BUSINESS SEGMENTS | BUSINESS 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 June 30, 2017 , consisted of the following: • U.S.: property operations in the United States; • Asia: property operations in India; • Europe, Middle East and Africa (“EMEA”): property operations in France, Germany, Ghana, Nigeria, South Africa and Uganda; and • Latin America: property operations in Argentina, 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 that is 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 and structural analysis, 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, and requires different resources, skill sets and marketing strategies than, the property operating segments. 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 2016 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 interests 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 and six months ended June 30, 2017 and 2016 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. Property Total Property Services Other Total Three Months Ended June 30, 2017 U.S. Asia EMEA Latin America (in thousands) Segment revenues $ 897,296 $ 294,556 $ 159,628 $ 286,695 $ 1,638,175 $ 24,259 $ 1,662,434 Segment operating expenses (1) 183,625 167,993 59,069 95,902 506,589 9,748 516,337 Interest income, TV Azteca, net — — — 2,770 2,770 — 2,770 Segment gross margin 713,671 126,563 100,559 193,563 1,134,356 14,511 1,148,867 Segment selling, general, administrative and development expense (1) 36,223 16,571 17,949 19,482 90,225 3,422 93,647 Segment operating profit $ 677,448 $ 109,992 $ 82,610 $ 174,081 $ 1,044,131 $ 11,089 $ 1,055,220 Stock-based compensation expense $ 25,738 25,738 Other selling, general, administrative and development expense 34,609 34,609 Depreciation, amortization and accretion 396,355 396,355 Other expense (2) 186,048 186,048 Income from continuing operations before income taxes $ 412,470 Total assets $ 18,717,076 $ 4,808,551 $ 3,189,403 $ 5,100,443 $ 31,815,473 $ 43,366 $ 279,371 $ 32,138,210 _______________ (1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $0.8 million and $24.9 million , respectively. (2) Primarily includes interest expense. Property Total Property Services Other Total Three Months Ended June 30, 2016 U.S. Asia EMEA Latin America (in thousands) Segment revenues $ 829,680 $ 224,611 $ 134,762 $ 237,139 $ 1,426,192 $ 16,035 $ 1,442,227 Segment operating expenses (1) 182,376 127,855 58,462 83,486 452,179 6,885 459,064 Interest income, TV Azteca, net — — — 2,748 2,748 — 2,748 Segment gross margin 647,304 96,756 76,300 156,401 976,761 9,150 985,911 Segment selling, general, administrative and development expense (1) 34,721 14,770 16,685 15,031 81,207 3,346 84,553 Segment operating profit $ 612,583 $ 81,986 $ 59,615 $ 141,370 $ 895,554 $ 5,804 $ 901,358 Stock-based compensation expense $ 21,907 21,907 Other selling, general, administrative and development expense 32,421 32,421 Depreciation, amortization and accretion 397,765 397,765 Other expense (2) 213,291 213,291 Income from continuing operations before income taxes $ 235,974 Total assets $ 18,949,936 $ 4,557,692 $ 2,025,767 $ 4,929,052 $ 30,462,447 $ 62,766 $ 214,985 $ 30,740,198 _______________ (1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $0.6 million and $21.3 million , respectively. (2) Primarily includes interest expense. Property Total Property Services Other Total Six Months Ended June 30, 2017 U.S. Asia EMEA Latin America (in thousands) Segment revenues $ 1,789,180 $ 570,087 $ 310,035 $ 562,937 $ 3,232,239 $ 46,433 $ 3,278,672 Segment operating expenses (1) 364,960 317,394 120,564 189,183 992,101 16,066 1,008,167 Interest income, TV Azteca, net — — — 5,470 5,470 — 5,470 Segment gross margin 1,424,220 252,693 189,471 379,224 2,245,608 30,367 2,275,975 Segment selling, general, administrative and development expense (1) 70,871 37,066 34,402 38,043 180,382 6,593 186,975 Segment operating profit $ 1,353,349 $ 215,627 $ 155,069 $ 341,181 $ 2,065,226 $ 23,774 $ 2,089,000 Stock-based compensation expense $ 61,960 61,960 Other selling, general, administrative and development expense 70,733 70,733 Depreciation, amortization and accretion 817,495 817,495 Other expense (2) 392,169 392,169 Income from continuing operations before income taxes $ 746,643 _______________ (1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $1.7 million and $60.2 million , respectively. (2) Primarily includes interest expense. Property Total Property Services Other Total Six Months Ended June 30, 2016 U.S. Asia EMEA Latin America (in thousands) Segment revenues $ 1,681,424 $ 287,827 $ 264,402 $ 460,190 $ 2,693,843 $ 37,431 $ 2,731,274 Segment operating expenses (1) 360,098 160,935 114,121 158,808 793,962 15,889 809,851 Interest income, TV Azteca, net — — — 5,464 5,464 — 5,464 Segment gross margin 1,321,326 126,892 150,281 306,846 1,905,345 21,542 1,926,887 Segment selling, general, administrative and development expense (1) 72,007 21,346 32,837 29,615 155,805 6,262 162,067 Segment operating profit $ 1,249,319 $ 105,546 $ 117,444 $ 277,231 $ 1,749,540 $ 15,280 $ 1,764,820 Stock-based compensation expense $ 49,986 49,986 Other selling, general, administrative and development expense 62,801 62,801 Depreciation, amortization and accretion 739,399 739,399 Other expense (2) 366,229 366,229 Income from continuing operations before income taxes $ 546,405 _______________ (1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $1.3 million and $48.7 million , respectively. (2) Primarily includes interest expense. |