Operating Segments and Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2019

Segment Reporting Information [Line Items]

Operating Segments and Concentrations of Credit Risks

Operating Segments and Concentrations of Credit Risk

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 ancillary services relating to the Company's towers, predominately consisting of site development services and installation services. The Fiber segment provides access, including space or capacity, to the Company's approximately 80,000 route miles of fiber primarily supporting small cell networks and fiber solutions geographically dispersed throughout the U.S.

The tables below for the years ended December 31, 2018 and 2017 also give effect to the Historical Adjustments as discussed in note 2. Each of the Historical Adjustments for the years ended December 31, 2018 and 2017 are attributable only to the Towers segment.

	Year Ended December 31, 2019
	Towers		Fiber		Other		Consolidated Total
Segment site rental revenues	$	3,389	$	1,704			$	5,093
Segment services and other revenues	653		17				670
Segment revenues	4,042		1,721				5,763
Segment site rental cost of operations	864		559				1,423
Segment services and other cost of operations	506		11				517
Segment cost of operations(a)(b)	1,370		570				1,940
Segment site rental gross margin	2,525		1,145				3,670
Segment services and other gross margin	147		6				153
Segment selling, general and administrative expenses(b)	96		195				291
Segment operating profit (loss)	2,576		956				3,532
Other selling, general and administrative expenses(b)					$	233	233
Stock-based compensation expense					116		116
Depreciation, amortization and accretion					1,572		1,572
Interest expense and amortization of deferred financing costs					683		683
Other (income) expenses to reconcile to income (loss) before income taxes(c)					47		47
Income (loss) before income taxes							$	881
Capital expenditures	$	543	$	1,473	$	41	$	2,057
Total assets (at year end)	$	22,357	$	15,389	$	711	$	38,457
Total goodwill (at year end)	$	5,127	$	4,951	$	—	$	10,078

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

(b) Segment cost of operations for the year ended December 31, 2019 excludes (1) stock-based compensation expense of $26 million and (2) prepaid lease purchase price adjustments of $20 million. For the year ended December 31, 2019, segment selling, general and administrative expenses exclude stock-based compensation expense of $90 million.

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

	Year Ended December 31, 2018
	(As Restated)
	Towers		Fiber		Other		Consolidated Total
Segment site rental revenues	$	3,196	$	1,600			$	4,796
Segment services and other revenues	558		16				574
Segment revenues	3,754		1,616				5,370
Segment site rental cost of operations	848		525				1,373
Segment services and other cost of operations	415		11				426
Segment cost of operations(a)(b)	1,263		536				1,799
Segment site rental gross margin	2,348		1,075				3,423
Segment services and other gross margin	143		5				148
Segment selling, general and administrative expenses(b)	110		179				289
Segment operating profit (loss)	2,381		901				3,282
Other selling, general and administrative expenses(b)					$	191	191
Stock-based compensation expense					108		108
Depreciation, amortization and accretion					1,527		1,527
Interest expense and amortization of deferred financing costs					642		642
Other (income) expenses to reconcile to income (loss) before income taxes(c)					173		173
Income (loss) before income taxes							$	641
Capital expenditures	$	440	$	1,264	$	35	$	1,739
Total assets (at year end)	$	17,644	$	14,512	$	606	$	32,762
Total goodwill (at year end)	$	5,127	$	4,951	$	—	$	10,078

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

(b) Segment cost of operations for the year ended December 31, 2018 excludes (1) stock-based compensation expense of $25 million and (2) prepaid lease purchase price adjustments of $20 million. For the year ended December 31, 2018, segment selling, general and administrative expenses exclude stock-based compensation expense of $83 million.

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

	Year Ended December 31, 2017
	(As Restated)
	Towers		Fiber		Other		Consolidated Total
Segment site rental revenues	$	2,965	$	769			$	3,734
Segment services and other revenues	471		50				521
Segment revenues	3,436		819				4,255
Segment site rental cost of operations	845		264				1,109
Segment services and other cost of operations	353		41				394
Segment cost of operations(a)(b)	1,198		305				1,503
Segment site rental gross margin	2,120		505				2,625
Segment services and other gross margin	118		9				127
Segment selling, general and administrative expenses(b)	94		89				183
Segment operating profit (loss)	2,144		425				2,569
Other selling, general and administrative expenses(b)					$	167	167
Stock-based compensation expense					96		96
Depreciation, amortization and accretion					1,241		1,241
Interest expense and amortization of deferred financing costs					591		591
Other (income) expenses to reconcile to income (loss) before income taxes(c)					82		82
Income (loss) before income taxes							$	392
Capital expenditures	$	407	$	782	$	28	$	1,217
Total assets (at year end)	$	17,918	$	13,669	$	619	$	32,206
Total goodwill (at year end)	$	5,127	$	4,894	$	—	$	10,021

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

(b) Segment cost of operations for the year ended December 31, 2017 excludes (1) stock-based compensation expense of $20 million and (2) prepaid lease purchase price adjustments of $20 million. For the year ended December 31, 2017, segment selling, general and administrative expenses exclude stock-based compensation expense of $76 million.

(c)

See consolidated statement of operations for further information.

Major Tenants

The following table summarizes the percentage of the consolidated revenues for those tenants accounting for more than 10% of the consolidated revenues. The table below also gives effect to the Historical Adjustments, as discussed in note 2.

	Years Ended December 31,
	2019		2018		2017
			(As Restated)
T-Mobile	22	%	19	%	22	%
AT&T	21	%	20	%	25	%
Verizon Wireless	19	%	20	%	16	%
Sprint	14	%	15	%	23	%
Total	76	%	74	%	86	%

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, restricted cash and trade receivables. The Company mitigates its risk with respect to cash and cash equivalents by maintaining such deposits at high credit quality financial institutions and monitoring the credit ratings of those institutions. The Company's restricted cash is predominately held and directed by a trustee (see note 3).

The Company derives the largest portion of its revenues from tenants in the wireless industry. The Company also has a concentration in its volume of business with T-Mobile, AT&T, Verizon Wireless and Sprint or their agents that accounts for a significant portion of the Company's revenues, receivables and deferred site rental receivables. The Company mitigates its concentrations of credit risk with respect to trade receivables by actively monitoring the creditworthiness of its tenants, the use of tenant leases with contractually determinable payment terms or proactive management of past due balances.