Operating Segments

3 Months Ended

Mar. 31, 2019

Segment Reporting Disclosure [Text Block]

Operating Segments

The Company's operating segments consist of (1) Towers and (2) Fiber. The Towers segment provides access, including space or capacity, to the Company's approximately 40,000 towers geographically dispersed throughout the U.S. The Towers segment also reflects certain services relating to the Company's towers, consisting of site development services and installation services. The Fiber segment provides access, including space or capacity, to the Company's approximately 70,000 route miles of fiber primarily supporting small cell networks and fiber solutions geographically dispersed throughout the U.S.

The measurements of profit or loss used by the Company's chief operating decision maker to evaluate the performance of its operating segments are (1) segment site rental gross margin, (2) segment services and other gross margin and (3) segment operating profit. The Company defines segment site rental gross margin as segment site rental revenues less segment site rental cost of operations, which excludes stock-based compensation expense and prepaid lease purchase price adjustments recorded in consolidated cost of operations. The Company defines segment services and other gross margin as segment services and other revenues less segment services and other cost of operations, which excludes stock-based compensation expense recorded in consolidated cost of operations. The Company defines segment operating profit as segment site rental gross margin plus segment services and other gross margin, less selling, general and administrative expenses attributable to the respective segment. All of these measurements of profit or loss are exclusive of depreciation, amortization and accretion, which are shown separately.

Costs that are directly attributable to Towers and Fiber are assigned to those respective segments. Additionally, certain costs are shared across segments and are reflected in the Company's segment measures through allocations that management believes to be reasonable. The "Other" column (1) represents amounts excluded from specific segments, such as asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, gains (losses) on retirement of long-term obligations, net gain (loss) on interest rate swaps, gains (losses) on foreign currency swaps, interest income, other income (expense), income (loss) from discontinued operations, and stock-based compensation expense, and (2) reconciles segment operating profit to income (loss) before income taxes, as the amounts are not utilized in assessing each segment’s performance. The "Other" total assets balance includes corporate assets such as cash and cash equivalents which have not been allocated to specific segments. There are no significant revenues resulting from transactions between the Company's operating segments.



	Three Months Ended March 31, 2019								Three Months Ended March 31, 2018
	Towers		Fiber		Other		Consolidated Total		Towers		Fiber		Other		Consolidated Total
Segment site rental revenues	$	805	$	414			$	1,219	$	764	$	389			$	1,153
Segment services and other revenues	203		4				207		142		4				146
Segment revenues	1,008		418				1,426		906		393				1,299
Segment site rental cost of operations	211		140				351		211		126				337
Segment services and other cost of operations	121		3				124		82		2				84
Segment cost of operations^(a)(b)	332		143				475		293		128				421
Segment site rental gross margin	594		274				868		553		263				816
Segment services and other gross margin	82		1				83		60		2				62
Segment selling, general and administrative expenses^(b)	26		48				74		26		43				69
Segment operating profit (loss)	650		227				877		587		222				809
Other selling, general and administrative expenses^(b)					$	55	55						$	46	46
Stock-based compensation expense					29		29						26		26
Depreciation, amortization and accretion					394		394						374		374
Interest expense and amortization of deferred financing costs					168		168						160		160
Other (income) expenses to reconcile to income (loss) before income taxes^(c)					15		15						85		85
Income (loss) before income taxes							$	216							$	118
Capital expenditures	$	119	$	355	$	6	$	480	$	96	$	262	$	12	$	370
Total assets (at period end)	$	22,114	$	14,930	$	734	$	37,778	$	17,868	$	13,883	$	499	$	32,250


(a)	Exclusive of depreciation, amortization and accretion shown separately.

(b)

Segment cost of operations for the three months ended March 31, 2019 and 2018 excludes (1) stock-based compensation expense of $6 million and $7 million, respectively, and (2) prepaid lease purchase price adjustments of $5 million, for both periods. For the three months ended March 31, 2019 and 2018 segment selling, general and administrative expenses exclude stock-based compensation expense of $23 million and $19 million, respectively.


(c)	See condensed consolidated statement of operations for further information.