Operating Segments

9 Months Ended

Sep. 30, 2017

Segment Reporting Disclosure [Text Block]

Operating Segments

The Company's operating segments are (1) Towers and (2) Small Cells. 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 network services relating to the Company's towers, consisting of site development services and installation services. The Small Cells segment provides access, including space or capacity, to the Company's approximately 32,000 route miles of fiber primarily supporting small cell networks and fiber based solutions.

The measurements of profit or loss used by the Company's chief operating decision maker to evaluate the results of operations of its operating segments are (1) segment site rental gross margin, (2) segment network 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 network services and other gross margin as segment network services and other revenues less segment network 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 network services and other gross margin, less general and administrative expenses attributable to the respective segment.

Costs that are directly attributable to Towers and Small Cells are assigned to those respective segments. 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, gains (losses) on retirement of long-term obligations, net gain (loss) on interest rate swaps, gains (losses) on foreign currency swaps, impairment of available-for-sale securities, interest income, other income (expense), cumulative effect of a change in accounting principle, 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 September 30, 2017									Three Months Ended September 30, 2016
	Towers		Small Cells		Other			Consolidated Total		Towers		Small Cells		Other			Consolidated Total
Segment site rental revenues	$	724,813	$	167,950				$	892,763	$	709,603	$	102,429				$	812,032
Segment network services and other revenues	153,001		17,474					170,475		166,979		13,005					179,984
Segment revenues	877,814		185,424					1,063,238		876,582		115,434					992,016
Segment site rental cost of operations	212,037		59,319					271,356		210,322		37,754					248,076
Segment network services and other cost of operations	90,845		14,245					105,090		97,395		10,194					107,589
Segment cost of operations^(a)	302,882		73,564					376,446		307,717		47,948					355,665
Segment site rental gross margin	512,776		108,631					621,407		499,281		64,675					563,956
Segment network services and other gross margin	62,156		3,229					65,385		69,584		2,811					72,395
Segment general and administrative expenses ^(a)	22,490		18,415		41,085			81,990		22,225		14,480		35,526			72,231
Segment operating profit (loss)	552,442		93,445		(41,085		)	604,802		546,640		53,006		(35,526		)	564,120
Stock-based compensation expense					24,681			24,681						22,594			22,594
Depreciation, amortization and accretion					296,033			296,033						280,824			280,824
Interest expense and amortization of deferred financing costs					154,146			154,146						129,916			129,916
Other income (expenses) to reconcile to income (loss) before income taxes^(b)					12,365			12,365						27,379			27,379
Income (loss) before income taxes								$	117,577								$	103,407
Capital expenditures	$	108,625	$	171,650	$	7,876		$	288,151	$	103,679	$	111,885	$	5,617		$	221,181
Total assets (at period end)	$	18,099,103	$	5,927,354	$	6,985,299		$	31,011,756	$	18,466,528	$	3,298,927	$	406,268		$	22,171,723

(a)

Segment cost of operations excludes (1) stock-based compensation expense of $5.9 million and $4.9 million for the three months ended September 30, 2017 and 2016, respectively, and (2) prepaid lease purchase price adjustments of $5.0 million and $5.4 million for the three months ended September 30, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $18.8 million and $17.7 million for the three months ended September 30, 2017 and 2016, respectively.


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



	Nine Months Ended September 30, 2017									Nine Months Ended September 30, 2016
	Towers		Small Cells		Other			Consolidated Total		Towers		Small Cells		Other			Consolidated Total
Segment site rental revenues	$	2,158,994	$	459,511				$	2,618,505	$	2,118,159	$	297,767				$	2,415,926
Segment network services and other revenues	460,593		38,417					499,010		434,042		38,841					472,883
Segment revenues	2,619,587		497,928					3,117,515		2,552,201		336,608					2,888,809
Segment site rental cost of operations	632,705		158,426					791,131		625,331		109,402					734,733
Segment network services and other cost of operations	275,618		31,078					306,696		249,306		30,652					279,958
Segment cost of operations^(a)	908,323		189,504					1,097,827		874,637		140,054					1,014,691
Segment site rental gross margin	1,526,289		301,085					1,827,374		1,492,828		188,365					1,681,193
Segment network services and other gross margin	184,975		7,339					192,314		184,736		8,189					192,925
Segment general and administrative expenses ^(a)	69,125		54,770		121,045			244,940		68,329		45,720		107,161			221,210
Segment operating profit (loss)	1,642,139		253,654		(121,045		)	1,774,748		1,609,235		150,834		(107,161		)	1,652,908
Stock-based compensation expense					66,458			66,458						75,297			75,297
Depreciation, amortization and accretion					880,197			880,197						834,725			834,725
Interest expense and amortization of deferred financing costs					430,402			430,402						385,656			385,656
Other income (expenses) to reconcile to income (loss) from continuing operations before income taxes^(b)					39,955			39,955						112,170			112,170
Income (loss) from continuing operations before income taxes								$	357,736								$	245,060
Capital expenditures	$	317,050	$	514,006	$	20,456		$	851,512	$	318,900	$	279,488	$	15,790		$	614,178

(a)

Segment cost of operations excludes (1) stock-based compensation expense of $12.2 million and $17.6 million for the nine months ended September 30, 2017 and 2016, respectively, and (2) prepaid lease purchase price adjustments of $15.1 million and $16.0 million for the nine months ended September 30, 2017 and 2016, respectively. Segment general and administrative expenses exclude stock-based compensation expense of $54.3 million and $57.7 million for the nine months ended September 30, 2017 and 2016, respectively.


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