs in the fourth quarter 2007 does little for revenues in 2007, but will have an impact we believe starting in the first quarter of 2008.

For longer term, we are also looking forward to the results of the FTC's upcoming 700 megahertz auction, which is expected to begin in January 2008. We believe that whatever the outcome the auction of this prime band of spectrum will have a positive effective on the tower industry.

Our assets are the best located in the tower industry, with 72% of our portfolio in the top 100 BTAs. And as such, we believe we are in a favorable position to partner with the ultimate winners of the auction to deploy their new networks or deploy new applications using the spectrum on sites in place to day.

Although the television broadcasters currently using the spectrum, are not required to fully transition to digital television until February 2009. Crown Castle is spending time, currently working and proactively planning with our customers to determine how to best meet their needs, and to have sufficient co-location options available to them in deploying the new 700 megahertz spectrum.

And we believe we are extremely well positioned for the growth opportunities in 2008 and beyond due to our considerable progress on the global signal integration. We've made significant progress since January on the integration in number of areas, including operations, IT, property management, accounting and human resources. I am very pleased with the remarkable progress of our integration teams, and quite frankly all of our employees have made during this transitional time. And we expect to be substantially complete with this integration effort by the end of the year.

We have also realized, as a result of all the integration efforts to date, we have realized annualized run rate G&A synergies comparing full year 2006 to annualized third quarter 2007, are more than double our original estimates. These synergies are included in our 2008 outlook. Thus far, the results from the Global Signal acquisition have exceeded our expectations for revenue growth, synergies, and the resulting benefit to adjusted EBITDA.

So, before I turn the call over for questions I want to reinforce that, we reported a great quarter of results, we are optimistic about the increased leasing, we believe will occur towards the end of the year and into 2008 from the AWS deployments. And certainly, looking forward in to 2009, there should be some positive from the results of the 700 megahertz auction.

An important point, I would like to emphasis is, notwithstanding the opportunities for growth in 2008, it is still only just about the beginning of November. And so, would have difficult to forecast into 2008 with perfect clarity, what leasing will look like? So, I am especially pleased with the efficiency of our capital structure that we built over the last four years, which translates 2008 revenue growth that is forecasted in our outlook to be comparable to the 2007, in to recurring cash flow per share growth at the high end of targeted range of 20% to 25%. That occurs because of the efficiency of our capital structure.

I reiterate the points about the integration efforts. We expect to be substantially complete with the Global Signal integration by the end of this year. And as Ben discussed, we are poised to resume our practice of borrowing funds, and investing in our core tower business including stock purchases.

So, with that operator, I would like to turn the call over to you, to organize the question-and-answer period please.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen at this time we will begin the question-and-answer session. (Operator Instructions) And our first question comes from Vance Edelson with Morgan Stanley. Please, go ahead.

Vance Edelson - Morgan Stanley

Thanks a lot. Congrats on the quarterly results. Ben, on your share buyback, I think the approach is always a made lot of sense buying opportunistically rather than announcing a specific amount over a specific timeframe, which would just drive the price up before you can buy. That said, we haven’t seen any buybacks in some time, what’s you current thinking on this as a potential use of cash? How attractive do you think the shares look now relative to other potential uses of cash? Thanks.

Ben Moreland

Vance thanks for a good question. We did not invest any in the third quarter, as we were just coming down under our, sort of, our eight times leverage targets finished the quarter at 7.7 times. But as we said in the prepared remarks, at this point, clearly, we are building capacity and we’ve got some cash that’s unspoken for at the moment.

So you should expect that our appetite to continue to invest in our shares is as robust as it’s ever been. As you think about, now that we’ve got 2008 outlook outstanding for year-to-date and look at the forward growth rate of 25% in recurring cash flow, we are trading at less than, sort of, one times multiple to growth rate. And so we continue to be very optimistic. And if you think that’s a compelling investment, I guess the other thing I would say is now that we’ve got the '08 outlook out there $100 million of EBITDA growth in the remaining leverage that eight times requires that you can borrow $800 million over the next 12 months.

And with the 480 of our current cash flow on top of that and that $280 billion is a significant amount of capacity that we have over then next 12 months to invest. And even if you make certain assumptions around capital expenditures associated with the core business like land purchases, power builds, some smaller acquisitions, we can still come up to a very significant amount of money, maybe, even approaching $1 billion that could be year mark for purchases, if we don’t otherwise buy assets that bring cash flow with it. So, we are still very, very interested in proceeding with our plan, and think the ability to borrow in an around 6.5% or a little less depending upon where the five year lot or swap is, is still a very compelling proposition given what we think the targeted for the -- our expected returns on the equity will be?

Vance Edelson - Morgan Stanley

Okay. I appreciate the color there. And speaking of tower built or bought, just on the house keeping front, I didn’t see it in the release, can you tell any were bought and built during the quarter?

Ben Moreland

There were 42.

Vance Edelson - Morgan Stanley

Okay, great. And finally, could you just elaborate on the land purchases, would you continue to spend fair amount on remind us what the criteria are for making a purchase, and as it getting more or less difficult to find accretive opportunities there? Thanks.

Ben Moreland

Yeah. Vance, we continue to be very optimistic about the land purchase business. We’re committing some time and resource, and obviously some capital for that. And find that we're able to continue to buy these, sort of, in and around, sort of, that 12 to 14 multiple consistently, which then eliminates the ground rep and the acceleration forever. So, it's a very compelling return on investment from what is effectively refinancing what is essentially an off balance sheet data obligation on balance sheet.

And so, we think about it to a similarly to refinancing in just the cold financial reality, but also it obviously solidifies the long-term control of the asset, which we want to pursue. So I think you should expect that we’re going to continue, sort of, at these levels and perhaps even greater, if we can find the right opportunities.

Vance Edelson - Morgan Stanley

Okay. That’s sounds good. Thanks a lot.

Ben Moreland

Thanks.

Operator

Thank you. Our next question comes from Jonathan Atkin with RBC Capital Market. Please, go ahead.

Jonathan Atkin - RBC Capital Markets

Yes good morning. Thanks for the color on the AWS spectrum clearing and some of the build out or leasing activity that you are starting to see. Can you talk about any notable changes in the activity level at the major carriers on their exciting networks, as well as perhaps provide a perspective on WiMAX?

John Kelly

Yeah, Jonathan, as I mentioned in the prepared remarks, what was a delay in 2007 on AWS clearly was the ability for those companies that had successfully bid in the auctions in 2006, that have unfettered access to that spectrum, to deploy either new systems or in the case T-Mobile their 3G network. There was a spectrum clearing process that they had to undergo, essentially to move the people that were already using that spectrum, and in this case there was a private industry, but also government users in that space. And the government user side it took a little longer than I think some had perhaps originally forecast.

And so, it was impossible quite frankly, for them to deploy without them interfering with the incumbent user, that was being moved out and/or interference been created on their networks. So, that really is well under way at this time. And that certainly is something that we have visibility into as we see it to-date for 2008. And can see the activity levels for those companies that were the winners of the AWS spectrum are reinforcing at this point. I think speed is of the essence in building out and adding this new application.

With respect to the question on WiMAX, very clearly Jonathan, we think it is reasonable, given some of the change that has occurred at the company that is the primary advocate of the WiMAX technology today. We believe it's reasonable to expect that there could be some rethinking about the deployment scheduling. Don't think that there is going to be any changes to the test markets, the original markets being deployed, and we certainly see the activity in that particular regard. And that would be something that we can be comfortable with as we look forward to 2008.

But, as you look at the deployment schedule, and what was organically contemplated. We think it is reasonable that, given some of the management shift, there may be some rethinking relative to the pace at which those markets deploy. Now that's something certainly that the specific carrier in question is going to be asked on their call, and certainly will have their perspectives on it. And we will be listening carefully. But it was that one particular element that as we looked forward into 2008, we didn't have enough visibility to be comfortable with that in the outlook.

Jonathan Atkin - RBC Capital Markets

And then in terms of conventional network activity by the big four, any changes recently compared to say the first half of the year?

Ben Moreland

What's interesting is, we try not to get into too much specific details Jonathan about each specific carrier. But what I would say is this most recent wireless data service trends are quite frankly being manifested in some of what we see these carriers are planning for 2008.

In essence, the carriers I think are very definitely, the other big four carriers are very definitely committed to in showing that the wireless data experience that their customers have is going to be as robust, as what they have been trying to do on the both side of the equation. And that does require additional build out. We're beginning to see if there is some capacity building taking place to ensure that geographic areas that currently have EV-DO or UMTS systems are, in fact, enhanced and some additional expansion into market that don’t have those technologies deployed currently.

A little more of the capacity on the side of the equation at this juncture than pure expansion into new markets, but there is still the priority set of new markets having 3G look deployed from the outset. So that, I think, is going to be continuing trend into 2008, and with one of the carriers they have been fairly consistent. They do pretty much the same level of activity quarter after quarter after quarter. So I wouldn’t expect too much of a ramp-up in their place. But another one of our big four customers, I would expect to see more activity in 2008 than 2007. We are just waiting to see, kind of, what their final 2008 budgets reflect on as we then continue to prepare for the New Year.

Jonathan Atkin - RBC Capital Markets

Thank you. And, then, briefly for Ben, the '07 EBITDA guidance was lowered nominally compared to the higher call revenue and higher cash for guidance. I assume this service is related, but can you elaborate a bit on that?

Ben Moreland

This service is related. And some had maybe gotten a little bit confused and thought it was G&A, it’s not. It’s the ramping of services as we had expected from Q3 to Q4. I realize we don’t give you that guidance. We don’t have that visibility. It is still ramping quarter-to-quarter and, in fact, not insignificantly but it’s not going to ramp at the levels from the second quarter to fourth quarter that we initially thought. And that’s our best judgment of how we're going to finish the year. So, it's going to ramp, sort of, in the range $2 million or $3 million instead of $4 million or $5 million. And that’s the difference in why once we get into the fourth quarter we have to trim the high-end of that EBITDA range.

Jonathan Atkin - RBC Capital Markets

Margins in the business are pretty steady?

Ben Moreland

Yes, yes. It's purely an activity level, and it's growing and has grown as we expected it would across the second half for the year not insignificantly, but, again, based upon initial expectations from the beginning of 2007 and it came in a little light in terms of pace where you finished the year.

Jonathan Atkin - RBC Capital Markets

Thank you.

Operator

Thank you. Next question comes from Jason Armstrong with Goldman Sachs. Please, go ahead.

Jason Armstrong - Goldman Sachs

Great, thanks. Good morning a couple of questions. First just, maybe, how to think about balance sheet positioning in strategic opportunities in light of the comment about credit markets, sort of, 70 to 100 basis points write-off a year method of financing, at least one large transaction that's sitting out there. You stay around eight times just got buyback shares to land acquisition et cetera. You still have the willingness and ability to extend the balance sheet for the right deal and maybe put some parameters behind that?

And then second question on '08 guidance, just in terms of how it was constructed from an EBITDA perspective, 100 million increases in rates, 100 million increased in EBITDA. Just how you thought about full through margins versus some of the expense pressure that goes away related to Modeo or Global Signal synergies et cetera? Thanks.

Ben Moreland

Okay, Jason, sure. Let me take both of that in order and John can certainly jump in. On the balance sheet positioning, you know, I think it's very important to reemphasize. As a practice, we do not put in our outlook, the expected deployment of this additional capacity that I talked about. So, it’s in the round numbers of call it a $1.280 billion. We just talked about it on the previous question again, the eight times that capacity at the $100 million of growth in the recurring cash flow. So, we don’t forecast that, and I guess you could well, you could have and then we could had more revenue or EBITDA or alternatively recurring cash flow per share if you are shrinking the share count, but we don’t.

But our view around the credit markets are, the ability to continue to borrow in or around 6.5% on a long term basis, is still very compelling. What we see is the long term growth prospects, certainly of our own stock, based upon our own ability to drive recurring cash flow per share growth as we demonstrated in this outlook. And our longer term views, which are still unchanged, and very consistent with our long term statement of the 20% to 25% growth.

To the extent we would deviate from that and approach an asset acquisition, particularly in size. We would have to believe more of the same and that would be more compelling, more attractive to the long term growth. And it would likely come at a lower initial multiple or higher initial yield, and by definition buying our own stock. And that’s where you are paying a public multiple, which we wouldn’t expect.

So, you probably come with more short term impacts, in terms of benefit against the cost of debt in the short-term. And so, we remain very engaged and committed, but I wouldn’t suggest that the cost of debt hasn’t certainly impacted the way we would've analyzed an acquisition. I think we certainly look at that, because again, at a given cost of debt it should ultimately impact how you think about an acquisition at least at the margin.

I hope that answers that question. On EBITDA construction, the easiest way to think about that is take the fourth quarter, annualize sort of fourth quarter either revenue or EBITDA, and roll forward $50 million, which will be the half year convention on the $100 million year-over-year. It is sort of how you get to that number, and while it is a little unusual for us to forecast a 100% incremental margin, because as we've said for many years, that's not long term, probably sustainable. Certainly in 2008, we believe it's sustainable, because we've incurred expenses in 2007 that are not recurring. So, when you look at the year-over-year benefit we think well within reason to expect that cost will run pretty flat.

Maybe there is even some room in that, that's again a very early read on 2008. But we think we are within reason to say that costs are going to run flat comparative to full year 2007, and that's how we get to the 100% incremental margin. And that's part of the benefit of the synergies that we wound through in 2007, but then you don't have it obviously on the run rate basis, you get the benefit for the full year 2008.

Jason Armstrong - Goldman Sachs

Okay. Great, that's helpful, and just on the revenue side sort of what you just talked about constructing the revenue piece. Can you just help frame, what the upside to guidance might be, there is been comments on the call suggesting AWS, you are actually seeing in the pipeline, 1Q '07 or 1Q '08?

Ben Moreland

Yeah, I think it's important, I am happy to do that and I will do it this way, again the theme we want to leave you with is, at this level of 8% revenue growth 14% EBITDA growth, which is consistent revenue growth to 2007. We are forecasting the high end of our recurring cash flow growth per share of 25%.

Now some out there had models that, and by the way that's pretty consistent, that's $100 million of revenue growth, it's pretty consistent with what we have talked about in priors calls and other conferences etcetera. Some had models out there that were substantially above that, for expectations for 2008. And I just wanted to give you a little flavor for kind of how those numbers would in fact work, I mean, for example if leasing were up 20% over 2007 so if we saw a 20% impact on the positive side for the full year, again, starting January 1st to give the full year impact, you know, that would be in and around $15 million to $16 million of out performance. Okay, so that’s the order of magnitude, if you want you go up 20%.

Some of the models I saw would have, sort of, imply 50% increase year-over-year. In order back into the numbers and you know, in all phase face sitting here at the -- beginning in November, we can’t tell you we'd see that today, 50% increase. I mean just we don’t see it. I mean if there is some upside, likely it will come staggered throughout the years. You’ll get some fraction, if it occurs at all. But I just thought it to be helpful to walk everybody through the unit map, again, sort of, that up 20% full year would be $16 million or $15 million. And it’s, of course, half year, in the half of that.

So anyway, I think continued recognition maybe on everybody’s part that the volatility on the up and down from leasing results, many of you heard me say this in conferences, it’s just not there. I mean, given the run rates we have today and the embedded base of free cash flow, the current cash flow, leasing can go up or down 20%. And you frankly hardly feel.

Jason Armstrong - Goldman Sachs

Yeah. That's helpful, Ben. Thanks a lot.

Operator

Thank you. Your next question comes from David Barden with Banc of America. Please. Go ahead.

David Barden - Banc of America Securities

Hey, guys. Thanks a lot and I apologize. I would like to follow-up on that point. Ben, I guess looking at the adjusted EBITDA guidance in '08 and this is not the first time, I think we’ve had these conversations about conservative expectation at the beginning of year and then, kind of, things unfolding more positively. But looking back to 2006 when Crown Castle was standalone company, just EBITDA quarter-to-quarter, kind of, was up $6 million to $7 million in any given quarter that year. And then, obviously, we had an issue with the Global Signal acquisition, but in third quarter EBITDA was up $10 million sequentially. In fourth quarter we got into up $9 million sequentially.

If I annualize fourth quarter number, the sequential rate of growth in adjusted EBITDA would have to fall to below $4 million in each of the coming four quarters. And so, I guess when you guys say you believe that that’s going to happen, I think, it bags the question, why will…

Ben Moreland

It's very dangerous to annualize fourth quarter, for example. When you will start getting into shortcuts, I am happy it can walk you through as much details as you can tolerate. But for example, we are annualizing, if you annualize fourth quarter and that’s the shortcut method which I would suggest is easy. But remember you are annualizing of a ramped up service margin, but now you are going to annualize for full year 2008. So it does, sort of, make that challenging.

When we wouldn’t, again, we don’t give you this guidance. I know you are slide is blank, but we wouldn’t necessarily believe that you would annualize service margin for the full year 2008, up from fourth quarter 2007 that would be in and around substantial increase in service margin that we expected to deliver this year versus next year. So, and again we are forecasting, again, I know you can't see this. We are forecasting service margins to be roughly comparable to 2007.

So, it gets a little bit challenging. I think the simplest thing to do is, sort of, go to the -- because EBITDA has G&A and service margin impacting it. Simplest thing to do is, sort of go to site rental revenue and site rental margin and say, okay, what doesn’t that look like? And that 100 million of growth in both those numbers is, we believe consistent with kind of what we've said and what we've delivered in 2007. And, again, could it be higher? Yeah, it could be. But I think it's important to, again, frame that order of magnitude around what percentage of leasing do you expect outperform for -- if any of these other events would have happened early enough in the year to make it impactful…

David Barden - Banc of America Securities

Perfect, and just a follow-up again on the kind of, it sounds like an assertion, there is an appetite to kind of go back into the buyback market. But obviously, there are other decisions that need to be made from kind of accepting or rejecting asset opportunities that are out there today. I guess what I heard was that this decisions or actions that might be taken sooner rather than later, but I guess, is this more of a '08 kind of event? Do you want to have another board meeting before decisions are made or are you guys in a position to take action and make decisions today?

Ben Moreland

Are you referring to just deployment of the capital in general, so it should be around share purchases or acquisitions?

David Barden - Banc of America

Yeah, obviously there have been a number of reports about the T-Mobile assets out there, and that there is a second round of bidding that’s occurring currently. And do you have to wait to see how that plays out before you are in the market, maybe looking at equity buybacks or can you do that?

Ben Moreland

We’re not going to get into what we’re doing in particular, and I would say it just from the corporate governance matter, we do have ready access to our Board and get decisions kindly timely as required. And that sort of has been always our approach, but in terms of commenting on specifically which direction we may be leaning, I am just not going to get into that, at this point I just can't.

David Barden - Banc of America

Thanks Ben.

Ben Moreland

Okay.

Operator

Thank you. Your next question comes from Brett Feldman with Lehman Brothers. Please, go ahead.

Brett Feldman - Lehman Brothers

Yeah, thanks for taking my question. I just wanted to drill in a little bit more into the cost structure, and I know you sort of alluded to it earlier, but let’s just say your cost of services per tower and they seem to have stabilized on a monthly relative to the prior quarter. Are we kind of at a new run rate level now, we can sort of look at that and begin to extrapolate that forward, based on historical trends or is there any reason why that might change in the near term?

Ben Moreland

No, I think Brett, we’re very comfortable with these run rates, and I would tell you, we are probably not done, working on them on the positive. But I think we are very comfortable with these run rates and should not be probably a pretty good places start for as you go forward.

Brett Feldman - Lehman Brothers

I mean other than purchasing more land, how well else you get leverage on that cost item?

Ben Moreland

Well, we are continuing to get better and more efficient around repairs and maintenance activities. Which is the bulk of our spend there, after ground lease expense, you look at ground leased expense it is in and around $300 million a year for the overall company, repairs and maintenance are in and around $45 million to $50 million a year, in the new combined company.

You have got property taxes. That's an ongoing process to try to mitigate property taxes. So, those are your biggest items, you look at headcounts salary, sort of SG&A benefits, all of that combined is give or take $135 million on a $550 million total cost structure, which includes the ground leases.

So, there are things you can certainly do around being efficient, and we expect to get that. That is part and parcel of the reason for the 100% incremental margin forecast. But again, most of the 100% margin comes from again expenses that were incurred in '07. We don't think we'll replicate in '08. Therefore, you get that nice run rate benefit year-to-year.

But I do expect as we go through time, we will find more places to become more efficient. And we would see run rates. I have expectation maybe you will see them come down on cost and asset basis.

Brett Feldman - Lehman Brothers

That's great, and do you think really you have been buying 11, 12 to 14 times, is that, did I get that right?

Ben Moreland

Yeah, that's generally the average, it depends on the transaction, but that's in and around that average. And we would certainly continue to do that, it's a favorable way to refinance, and off balance sheet obligation on balance sheet if you will.

Brett Feldman - Lehman Brothers

And what about pricing of the private tower that’s out there? Have you seen them changing much deep into gain to a level one, little bit or not, nearly as many opportunities as you previously seen?

Ben Moreland

There are still opportunities. Yeah, we still see opportunities and we are actively looking at pretty much everything in the market today. We didn’t really do anything of any significance in the third quarter but we have a pipeline at any given time that we are pursuing. And we employ, sort of, all our internal tools in terms of looking at long-term leasing demand against run rates that exists on the sites those were today, you know a mature site with lots of revenue per power, you might expect to come at a lower multiple than an amateur site where you, kind of, have lot of lease up potential. So we are constantly trying to manage that balance but there is some active pipeline and we’ve got a team working on it. And I would expect part of our capital investment allocation in 2008 will go through those smaller type acquisitions.

Brett Feldman - Lehman Brothers

Okay, and then, one, sort of, all of the questions here. One of your customers has actually indicated that some of the cash equivalents they had in their balance sheet or maybe not as liquid as their broker had led them to believe that they were. Considering what’s going on in some parts of the credit markets and the money markets, I am just curious how do you manage your cash? When you have cash in the balance sheet, is that cash or you have lot of it in cash equivalence and marketable securities? And if so, have you actually had any trouble liquidating those securities?

Ben Moreland

Yeah. It’s an overnight investment and they are all A1/P1 graded paper. And we’ve had absolutely no problem rolling any of that over or had any price deterioration in any of our investments. And we have double checked that, after that equivalents like probably every corporate in America. And that sounds very pleasingly that our investments are, in fact, in compliance with our board authorization as you expect they would be and we've had absolutely no issue there.

Brett Feldman - Lehman Brothers

Okay. So you didn’t have to reallocate something that you thought was short-term item into long-term assets, this quarter?

Ben Moreland

Not at all, nothing there.

Brett Feldman - Lehman Brothers

Okay. That’s good. Okay, great. Thanks, guys.

Operator

Thank you. Our next question comes from Rick Prentiss with Raymond James and Associates. Please, go ahead.

Rick Prentiss - Raymond James and Associates

Hi. Good morning, guys.

Unidentified Company Representative

Rick.

Rick Prentiss - Raymond James and Associates

Tough questions for you when I keep drilling down, I guess on the horse that everybody was beaten a little bit, there the '08 revenue guidance. I appreciate your comment about, even if you see pretty big revenue increases. It's 15 million to 16 million delta on the revenue side, but as we look at it, I think there maybe one just to get the conservative item handle upfront. Historically, I found you guys for a long time, kind of, maybe 1% swing it looks like what we saw in the '07 timeframe to, kind to keep year-over-year revenue growth. It will take it up quarter-over-quarter, any thoughts you guys are getting more conservative in your historical trends?

Ben Moreland

No, I want to be careful about that. We want to make sure we leave you with the right notion. We are not timid or conformed, or haven't a sequentially more negative view than we had on the last call. So I think that’s very important. So anybody that would take away the view that we are worried about 2008 would be misstating our view. As you suggest that 1% revenue growth delta, could it be there? Sure it could.

If that type of activity were to manifest itself early in less than a year, but as we sit here today, again what can you get comfortable in good faith putting out there. I mean, you know, I'll just tell you in all honesty, Rick, and for everybody listening, we had an active debate about whether or not we just widened out the range to include that 1% growth, when we can't -- we really don’t have visibility into the second half of '08, and so you could have made a, put a $30 million revenue range out there, instead of $15 million and captured that in the upside.

And maybe that would have made everybody a little sleep better at night. That's just not been our approach frankly. We will take what we see, in our view it is more than sufficient to drive the kind of returns that we have committed to ourselves and to the street to provide. And if it is there, then we’ll adjust that expectation across the balance of the year. It's just an approach, I mean others can take a different approach, and put a wider range out there and then you work to the higher range over the course of the year.

John Kelly

I think the one point echo is well, or it is that when we've talked on conference calls in past, we talk about the 1.25 indicated need for our towers in the form of new tenants from project sell point.

The only downside to that entire forecasting methodology is, we can’t tell you with absolute precision what years those are all going to be taken down. There is a need to for this, 1.25 tenants we believe. But as far as what the rate and what the pace of that leasing is going to be from year-to-year, that’s of course much more difficult to predict.

And when you look across the wireless carrier landscape, what you find is and you and many others certainly follow the wireless carriers as you do the tower companies, is that there is really only one big wireless carrier that is incredibly consistent in their capital spend on new sites year-to-year, quarter-to-quarter. And so you can look to them for what you would expect they will do in the New Year.

But many other carriers have more of a fits and starts kind of a capital program, relative to the kinds of activities that are going to impact tower leasing. And so in some years, there is just a flurry of activity, and then there seems to be a digestion and a consideration of what that level of activity should be following that flurry. And they slow down a little bit, and then they fix up.

But that's difficult for us, because of the pace changes, what we do is and this is entirely consistent with how we handled that in prior years, is we give you an outlook here in this October call for the New Year, and give an indication as to whether or not we see it getting worst than the current year we just experienced or because we have absolutely visibility significantly better.

But for the most part, we have reiterated the point that is important for us to wait until the capital budgets for the wireless carriers for the New Year have been released, and have also been distributed to their field areas. So that we can begin the start seeing with granularity, exactly what's going to happen in the New Year, and so as we look forward to 2008 as Ben pointed we certainly don't see the year being worst than 2007.

And there are certainly things that are going on that would suggest it could be a better year. But we don't have all of carriers through their positive process and distributing capital budget and as such we forecasted 2008 on the basis of similar growth and top client revenue, and leasing as was the case in 2007.

And then by virtue of the efficiencies, through the integration efforts coming to a close, and so forth, we are able to translate that rather effectively, 100% EBITDA and of course cash flow per share growth at the high end of the 20% 25% range and that is a consistent methodology to what we have done in the prior years.

Richard Prentiss - Raymond James & Associates

So, just to continue down that path a little bit further if I may, John when you mentioned that, there was just name Sprint executive change, could be rethinking their deployment, did you guys pull out of your '08 thought process per year numbers all launches for Sprint WiMAX except for the DC, Chicago, data markets.

John Kelly

The short answer to that Rick is, we are waiting for more clarity from Sprint as to what the specific deployment schedule beyond these beta markets will be before we are going incorporate that in to our outlook for 2008. So, yes we are not focusing on large scale WiMAX deployments in our outlook until such times as we get greater visibility from Sprint itself.

Richard Prentiss - Raymond James & Associates

Okay. That helps a great deal because I think a lot of us maybe we are thinking Sprint WiMAX could be say 3000 sale sides in '08. If you guys got say at 20% share say 12,000 year, that could be a $7 million kind of revenue swing, if you pull that out, waiting to see who is running Sprint, is the Board committed to building this out, those Clearwire pick it up etcetera. So, is that out of your numbers right now?

John Kelly

That's right.

Richard Prentiss - Raymond James & Associates

Okay. And then just a final question I swear, on the guidance. A lot of people have been very spooked about all the equipment companies that have being pre-releasing, warning, firing 4000 or more people at both Lucent-Alcatel. Can you talk to us a little bit about, what we are seeing from equipment guys, and there are concerns about getting equipment sales into the carriers, versus your comfort that '08 is no worth than '07 and hopefully better?

John Kelly

Yeah, I think that Rick as you know there is a pretty big difference between the electronics infrastructure providers and the level of competition in that space between new foreign electronics firms. Some of the equipment is now coming out of China, that’s adding to the mix sort of American and European providers of the electronics, and the whole tower side of the equation.

That is part of the issue clearly, and they will be much more eloquent in their description of what is going on than I can be, is just a level of competition on electronic side that otherwise impacts the economics associated with deploying new applications on existing networks to a new networks to begin with, just in terms of pricing and margins on that particular side of the business.

The trends associated with growth on the wireless industry are continuing, as I have indicated before in my prepared comments, with the move ever increasing to deploy robust state in networks. The need for robust deployments is there, but you can deploy these sites less expensively on a electronic side than you could originally, because of what’s been going on in that space over the years.

And that certainly is a backdrop, perhaps to some of the announcements that you see coming from electronics manufacturers, but by the same token the need for protocol height, when you are deploying either a new network or whether you are deploying an enhancement to an existing network for things like data, is an absolute. And the need for towers as such is an absolute and the ability to build towers in this country is not getting any easier year-after-year, quarter-to-quarter. And as such I think the two sectors are differentiated, and the reason why the tower state has a different dynamic than you would see on the electronics infrastructure side.

Richard Prentiss - Raymond James & Associates

Yeah it’s nice, I mean your revenue for '08, [loss] booked as opposed be an equipment company, who gets today 90 and might still need to make a quarter?

John Kelly

Yes it is.

Richard Prentiss - Raymond James & Associates

One, final question for Ben on the investments, I think I understood pretty loud and clear that obviously you guys have not included the ability to put the balance sheet to work into your guidance. Is it fair to kind of bracket it to say when you put your balance sheet to work, whether its stock, land, buy, build that we could see possibly 5% to 10% move in that free cash flow per share as you deploy that kind of balance sheet to put it work versus $1.70 per share?

Ben Moreland

The way the math would work is the cash that you would put to work as opposed to borrowings, definitely obviously brings that number up in the vicinity of, compelling upon what's you are doing with it, $0.03 to $0.05, which put us close to 30% growth year-over-year, if you were to do that.

When you start borrowing as we keep agonizing overall on these calls, have reported in the short-term impact its negative, depending upon what you bought with it. Obviously if you are borrowing at 6.5% and you are buying stock on a 20 plus multiple then it's short-term dilutive, to those numbers. And so, the 2008 full year number, depending upon the mix of cash versus borrowings could move around few pennies up or down depending upon the mix.

Rick Prentiss - Raymond James

I guess I should have talked '09, through more value, you guys are up '09 right now, and obviously the short-term effect will hopefully then start playing out as you look outside of it?

Ben Moreland

Just like the standalone in the '08 numbers, where the '07 dilution affect of the borrowings is obviously watched through, so the '08 numbers are that much stronger.

Rick Prentiss - Raymond James

Okay, good luck guys.

Ben Moreland

Thanks Rick.

Operator

Thank you. Next question comes from Gray Powell with Wachovia Securities. Please, go ahead.

Gray Powell - Wachovia Securities

Hi, guys thanks for taking the question. I am not going to ask about guidance, but I am just going to ask about the timing of leasing demands going in 2008? And specifically, if I look back over to 2007 trends, we saw leasing demand increase each quarter starting of pretty small at the beginning of the year, and then increasing, particularly going into Q4. So, as we are looking at 2008, do you guys think that will be the same case again next year or do you think leasing demand will be more evenly distributed, particularly as AT&T and T-Mobile appeared to be getting more aggressive on their 3G overlays?

John Kelly

Gray based on what we’re seeing in the fourth quarter, that 2008 is going to roll out differently than 2007. Were as you point out, we had anticipated and it came true that 2007 is going to be characterized as a backend loaded year, as various different activities were been sorted out. Most specifically the AWS clearing, that been well underway as we have discussed, I think what you are seeing in 2008, is more of the leasing activity at least from where we see it occurring in the first half, and then perhaps slowing a little bit towards the second half as people are otherwise focusing more on what they are going to be doing with the 700mhz spectrum.

However, that plays out whoever captures that, that will start to become part of their longer term capital planning and they may in fact delay some activity towards the back half of the year as they start to focus on what does that 700mhz do for them relative to any enhancements that they were planning for their networks because it will. There won't be electronics necessarily available, nor will that spectrum might have been cleared by the second half of 2008, as I discussed the broadcasters don’t have to clear out 2009. But if you are a winner of that particular spectrum in whatever blocks they might be a winner. It could in fact have an impact. So I think 2008, it's going to rollout a little differently and will be more in the first part than perhaps in the second half. And that's certainly how we're fundamentally looking at the year.

Gray Powell - Wachovia Securities

Okay. That's makes a lot of sense. And then, just kind on top of that like I guess next year and even longer term, where do you see the bigger driver of growth, is it going to be new tenants coming on the towers or leasing amendments from existing tenants?

Ben Moreland

You know that's a great question, Greg. And, you know, what was interesting was in the third quarter amendments has reasoned pretty much in the first half of this year and certainly in 2006 but was running close to 40% of total new leasing activity. In the third quarter amendments were 20% of our total new leasing activity. And so that that was backed down to what has been, kind of, a historical average pre-2006 where new leasing activity, new installations on towers were the much larger percentage, the 80% and amendment were 20 and then it built the other way and now it's coming back to what the previous historical trends were.

As we move forward, I think that what we probably be seeing is a slight increase in the percentage on amendments. I think it could be upwards of 30% as opposed to the 20% that we're seeing right now. As some of these networks are simply enhancing existing sites with new tenants in line for new applications but I think that it's not going to go quite above the 60, 40s that we were seeing in 2006. And that's because I think that a lot of the effort today that wireless carriers are looking at in enhancing their networks for data is around inbuilt capacity for these high bandwidth intensive applications.

There is a need for a very robust signal, number one and as these minute of use trends continue the need for capacity. And so that’s not something that you necessarily get, which is simply enhancing an existing site, that’s something that you get with just putting a site and adding a new one. And so I think that whereas it could take up a little bit new licensing activity, it’s going to be more in the 70% range than this 80%.

Gray Powell - Wachovia Securities

Okay, great. Thank you very much.

Operator

Thank you. Your next question comes from Michael Rollins with Citigroup. Please, go ahead.

Michael Rollins - Citigroup

Hi. Thank you. Good morning. Just a quick follow-up, you've already explained it was on the incremental revenue growth assumptions in your guidance. But I guess one thing that that I think what surprising is, if you can look at what you described when you brought Global Signal, the idea of improving performance overtime and being accretive in future periods. Why wouldn’t all other things be in terms ofsite leasing activity your ability to grow revenue year-over-year be better a year after completing the Global Signal acquisition. Presumably you had that running at much fuller speed than when you bought that property. You would still be executing the core business Australia should presumably still be doing what you have saw. Why wouldn’t there be accretion in the incremental amount of revenue from that Global Signal acquisition? Thanks.

Ben Moreland

Mike, the math is -- you are exactly correct. They are -- on a given level of demand, given the lower run rates with Global Signal you’d expect there had been accretion to the growth rate. And, in fact, we probably don't have that level of granularity for '08 view to be able to demonstrate that to you. But, in fact, that’s probably already occurring. In fact, of the accretion to the growth rate and I can tell you that thus far through the year the Global Signal assets are outperforming our, sort of, regional expectation of what they would have done and that’s to the year of integration. So, as you going forward to your point do you better? Perhaps, but again as our sales team is likely to remind me, we can't manufacture demand. And so we have done the best we can to forecast the demand we see.

But your point is exactly right to give reminder that across this tower footprint and given level of demand across the GSO assets will drive a higher growth rate in across the legacy Crown side. And what's imply there in that 8% growth, I think, frankly, it's probably already contributing somewhat to that, because remember that 100 million of growth across an ever increasing base would obviously bring that percentage down every year. And then, once you are doing something in adding assets you are doing something else. But on cost and asset basis, that percentage change is going to decline every year.

That’s why we are trying to remind everybody to focus on the nominal numbers as much as the percentages in down and till you ultimately get to the one that matters, which is our view is the percentage change in recurring cash flow per share, which sort of normalize this for everything based upon how you finance the company. Probably the best way I could answer that is we think we are seeing that impact for the accretive growth on the global assets. And that will likely continue as we add revenue comparably to the Crown side going forward.

Michael Rollins - Citigroup

Thank you.

Operator

Thank you. And our final question comes from David Janazzo with Merrill Lynch. Please, go ahead.

David Janazzo - Merrill Lynch

Good morning. Ben you had mentioned the significant services ramp, how reliable an indicator is that for, say, on revenues? And how do you fractured into your outlook?

Ben Moreland

It's pretty reliable, I mean, we see that as the pre-activity that it’s a tax on application, ultimately is the lease that commences in our accounting system and install on our site. And so that ramp we continue to note throughout the Q3 and Q4, again, not quite as the pace we'd initially expected like I mentioned earlier, but still ramping and not insignificantly through the year. So that does bag the question then, I think its on many of your minds, if that’s the case in Q4 than what is at that, sort of, could roll forward in the Q1 to -- on in this 2008.

We think it does. Again, it gets somewhat fussy in the second half of 2008 as John was just mentioning. And that’s where you get a little bit more tentative about putting that same level of, sort of, fourth quarter activity all the way through 2008. It's just, it's impossible to do that with any certainty today. And again, we could have just wind-up the range with less confidence around the number but we decided to take this approach. But it is definitely an indicator of activity

David Janazzo - Merrill Lynch

Thank you.

John Kelly

Alright, well, with that I think what we’ll do is conclude the call. We’re looking forward to finishing up the year strong and reporting to you in the fourth quarter how we did for the full year and any additional visibility, we have at that juncture on 2008 and certainly it is a topic on a lot of people's minds. But we thank you all for joining us on the call today. And look forward to talking to again in the near future.

Operator

Thank you. Ladies and gentlemen that will conclude today’s teleconference. We do thank you again for your participation and at this time you may disconnect.

Copyright policy: All transcripts on this site are copyright Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.