Operating Segments and Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2022

Operating Segments and Concentrations of Credit Risk [Abstract]

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 more than 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 (1) 120,000 small cells on air or under contract and (2) 85,000 route miles of fiber primarily supporting small cells and fiber solutions geographically dispersed throughout the U.S.

The measurements of profit or loss used by the Company's chief operating decision maker ("CODM") 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 costs of operations, excluding stock-based compensation expense and prepaid lease purchase price adjustments recorded in consolidated site rental costs of operations. The Company defines segment services and other gross margin as segment services and other revenues less segment services and other costs of operations, excluding stock-based compensation expense recorded in consolidated services and other costs of operations. The Company defines segment operating profit as segment site rental gross margin plus segment services and other gross margin, and segment other operating (income) expense, 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, interest income, other income (expense), income (loss) from discontinued operations, and stock-based compensation expense, and (2) reconciles segment operating profit to income (loss) from continuing operations 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.

	Year Ended December 31, 2022
	Towers		Fiber		Other		Consolidated Total
Segment site rental revenues	$	4,322	$	1,967			$	6,289
Segment services and other revenues	685		12				697
Segment revenues	5,007		1,979				6,986
Segment site rental costs of operations	918		650				1,568
Segment services and other costs of operations	447		9				456
Segment costs of operations(a)(b)	1,365		659				2,024
Segment site rental gross margin	3,404		1,317				4,721
Segment services and other gross margin	238		3				241
Segment selling, general and administrative expenses(b)	115		190				305
Segment operating profit (loss)	3,527		1,130				4,657
Other selling, general and administrative expenses(b)					$	317	317
Stock-based compensation expense					156		156
Depreciation, amortization and accretion					1,707		1,707
Interest expense and amortization of deferred financing costs					699		699
Other (income) expenses to reconcile to income (loss) from continuing operations before income taxes(c)					87		87
Income (loss) from continuing operations before income taxes							$	1,691
Capital expenditures	$	185	$	1,058	$	67	$	1,310
Total assets (at year end)	$	22,210	$	16,010	$	701	$	38,921
Total goodwill (at year end)	$	5,127	$	4,958	$	—	$	10,085

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

(b)Segment costs of operations for the year ended December 31, 2022 excludes (1) stock-based compensation expense of $28 million and (2) prepaid lease purchase price adjustments of $16 million. For the year ended December 31, 2022, segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense of $128 million.

(c)See consolidated statement of operations and comprehensive income (loss) for further information.

	Year Ended December 31, 2021
	Towers		Fiber		Other		Consolidated Total
Segment site rental revenues	$	3,804	$	1,915			$	5,719
Segment services and other revenues	601		20				621
Segment revenues	4,405		1,935				6,340
Segment site rental costs of operations	889		633				1,522
Segment services and other costs of operations	414		17				431
Segment costs of operations(a)(b)	1,303		650				1,953
Segment site rental gross margin	2,915		1,282				4,197
Segment services and other gross margin	187		3				190
Segment selling, general and administrative expenses(b)	107		174				281
Segment operating profit (loss)	2,995		1,111				4,106
Other selling, general and administrative expenses(b)					$	290	290
Stock-based compensation expense					131		131
Depreciation, amortization and accretion					1,644		1,644
Interest expense and amortization of deferred financing costs					657		657
Other (income) expenses to reconcile to income (loss) from continuing operations before income taxes(c)					205		205
Income (loss) from continuing operations before income taxes							$	1,179
Capital expenditures	$	221	$	956	$	52	$	1,229
Total assets (at year end)	$	22,318	$	15,876	$	846	$	39,040
Total goodwill (at year end)	$	5,127	$	4,951	$	—	$	10,078

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

(b)Segment costs of operations for the year ended December 31, 2021 excludes (1) stock-based compensation expense of $22 million and (2) prepaid lease purchase price adjustments of $18 million. For the year ended December 31, 2021, segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense of $109 million.

(c)See consolidated statement of operations and comprehensive income (loss) for further information.

	Year Ended December 31, 2020
	Towers		Fiber		Other		Consolidated Total
Segment site rental revenues	$	3,497	$	1,823			$	5,320
Segment services and other revenues	500		20				520
Segment revenues	3,997		1,843				5,840
Segment site rental costs of operations	866		620				1,486
Segment services and other costs of operations	429		12				441
Segment costs of operations(a)(b)	1,295		632				1,927
Segment site rental gross margin	2,631		1,203				3,834
Segment services and other gross margin	71		8				79
Segment selling, general and administrative expenses(b)	100		186				286
Segment other operating (income) expense(c)	—		(362)				(362)
Segment operating profit (loss)	2,602		1,387				3,989
Other selling, general and administrative expenses(b)					$	283	283
Stock-based compensation expense					133		133
Depreciation, amortization and accretion					1,608		1,608
Interest expense and amortization of deferred financing costs					689		689
Other (income) expenses to reconcile to income (loss) from continuing operations before income taxes(d)					200		200
Income (loss) from continuing operations before income taxes							$	1,076
Capital expenditures	$	335	$	1,232	$	57	$	1,624
Total assets (at year end)	$	22,242	$	15,746	$	780	$	38,768
Total goodwill (at year end)	$	5,127	$	4,951	$	—	$	10,078

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

(b)Segment costs of operations for the year ended December 31, 2020 excludes (1) stock-based compensation expense of $24 million and (2) prepaid lease purchase price adjustments of $18 million. For the year ended December 31, 2020, segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense of $109 million.

(c)See note 15 for further information.

(d)See consolidated statement of operations and comprehensive income (loss) 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.

	Years Ended December 31,
	2022		2021		2020(a)
T-Mobile	38	%	35	%	36	%
AT&T	18	%	20	%	22	%
Verizon Wireless	18	%	20	%	19	%
Total	74	%	75	%	77	%

(a)For the year ended December 31, 2020, revenues attributable to T-Mobile include revenues previously derived from Sprint. On April 1, 2020, T-Mobile and Sprint announced the completion of their previously disclosed merger.

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 2).

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 and Verizon Wireless 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.