Operating Segments and Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2023

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. See note 16 to our consolidated financial statements for a discussion of the Company's July 2023 restructuring plan, which included discontinuing installation services as a Towers product offering. The Fiber segment provides access, including space or capacity, to the Company's approximately (1) 115,000 small cells on air or under contract and (2) 90,000 route miles of fiber primarily supporting small cells and fiber solutions geographically dispersed throughout the U.S.

The measurement of profit or loss used by the Company's chief operating decision maker ("CODM") to evaluate the performance of its operating segments is segment operating profit (loss). Additionally, the Company CODM also reviews segment site rental gross margin and segment services and other gross margin. The Company defines segment operating profit (loss) as segment site rental gross margin plus segment services and other gross margin, and segment other operating (income) expense, less segment selling, general and administrative expenses. 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, net and amortization of 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, net recorded in consolidated services and other costs of operations. All of these measurements 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 restructuring charges (credits), 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, net, gains (losses) on retirement of long-term obligations, interest income, other income (expense), stock-based compensation expense, net and certain selling, general and administrative expenses, and (2) reconciles segment operating profit (loss) 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.

	Year Ended December 31, 2023
	Towers		Fiber		Other		Total
Segment site rental revenues	$	4,313	$	2,219			$	6,532
Segment services and other revenues	421		28				449
Segment revenues	4,734		2,247				6,981
Segment site rental costs of operations	943		686				1,629
Segment services and other costs of operations	294		12				306
Segment costs of operations(a)(b)	1,237		698				1,935
Segment site rental gross margin	3,370		1,533				4,903
Segment services and other gross margin	127		16				143
Segment selling, general and administrative expenses(b)	104		194				298
Segment operating profit (loss)	3,393		1,355				4,748
Other selling, general and administrative expenses(b)					$	333	333
Stock-based compensation expense, net					157		157
Depreciation, amortization and accretion					1,754		1,754
Restructuring charges					85		85
Interest expense and amortization of deferred financing costs, net					850		850
Other (income) expenses to reconcile to income (loss) from continuing operations before income taxes(c)					41		41
Income (loss) from continuing operations before income taxes							$	1,528
Capital expenditures	$	194	$	1,175	$	55	$	1,424
Total assets (at year end)	$	21,550	$	16,308	$	669	$	38,527
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, 2023 excludes (1) stock-based compensation expense, net of $29 million and (2) prepaid lease purchase price adjustments of $16 million. For the year ended December 31, 2023, segment selling, general and administrative expenses and other selling, general and administrative expenses exclude stock-based compensation expense, net of $128 million.

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

	Year Ended December 31, 2022
	Towers		Fiber		Other		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, net					156		156
Depreciation, amortization and accretion					1,707		1,707
Interest expense and amortization of deferred financing costs, net					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, net 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, net of $128 million.

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

	Year Ended December 31, 2021
	Towers		Fiber		Other		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, net					131		131
Depreciation, amortization and accretion					1,644		1,644
Interest expense and amortization of deferred financing costs, net					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, net 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, net of $109 million.

(c)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,
	2023		2022		2021
T-Mobile	38	%	38	%	35	%
AT&T	19	%	18	%	20	%
Verizon Wireless	19	%	18	%	20	%
Total	76	%	74	%	75	%

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 cash equivalents 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 and cash equivalents are 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.