BUSINESS SEGMENTS | BUSINESS SEGMENTS In 2015, as a result of recent investment activity, including signed acquisitions, the Company reviewed and changed its reportable segments to divide its international segment into three regional segments: Asia property, Europe, Middle East and Africa (“EMEA”) property, and Latin America property, resulting in five total segments. The change in reportable segments had no impact on the Company’s consolidated and condensed consolidated financial statements for any periods. However, certain expenses previously reflected in segment selling, general, administrative and development expense have been reclassified and are now reflected as Other selling, general, administrative and development expense. Historical financial information included in this Quarterly Report on Form 10-Q has been adjusted to reflect the change in reportable segments. The Company’s primary business is leasing space on multitenant communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. This business is referred to as the Company’s property operations, which as of March 31, 2016 , consisted of the following: • U.S.: property operations in the United States; • Asia: property operations in India; • EMEA: property operations in Germany, Ghana, Nigeria, South Africa and Uganda; and • Latin America: property operations in Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. The Company has applied the aggregation criteria to operations within the EMEA and Latin America property operating segments on a basis consistent with management’s review of information and performance evaluations of these regions. The Company’s services segment offers tower-related services in the United States, including site acquisition, zoning and permitting services and structural analysis services, which primarily support its site leasing business, including the addition of new tenants and equipment on its sites. The services segment is a strategic business unit that offers different services from the property operating segments and requires different resources, skill sets and marketing strategies. The accounting policies applied in compiling segment information below are similar to those described in note 1 to the Company’s consolidated financial statements included in the 2015 Form 10-K. Among other factors, in evaluating financial performance in each business segment, management uses segment gross margin and segment operating profit. The Company defines segment gross margin as segment revenue less segment operating expenses excluding stock-based compensation expense recorded in costs of operations; Depreciation, amortization and accretion; Selling, general, administrative and development expense; and Other operating expenses. The Company defines segment operating profit as segment gross margin less Selling, general, administrative and development expense attributable to the segment, excluding stock-based compensation expense and corporate expenses. For reporting purposes, the Latin America property segment gross margin and segment operating profit also include Interest income, TV Azteca, net. These measures of segment gross margin and segment operating profit are also before Interest income, Interest expense, Gain (loss) on retirement of long-term obligations, Other income (expense), Net income (loss) attributable to noncontrolling interest and Income tax benefit (provision). The categories of expenses indicated above, such as depreciation, have been excluded from segment operating performance as they are not considered in the review of information or the evaluation of results by management. There are no significant revenues resulting from transactions between the Company’s operating segments. All intercompany transactions are eliminated to reconcile segment results and assets to the consolidated statements of operations and consolidated balance sheets. Summarized financial information concerning the Company’s reportable segments for the three months ended March 31, 2016 and 2015 is shown in the following tables. The “Other” column (i) represents amounts excluded from specific segments, such as business development operations, stock-based compensation expense and corporate expenses included in Selling, general, administrative and development expense; Other operating expenses; Interest income; Interest expense; Gain (loss) on retirement of long-term obligations; and Other income (expense), and (ii) reconciles segment operating profit to Income from continuing operations before income taxes, as the amounts are not utilized in assessing each segment’s performance. Property Total Property Services Other Total Three Months Ended March 31, 2016 U.S. Asia EMEA Latin America (in thousands) Segment revenues $ 851,744 $ 63,216 $ 129,640 $ 223,051 $ 1,267,651 $ 21,396 $ 1,289,047 Segment operating expenses (1) 177,722 33,080 55,659 75,322 341,783 9,004 350,787 Interest income, TV Azteca, net — — — 2,716 2,716 — 2,716 Segment gross margin 674,022 30,136 73,981 150,445 928,584 12,392 940,976 Segment selling, general, administrative and development expense (1) 37,286 6,576 16,152 14,584 74,598 2,916 77,514 Segment operating profit $ 636,736 $ 23,560 $ 57,829 $ 135,861 $ 853,986 $ 9,476 $ 863,462 Stock-based compensation expense $ 28,079 28,079 Other selling, general, administrative and development expense 30,380 30,380 Depreciation, amortization and accretion 341,634 341,634 Other expense (2) 152,938 152,938 Income from continuing operations before income taxes $ 310,431 Total assets $ 19,110,950 $ 698,798 $ 2,327,461 $ 4,668,298 $ 26,805,507 $ 61,117 $ 197,691 $ 27,064,315 _______________ (1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $0.7 million and $27.4 million , respectively. (2) Primarily includes interest expense. Property Total Property Services Other Total Three Months Ended March 31, 2015 U.S. Asia EMEA Latin America (in thousands) Segment revenues $ 717,880 $ 57,127 $ 75,801 $ 211,372 $ 1,062,180 $ 17,010 $ 1,079,190 Segment operating expenses (1) 133,032 29,660 28,515 67,618 258,825 5,244 264,069 Interest income, TV Azteca, net — — — 2,596 2,596 — 2,596 Segment gross margin 584,848 27,467 47,286 146,350 805,951 11,766 817,717 Segment selling, general, administrative and development expense (1) 26,822 6,829 8,859 17,262 59,772 3,436 63,208 Segment operating profit $ 558,026 $ 20,638 $ 38,427 $ 129,088 $ 746,179 $ 8,330 $ 754,509 Stock-based compensation expense $ 29,861 29,861 Other selling, general, administrative and development expense (2) 30,792 30,792 Depreciation, amortization and accretion 263,520 263,520 Other expense (3) 210,972 210,972 Income from continuing operations before income taxes $ 219,364 Total assets (4) $ 19,560,579 $ 755,290 $ 1,195,027 $ 4,239,821 $ 25,750,717 $ 67,226 $ 112,251 $ 25,930,194 _______________ (1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $0.6 million and $29.3 million , respectively. (2) Includes $1.7 million of expense previously recorded as segment selling, general, administrative and development expense. (3) Primarily includes interest expense. (4) $21.7 million of assets previously recorded to the Asia Property segment have been reclassified to the Other segment. |