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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 the potential 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 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 vary significantly from those expected. Our statements are made as of today, April 26, 2012, and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, today's call includes discussions of certain non-GAAP financial measures, including adjusted EBITDA, funds from operations, funds from operations per share, adjusted funds from operations and adjusted funds from operations per share. Tables reconciling such non-GAAP financial measures are available under the Investors section of the company's website at crowncastle.com. With that, I'll turn the call over to Jay. Jay A. Brown Thanks, Fiona, and good morning, everyone. As you've seen from our press release and as outlined on Slide 3, we had an excellent first quarter, exceeding the high end of our previously issued guidance for site rental revenue, site rental gross margin and adjusted EBITDA. We completed the acquisition of assets from Wireless Capital Partners, which we refer to as WCP on January 31, and the acquisition of NextG Networks on April 10. And we are making good progress integrating these acquisitions. We believe these acquisitions and the other investments we made during the quarter will enhance long-term AFFO per share.
The strong year-to-date results from our site rental business, together with continued strong results from network services and the completion of the acquisition of NextG and the WCP assets, allow us to increase our 2012 outlook for site rental revenue and adjusted EBITDA by approximately $108 million and $88 million, respectively.Further, we saw a 25% increase in leasing activity in the first quarter of 2012 compared to the same quarter last year with the 4 major carriers in the U.S. accounting for approximately 83% of the activity. Turning to Slide 4. I'd like to highlight a few things from our first quarter results. During the first quarter, we generated site rental revenue of $498 million, up 9% or $41 million from the first quarter of 2011. Approximately 6% of the growth came from new tenant addition, reflecting the increased leasing activity driven by the 4 major U.S. carriers upgrading their networks. The acquisition of the WCP assets contributed approximately 1% to the growth in site rental revenue. Growth from the existing base of business from contracted renewals and contracted escalators net of any churn contributed another approximately 1% to the growth in revenue. Further, we had approximately $5 million of nonrecurring items in the first quarter of 2012 as compared to $9 million in the first quarter of 2011. Site rental gross margin defined as site rental revenues less cost of operation was $375 million, up 11% from the first quarter of 2011, reflecting an incremental margin of 89%. Furthermore, our Services business performed very well, posting another record quarter with the contribution from services gross margin increasing year-over-year by 45%. Adjusted EBITDA for the first quarter of 2012 was $360 million, up 13% from the first quarter of 2011. As shown on Slide 5, AFFO was $198 million, up 13% from the first quarter of 2011 or $0.69 per share, also up 13% from the first quarter of 2011.
As reflected on Slide 6, we significantly exceeded our previously issued outlook for the first quarter for site rental revenue, site rental gross margin and adjusted EBITDA due to outperformance in our core business and the benefit of the acquisition of WCP, which was not included in our outlook for the first quarter.We exceeded our first quarter adjusted EBITDA outlook by $22 million due to an increase in leasing activity in the base business of approximately $7 million, a $6 million contribution from the WCP assets, which was not in our original guidance issued on January 25, 2012. Read the rest of this transcript for free on seekingalpha.com