CCI 10-K diff: FY 2024-12-31 → FY 2025-12-31
Paragraph-level diff of Risk Factors (Item 1A) and Management's Discussion & Analysis (Item 7).
Item 1A · Risk Factors
+58 paragraphs −57 paragraphs ~57 changed
FY 2024-12-31 (earlier)
Item 1A. Risk Factors
You should carefully consider all of the risks described below, as well as the other information contained in this document, when evaluating your investment in our securities.
Summary of Risk FactorsThe following summarizes our material risk factors. However, this summary is not intended to be a comprehensive and complete list of all risk factors identified by the Company. Refer to the following pages of this section for additional details regarding these summarized risk factors.Risks Relating to Our Business and Industry:
• Our business depends on the demand for our communications infrastructure (including towers, small cells and fiber), driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services).
• A substantial portion of our revenues is derived from a small number of tenants, and the loss, consolidation or financial instability of any of such tenants may materially decrease revenues, reduce demand for our communications infrastructure and services and impact our dividend per share growth.
• The expansion or development of our business, including through acquisitions, increased product offerings or other strategic opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations or financial results.• Our Fiber business model contains certain differences from our Towers business model, resulting in different operational risks. If we do not successfully operate our Fiber business model or identify or manage the related operational risks, such operations may produce results that are lower than anticipated.• Failure to timely, efficiently and safely execute on our construction projects could adversely affect our business.
• New technologies may reduce demand for our communications infrastructure or negatively impact our revenues.
• If we fail to retain rights to our communications infrastructure, including the rights to land under our towers and the right-of-way and other agreements related to our small cells and fiber, our business may be adversely affected.
• Our services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
• As a result of competition in our industry, we may find it more difficult to negotiate favorable rates on our new or renewing tenant contracts.
• New wireless technologies may not deploy or be adopted by tenants as rapidly or in the manner projected.
• If radio frequency emissions from wireless handsets or equipment on our communications infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues.
• Cybersecurity breaches or other information technology disruptions could adversely affect our operations, business, and reputation.• Our business may be adversely impacted by climate-related events, natural disasters, including wildfires, and other unforeseen events.• Our focus on and disclosure of our ESG position, metrics, strategy, goals and initiatives expose us to potential litigation or regulatory action and other adverse effects to our business.• Failure to attract, recruit and retain qualified and experienced employees could adversely affect our business, operations and costs.
• Changes to management, including turnover of our top executives, could have an adverse effect on our business.
• Actions that we are taking, or have completed, to restructure our business in alignment with our strategic priorities may not be as effective as anticipated.
• Actions of activist stockholders could impact the pursuit of our business strategies and adversely affect our results of operations, financial condition, or stock price.
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Risks Relating to Our Pending Sale of the Fiber Business:
• The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position.
• Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed.
• The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price.
Risks Relating to Our Debt and Equity
• Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments limit our ability to take a number of actions that our management might otherwise believe to be in our best interests. In addition, if we fail to comply with our covenants, our debt could be accelerated.
• We have a substantial amount of indebtedness. In the event we do not repay or refinance such indebtedness, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets, possibly on unfavorable terms, to meet our debt payment obligations.
• Sales or issuances of a substantial number of shares of our common stock or securities convertible into shares of our common stock may adversely affect the market price of our common stock.
• Certain provisions of our restated certificate of incorporation ("Charter") and second amended and restated by-laws, as amended ("By-laws") and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders.
Risks Relating to Corporate Compliance
• If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.
Risks Relating to Our REIT Status
• Future dividend payments to our stockholders will reduce the availability of our cash on hand available to fund future discretionary investments, and may result in a need to incur indebtedness or issue equity securities to fund growth opportunities. In such event, the then current economic, credit market or equity market conditions will impact the availability or cost of such financing, which may hinder our ability to grow our per share results of operations.
• Remaining qualified to be taxed as a REIT involves highly technical and complex provisions of the Code. Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, thereby increasing our tax obligations and reducing our available cash.
• Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives.
• REIT related ownership limitations and transfer restrictions may prevent or restrict certain transfers of our capital stock.
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Risks Relating to Our Business and Industry
Our business depends on the demand for our communications infrastructure (including towers, small cells and fiber), driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services).
Tenant demand for our communications infrastructure depends on consumers' and organizations' demand for data. Additionally, the willingness of our tenants to utilize our communications infrastructure, or renew or extend existing tenant contracts on our communications infrastructure, is affected by numerous factors, including:
• availability or capacity of our communications infrastructure or associated land interests;
• location of our communications infrastructure;
• financial condition of our tenants, including their profitability and availability or cost of capital, including through government funding;
• willingness of our tenants to maintain or increase their network investment or changes in their capital allocation strategy;
• need for integrated networks and organizations;
• availability and cost of spectrum for commercial use;
• increased use of network sharing, roaming, joint development, or resale agreements by our tenants;
• mergers or consolidations by and among our tenants;
• changes in, or success of, our tenants' business models;
• governmental regulations and initiatives, including local or state restrictions on the proliferation of communications infrastructure;
• cost of constructing communications infrastructure;
• our market competition, including tenants that may elect to self-perform;
• technological changes, including those (1) affecting the number or type of communications infrastructure needed to provide data to a given geographic area or which may otherwise serve as a substitute or alternative to our communications infrastructure or (2) resulting in the obsolescence or decommissioning of certain existing wireless networks; and
• our ability to efficiently satisfy our tenants' service requirements.
A slowdown in demand for data or our communications infrastructure may negatively impact our growth or otherwise have a material adverse effect on us. If our current or potential tenants are unable to raise adequate capital to fund their business plans, as a result of disruptions in the financial and credit markets or otherwise, they may reduce their spending, which could adversely affect our anticipated growth or the demand for our communications infrastructure or services.The amount, timing, and mix of our tenants' network investment is variable and can be significantly impacted by the various matters described in these risk factors. Changes in tenant network investment typically impact the demand for our communications infrastructure. As a result, changes in tenant plans such as delays in the implementation of new systems, new and emerging technologies, or change in plans to expand coverage or capacity may reduce demand for our communications infrastructure. As part of our announced plans to enhance returns in the Fiber segment, during the fourth quarter of 2024, we completed discussions with certain of our tenants regarding approximately 7,000 previously-identified greenfield small cell nodes in our contracted backlog that both parties mutually agreed to cancel. These cancellations resulted in a $106 million asset write-down charge in the fourth quarter of 2024.Furthermore, the industries in which our tenants operate (particularly those in the wireless industry) could experience a slowdown or slowing growth rates as a result of numerous factors, including a reduction in consumer demand for data or general economic conditions. There can be no assurances that weakness or uncertainty in the economic environment will not adversely impact our tenants or their industries, which may materially and adversely affect our business, including by reducing demand for our communications infrastructure or services. In addition, a slowdown may increase competition for site rental tenants or services. Such an industry slowdown or a reduction in tenant network investment may materially and adversely affect our business.
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A substantial portion of our revenues is derived from a small number of tenants, and the loss, consolidation or financial instability of any of such tenants may materially decrease revenues, reduce demand for our communications infrastructure and services and impact our dividend per share growth.Our three largest tenants are T-Mobile, AT&T and Verizon Wireless. In addition to our three largest tenants, we also derive a meaningful portion of our revenues and anticipated future growth from DISH Network Corporate ("DISH"). The loss of any one of our largest tenants, including DISH, as a result of consolidation, merger, bankruptcy, insolvency, network sharing, roaming, joint development, resale agreements by our tenants or otherwise may result in (1) a material decrease in our revenues, (2) uncollectible account receivables, (3) an impairment of our deferred site rental receivables, communications infrastructure assets, or intangible assets (including goodwill), or (4) other adverse effects to our business. We cannot guarantee that tenant contracts with our largest tenants will not be terminated or that these tenants will renew their tenant contracts with us.Consolidation among our largest tenants will likely result in duplicate or overlapping parts of networks, for example, where they are co-residents on a tower or small cell network, which may result in the termination, non-renewal or re-negotiation of tenant contracts and negatively impact revenues from our communications infrastructure. Due to the long-term nature of our tenant contracts, we generally expect that the impact to our site rental revenues from any termination of our tenant contracts as a result of such potential consolidation would be spread out over multiple years. Such consolidation (or potential consolidation) may result in a reduction or slowdown in such tenants' network investment in the aggregate because their expansion plans may be similar. Tenant consolidation could decrease the demand for our communications infrastructure and services, which in turn may result in a reduction in our revenues or cash flows and may trigger a review for impairment of certain long-lived assets.On January 6, 2022, we entered into an agreement with T-Mobile that addressed the T-Mobile and Sprint network consolidation. We anticipate that this consolidation will result in approximately $200 million in Towers non-renewals in 2025, with additional non-renewals from this agreement, which we expect to fall within our historical non-renewal range of 1% to 2% of Towers annual site rental revenues, to occur each year through 2034. We expect an additional impact of approximately $45 million in aggregate Fiber non-renewals to occur in 2025 and in subsequent years.
See "Item 1. Business—The Company" and note 14 to our consolidated financial statements for further information regarding our largest tenants.The expansion or development of our business, including through acquisitions, increased product offerings or other strategic opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations or financial results.
We seek to expand and develop our business, including through acquisitions, increased product offerings, or other strategic opportunities. In the ordinary course of our business, we review, analyze and evaluate various potential transactions or other activities in which we may engage. Such transactions or activities could be complex, costly and time-consuming, or cause disruptions in, increase risk to or otherwise negatively impact our business. Among other things, such transactions and activities may:
• disrupt our business relationships with our tenants and landlords, depending on the nature of or counterparty to such transactions and activities;
• divert capital and the time or attention of management away from other business operations, including as a result of post-transaction integration activities;
• fail to achieve revenue or margin targets, operational synergies or other benefits contemplated;
• increase operational risk or volatility in our business;
• temporarily decrease the volume of our business;
• not result in the benefits management had expected to realize from such expansion and development activities, or those benefits may take longer to realize than expected;• impact our cost structure and result in the need to hire additional employees;
• increase demands on current employees or result in current or prospective employees experiencing uncertainty about their future roles with us, which might adversely affect our ability to retain or attract key employees; or
• result in the need for additional TRSs or contributions of certain assets to TRSs, which are subject to federal and state corporate income taxes.15
Our Fiber business model contains certain differences from our Towers business model, resulting in different operational risks. If we do not successfully operate our Fiber business model or identify or manage the related operational risks, such operations may produce results that are lower than anticipated.
Over the last decade, we have allocated a significant amount of capital to our Fiber business, which is a much less mature business for us than our Towers business. Our Fiber segment represented 33% and 34% of our site rental revenues for the years ended December 31, 2024 and 2023, respectively. The business model for our Fiber operations contains certain differences from our business model for our Towers operations, including those relating to tenant base, competition, contract terms (including requirements for service level agreements regarding network performance and maintenance), upfront capital requirements, labor costs, landlord demographics, deployment and ownership of certain network assets, operational oversight requirements, government regulations, growth rates and applicable laws.While our Fiber operations have certain risks that are similar to our Towers operations, they also have certain operational risks (including the scalability of processes) that are different from our Towers business, including:
• the use of public rights-of-way and franchise agreements;
• the use of poles and conduits owned solely by, or jointly with, third parties;
• risks relating to overbuilding competitive fiber assets;
• risks relating to the specific markets in which we choose or plan to operate;
• risks relating to construction hazards, including boring, trenching, utility and maintenance of traffic hazards;
• construction management and construction-related billings to tenants;
• risks relating to efficiently and rapidly adjusting the size of the personnel needed to operate our Fiber business;
• risks relating to wireless carriers building their own small cell networks, or tenants utilizing their own or alternative fiber assets;
• the risk of failing to optimize the use of our finite supply of fiber strands;
• damage to our assets and the need to maintain, repair, upgrade and periodically replace our assets;
• the risk of failing to properly maintain or operate highly specialized hardware and software;
• network data security risks;
• the risk of new technologies that could enable tenants to realize the same benefits with less utilization of our fiber;
• potential damage to our overall reputation as a communications infrastructure provider; and• the use of CLEC status.
In addition, the rate at which tenants adopt or prioritize small cells and fiber solutions has been lower or slower than we anticipated, and may continue to be lower or slower, or may cease to exist altogether. For example, our tenants have initially focused on utilizing towers in the first phase of deploying their 5G networks, which has led to delays in some of our small cell deployments. We anticipate that these delays will be temporary, as our tenants plan for the next phase of their 5G network deployment which we believe will require small cells at scale. Our Fiber operations also expose us to different safety or liability risks or hazards than our Towers business as a result of numerous factors, including those stemming from the deployment, location or nature of the assets involved. There may be risks and challenges associated with small cells and fiber solutions being comparatively new and emerging technologies that are continuing to evolve, and there may be other risks related to small cells and fiber solutions of which we are not yet aware. See " —The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position. ", " —Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed. ", " —The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price. " and "—Our business depends on the demand for our communications infrastructure (including towers, small cells and fiber), driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services.) ", for discussions of the Strategic Fiber Transaction and the potential impact to the growth of our Fiber segment as well as the previously announced small cell node cancellations.Failure to timely, efficiently and safely execute on our construction projects could adversely affect our business.Our construction projects and related contracts can be long-term, complex in nature, dangerous, costly and challenging to execute. The quality of our performance on such construction projects depends in large part upon our ability to manage (1) the associated tenant relationship and (2) the project itself by timely deploying and properly managing appropriate internal and external project resources. In connection with our construction projects, we generally bear the risk of cost over-runs, labor availability and productivity, and contractor pricing and performance.16In addition, the construction projects (including modifications of existing communications infrastructure) can pose certain safety risks, including:
• risks resulting from elevated work, including falling hazards;
• risks of third-party non-compliance with safety regulations, industry best practices or other applicable standards;
• risks associated with utility hazards, including gas line, electrical or sewage strikes, which may result in explosions, electrocution and other potentially catastrophic events; and
• risk of potential wildfires, including due to welding, grinding, cutting, or other construction activity.
Such safety risks may cause personal injury or loss of life, severe damage to or destruction of property, suspension of operations or services, or significant damage to the environment, creating financial, regulatory or reputational damage that could adversely affect our business. See "—Our business may be adversely impacted by climate-related events, natural disasters, including wildfires, and other unforeseen events" below for additional information regarding potential adverse impacts to our business which may result from wildfires and other climate-related events.
Further, investments in newly constructed communications infrastructure may result in lower initial returns compared to returns on our existing communications infrastructure or us not being able to realize future tenant additions at anticipated levels.Additionally, contracts with our tenants for these projects typically specify delivery dates, performance criteria and penalties for our failure to perform. Our failure to perform timely and in accordance with the performance criteria exposes us to penalties specified in the contract or possible litigation. We often experience unforeseen delays from municipalities and utility companies that result in longer construction timelines than expected, which impact our ability to timely deliver on our projects. We may also experience unforeseen delays and increased project costs as a result of labor shortages, which may impact the availability of contractors to work on our construction projects. Our failure to manage such tenant relationships, project resources, and project milestones in a timely and efficient manner and appropriately manage safety risks could have a material adverse effect on our business.New technologies may reduce demand for our communications infrastructure or negatively impact our revenues.Improvements in the efficiency, architecture, and design of communication networks may reduce the demand for our communications infrastructure. For example, new technologies and spectrum that may promote network sharing, joint development, backhaul and fronthaul efficiency or resale agreements by our tenants, such as signal combining technologies or network virtualization, may reduce the need for our communications infrastructure. In addition, other technologies, such as WiFi, blimps, satellite (such as low earth orbiting) and mesh transmission systems may, in the future, serve as substitutes for, or alternatives to, leasing on communications infrastructure that might otherwise be anticipated or expected had such technologies not existed. In addition, new technologies that enhance the range, efficiency and capacity of communication equipment could reduce demand for our communications infrastructure. Any significant reduction in demand for our communications infrastructure resulting from the new technologies may negatively impact our revenues or otherwise have a material adverse effect on us.If we fail to retain rights to our communications infrastructure, including the rights to land under our towers and the right-of-way and other agreements related to our small cells and fiber, our business may be adversely affected.
The property interests and other rights to our communications infrastructure, including the land under our towers, are derived from leasehold and sub-leasehold interests, fee interests, easements, licenses, rights-of-way, and franchise and other agreements. A loss of these interests and other rights may interfere with our ability to conduct our business or generate revenues. For various reasons, we may not always have the ability to access, analyze, or verify all information regarding titles or other issues prior to acquiring communications infrastructure. Further, we may not be able to renew ground leases or other agreements on commercially viable terms.Our ability to retain rights to the land on which our towers are located depends on our ability to purchase such land, by acquiring fee interests and perpetual easements, or renegotiate or extend the terms of the agreements relating to such land. Approximately 10% of our towers site rental gross margin for the year ended December 31, 2024 was derived from towers where the leases for the land under such towers had final expiration dates of less than 10 years. If we are unable to retain rights to the property on which our communications infrastructure is located, our business may be adversely affected.
As of December 31, 2024, approximately 54% of our towers were leased or subleased or operated and managed under master leases, subleases, or other agreements with AT&T and T-Mobile (including those which T-Mobile assumed in its merger with Sprint). We have the option to purchase these towers at the end of their respective lease terms. We have no obligation to exercise such purchase options. We may not have the required available capital to exercise our right to purchase some or all of these towers at the time these options are exercisable. Even if we do have available capital, we may choose not to exercise our17right to purchase these towers or some or all of the T-Mobile or AT&T towers for business or other reasons. In the event that we do not exercise these purchase rights, or are otherwise unable to acquire an interest that would allow us to continue to operate these towers after the applicable period, we will lose the cash flows derived from such towers, which may have a material adverse effect on our business. In the event that we decide to exercise these purchase rights, the benefits of the acquisition of these towers may not exceed the costs, which could adversely affect our business. Additional information concerning these towers and the applicable purchase options as of December 31, 2024 is as follows:
• 22% of our towers are leased or subleased or operated and managed under a master lease or other related agreements with AT&T for a weighted-average initial term of approximately 28 years, weighted based on towers site rental gross margin. We have the option to purchase the leased and subleased towers from AT&T at the end of the respective lease or sublease terms for aggregate option payments of approximately $4.2 billion, which payments, if such option is exercised, would be due between 2032 and 2048.
• 32% of our towers are leased or subleased or operated and managed under master leases, subleases or other agreements with T-Mobile (including those which T-Mobile assumed in its merger with Sprint). Approximately half of such towers have an initial term of 32 years (through May 2037), and we have the option to purchase in 2037 all (but not less than all) of such leased and subleased towers from T-Mobile for approximately $2.3 billion. The remainder of such towers have a weighted-average initial term of approximately 28 years, weighted based on towers site rental gross margin. We have the option to purchase such towers from T-Mobile at the end of the respective terms for aggregate option payments of approximately $2.0 billion, which payments, if such option is exercised, would be due between 2035 and 2049. In addition, another 1% of our towers under master leases, subleases, and other agreements with T-Mobile are subject to a lease and sublease or other related arrangements with AT&T. We have the option to purchase these towers from AT&T at the end of their respective lease terms for aggregate option payments of up to approximately $385 million, which payments, if such option is exercised, would be due prior to 2032 (less than $12 million would be due before 2029).Under master lease or master prepaid lease arrangements we have with AT&T and T-Mobile (including those which T-Mobile assumed in its merger with Sprint), certain of our subsidiaries lease or sublease, or are otherwise granted the right to operate and manage, towers from bankruptcy remote subsidiaries of such carriers. If one of these bankruptcy remote subsidiaries should become a debtor in a bankruptcy proceeding and is permitted to reject the underlying ground lease, our subsidiaries could lose their interest in the applicable sites. If our subsidiaries were to lose their interest in the applicable sites or if the applicable ground leases were to be terminated, we would lose the cash flow derived from the towers on those sites, which may have a material adverse effect on our business. We have similar bankruptcy risks with respect to sites that we operate under management agreements.
For our small cells and fiber, we must maintain rights-of-way, franchise, pole attachment, conduit use, fiber use and other agreements to operate our assets. For various reasons, we may not always have the ability to maintain these agreements or obtain future agreements to construct, maintain and operate our fiber assets. Access to rights-of-way may depend on our CLEC status, and we cannot be certain that jurisdictions will (1) recognize such CLEC status or (2) not change their laws concerning CLEC access to rights-of-way. If a material portion of these agreements are terminated or are not renewed, we might be forced to abandon our assets, which may adversely impact our business. In order to operate our assets, we must also maintain fiber agreements that we have with public and private entities. There is no assurance that we will be able to renew these agreements on favorable terms, or at all. If we are unable to renew these agreements on favorable terms, we may face increased costs or reduced revenues.
Additionally, in order to expand our communications infrastructure footprint to new locations, we often need to obtain new or additional rights-of-way and other agreements. Our failure to obtain these agreements in a prompt and cost-effective manner may prevent us from expanding our footprint, which may be necessary to meet our contractual obligations to our tenants and could adversely impact our business.
Our services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
The operating results of our services business for any particular period may experience significant fluctuations given its non-recurring nature and should not necessarily be considered indicative of longer-term results for this activity. Our services business is generally driven by demand for our communications infrastructure and may be adversely impacted by various factors, including:
• competition;
• the timing, mix and amount of tenant network investments;
• the rate and volume of tenant deployment plans;
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• unforeseen delays or challenges relating to work performed;
• economic weakness or uncertainty;
• labor availability and productivity;
• availability of key components;
• our market share; and
• changes in the size, scope, or volume of work performed.During both 2023 and 2024, due primarily to our discontinuation of installation services as a Towers product offering previously announced in July 2023, services and other revenues decreased by 36% and 53%, respectively, when compared to years ended December 31, 2022 and 2023, respectively. We continue to offer site development services on our towers. See note 16 to our consolidated financial statements and "Item 7. MD&A—General Overview—Highlights of Business Fundamentals and Results" for further discussion of our 2023 Restructuring Plan, which included discontinuing installation services as a Towers product offering.As a result of competition in our industry, we may find it more difficult to negotiate favorable rates on our new or renewing tenant contracts.
Our growth is dependent on our entering into new tenant contracts (including amendments to tenant contracts upon modification of existing towers, small cells or fiber), as well as renewing or renegotiating tenant contracts when existing tenant contracts terminate. Competition in our industry may make it more difficult for us to attract new tenants, maintain or increase our gross margins, or maintain or increase our market share. In addition, competition (primarily in our fiber solutions business) may, in certain circumstances, cause us to renegotiate certain existing tenant contracts to avoid early contract terminations. We face competition for site rental tenants and associated contractual rates from various sources, including (1) other independent communications infrastructure owners or operators, including those that own, operate, or manage towers, rooftops, broadcast or transmission towers, utility poles, fiber (including non-traditional competitors such as cable providers) or small cells, (2) tenants who elect to self-perform and (3) new alternative deployment methods for communications infrastructure.
Our Fiber business generally has different competitors than those in our Towers business, including other owners of fiber, as well as new entrants into small cells and fiber solutions, some of which may have larger networks, greater financial resources or more experience in managing such assets than we have. The level of non-renewals associated with fiber solutions is generally higher than that of Towers and small cells.
New wireless technologies may not deploy or be adopted by tenants as rapidly or in the manner projected.
There can be no assurances that new wireless services or technologies, which may drive demand for our communications infrastructure, will be introduced or deployed as rapidly or in the manner projected by the wireless carriers. In addition, demand or tenant adoption rates for such new technologies may be lower or slower than anticipated for numerous reasons. As a result, growth opportunities or demand for our communications infrastructure arising from such technologies may not be realized at the times or to the extent anticipated.
If radio frequency emissions from wireless handsets or equipment on our communications infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues.
The potential connection between radio frequency emissions and certain negative health effects, including some forms of cancer, has been the subject of substantial study by the scientific community in recent years. We cannot guarantee that claims relating to radio frequency emissions will not arise in the future or that the results of such studies will not be adverse to us.
Public perception of possible health risks associated with cellular or other wireless connectivity services and wireless technologies (such as 5G) may slow or diminish the growth of wireless companies and deployment of new wireless technologies, which may in turn slow or diminish our growth. In particular, negative public perception of, and regulations regarding, these perceived health risks may slow or diminish the market acceptance of wireless services and technologies. If a connection between radio frequency emissions and possible negative health effects were established, our operations, costs, or revenues may be materially and adversely affected. We currently do not maintain any significant insurance with respect to these matters.
Cybersecurity breaches or other information technology disruptions could adversely affect our operations, business, and reputation.Despite existing security measures, certain of our information technology and communications infrastructure may be subject to damage, disruptions, or shutdowns due to unauthorized access, computer viruses, ransomware or other malicious software, cyber-attacks and other security breaches. In addition, our reliance on cloud- or internet-based services and on remote19access to information systems increases our exposure to potential cybersecurity incidents. An attack attempt or security breach, such as a distributed denial of service attack, could potentially result in (1) interruption or cessation of certain of our services to our tenants or access by our tenants to certain of our information technology systems, (2) our inability to meet expected levels of service to our tenants, (3) data transmitted over our tenants' networks being compromised or misappropriated, or (4) business or other sensitive data being compromised, misappropriated or lost. Although we believe we have a comprehensive incident response plan and other cybersecurity measures and policies in place, we cannot guarantee that our security measures will not be circumvented, resulting in tenant network failures or interruptions that could impact our tenants' network availability and have a material adverse effect on our business, financial condition, or operational results.
Additionally, security incidents impacting our tenants, vendors and business partners could result in a material adverse effect on our business. We may be required to expend significant resources to protect against or recover from such threats. If an actual or perceived breach of our cybersecurity or information technology, or that of our cloud- or internet-based service providers, occurs, the market perception of the effectiveness of our security measures could be harmed, and we could lose tenants. Further, the perpetrators of cyber-attacks are not restricted to particular groups or persons. These threats can arise from external parties, such as cyber terrorists or nation-state actors, as well as insiders, such as our employees or contractors, who knowingly or unknowingly engage in or enable malicious cyber activities. In addition, our acquisitions, both past and future, may alter our potential exposure to the risks described above. While we maintain insurance that includes coverage in the event of cybersecurity or other information technology breaches, there can be no assurances that such coverage will be adequate to cover exposure from such incidents.Our business may be adversely impacted by climate-related events, natural disasters, including wildfires, and other unforeseen events.We could be negatively impacted by other unforeseen events, such as extreme weather events or natural disasters (including as a result of any potential effects of climate change), or acts of vandalism. There is increasing concern that global climate change is occurring and could result in increased frequency of certain types of natural disasters and extreme weather events. Although we have implemented a wildfire risk mitigation program, the effects of climate change have increased the risk and extent of wildfires that could potentially result from certain of our construction and maintenance projects and other operating activities. We cannot predict with certainty the rate at which climate change is occurring or the potential direct or indirect impacts of climate change to our business. Any such unforeseen events could, among other things, damage or delay deployment of our communications infrastructure, interrupt or delay service to our tenants or could result in legal claims or penalties, disruption in operations, damage to our reputation, negative market perception, or costly response measures, which could adversely affect our business.
While we currently maintain insurance policies that include coverage in the event of natural disasters and other unforeseen events, including possible incidents in which our actions (or the actions of those acting on our behalf) contribute to such events, there can be no assurances that such coverage will be adequate to cover exposure from such events. Further, we do not maintain, and do not expect to maintain, insurance policies that provide adequate coverage in the event that our actions (or those actions of those acting on our behalf) contribute to a wildfire event, as a result of the fact that such insurance policies are generally not economically available.
Our focus on and disclosure of our ESG position, metrics, strategy, goals and initiatives expose us to potential litigation or regulatory action and other adverse effects to our business.
In recent years, certain of our investors, tenants, employees and other stakeholders have increased their focus on ESG matters and disclosure. In response, we have published ESG reports and related materials and made other public announcements regarding our ESG position, initiatives and goals. Our ESG metrics, initiatives and goals, and progress against those goals, may be based on standards that are still developing and that may not be uniformly adopted or applied by other companies, processes and internal controls that continue to evolve, potentially missing or deficient third-party data, wide range of acceptable estimation techniques, and estimates and assumptions that are subject to a greater degree of uncertainty and may change more frequently than those underlying our financial metrics. Our ESG initiatives and goals may be difficult to implement, may lead to increased scrutiny by policymakers and stakeholders, may be contrary to interests of other stakeholders and may increase operating costs and result in changes to certain of our operations, assets and processes.
In addition, we are subject to, and may become subject to additional, climate change-based and other ESG-related laws, regulations and policies, with varying scopes and complexity, such as the SEC's climate-related disclosure rules and the State of California's carbon and climate disclosure laws, that have increased, and could further increase, compliance burdens and associated costs. Applicable laws, regulations and policies in some jurisdictions may conflict with those in other jurisdictions. In addition, regulators may interpret and apply laws, regulations and policies in a manner inconsistent with previous interpretation and application. Failure to comply with any legislation, regulation or policy, including as a result of good faith20interpretations that may differ from those taken by the relevant enforcement authorities, could potentially result in substantial fines, criminal sanctions, reputational harm or operational changes.
Our focus and disclosure of our ESG goals and initiatives – including achievement of or failure to achieve such goals and initiatives, accurately reporting our metrics or adherence to prior public statements – exposes us to potential litigation or regulatory action, which may materially adversely affect our business, results of operations, financial condition and stock price.Failure to attract, recruit and retain qualified and experienced employees could adversely affect our business, operations and costs.
Our ability to sustain and grow our business and execute on our strategy requires us, in part, to attract, recruit and retain qualified and experienced employees, including key management personnel and other talent. We have encountered a competitive labor market for experienced talent in our industry due, in part, to macroeconomic conditions. Our stock price performance has caused, and may continue to cause, a failure to achieve certain metrics on which vesting of our performance-based equity awards is based. If our total compensation package is not viewed as competitive, our ability to successfully attract, recruit and retain key employees could adversely impact our business, operations, and costs, which could result in the loss of institutional knowledge and expertise of departing employees.
We have recently experienced, and may continue to experience, the departure of key management personnel, as well as the elimination and consolidation of roles and responsibilities. See " —Changes to management, including turnover of our top executives, could have an adverse effect on our business.", "—Actions that we are taking, or have completed, to restructure our business in alignment with our strategic priorities may not be as effective as anticipated." and " — The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position. " for a discussion of the Strategic Fiber Transaction, recent management changes and the reductions in our workforce in 2023 and 2024, and the potential adverse impact on our workforce therefrom.
Changes to management, including turnover of our top executives, could have an adverse effect on our business.Our business has experienced, and may continue to experience, significant executive management changes, including the consolidation of roles and responsibilities. In December 2023, we announced the retirement of Jay A. Brown, our President and Chief Executive Officer ("CEO") and the appointment of Anthony J. Melone, a member of our board of directors, to serve as interim President and CEO. In April 2024, Steven J. Moskowitz was appointed as President and CEO. Additionally, in January 2025, we announced that Daniel K. Schlanger would cease serving as our Executive Vice President and Chief Financial Officer, effective March 2025. We also have experienced and may continue to experience the departure and transition of other members of our executive management team.These leadership changes may be inherently difficult to manage and may hamper our ability to meet our financial and operational goals as new management becomes familiar with their roles and the business. Such changes may also result in added costs, uncertainty concerning our future direction, decreased employee morale, and the loss of personnel with deep institutional knowledge and industry relationships. Any of the foregoing could result in significant disruptions to our operations and impact our ability to execute on our strategy and pursue strategic initiatives.
Further, we have increased our dependency on the remaining members of our executive management team to facilitate a smooth transition in leadership roles. Our executive officers are at-will employees; as such, their employment with us could terminate at any time, and any such departure could be particularly disruptive in light of the recent leadership changes. If we are unable to mitigate these or other similar risks, our business, results of operations and financial condition may be adversely affected.
Actions that we are taking, or have completed, to restructure our business in alignment with our strategic priorities may not be as effective as anticipated.In July 2023, we initiated the 2023 Restructuring Plan as part of our efforts to reduce costs to better align our operational needs with lower tower activity. The 2023 Restructuring Plan included reducing our total employee headcount by approximately 15%, discontinuing installation services as a Towers product offering, and consolidating office space. As a result of the foregoing actions, we incurred $85 million and $9 million of restructuring charges in 2023 and 2024, respectively. The actions associated with the 2023 Restructuring Plan were substantially completed and related charges were recorded by June 30, 2024, while the payments for the employee headcount reduction were substantially completed by December 31, 2024. The remaining payments for the office space consolidation will be completed in 2032.
In June 2024, we initiated the 2024 Restructuring Plan as part of our efforts to drive operational efficiencies and reduce operating costs and capital expenditures, with a primary focus on our Fiber segment. As a result, we announced a reduction of21our total employee headcount by more than 10% and the closing of certain offices. Related to the actions undertaken for the 2024 Restructuring Plan, we incurred $100 million of restructuring charges in 2024. The actions associated with the 2024 Restructuring Plan and related charges were substantially completed and recorded by December 31, 2024, while the payments are expected to be completed for the employee headcount reduction in 2025 and office closures in 2033.
In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the execution of these actions. We have made certain assumptions in estimating the anticipated savings we expect to achieve under the Restructuring Plans, which include the estimated savings from the elimination of certain headcount and the consolidation and closure of office space. These assumptions may turn out to be incorrect due to a variety of factors. In addition, our ability to realize the expected benefits from the Restructuring Plans is subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. As such, we may not realize, in full or in part, or sustain, the anticipated benefits from the Restructuring Plans or do so within the expected time frame, and anticipated benefits may not be adequate to meet our long-term profitability and operational expectations.
Furthermore, the Restructuring Plans may result in unintended consequences, including:• employee attrition beyond the intended reduction in force;
• damage to our corporate culture and decreased employee morale and productivity among our remaining employees;
• diversion of management attention;
• adverse effects to our reputation as an employer (which could make it more difficult for us to hire new employees in the future);
• loss of institutional knowledge and expertise of departing employees;
• inability to timely and efficiently scale our workforce in response to shifting demand in our business; and
• potential failure or delays to meet operational and growth targets due to the loss of qualified employees.If we experience any of these adverse consequences, the Restructuring Plans and other strategic initiatives may not achieve or sustain their intended benefits, or the benefits, even if achieved, may not be adequate to meet our long-term profitability and operational expectations, which could adversely affect our business, results of operations and financial condition.Actions of activist stockholders could impact the pursuit of our business strategies and adversely affect our results of operations, financial condition, or stock price.We have been, and may in the future be, subject to activities initiated by activist stockholders. In December 2023, we entered into a Cooperation Agreement ("Cooperation Agreement") with Elliott Investment Management L.P., Elliott Associates, L.P. and Elliott International, L.P. (collectively, "Elliott"). Pursuant to the Cooperation Agreement, we agreed, among other things, (1) to promptly appoint Jason Genrich and Sunit Patel as members of the board of directors, with an initial term that expired at our 2024 Annual Meeting of Stockholders ("2024 Annual Meeting"), (2) to establish a Fiber Review Committee to conduct a strategic and operational review of our Fiber business and (3) to establish a CEO Search Committee to conduct a search for the next CEO of our company.
On March 3, 2024, we entered into an amendment to the Cooperation Agreement with Elliott, which, among other things, (1) eliminated limitations on the size of our board of directors, the Fiber Review Committee and the CEO Search Committee, (2) provided that Elliott and certain of its affiliates would vote pro rata in accordance with the vote of other stockholders at the 2024 Annual Meeting, subject to certain exceptions, and (3) provided our board of directors could change its recommendation and cease soliciting proxies in favor of Messrs. Genrich or Patel if it first made a determination that its fiduciary duties required it to do so. Messrs. Genrich and Patel were subsequently reelected to serve until our 2025 Annual Meeting of Stockholders. The operational review of our Fiber business and the search for the next CEO of our company concluded during 2024, and the strategic review of our Fiber business concluded in 2025 with our entry into the Strategic Fiber Agreement. See " —The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position. ", " —Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed. " and " —The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price. " for a discussion of the Strategic Fiber Transaction. The Cooperation Agreement, as amended, remains in effect.
We strive to maintain constructive, ongoing communications with all stockholders, and we welcome constructive input from all stockholders toward the shared goal of enhancing long-term stockholder value. Nonetheless, we may not be successful in engaging constructively with one or more stockholders, and any resulting activist campaign that contests, or seeks to change,22our strategic direction or business mix (for example, our proxy contest in 2024 with Boots Capital) could have an adverse effect on us because: (1) responding to actions by activist stockholders could disrupt our business and operations, be costly or time-consuming, or divert the attention of our board of directors or management from the pursuit of business strategies, which could adversely affect our results of operations or financial condition; (2) perceived uncertainties as to our future direction may lead to the perception of a change in the direction of the business, instability, or lack of continuity, any of which may be exploited by our competitors, cause concern to our current or potential customers and vendors, cause concern in the minds of our employees and make it more difficult to attract and retain qualified personnel; and (3) these types of actions could cause significant fluctuations in our share price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.Risks Relating to Our Pending Sale of the Fiber Business
The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position.
On March 13, 2025, we signed the Strategic Fiber Agreement to sell all of our Fiber Business, with Zayo acquiring the fiber solutions business and EQT acquiring the small cell business. The pending sale of the Fiber Business may have an adverse effect on our operating results if our customers delay, defer, or cancel work with us pending completion of the Strategic Fiber Transaction.
We are subject to additional risks in connection with the pendency of the proposed Strategic Fiber Transaction, including:
• Parties with which we do business may be uncertain as to the effects the transaction may have on them, including with respect to current or future business relationships with us, and these relationships may be subject to disruption as customers, suppliers and other persons with whom we have a business relationship may delay or defer certain business decisions or might decide to terminate, change or renegotiate their relationships with us, as applicable, or consider entering into business relationships with parties other than us. The risk, and adverse effect, of any disruption could be exacerbated by a delay in the consummation of the transaction or termination of the Strategic Fiber Agreement;
• The restrictions and requirements imposed on our business and operations pursuant to certain covenants set forth in the Strategic Fiber Agreement and ancillary transaction agreements obligate us to generally conduct our business in a commercially reasonable manner and in all material respects in the ordinary course of business consistent with past practice and may prevent us from pursuing certain opportunities, entering into certain contracts with customers and suppliers, or taking certain other actions without Zayo’s and/or EQT's approval;
• We may be unable to attract, recruit, retain and motivate current and prospective employees who may be uncertain about their future roles following completion of the proposed transaction, and our operations could suffer due to employee attrition or a reduction in employee productivity as a result of this uncertainty; and• The pursuit and planning for the transaction have placed and will continue to place a significant burden on management and other internal resources and may divert management’s attention away from day-to-day business concerns and other opportunities that may have been beneficial to us could adversely affect our business, financial condition and operating results.See " —The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price. " below for a discussion of risks associated with the potential failure to complete the planned sale of the Fiber Business.
Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed.The Strategic Fiber Agreement contains closing conditions and requirements with which we must comply pending the closing of the Strategic Fiber Transaction, including (1) obtaining regulatory approvals from certain U.S. regulatory and governmental authorities, including various consents, clearances under antitrust statutes, authorizations and declarations of non-objection, or expiration of waiting periods (or extensions thereof), and (2) separating each of the fiber solutions and small cell businesses from our current operations, in accordance with the terms of the Strategic Fiber Agreement.
In deciding whether to grant the required regulatory approval, consent or clearance, the relevant governmental entities will consider the effect of the transaction on competition within their relevant jurisdiction. Regulatory and governmental entities may impose conditions on their respective approvals, in which case lengthy negotiations may ensue among such regulatory or23governmental entities, Zayo, EQT and us. Such conditions, any such negotiations and the process of obtaining regulatory approvals could have the effect of delaying or preventing consummation of the transaction.The separation and conveyance of each of the fiber solutions and small cells businesses from our current operations to the respective purchaser in connection with the Strategic Fiber Transaction poses significant challenges, including division and allocation of assets, information technology, contracts and employees relating to each of the applicable businesses.
If any of these conditions, certain of which may not be within our control, are not satisfied or waived, the Strategic Fiber Agreement may be terminated, or the Strategic Fiber Transaction may not close.
The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price.
The Strategic Fiber Transaction, which is expected to close in the first half of 2026, is subject to the satisfaction or waiver of certain closing conditions, and there is no assurance that all of the various conditions will be satisfied, or that the transaction will be completed on the proposed terms, within the expected timeframe or at all. The closing of the transaction may be delayed, and the transaction may ultimately not be completed, due to a number of factors, including as a result of the failure to satisfy any requisite closing condition in the Strategic Fiber Agreement, potential future stockholder litigation and other legal and regulatory proceedings.
If the Strategic Fiber Transaction does not close, we may suffer consequences that could adversely affect our ongoing and future business, financial condition, operating results, cash flows and stock price, and our stockholders would be exposed to additional risks, including for example:
• To the extent that the current market price of our stock reflects an assumption that the transaction will be completed, the price of our common stock could decrease;
• Investor confidence in us could decline and stockholder litigation could be brought against us;
• We have incurred significant costs, including professional services fees and other transaction costs, in connection with the proposed transaction that we would be unable to recover, and devoted substantial commitments of time and resources by our management and employees, which could have otherwise been devoted to day-to-day operations and other opportunities that could have been beneficial to us as an independent company; and
• There can be no assurance that our business, relationships with other parties, liquidity or financial condition will not be adversely affected, as compared to the condition prior to the announcement of the transaction, if the transaction is delayed or not consummated.Risks Relating to Our Debt and Equity
Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments limit our ability to take a number of actions that our management might otherwise believe to be in our best interests. In addition, if we fail to comply with our covenants, our debt could be accelerated.We have a substantial amount of indebtedness (approximately $23.8 billion as of March 12, 2025). See "Item 7. MD&A—Liquidity and Capital Resources" for a tabular presentation of our contractual debt maturities. As a result of our substantial indebtedness:• we may be more vulnerable to general adverse economic or industry conditions;
• we may find it more difficult to obtain additional financing to fund discretionary investments or other general corporate requirements or to refinance our existing indebtedness;
• we are or will be required to dedicate a substantial portion of our cash flows from operations to the payment of principal or interest on our debt, thereby reducing the available cash flows to fund other projects, including the discretionary investments discussed in "Item 1. Business" and "Item 7. MD&A—Liquidity and Capital Resources" ;
• we may have limited flexibility in planning for, or reacting to, changes in our business or in the industry;
• we may have a competitive disadvantage relative to other companies in our industry with less debt;
• we may be adversely impacted by changes in interest rates (see below);
• we may be adversely impacted by changes to credit ratings related to our debt instruments;
• we may be required to issue equity securities or securities convertible into equity securities or sell some of our assets, possibly on unfavorable terms, in order to meet our debt payment obligations;
• we may be limited in our ability to take advantage of strategic business opportunities, including communications infrastructure development or mergers and acquisitions; and
• we could fail to remain qualified for taxation as a REIT due to limitations on our ability to declare and pay dividends to stockholders as a result of restrictive covenants in our debt instruments.24
From March 2022 until recently, the Federal Reserve repeatedly raised the federal funds rate, which adversely impacted the interest rates on our variable rate debt and refinancings of fixed rate debt. As of March 12, 2025, approximately 9% of our outstanding indebtedness consisted of variable interest rates. Such variable interest debt had a weighted average rate of 5.2% as of March 12, 2025, compared to 6.5%, 5.4% and 1.1% as of December 31, 2023, 2022 and 2021, respectively. Recently, the Federal Reserve has started to loosen its monetary policy by lowering the federal funds rate; however, any prolonged period of elevated interest rates or further increases to interest rates on such debt could continue to adversely impact our financial results and our ability to meet our dividend growth targets, strategically deploy our capital or execute our business plan. See " Item 7A. Quantitative and Qualitative Disclosures about Market Risk" for a further discussion of our interest rate risk.
Currently, we have debt instruments in place that limit, in certain circumstances, our ability to incur additional indebtedness, pay dividends, create liens, sell assets, or engage in certain mergers and acquisitions, among other things. In addition, the credit agreement governing our senior unsecured credit facility ("2016 Credit Agreement"), which consists of our senior unsecured term loan A facility and senior unsecured revolving credit facility (collectively, "2016 Credit Facility"), contains financial maintenance covenants. Our ability to comply with these covenants or to satisfy our debt obligations will depend on our future operating performance. If we violate the restrictions in our debt instruments or fail to comply with our financial maintenance covenants, we will be in default under those instruments, which in some cases would cause the maturity of a substantial portion of our long-term indebtedness to be accelerated. Furthermore, if the limits on our ability to pay dividends prevent us from satisfying our REIT distribution requirements, we could fail to remain qualified for taxation as a REIT. If these limits do not jeopardize our qualification for taxation as a REIT but nevertheless prevent us from distributing 100% of our REIT taxable income, we will be subject to federal and state corporate income taxes, and potentially a nondeductible excise tax, on our undistributed taxable income. If our operating subsidiaries were to default on their debt, the trustee could seek to foreclose the collateral securing such debt, in which case we could lose the communications infrastructure and the associated revenues. See "Item 7. MD&A—Liquidity and Capital Resources—Debt Covenants" for a further discussion of our debt covenants.CCI is a holding company that conducts all of its operations through its subsidiaries. Accordingly, CCI's sources of cash to pay interest or principal on its outstanding indebtedness are distributions relating to its respective ownership interests in its subsidiaries from the net earnings and cash flows generated by such subsidiaries or from proceeds of debt or equity offerings. Earnings and cash flows generated by CCI's subsidiaries are first applied by such subsidiaries to conduct their operations, including servicing their respective debt obligations, after which any excess cash flows generally may be paid to CCI, in the absence of any special conditions, such as a continuing event of default. However, CCI's subsidiaries are legally distinct from the holding company and, unless they guarantee such debt, have no obligation to pay amounts due on their debt or to make funds available to us for such payment.We have a substantial amount of indebtedness. In the event we do not repay or refinance such indebtedness, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets, possibly on unfavorable terms, to meet our debt payment obligations.We have a substantial amount of indebtedness, which, upon final maturity, we will need to refinance or repay. See "Item 7. MD&A—Liquidity and Capital Resources" for a tabular presentation of our contractual debt maturities. There can be no assurances we will be able to refinance our indebtedness (1) on commercially reasonable terms, (2) on terms, including with respect to interest rates, as favorable as our current debt, or (3) at all. As of March 12, 2025, approximately 55% of our fixed rate debt, with a weighted average interest rate of 3.8%, is scheduled to mature over the next five years. If interest rates remain elevated or continue to increase, we may have to (1) refinance our maturing fixed rate debt at interest rates that exceed the current interest rates on such debt or (2) use our variable interest rate debt to repay such fixed rate debt, thereby increasing our exposure to interest rate fluctuations.
Economic conditions and the credit markets have historically experienced, and may continue to experience, periods of volatility, uncertainty, or weakness that could impact (1) the availability or cost of debt financing, including any refinancing of the obligations described above, (2) our ability to draw the full amount of our $7.0 billion senior unsecured revolving credit facility under our 2016 Credit Facility ("2016 Revolver"), that, as of March 12, 2025, had $7.0 billion of undrawn availability, or (3) our ability to issue the full amount of the $2.0 billion commercial paper notes ("Commercial Paper Notes") under our unsecured commercial paper program ("CP Program"), that, as of March 12, 2025, had $1.1 billion outstanding.If we are unable to repay or refinance our debt, we cannot guarantee that we will be able to generate enough cash flows from operations or that we will be able to obtain enough capital to service our debt, fund our planned capital expenditures or pay future dividends. In such an event, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets, possibly on unfavorable terms, to meet our debt payment obligations. Failure to repay or refinance indebtedness when required could result in a default under such indebtedness. If we incur additional indebtedness, any such indebtedness could exacerbate the risks described above.25Sales or issuances of a substantial number of shares of our common stock or securities convertible into shares of our common stock may adversely affect the market price of our common stock.Future sales or issuances of common stock or other equity related securities may adversely affect the market price of our common stock, including any shares of our common stock issued to finance capital expenditures, finance strategic initiatives or repay debt. Our business strategy contemplates access to external financing to fund certain discretionary investments, which may include issuances of common stock or other equity related securities. We maintain an "at-the-market" stock offering program ("2024 ATM Program") through which we may, from time to time, issue and sell shares of our common stock having an aggregate gross sales price of up to $750 million to or through sales agents. As of March 12, 2025, we had $750 million of gross sales of common stock remaining under our 2024 ATM Program. From time to time, we may refresh or implement a new "at-the-market" stock offering program. See note 10 to our consolidated financial statements. As of March 12, 2025, we had approximately 435 million shares of common stock outstanding.
We have reserved an aggregate of approximately 15 million shares of common stock for issuance in connection with awards granted under our stock compensation plans.Further, a small number of common stockholders own a significant percentage of our outstanding common stock. If any one of these common stockholders, or any group of our common stockholders, sells a large quantity of shares of our common stock, or the public market perceives that existing common stockholders might sell a large quantity of shares of our common stock, the market price of our common stock may significantly decline.
Certain provisions of our Charter and By-laws and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders.
We have a number of anti-takeover devices in place that will hinder takeover attempts or may reduce the market value of our common stock. Our anti-takeover provisions include:
• the authority of the board of directors to issue preferred stock without approval of the holders of our common stock;
• advance notice and other procedural requirements relating to director nominations or proposals submitted by stockholders for actions to be taken at annual meetings of stockholders; and• provisions that the state courts or, in certain circumstances, the federal courts, in Delaware shall be the sole and exclusive forum for certain actions involving us, our directors, officers, employees and stockholders, and, unless the Company otherwise consents, that the federal courts shall be the sole and exclusive forum for resolution of claims arising under the Securities Act of 1933, as amended (“Securities Act”). Since the Securities Act provides that federal and state courts have concurrent jurisdiction over lawsuits brought pursuant to the Securities Act, there may be uncertainty as to whether a court would enforce such a provision. Stockholders will not be deemed to have waived compliance with the federal securities laws, and this provision does not apply to claims for which the federal courts have exclusive jurisdiction (such as under the Exchange Act).Such provisions, as well as the provisions of Section 203 of the Delaware General Corporation Law, may impede a merger, consolidation, takeover, or other business combination or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
In addition, domestic or international competition laws may prevent or discourage us from acquiring communications infrastructure in certain geographical areas or impede a merger, consolidation, takeover, or other business combination or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
Risks Relating to Corporate Compliance
If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.
A variety of federal, state, local, and foreign laws and regulations apply to our business, including those discussed in "Item 1. Business." Failure to comply with applicable requirements may lead to civil or criminal penalties, require us to assume indemnification obligations or breach contractual provisions. We cannot guarantee that existing or future laws or regulations, including federal, state, local, or foreign tax laws, will not adversely affect our business (including our REIT status), increase delays or result in additional costs. We also may incur additional costs as a result of liabilities under applicable laws and regulations, such as those governing environmental and safety matters. These factors may have a material adverse effect on us.26Risks Relating to Our REIT Status
Future dividend payments to our stockholders will reduce the availability of our cash on hand available to fund future discretionary investments, and may result in a need to incur indebtedness or issue equity securities to fund growth opportunities. In such event, the then current economic, credit market or equity market conditions will impact the availability or cost of such financing, which may hinder our ability to grow our per share results of operations.During each of the quarters in the year ended 2024, we paid a common stock dividend of $1.565 per share, totaling approximately $2.7 billion. We are updating our capital allocation framework to focus more on free cash flow generation and financial flexibility, which we currently expect to result in a reduction to our dividend, beginning with our expected second quarter 2025 dividend. As we grow cash flows thereafter, we expect to increase our dividend per share. Whether dividends are to be declared and the amount and timing thereof remain subject to the discretion of our board of directors. See notes 10 and 17 to our consolidated financial statements.We operate as a REIT for U.S. federal income tax purposes. To remain qualified and be taxed as a REIT, we are generally required to annually distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction, excluding net capital gain and after the utilization of any available NOLs) to our stockholders. Our quarterly cash common stock dividend will delay the utilization of our NOLs and may cause certain of the NOLs to expire without utilization. See also "Item 1. Business—REIT Status" and "Item 7. MD&A—General Overview—Common Stock Dividend."
As discussed in "Item 1. Business—Strategy," we seek to invest our available capital, including the net cash generated by our operating activities and external financing sources, in a manner that we believe will increase long-term stockholder value on a risk-adjusted basis. Our historical discretionary investments have included the following (in no particular order): construction of communications infrastructure; acquisitions of communications infrastructure; acquisitions of land interests (which primarily relate to land assets under towers); improvements and structural enhancements to our existing communications infrastructure; purchases of shares of our common stock from time to time; and purchases, repayments or redemptions of our debt. External financing, including debt, equity, and equity-related issuances to fund future discretionary investments either (1) may not be available to us or (2) may not be accessible by us at terms that would result in the investment of the net proceeds raised yielding incremental growth in our per share operating results. As a result, future dividend payments may hinder our ability to grow our per share results of operations or otherwise adversely affect our ability to execute our business plan.
Remaining qualified to be taxed as a REIT involves highly technical and complex provisions of the Code. Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, thereby increasing our tax obligations and reducing our available cash.
As a REIT, we are generally entitled to a deduction for dividends that we pay and therefore are not subject to U.S. federal corporate income tax on our net taxable income that is currently distributed to our common stockholders.While we intend to operate so that we remain qualified as a REIT, given the highly complex nature of the rules governing REITs, the importance of ongoing factual determinations, the possibility of future changes in our circumstances, and the potential impact of future changes to laws and regulations impacting REITs, no assurance can be given that we will qualify as a REIT for any particular year.
In addition, the present U.S. federal tax treatment of REITs is subject to change, possibly with retroactive effect, by legislative, judicial or administrative action at any time, and any such change might adversely affect our REIT status or benefits. We cannot predict the impact, if any, that such changes, if enacted, might have on our business. However, it is possible that such changes could adversely affect our business, including our REIT status.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under certain provisions of the Code, then:
• we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income;
• we will be subject to federal and state income tax on our taxable income at regular corporate tax rates and, for years beginning before January 1, 2018, any applicable alternative minimum tax; and
• we would be disqualified from re-electing REIT status for the four taxable years following the year during which we were so disqualified.
Although we may have federal NOLs available to reduce any taxable income, to the extent our federal NOLs have been utilized or are otherwise unavailable, any such corporate tax liability could be substantial, would reduce the amount of cash available for other purposes and might necessitate the borrowing of additional funds or the liquidation of some investments to pay any additional tax liability. Accordingly, funds available for investment would be reduced.27
Under the Code, for taxable years beginning in or after 2018, no more than 20% of the value of the assets of a REIT may be represented by securities of one or more TRSs. These limitations may affect our ability to make additional investments in non-REIT qualifying operations or assets, or in any operations held through TRSs. The net income of our TRSs is not required to be distributed to us, and income that is not distributed to us generally will not be subject to the REIT income distribution requirement. However, there may be limitations on our ability to accumulate earnings in our TRSs and the accumulation or reinvestment of significant earnings in our TRSs could result in adverse tax treatment. In particular, if the accumulation of cash in our TRSs causes the fair market value of our securities in our TRSs to exceed current or future limitations of the fair market value of our assets at the end of any quarter, then we may fail to remain qualified as a REIT.Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives.To remain qualified and be taxed as a REIT, we are required to satisfy the 90% distribution requirement as described above. We commenced declaring regular quarterly dividends to our common stockholders beginning with the first quarter of 2014. See notes 10 and 17 to our consolidated financial statements. Whether dividends are to be declared and the amount and timing thereof remain subject to the discretion of our board of directors based on then-current and anticipated future conditions, including our earnings, net cash generated by operating activities, capital requirements, financial condition, our relative market capitalization, our existing federal NOLs of approximately $1.5 billion or other factors deemed relevant by our board of directors.To the extent that we satisfy the 90% distribution requirement but distribute less than 100% of our REIT taxable income (determined without regard to the dividends paid deduction, excluding net capital gain and after the utilization of any available NOLs), we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay to our stockholders for a calendar year is less than a minimum amount specified under the Code.
From time to time, we may generate REIT taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments. If we do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices, or distribute amounts that would otherwise be invested in future acquisitions to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT dividend requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect the value of our common stock. Furthermore, the REIT dividend requirements may increase the financing we need to fund capital expenditures, future growth, or expansion initiatives, which would increase our total leverage.In addition to satisfying the 90% distribution requirement, to remain qualified as a REIT for tax purposes, we are required to continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets and the ownership of our capital stock. Compliance with these tests will require us to refrain from certain activities and may hinder our ability to make certain attractive investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities, or investments in the businesses to be conducted by our TRSs, and to that extent, limit our opportunities and our flexibility to change our business strategy. Furthermore, acquisition opportunities in domestic or international markets may be adversely affected if we need or require the target company to comply with some REIT requirements prior to completing any such acquisition. In addition, our status as a REIT may result in investor pressures not to pursue growth opportunities that are not immediately accretive.
Moreover, if we fail to comply with certain asset ownership tests, at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate assets in adverse market conditions or forgo otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders.28REIT related ownership limitations and transfer restrictions may prevent or restrict certain transfers of our capital stock.
In order for us to continue to satisfy the requirements for REIT qualification, our capital stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer "individuals" (as defined in the Code to include certain entities such as private foundations) during the last half of a taxable year. In order to facilitate compliance with the REIT rules, our Charter includes provisions regarding REIT-related ownership limitations and transfer restrictions that generally prohibit any "person" (as defined in our Charter) from beneficially or constructively owning, or being deemed to beneficially or constructively own by virtue of the attribution provisions of the Code, more than (1) 9.8%, by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, or (2) 9.8% in aggregate value of the outstanding shares of all classes and series of our capital stock. In addition, our Charter provides for certain other ownership limitations and transfer restrictions. Under applicable constructive ownership rules, any shares of capital stock owned by certain affiliated owners generally would be added together for purposes of the ownership limitations. These ownership limitations and transfer restrictions could have the effect of delaying, deferring or preventing a transaction or a change in control of our company that might involve a premium price for our capital stock or otherwise might be in the best interest of our stockholders.Certifications
We submitted the CEO certification required by Section 303A.12(a) of the New York Stock Exchange ("NYSE") Listed Company Manual, relating to compliance with the NYSE's corporate governance listing standards, to the NYSE on June 7, 2024 with no qualifications. We have included the certifications of our CEO and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 and related rules as Exhibits 31.1 and 31.2 to this 2024 Form 10-K.29
FY 2025-12-31 (later)
Item 1A. Risk Factors
You should carefully consider all of the risks described below, as well as the other information contained in this document, when evaluating your investment in our securities.
Summary of Risk FactorsThe following summarizes our material risk factors, including risk factors relating to our Fiber Business. However, this summary is not intended to be a comprehensive and complete list of all risk factors identified by the Company. Refer to the following pages of this section for additional details regarding these summarized risk factors.Risks Relating to Our Business and Industry:
• Our business depends on the demand for our communications infrastructure (including towers, small cells and fiber), driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services).
• A substantial portion of our revenues is derived from a small number of tenants, and the loss, consolidation or financial instability of any of such tenants may materially decrease revenues, reduce demand for our communications infrastructure and services and impact our dividend per share growth.
• The expansion or development of our business, including through acquisitions, increased product offerings or other strategic opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations or financial results.• Our Fiber business model contains certain differences from our Towers business model, resulting in different operational risks. If we do not successfully operate our Fiber business model or identify or manage the related operational risks through the closing of the Strategic Fiber Transaction, such operations may produce results that are lower than anticipated.• Failure to timely, efficiently and safely execute on our construction projects could adversely affect our business.
• New technologies may reduce demand for our communications infrastructure or negatively impact our revenues.
• If we fail to retain rights to our communications infrastructure, including the rights to land under our towers and the right-of-way and other agreements related to our small cells and fiber, our business may be adversely affected.
• Our services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
• As a result of competition in our industry, we may find it more difficult to negotiate favorable rates on our new or renewing tenant contracts.
• New wireless technologies may not deploy or be adopted by tenants as rapidly or in the manner projected.
• If radio frequency emissions from wireless handsets or equipment on our communications infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues.
• Cybersecurity breaches or other information technology disruptions could adversely affect our operations, business, and reputation.• If we do not continue to make appropriate investments in, and effectively implement and maintain, our information technology systems and digital capabilities, our business and operating results could be adversely affected.• Our business may be adversely impacted by climate-related events, natural disasters, including wildfires, and other unforeseen events.• Failure to attract, recruit and retain qualified and experienced employees could adversely affect our business, operations and costs.
• Changes to management, including turnover of our top executives, could have an adverse effect on our business.
• Actions that we are taking, or have completed, to restructure our business in alignment with our strategic priorities may not be as effective as anticipated.
• Actions of activist stockholders could impact the pursuit of our business strategies and adversely affect our results of operations, financial condition, or stock price.
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Risks Relating to Our Pending Sale of the Fiber Business:
• The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position.
• Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed.
• The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price.
Risks Relating to Our Debt and Equity
• Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments limit our ability to take a number of actions that our management might otherwise believe to be in our best interests. In addition, if we fail to comply with our covenants, our debt could be accelerated.
• We have a substantial amount of indebtedness. In the event we do not repay or refinance such indebtedness, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets, possibly on unfavorable terms, to meet our debt payment obligations.
• Sales or issuances of a substantial number of shares of our common stock or securities convertible into shares of our common stock may adversely affect the market price of our common stock.
• Certain provisions of our restated certificate of incorporation ("Charter") and second amended and restated by-laws, as amended ("By-laws") and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders.
Risks Relating to Corporate Compliance
• If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.
Risks Relating to Our REIT Status
• Future dividend payments to our stockholders will reduce the availability of our cash on hand available to fund future discretionary investments, and may result in a need to incur indebtedness or issue equity securities to fund growth opportunities. In such event, the then current economic, credit market or equity market conditions will impact the availability or cost of such financing, which may hinder our ability to grow our per share results of operations.
• Remaining qualified to be taxed as a REIT involves highly technical and complex provisions of the Code. Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, thereby increasing our tax obligations and reducing our available cash.
• Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives.
• REIT related ownership limitations and transfer restrictions may prevent or restrict certain transfers of our capital stock.
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Risks Relating to Our Business and Industry
Our business depends on the demand for our communications infrastructure (including towers, small cells and fiber), driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services).
Tenant demand for our communications infrastructure depends on consumers' and organizations' demand for data. Additionally, the willingness of our tenants to utilize our communications infrastructure, or renew or extend existing tenant contracts on our communications infrastructure, is affected by numerous factors, including:
• availability or capacity of our communications infrastructure or associated land interests;
• location of our communications infrastructure;
• financial condition of our tenants, including their profitability and availability or cost of capital, including through government funding;
• willingness of our tenants to maintain or increase their network investment or changes in their capital allocation strategy;
• need for integrated networks and organizations;
• availability and cost of spectrum for commercial use;
• increased use of network sharing, roaming, joint development, or resale agreements by our tenants;
• mergers or consolidations by and among our tenants;
• changes in, or success of, our tenants' business models;
• governmental regulations and initiatives, including local or state restrictions on the proliferation of communications infrastructure;
• cost of constructing communications infrastructure;
• our market competition, including tenants that may elect to self-perform;
• technological changes, including those (1) affecting the number or type of communications infrastructure needed to provide data to a given geographic area or which may otherwise serve as a substitute or alternative to our communications infrastructure or (2) resulting in the obsolescence or decommissioning of certain existing wireless networks; and
• our ability to efficiently satisfy our tenants' service requirements.
A slowdown in demand for data or our communications infrastructure may negatively impact our growth or otherwise have a material adverse effect on us. If our current or potential tenants are unable to raise adequate capital to fund their business plans, as a result of disruptions in the financial and credit markets or otherwise, they may reduce their spending, which could adversely affect our anticipated growth or the demand for our communications infrastructure or services.The amount, timing, and mix of our tenants' network investment is variable and can be significantly impacted by the various matters described in these risk factors. Changes in tenant network investment typically impact the demand for our communications infrastructure. As a result, changes in tenant plans such as delays in the implementation of new systems, new and emerging technologies, or change in plans to expand coverage or capacity may reduce demand for our communications infrastructure.Furthermore, the industries in which our tenants operate (particularly those in the wireless industry) could experience a slowdown or slowing growth rates as a result of numerous factors, including a reduction in consumer demand for data or general economic conditions. There can be no assurances that weakness or uncertainty in the economic environment will not adversely impact our tenants or their industries, which may materially and adversely affect our business, including by reducing demand for our communications infrastructure or services. In addition, a slowdown may increase competition for site rental tenants or services. Such an industry slowdown or a reduction in tenant network investment may materially and adversely affect our business.
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A substantial portion of our revenues is derived from a small number of tenants, and the loss, consolidation or financial instability of any of such tenants may materially decrease revenues, reduce demand for our communications infrastructure and services and impact our dividend per share growth.Our three largest tenants are T-Mobile, AT&T and Verizon Wireless. In addition to our three largest tenants, we also derived a meaningful portion of our revenues and previously anticipated future growth from DISH. The loss of any one of our three largest tenants as a result of consolidation, merger, bankruptcy, insolvency, network sharing, roaming, joint development, resale agreements by our tenants or otherwise may result in (1) a material decrease in our revenues, (2) uncollectible account receivables, (3) an impairment of our deferred site rental receivables, communications infrastructure assets, or intangible assets (including goodwill), or (4) other adverse effects to our business. We cannot guarantee that tenant contracts with our largest tenants will not be terminated or that these tenants will renew their tenant contracts with us.Consolidation among our largest tenants will likely result in duplicate or overlapping parts of networks, for example, where they are co-residents on a tower or small cell network, which may result in the termination, non-renewal or re-negotiation of tenant contracts and negatively impact revenues from our communications infrastructure. Due to the long-term nature of our tenant contracts, we generally expect that the impact to our site rental revenues from any termination of our tenant contracts as a result of such potential consolidation would be spread out over multiple years. Such consolidation (or potential consolidation) may result in a reduction or slowdown in such tenants' network investment in the aggregate because their expansion plans may be similar. Tenant consolidation could decrease the demand for our communications infrastructure and services, which in turn may result in a reduction in our revenues or cash flows and may trigger a review for impairment of certain long-lived assets.On January 6, 2022, we entered into an agreement with T-Mobile that addressed the T-Mobile and Sprint network consolidation. This consolidation resulted in approximately $200 million in Towers non-renewals in 2025, and we anticipate additional non-renewals from this agreement, which we expect to fall within our historical non-renewal range of 1% to 2% of Towers annual site rental revenues, to occur each year through 2034. We expect an additional impact of approximately $40 million in aggregate Fiber non-renewals to occur in 2026 and in subsequent years, until the closing of the Strategic Fiber Transaction.
On January 12, 2026, we delivered a notice of default and termination to DISH relating to our Master Lease Agreement and underlying agreements with DISH as a result of DISH failing to make required payments and defaulting on its obligations under the agreements. As a result of the termination, we assert in the notice that DISH owes us all remaining payments under these agreements, which total in excess of $3.5 billion. As of December 31, 2025, associated with our agreements with DISH, we had recorded on our consolidated balance sheet approximately $50 million within "Receivables, net" and approximately $150 million within "Deferred site rental receivables," partially offset by approximately $34 million recorded within "Deferred revenues" and "Other long-term liabilities." We expect the total net balance sheet impact of approximately $165 million will ultimately be recoverable, and accordingly no adjustments have been made to reserve such net amount as of December 31, 2025. We do not intend to recognize additional revenue under these agreements pending further developments with respect to this matter.
See "Item 1. Business—The Company" and note 15 to our consolidated financial statements for further information regarding our largest tenants.The expansion or development of our business, including through acquisitions, increased product offerings or other strategic opportunities, may cause disruptions in our business, which may have an adverse effect on our business, operations or financial results.
We seek to expand and develop our business, including through acquisitions, increased product offerings, or other strategic opportunities. In the ordinary course of our business, we review, analyze and evaluate various potential transactions or other activities in which we may engage. Such transactions or activities could be complex, costly and time-consuming, or cause disruptions in, increase risk to or otherwise negatively impact our business. Among other things, such transactions and activities may:
• disrupt our business relationships with our tenants and landlords, depending on the nature of or counterparty to such transactions and activities;
• divert capital and the time or attention of management away from other business operations, including as a result of post-transaction integration activities;
• fail to achieve revenue or margin targets, operational synergies or other benefits contemplated;
• increase operational risk or volatility in our business;
• temporarily decrease the volume of our business;
• not result in the benefits management had expected to realize from such expansion and development activities, or those benefits may take longer to realize than expected;15• impact our cost structure and result in the need to hire additional employees;
• increase demands on current employees or result in current or prospective employees experiencing uncertainty about their future roles with us, which might adversely affect our ability to retain or attract key employees; or
• result in the need for additional TRSs or contributions of certain assets to TRSs, which are subject to federal and state corporate income taxes.Our Fiber business model contains certain differences from our Towers business model, resulting in different operational risks. If we do not successfully operate our Fiber business model or identify or manage the related operational risks through the closing of the Strategic Fiber Transaction, such operations may produce results that are lower than anticipated.
The business model for our Fiber operations contains certain differences from our business model for our Towers operations, including those relating to tenant base, competition, contract terms (including requirements for service level agreements regarding network performance and maintenance), upfront capital requirements, labor costs, landlord demographics, deployment and ownership of certain network assets, operational oversight requirements, government regulations, growth rates and applicable laws.While our Fiber operations have certain risks that are similar to our Towers operations, they also have certain operational risks (including the scalability of processes) that are different from our Towers business, including:
• the use of public rights-of-way and franchise agreements;
• the use of poles and conduits owned solely by, or jointly with, third parties;
• risks relating to overbuilding competitive fiber assets;
• risks relating to the specific markets in which we choose or plan to operate;
• risks relating to construction hazards, including boring, trenching, utility and maintenance of traffic hazards;
• construction management and construction-related billings to tenants;
• risks relating to efficiently and rapidly adjusting the size of the personnel needed to operate our Fiber business;
• risks relating to wireless carriers building their own small cell networks, or tenants utilizing their own or alternative fiber assets;
• the risk of failing to optimize the use of our finite supply of fiber strands;
• damage to our assets and the need to maintain, repair, upgrade and periodically replace our assets;
• the risk of failing to properly maintain or operate highly specialized hardware and software;
• network data security risks;
• the risk of new technologies that could enable tenants to realize the same benefits with less utilization of our fiber;
• potential damage to our overall reputation as a communications infrastructure provider; and• the use of competitive local exchange carrier ("CLEC") status.
In addition, the rate at which tenants adopt or prioritize small cells and fiber solutions has been lower or slower than we anticipated, and may continue to be lower or slower, or may cease to exist altogether. For example, our tenants have initially focused on utilizing towers in the first phase of deploying their 5G networks, which has led to delays in some of our small cell deployments. We anticipate that these delays will be temporary, as our tenants plan for the next phase of their 5G network deployment which we believe will require small cells at scale. Our Fiber operations also expose us to different safety or liability risks or hazards than our Towers business as a result of numerous factors, including those stemming from the deployment, location or nature of the assets involved. There may be risks and challenges associated with small cells and fiber solutions being comparatively new and emerging technologies that are continuing to evolve, and there may be other risks related to small cells and fiber solutions of which we are not yet aware. See " —The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position. ", " —Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed. ", " —The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price. " and "—Our business depends on the demand for our communications infrastructure (including towers, small cells and fiber), driven primarily by demand for data, and we may be adversely affected by any slowdown in such demand. Additionally, a reduction in the amount or change in the mix of network investment by our tenants may materially and adversely affect our business (including reducing demand for our communications infrastructure or services.) ", and note 3 to our consolidated financial statements, for discussions of the Strategic Fiber Transaction.Failure to timely, efficiently and safely execute on our construction projects could adversely affect our business.Our construction projects and related contracts can be long-term, complex in nature, dangerous, costly and challenging to execute. The quality of our performance on such construction projects depends in large part upon our ability to manage (1) the16associated tenant relationship and (2) the project itself by timely deploying and properly managing appropriate internal and external project resources. In connection with our construction projects, we generally bear the risk of cost over-runs, labor availability and productivity, and contractor pricing and performance.In addition, the construction projects (including modifications of existing communications infrastructure) can pose certain safety risks, including:
• risks resulting from elevated work, including falling hazards;
• risks of third-party non-compliance with safety regulations, industry best practices or other applicable standards;
• risks associated with utility hazards, including gas line, electrical or sewage strikes, which may result in explosions, electrocution and other potentially catastrophic events; and
• risk of potential wildfires, including due to welding, grinding, cutting, or other construction activity.
Such safety risks may cause personal injury or loss of life, severe damage to or destruction of property, suspension of operations or services, or significant damage to the environment, creating financial, regulatory or reputational damage that could adversely affect our business. See "—Our business may be adversely impacted by climate-related events, natural disasters, including wildfires, and other unforeseen events" below for additional information regarding potential adverse impacts to our business which may result from wildfires and other climate-related events.
Further, investments in newly constructed communications infrastructure may result in lower initial returns compared to returns on our existing communications infrastructure or us not being able to realize future tenant additions at anticipated levels.Additionally, contracts with our tenants for these projects typically specify delivery dates, performance criteria and penalties for our failure to perform. Our failure to perform timely and in accordance with the performance criteria exposes us to penalties specified in the contract or possible litigation. We often experience unforeseen delays, primarily in our Fiber business, from municipalities and utility companies that result in longer construction timelines than expected, which impact our ability to timely deliver on our projects. We may also experience unforeseen delays and increased project costs as a result of labor shortages, which may impact the availability of contractors to work on our construction projects. Our failure to manage such tenant relationships, project resources, and project milestones in a timely and efficient manner and appropriately manage safety risks could have a material adverse effect on our business.New technologies may reduce demand for our communications infrastructure or negatively impact our revenues.Improvements in the efficiency, architecture, and design of communication networks may reduce the demand for our communications infrastructure. For example, new technologies and spectrum that may promote network sharing, joint development, backhaul and fronthaul efficiency or resale agreements by our tenants, such as signal combining technologies or network virtualization, may reduce the need for our communications infrastructure. In addition, other technologies, such as WiFi, satellite (such as low earth orbiting) and mesh transmission systems may serve as substitutes for, or alternatives to, leasing on communications infrastructure that might otherwise be anticipated or expected had such technologies not existed. In addition, new technologies that enhance the range, efficiency and capacity of communication equipment could reduce demand for our communications infrastructure. Any significant reduction in demand for our communications infrastructure resulting from the new technologies may negatively impact our revenues or otherwise have a material adverse effect on us.If we fail to retain rights to our communications infrastructure, including the rights to land under our towers and the right-of-way and other agreements related to our small cells and fiber, our business may be adversely affected.
The property interests and other rights to our communications infrastructure, including the land under our towers, are derived from leasehold and sub-leasehold interests, fee interests, easements, licenses, rights-of-way, and franchise and other agreements. A loss of these interests and other rights may interfere with our ability to conduct our business or generate revenues. For various reasons, we may not always have the ability to access, analyze, or verify all information regarding titles or other issues prior to acquiring communications infrastructure. Further, we may not be able to renew ground leases or other agreements on commercially viable terms.Our ability to retain rights to the land on which our towers are located depends on our ability to purchase such land, by acquiring fee interests and perpetual easements, or renegotiate or extend the terms of the agreements relating to such land. Approximately 10% of our towers Adjusted Site Rental Gross Margin for the year ended December 31, 2025 was derived from towers where the leases for the land under such towers had final expiration dates of less than 10 years. If we are unable to retain rights to the property on which our communications infrastructure is located, our business may be adversely affected.
As of December 31, 2025, approximately 55% of our towers were leased or subleased or operated and managed under master leases, subleases, or other agreements with AT&T and T-Mobile (including those which T-Mobile assumed in its merger17with Sprint). We have the option to purchase these towers at the end of their respective lease terms. We have no obligation to exercise such purchase options. We may not have the required available capital to exercise our right to purchase some or all of these towers at the time these options are exercisable. Even if we do have available capital, we may choose not to exercise our right to purchase these towers or some or all of the T-Mobile or AT&T towers for business or other reasons. In the event that we do not exercise these purchase rights, or are otherwise unable to acquire an interest that would allow us to continue to operate these towers after the applicable period, we will lose the cash flows derived from such towers, which may have a material adverse effect on our business. In the event that we decide to exercise these purchase rights, the benefits of the acquisition of these towers may not exceed the costs, which could adversely affect our business. Additional information concerning these towers and the applicable purchase options as of December 31, 2025 is as follows:
• 22% of our towers are leased or subleased or operated and managed under a master lease or other related agreements with AT&T. We have the option to purchase the leased and subleased towers from AT&T at the end of the respective lease or sublease terms for aggregate option payments of approximately $4.2 billion, which payments, if such option is exercised, would be due between 2032 and 2048.
• 32% of our towers are leased or subleased or operated and managed under master leases, subleases or other agreements with T-Mobile (including those which T-Mobile assumed in its merger with Sprint). In 2037, we have the option to purchase all (but not less than all) of approximately half of such leased and subleased towers from T-Mobile for approximately $2.3 billion. We have the option to purchase the remainder of such towers from T-Mobile at the end of the respective terms for aggregate option payments of approximately $2.0 billion, which payments, if such option is exercised, would be due between 2035 and 2049. In addition, another 1% of our towers under master leases, subleases, and other agreements with T-Mobile are subject to a lease and sublease or other related arrangements with AT&T. We have the option to purchase these towers from AT&T at the end of their respective lease terms for aggregate option payments of up to approximately $373 million as of December 31, 2025, which payments, if such option is exercised, would be due prior to 2032 (less than $5 million would be due before 2029).Under master lease or master prepaid lease arrangements we have with AT&T and T-Mobile (including those which T-Mobile assumed in its merger with Sprint), certain of our subsidiaries lease or sublease, or are otherwise granted the right to operate and manage, towers from bankruptcy remote subsidiaries of such carriers. If one of these bankruptcy remote subsidiaries should become a debtor in a bankruptcy proceeding and is permitted to reject the underlying ground lease, our subsidiaries could lose their interest in the applicable sites. If our subsidiaries were to lose their interest in the applicable sites or if the applicable ground leases were to be terminated, we would lose the cash flow derived from the towers on those sites, which may have a material adverse effect on our business. We have similar bankruptcy risks with respect to sites that we operate under management agreements.
For our small cells and fiber, we must maintain rights-of-way, franchise, pole attachment, conduit use, fiber use and other agreements to operate our assets. For various reasons, we may not always have the ability to maintain these agreements or obtain future agreements to construct, maintain and operate our fiber assets. Access to rights-of-way may depend on our CLEC status, and we cannot be certain that jurisdictions will (1) recognize such CLEC status or (2) not change their laws concerning CLEC access to rights-of-way. If a material portion of these agreements are terminated or are not renewed, we might be forced to abandon our assets, which may adversely impact our business. In order to operate our assets, we must also maintain fiber agreements that we have with public and private entities. There is no assurance that we will be able to renew these agreements on favorable terms, or at all. If we are unable to renew these agreements on favorable terms, we may face increased costs or reduced revenues.
Additionally, in order to expand our communications infrastructure footprint to new locations, we often need to obtain new or additional rights-of-way and other agreements. Our failure to obtain these agreements in a prompt and cost-effective manner may prevent us from expanding our footprint, which may be necessary to meet our contractual obligations to our tenants and could adversely impact our business.
Our services business has historically experienced significant volatility in demand, which reduces the predictability of our results.
The operating results of our services business for any particular period may experience significant fluctuations given its non-recurring nature and should not necessarily be considered indicative of longer-term results for this activity. Our services business is generally driven by demand for our communications infrastructure and may be adversely impacted by various factors, including:
• competition;
• the timing, mix and amount of tenant network investments;
• the rate and volume of tenant deployment plans;
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• unforeseen delays or challenges relating to work performed;
• economic weakness or uncertainty;
• labor availability and productivity;
• availability of key components;
• our market share; and
• changes in the size, scope, or volume of work performed.During both 2024 and 2025, due primarily to our discontinuation of installation services as a towers product offering previously announced in July 2023, services and other revenues decreased by 54% and 49%, respectively, when compared to year ended December 31, 2023. We continue to offer site development services on our towers. See note 17 to our consolidated financial statements and "Item 7. MD&A—General Overview—Highlights of Business Fundamentals and Results" for further discussion of our 2023 Restructuring Plan, which included discontinuing installation services as a towers product offering.As a result of competition in our industry, we may find it more difficult to negotiate favorable rates on our new or renewing tenant contracts.
Our growth is dependent on our entering into new tenant contracts (including amendments to tenant contracts upon modification of existing towers, small cells or fiber), as well as renewing or renegotiating tenant contracts when existing tenant contracts terminate. Competition in our industry may make it more difficult for us to attract new tenants, maintain or increase our gross margins, or maintain or increase our market share. In addition, competition (primarily in our fiber solutions business) may, in certain circumstances, cause us to renegotiate certain existing tenant contracts to avoid early contract terminations. We face competition for site rental tenants and associated contractual rates from various sources, including (1) other independent communications infrastructure owners or operators, including those that own, operate, or manage towers, rooftops, broadcast or transmission towers, utility poles, fiber (including non-traditional competitors such as cable providers) or small cells, (2) tenants who elect to self-perform and (3) new alternative deployment methods for communications infrastructure.
Our Fiber business generally has different competitors than those in our Towers business, including other owners of fiber, as well as new entrants into small cells and fiber solutions, some of which may have larger networks, greater financial resources or more experience in managing such assets than we have. The level of non-renewals associated with fiber solutions is generally higher than that of Towers and small cells.
New wireless technologies may not deploy or be adopted by tenants as rapidly or in the manner projected.
There can be no assurances that new wireless services or technologies, which may drive demand for our communications infrastructure, will be introduced or deployed as rapidly or in the manner projected by the wireless carriers. In addition, demand or tenant adoption rates for such new technologies may be lower or slower than anticipated for numerous reasons. As a result, growth opportunities or demand for our communications infrastructure arising from such technologies may not be realized at the times or to the extent anticipated.
If radio frequency emissions from wireless handsets or equipment on our communications infrastructure are demonstrated to cause negative health effects, potential future claims could adversely affect our operations, costs or revenues.
The potential connection between radio frequency emissions and certain negative health effects, including some forms of cancer, has been the subject of substantial study by the scientific community in recent years. We cannot guarantee that claims relating to radio frequency emissions will not arise in the future or that the results of such studies will not be adverse to us.
Public perception of possible health risks associated with cellular or other wireless connectivity services and wireless technologies (such as 5G) may slow or diminish the growth of wireless companies and deployment of new wireless technologies, which may in turn slow or diminish our growth. In particular, negative public perception of, and regulations regarding, these perceived health risks may slow or diminish the market acceptance of wireless services and technologies. If a connection between radio frequency emissions and possible negative health effects were established, our operations, costs, or revenues may be materially and adversely affected. We currently do not maintain any significant insurance with respect to these matters.
Cybersecurity breaches or other information technology disruptions could adversely affect our operations, business, and reputation.Despite existing security measures, certain of our information technology and communications infrastructure may be subject to damage, disruptions, or shutdowns due to unauthorized access, computer viruses, ransomware or other malicious software, cyber-attacks and other security breaches. In addition, integration and adoption of artificial intelligence and machine learning ("AI") into our business may pose new information security risks and challenges. The increased prevalence of AI may19also heighten cybersecurity and data protection risks. AI-enabled systems, as well as AI-driven techniques used by threat actors, may increase the sophistication, scale, frequency, and speed of cyberattacks targeting our information technology systems, operational technology, or sensitive data. Further, our reliance on cloud- or internet-based services and on remote access to information systems increases our exposure to potential cybersecurity incidents. An attack attempt or security breach, such as a distributed denial of service attack, could potentially result in (1) interruption or cessation of certain of our services to our tenants or access by our tenants to certain of our information technology systems, (2) our inability to meet expected levels of service to our tenants, (3) data transmitted over our tenants' networks being compromised or misappropriated, or (4) business or other sensitive data being compromised, misappropriated or lost. Although we believe we have a comprehensive incident response plan and other cybersecurity measures and policies in place, we cannot guarantee that our security measures will not be circumvented, resulting in tenant network failures or interruptions that could impact our tenants' network availability and have a material adverse effect on our business, financial condition, or operational results.
Additionally, security incidents impacting our tenants, vendors and business partners could result in a material adverse effect on our business. We may be required to expend significant resources to protect against or recover from such threats. If an actual or perceived breach of our cybersecurity or information technology, or that of our cloud- or internet-based service providers, occurs, the market perception of the effectiveness of our security measures could be harmed, and we could lose tenants. Further, the perpetrators of cyber-attacks are not restricted to particular groups or persons. These threats can arise from external parties, such as cyber terrorists or nation-state actors, as well as insiders, such as our employees or contractors, who knowingly or unknowingly engage in or enable malicious cyber activities. In addition, our acquisitions and divestitures, both past and future, may alter our potential exposure to the risks described above. While we maintain insurance that includes coverage in the event of cybersecurity or other information technology breaches, there can be no assurances that such coverage will be adequate to cover exposure from such incidents.
If we do not continue to make appropriate investments in, and effectively implement and maintain, our information technology systems and digital capabilities, our business and operating results could be adversely affected.
Our business relies on information technology ("IT") systems to support key operational, commercial, and financial processes, including site and asset management, leasing and contract administration, billing and collections, construction and supply chain activities, regulatory compliance, and financial reporting. Our industry continues to experience increasing operational complexity and growing reliance on digital tools, automation, data analytics, and integrated systems, including the use of artificial intelligence. We continue to seek to drive organizational improvement through digital transformation initiatives and modernizing our legacy IT systems.
If we do not invest in modernizing our IT systems or fail to effectively execute our digital transformation initiatives, we may experience operational inefficiencies, higher operating costs, reduced scalability, and limitations on our ability to respond to customer requirements or support deployment activity. In addition, reliance on legacy or fragmented systems may affect data accuracy, system reliability, and management’s ability to obtain timely and actionable information.
Some of our IT and digital initiatives require significant investment, which can be complex and are subject to risks, including implementation delays, cost overruns, integration challenges, and disruption to ongoing operations. Even when successfully implemented, such systems may not deliver anticipated benefits or may require ongoing investment to remain effective as technologies, customer expectations, and industry practices evolve.
If our competitors or customers adopt advanced digital capabilities more quickly than we do, we could be at a competitive disadvantage. Any failure to effectively invest in or execute our IT and digital initiatives could adversely affect our operational performance, financial results, and ability to execute our business strategy.Our business may be adversely impacted by climate-related events, natural disasters, including wildfires, and other unforeseen events.We could be negatively impacted by unforeseen events, such as extreme weather events or natural disasters (including as a result of any potential effects of climate change), or acts of vandalism. There is increasing concern that global climate change is occurring and could result in increased frequency of certain types of natural disasters and extreme weather events. Although we have implemented a wildfire risk mitigation program, the effects of climate change have increased the risk and extent of wildfires that could potentially result from certain of our construction and maintenance projects and other operating activities. We cannot predict with certainty the rate at which climate change is occurring or the potential direct or indirect impacts of climate change to our business. Any such unforeseen events could, among other things, damage or delay deployment of our communications infrastructure, interrupt or delay service to our tenants or could result in legal claims or penalties, regulatory action or fines, disruption in operations, damage to our reputation, negative market perception, or costly response measures, which could adversely affect our business.20While we currently maintain insurance policies that include coverage in the event of natural disasters and other unforeseen events, including possible incidents in which our actions (or the actions of those acting on our behalf) contribute to such events, there can be no assurances that such coverage will be adequate to cover exposure from such events. Further, we do not maintain, and do not expect to maintain, insurance policies that provide adequate coverage in the event that our actions (or those actions of those acting on our behalf) contribute to a wildfire event, as a result of the fact that such insurance policies are generally not economically available.Failure to attract, recruit and retain qualified and experienced employees could adversely affect our business, operations and costs.
Our ability to sustain and grow our business and execute on our strategy requires us, in part, to attract, recruit and retain qualified and experienced employees, including key management personnel and other talent. We have encountered a competitive labor market for experienced talent in our industry due, in part, to macroeconomic conditions. Our stock price performance has caused, and may continue to cause, a failure to achieve certain metrics on which vesting of our performance-based equity awards is based. If our total compensation package is not viewed as competitive, our ability to successfully attract, recruit and retain key employees could adversely impact our business, operations, and costs, which could result in the loss of institutional knowledge and expertise of departing employees.
We have recently experienced, and may continue to experience, the departure of key management personnel, as well as the elimination and consolidation of roles and responsibilities. See " —Changes to management, including turnover of our top executives, could have an adverse effect on our business.", "—Actions that we are taking, or have completed, to restructure our business in alignment with our strategic priorities may not be as effective as anticipated." and " — The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position. " for a discussion of the Strategic Fiber Transaction, recent management changes and the reductions in our workforce in 2023 and 2024, and the potential adverse impact on our workforce therefrom.
Changes to management, including turnover of our top executives, could have an adverse effect on our business.Our business has experienced, and may continue to experience, significant executive management changes, including the consolidation of roles and responsibilities. In December 2023, we announced the retirement of Jay A. Brown, our President and Chief Executive Officer ("CEO") and the appointment of Anthony J. Melone, a member of our board of directors, to serve as interim President and CEO. In April 2024, Steven J. Moskowitz was appointed as President and CEO. Additionally, in January 2025, we announced that Daniel K. Schlanger would cease serving as our Executive Vice President ("EVP") and Chief Financial Officer ("CFO"), effective March 2025. In March 2025, we appointed Sunit Patel as EVP and CFO, effective April 2025. Additionally in March 2025, we announced the appointment of Mr. Schlanger as interim CEO and the termination of Mr. Moskowitz. In August 2025, we announced the appointment of Christian Hillabrant as President and CEO, effective September 2025, after which Mr. Schlanger was appointed EVP and Chief Transformation Officer. We also have experienced and may continue to experience the departure and transition of other members of our executive management team.These leadership changes may be inherently difficult to manage and may hamper our ability to meet our financial and operational goals as new management becomes familiar with their roles and the business. Such changes may also result in added costs, uncertainty concerning our future direction, decreased employee morale, and the loss of personnel with deep institutional knowledge and industry relationships. Any of the foregoing could result in significant disruptions to our operations and impact our ability to execute on our strategy and pursue strategic initiatives.
Further, we have increased our dependency on the remaining members of our executive management team to facilitate a smooth transition in leadership roles. Our executive officers are at-will employees; as such, their employment with us could terminate at any time, and any such departure could be particularly disruptive in light of the recent leadership changes. If we are unable to mitigate these or other similar risks, our business, results of operations and financial condition may be adversely affected.
Actions that we are taking, or have completed, to restructure our business in alignment with our strategic priorities may not be as effective as anticipated.In July 2023, we initiated the 2023 Restructuring Plan as part of our efforts to reduce costs to better align our operational needs with lower tower activity. The 2023 Restructuring Plan included reducing our total employee headcount by approximately 15%, discontinuing installation services as a towers product offering, and consolidating office space. As a result of the foregoing actions, we incurred $85 million and $9 million of restructuring charges in 2023 and 2024, respectively. The actions associated with the 2023 Restructuring Plan were substantially completed and related charges were recorded by June 30, 2024, while the payments for the employee headcount reduction were substantially completed by December 31, 2024. The remaining payments for the office space consolidation will be completed by 2032.21In June 2024, we initiated the 2024 Restructuring Plan as part of our efforts to drive operational efficiencies and reduce operating costs and capital expenditures, with a primary focus on our Fiber segment. As a result, we announced a reduction of our total employee headcount by more than 10% and the closing of certain offices. Related to the actions undertaken for the 2024 Restructuring Plan, we incurred $100 million of restructuring charges in 2024. The actions associated with the 2024 Restructuring Plan and related charges were substantially completed and recorded by December 31, 2024, while the payments were substantially completed for the employee headcount reduction in 2025 and are expected to be completed for office closures by 2033.
In February 2026, we initiated the 2026 Restructuring Plan as part of our efforts to enhance the efficiency and effectiveness of the our standalone tower business. As a result, we announced a reduction of our total tower and corporate employee headcount by approximately 20%.
In addition to the 2023 and 2024 Restructuring Plans and 2026 Restructuring Plan, we may from time to time take actions to realign our business, operations, and cost structure with our strategic priorities. In undertaking these actions we may incur other charges or cash expenditures not initially contemplated due to unanticipated events that may occur, including in connection with the execution of these actions. We make certain assumptions in estimating the anticipated savings we expect to achieve under these actions, which include the estimated savings from the elimination of certain headcount and the consolidation and closure of office space. These assumptions may turn out to be incorrect due to a variety of factors. In addition, our ability to realize the expected benefits from these actions is subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. As such, we may not realize, in full or in part, or sustain, the anticipated benefits from these actions or do so within the expected time frame, and anticipated benefits may not be adequate to meet our long-term profitability and operational expectations.
Furthermore, the actions may result in unintended consequences, including:• employee attrition beyond the intended reduction in force;
• damage to our corporate culture and decreased employee morale and productivity among our remaining employees;
• diversion of management attention;
• adverse effects to our reputation as an employer (which could make it more difficult for us to hire new employees in the future);
• loss of institutional knowledge and expertise of departing employees;
• inability to timely and efficiently scale our workforce in response to shifting demand in our business; and
• potential failure or delays to meet operational and growth targets due to the loss of qualified employees.If we experience any of these adverse consequences, the actions and other strategic initiatives may not achieve or sustain their intended benefits, or the benefits, even if achieved, may not be adequate to meet our long-term profitability and operational expectations, which could adversely affect our business, results of operations and financial condition.Actions of activist stockholders could impact the pursuit of our business strategies and adversely affect our results of operations, financial condition, or stock price.We have been, and may in the future be, subject to activities initiated by activist stockholders. In December 2023, we entered into a Cooperation Agreement ("Cooperation Agreement") with Elliott Investment Management L.P., Elliott Associates, L.P. and Elliott International, L.P. (collectively, "Elliott"). Pursuant to the Cooperation Agreement, we agreed, among other things, (1) to promptly appoint Jason Genrich and Sunit Patel as members of the board of directors, with an initial term that expired at our 2024 Annual Meeting of Stockholders ("2024 Annual Meeting"), (2) to establish a Fiber Review Committee to conduct a strategic and operational review of our Fiber business and (3) to establish a CEO Search Committee to conduct a search for the next CEO of our Company.
On March 3, 2024, we entered into an amendment to the Cooperation Agreement with Elliott, which, among other things, (1) eliminated limitations on the size of our board of directors, the Fiber Review Committee and the CEO Search Committee, (2) provided that Elliott and certain of its affiliates would vote pro rata in accordance with the vote of other stockholders at the 2024 Annual Meeting, subject to certain exceptions, and (3) provided our board of directors could change its recommendation and cease soliciting proxies in favor of Messrs. Genrich or Patel if it first made a determination that its fiduciary duties required it to do so. Messrs. Genrich and Patel were subsequently reelected to serve until our 2025 Annual Meeting of Stockholders. The operational review of our Fiber business and the search for the next CEO of our company concluded during 2024, and the strategic review of our Fiber business concluded in 2025 with our entry into the Strategic Fiber Agreement. In March 2025, we announced that Mr. Patel resigned from our board of directors, effective immediately, and was be appointed as Executive Vice President and CFO, effective April 2025. See " —The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position. ", " —Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may22not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed. " and " —The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price. " for a discussion of the Strategic Fiber Transaction. The Cooperation Agreement, as amended, remains in effect.
We strive to maintain constructive, ongoing communications with all stockholders, and we welcome constructive input from all stockholders toward the shared goal of enhancing long-term stockholder value. Nonetheless, we may not be successful in engaging constructively with one or more stockholders, and any resulting activist campaign that contests, or seeks to change, our strategic direction or business mix (for example, our proxy contest in 2024 with Boots Capital) could have an adverse effect on us because: (1) responding to actions by activist stockholders could disrupt our business and operations, be costly or time-consuming, or divert the attention of our board of directors or management from the pursuit of business strategies, which could adversely affect our results of operations or financial condition; (2) perceived uncertainties as to our future direction may lead to the perception of a change in the direction of the business, instability, or lack of continuity, any of which may be exploited by our competitors, cause concern to our current or potential customers and vendors, and our employees and make it more difficult to attract and retain qualified personnel; and (3) these types of actions could cause significant fluctuations in our share price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.Risks Relating to Our Pending Sale of the Fiber Business
The pendency of the sale of our Fiber Business to Zayo and EQT may have an adverse effect on our business, results of operations, cash flows and financial position.
On March 13, 2025, we signed the Strategic Fiber Agreement to sell all of our Fiber Business, with Zayo acquiring the fiber solutions business and EQT acquiring the small cell business. The pending sale of the Fiber Business may have an adverse effect on our operating results if our customers delay, defer, or cancel work with us pending completion of the Strategic Fiber Transaction.
We are subject to additional risks in connection with the pendency of the proposed Strategic Fiber Transaction, including:
• Parties with which we do business may be uncertain as to the effects the transaction may have on them, including with respect to current or future business relationships with us, and these relationships may be subject to disruption as customers, suppliers and other persons with whom we have a business relationship may delay or defer certain business decisions or might decide to terminate, change or renegotiate their relationships with us, as applicable, or consider entering into business relationships with parties other than us. The risk, and adverse effect, of any disruption could be exacerbated by a delay in the consummation of the transaction or termination of the Strategic Fiber Agreement;
• The restrictions and requirements imposed on our business and operations pursuant to certain covenants set forth in the Strategic Fiber Agreement and ancillary transaction agreements obligate us to generally conduct our business in a commercially reasonable manner and in all material respects in the ordinary course of business consistent with past practice and may prevent us from pursuing certain opportunities, entering into certain contracts with customers and suppliers, or taking certain other actions without Zayo’s and/or EQT's approval;
• We may be unable to attract, recruit, retain and motivate current and prospective employees who may be uncertain about their future roles following completion of the proposed transaction, and our operations could suffer due to employee attrition or a reduction in employee productivity as a result of this uncertainty; and• The pursuit and planning for the transaction have placed and will continue to place a significant burden on management and other internal resources and may divert management’s attention away from day-to-day business concerns and other opportunities that may have been beneficial to us, which could adversely affect our business, financial condition and operating results.See " —The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price. " below for a discussion of risks associated with the potential failure to complete the planned sale of the Fiber Business.
Completion of the Strategic Fiber Transaction is subject to the conditions contained in the Strategic Fiber Agreement, including regulatory approvals, which may not be received, and separation of the Fiber Business from our current operations, and if these conditions are not satisfied or waived, the transaction will not be completed.The Strategic Fiber Agreement contains closing conditions and requirements with which we must comply pending the closing of the Strategic Fiber Transaction, including (1) obtaining regulatory approvals from certain U.S. regulatory and23governmental authorities, including various consents, clearances under antitrust statutes, authorizations and declarations of non-objection, or expiration of waiting periods (or extensions thereof), and (2) separating each of the fiber solutions and small cell businesses from our current operations, in accordance with the terms of the Strategic Fiber Agreement.
In deciding whether to grant the required regulatory approval, consent or clearance, the relevant governmental entities will consider the effect of the transaction on competition within their relevant jurisdiction. Regulatory and governmental entities may impose conditions on their respective approvals, in which case lengthy negotiations may ensue among such regulatory or governmental entities, Zayo, EQT and us. Such conditions, any such negotiations and the process of obtaining regulatory approvals could have the effect of delaying or preventing consummation of the transaction.The separation and conveyance of each of the fiber solutions and small cells businesses from our current operations to the respective purchaser in connection with the Strategic Fiber Transaction poses significant challenges, including division and allocation of assets, information technology, contracts and employees relating to each of the applicable businesses.
If any of these conditions, certain of which may not be within our control, are not satisfied or waived, the Strategic Fiber Agreement may be terminated, or the Strategic Fiber Transaction may not close.
The failure to complete the planned sale of the Fiber Business to Zayo and EQT could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price.
The Strategic Fiber Transaction, which is expected to close in the first half of 2026, is subject to the satisfaction or waiver of certain closing conditions, and there is no assurance that all of the various conditions will be satisfied, or that the transaction will be completed on the proposed terms, within the expected timeframe or at all. The closing of the transaction may be delayed, and the transaction may ultimately not be completed, due to a number of factors, including as a result of the failure to satisfy any requisite closing condition in the Strategic Fiber Agreement, potential future stockholder litigation and other legal and regulatory proceedings.
If the Strategic Fiber Transaction does not close, we may suffer consequences that could adversely affect our ongoing and future business, financial condition, operating results, cash flows and stock price, and our stockholders would be exposed to additional risks, including for example:
• To the extent that the current market price of our stock reflects an assumption that the transaction will be completed, the price of our common stock could decrease;
• Investor confidence in us could decline and stockholder litigation could be brought against us;
• We have incurred significant costs, including professional services fees and other transaction costs, in connection with the proposed transaction that we would be unable to recover, and devoted substantial commitments of time and resources by our management and employees, which could have otherwise been devoted to day-to-day operations and other opportunities that could have been beneficial to us as an independent company; and
• There can be no assurance that our business, relationships with other parties, liquidity or financial condition will not be adversely affected, as compared to the condition prior to the announcement of the transaction, if the transaction is delayed or not consummated.24Risks Relating to Our Debt and Equity
Our substantial level of indebtedness could adversely affect our ability to react to changes in our business, and the terms of our debt instruments limit our ability to take a number of actions that our management might otherwise believe to be in our best interests. In addition, if we fail to comply with our covenants, our debt could be accelerated.We have a substantial amount of indebtedness (approximately $24.2 billion as of February 19, 2026). See "Item 7. MD&A—Liquidity and Capital Resources" for a tabular presentation of our contractual debt maturities. As a result of our substantial indebtedness:• we may be more vulnerable to general adverse economic or industry conditions;
• we may find it more difficult to obtain additional financing to fund discretionary investments or other general corporate requirements or to refinance our existing indebtedness;
• we are or will be required to dedicate a substantial portion of our cash flows from operations to the payment of principal or interest on our debt, thereby reducing the available cash flows to fund other projects, including the discretionary investments discussed in "Item 1. Business" and "Item 7. MD&A—Liquidity and Capital Resources" ;
• we may have limited flexibility in planning for, or reacting to, changes in our business or in the industry;
• we may have a competitive disadvantage relative to other companies in our industry with less debt;
• we may be adversely impacted by changes in interest rates (see below);
• we may be adversely impacted by changes to credit ratings related to our debt instruments;
• we may be required to issue equity securities or securities convertible into equity securities or sell some of our assets, possibly on unfavorable terms, in order to meet our debt payment obligations;
• we may be limited in our ability to take advantage of strategic business opportunities, including communications infrastructure development or mergers and acquisitions; and
• we could fail to remain qualified for taxation as a REIT due to limitations on our ability to declare and pay dividends to stockholders as a result of restrictive covenants in our debt instruments.An increase in interest rates driven by the Federal Reserve would increase our cost of borrowing. Between March 2022 and August 2023 the Federal Reserve raised the federal funds rate from 0.20% to 5.33%. As of February 19, 2026, approximately 19% of our outstanding indebtedness consisted of variable interest rates. Any prolonged period of elevated interest rates or further increases to interest rates on such debt could continue to adversely impact our financial results and our ability to meet our dividend growth targets, strategically deploy our capital or execute our business plan. See " Item 7A. Quantitative and Qualitative Disclosures about Market Risk" for a further discussion of our interest rate risk.
Currently, we have debt instruments in place that limit, in certain circumstances, our ability to incur additional indebtedness, pay dividends, create liens, sell assets, or engage in certain mergers and acquisitions, among other things. In addition, the credit agreement governing our senior unsecured credit facility ("2016 Credit Agreement"), which consists of our senior unsecured term loan A facility and senior unsecured revolving credit facility (collectively, "2016 Credit Facility"), contains financial maintenance covenants. Our ability to comply with these covenants or to satisfy our debt obligations will depend on our future operating performance. If we violate the restrictions in our debt instruments or fail to comply with our financial maintenance covenants, we will be in default under those instruments, which in some cases would cause the maturity of a substantial portion of our long-term indebtedness to be accelerated. In addition, the closing of the Strategic Fiber Transaction could adversely affect our compliance with certain covenants and restrictions. While we would expect to seek to refinance or amend the affected debt instrument in the event of noncompliance, there can be no assurance that we would be able to do so on acceptable terms. Furthermore, if the limits on our ability to pay dividends prevent us from satisfying our REIT distribution requirements, we could fail to remain qualified for taxation as a REIT. If these limits do not jeopardize our qualification for taxation as a REIT but nevertheless prevent us from distributing 100% of our REIT taxable income, we will be subject to federal and state corporate income taxes, and potentially a nondeductible excise tax, on our undistributed taxable income. If our operating subsidiaries were to default on their debt, the trustee could seek to foreclose the collateral securing such debt, in which case we could lose the communications infrastructure and the associated revenues. See "Item 7. MD&A—Liquidity and Capital Resources—Debt Covenants" for a further discussion of our debt covenants.CCI is a holding company that conducts all of its operations through its subsidiaries. Accordingly, CCI's sources of cash to pay interest or principal on its outstanding indebtedness are distributions relating to its respective ownership interests in its subsidiaries from the net earnings and cash flows generated by such subsidiaries or from proceeds of debt or equity offerings. Earnings and cash flows generated by CCI's subsidiaries are first applied by such subsidiaries to conduct their operations, including servicing their respective debt obligations, after which any excess cash flows generally may be paid to CCI, in the absence of any special conditions, such as a continuing event of default. However, CCI's subsidiaries are legally distinct from the holding company and, unless they guarantee such debt, have no obligation to pay amounts due on their debt or to make funds available to us for such payment.25We have a substantial amount of indebtedness. In the event we do not repay or refinance such indebtedness, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets, possibly on unfavorable terms, to meet our debt payment obligations.We have a substantial amount of indebtedness, which, upon final maturity, we will need to refinance or repay. See "Item 7. MD&A—Liquidity and Capital Resources" for a tabular presentation of our contractual debt maturities. There can be no assurances we will be able to refinance our indebtedness (1) on commercially reasonable terms, (2) on terms, including with respect to interest rates, as favorable as our current debt, or (3) at all. As of February 19, 2026, approximately 60% of our fixed rate debt, with a weighted average interest rate of 3.7%, is scheduled to mature over the next five years. If interest rates remain elevated or continue to increase, we may have to (1) refinance our maturing fixed rate debt at interest rates that exceed the current interest rates on such debt or (2) use our variable interest rate debt to repay such fixed rate debt, thereby increasing our exposure to interest rate fluctuations.
Economic conditions and the credit markets have historically experienced, and may continue to experience, periods of volatility, uncertainty, or weakness that could impact (1) the availability or cost of debt financing, including any refinancing of the obligations described above, (2) our ability to draw the full amount of our $7.0 billion senior unsecured revolving credit facility under our 2016 Credit Facility ("2016 Revolver"), that, as of February 19, 2026, had $5.2 billion of undrawn availability, or (3) our ability to issue the full amount of the $2.0 billion commercial paper notes ("Commercial Paper Notes") under our unsecured commercial paper program ("CP Program"), that, as of February 19, 2026, had $1.9 billion outstanding.If we are unable to repay or refinance our debt, we cannot guarantee that we will be able to generate enough cash flows from operations or that we will be able to obtain enough capital to service our debt, fund our planned capital expenditures or pay future dividends. In such an event, we could face substantial liquidity issues and might be required to issue equity securities or securities convertible into equity securities, or sell some of our assets, possibly on unfavorable terms, to meet our debt payment obligations. Failure to repay or refinance indebtedness when required could result in a default under such indebtedness. If we incur additional indebtedness, any such indebtedness could exacerbate the risks described above.Sales or issuances of a substantial number of shares of our common stock or securities convertible into shares of our common stock may adversely affect the market price of our common stock.Future sales or issuances of common stock or other equity related securities may adversely affect the market price of our common stock, including any shares of our common stock issued to finance capital expenditures, finance strategic initiatives or repay debt. Our business strategy contemplates access to external financing to fund certain discretionary investments, which may include issuances of common stock or other equity related securities. We maintain an "at-the-market" stock offering program ("2024 ATM Program") through which we may, from time to time, issue and sell shares of our common stock having an aggregate gross sales price of up to $750 million to or through sales agents. As of February 19, 2026, we had $750 million of gross sales of common stock remaining under our 2024 ATM Program. From time to time, we may refresh or implement a new "at-the-market" stock offering program. See note 11 to our consolidated financial statements. As of February 19, 2026, we had approximately 436 million shares of common stock outstanding.
We have reserved an aggregate of approximately 14 million shares of common stock for issuance in connection with awards granted under our stock compensation plans.Further, a small number of common stockholders own a significant percentage of our outstanding common stock. If any one of these common stockholders, or any group of our common stockholders, sells a large quantity of shares of our common stock, or the public market perceives that existing common stockholders might sell a large quantity of shares of our common stock, the market price of our common stock may significantly decline.
Certain provisions of our Charter and By-laws and operative agreements, and domestic and international competition laws may make it more difficult for a third party to acquire control of us or for us to acquire control of a third party, even if such a change in control would be beneficial to our stockholders.
We have a number of anti-takeover devices in place that will hinder takeover attempts or may reduce the market value of our common stock. Our anti-takeover provisions include:
• the authority of the board of directors to issue preferred stock without approval of the holders of our common stock;
• advance notice and other procedural requirements relating to director nominations or proposals submitted by stockholders for actions to be taken at annual meetings of stockholders; and• provisions that the state courts or, in certain circumstances, the federal courts, in Delaware shall be the sole and exclusive forum for certain actions involving us, our directors, officers, employees and stockholders, and, unless the Company otherwise consents, that the federal courts shall be the sole and exclusive forum for resolution of claims
26
arising under the Securities Act of 1933, as amended (“Securities Act”). Since the Securities Act provides that federal and state courts have concurrent jurisdiction over lawsuits brought pursuant to the Securities Act, there may be uncertainty as to whether a court would enforce such a provision. Stockholders will not be deemed to have waived compliance with the federal securities laws, and this provision does not apply to claims for which the federal courts have exclusive jurisdiction (such as under the Exchange Act).Such provisions, as well as the provisions of Section 203 of the Delaware General Corporation Law, may impede a merger, consolidation, takeover, or other business combination or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
In addition, domestic or international competition laws may prevent or discourage us from acquiring communications infrastructure in certain geographical areas or impede a merger, consolidation, takeover, or other business combination or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
Risks Relating to Corporate Compliance
If we fail to comply with laws or regulations which regulate our business and which may change at any time, we may be fined or even lose our right to conduct some of our business.
A variety of federal, state, local, and foreign laws and regulations apply to our business, including those discussed in "Item 1. Business." Failure to comply with applicable requirements may lead to civil or criminal penalties, require us to assume indemnification obligations or breach contractual provisions. We cannot guarantee that existing or future laws or regulations, including federal, state, local, or foreign tax laws, will not adversely affect our business (including our REIT status), increase delays or result in additional costs. We also may incur additional costs as a result of liabilities under applicable laws and regulations, such as those governing environmental and safety matters. These factors may have a material adverse effect on us.Risks Relating to Our REIT Status
Future dividend payments to our stockholders will reduce the availability of our cash on hand available to fund future discretionary investments, and may result in a need to incur indebtedness or issue equity securities to fund growth opportunities. In such event, the then current economic, credit market or equity market conditions will impact the availability or cost of such financing, which may hinder our ability to grow our per share results of operations.For the first quarter in the year ended 2025, we paid a common stock dividend of $1.565 per share, and for each remaining quarter in 2025, we paid a common stock dividend of $1.0625, totaling approximately $2.1 billion. As we grow cash flows, we expect to increase our dividend per share. Whether dividends are to be declared and the amount and timing thereof remain subject to the discretion of our board of directors. See note 11 to our consolidated financial statements.We operate as a REIT for U.S. federal income tax purposes. To remain qualified and be taxed as a REIT, we are generally required to annually distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction, excluding net capital gain and after the utilization of any available NOLs) to our stockholders. Our quarterly cash common stock dividend will delay the utilization of our NOLs and may cause certain of the NOLs to expire without utilization. See also "Item 1. Business—REIT Status" and "Item 7. MD&A—General Overview—Common Stock Dividend."
As discussed in "Item 1. Business—Strategy," we seek to invest our available capital, including the net cash generated by our operating activities and external financing sources, in a manner that we believe will increase long-term stockholder value on a risk-adjusted basis. Our historical discretionary investments have included the following (in no particular order): construction of communications infrastructure; acquisitions of communications infrastructure; acquisitions of land interests (which primarily relate to land assets under towers); improvements and structural enhancements to our existing communications infrastructure; purchases of shares of our common stock from time to time; and purchases, repayments or redemptions of our debt. External financing, including debt, equity, and equity-related issuances to fund future discretionary investments either (1) may not be available to us or (2) may not be accessible by us at terms that would result in the investment of the net proceeds raised yielding incremental growth in our per share operating results. As a result, future dividend payments may hinder our ability to grow our per share results of operations or otherwise adversely affect our ability to execute our business plan.
Remaining qualified to be taxed as a REIT involves highly technical and complex provisions of the Code. Failure to remain qualified as a REIT would result in our inability to deduct dividends to stockholders when computing our taxable income, thereby increasing our tax obligations and reducing our available cash.
As a REIT, we are generally entitled to a deduction for dividends that we pay and therefore are not subject to U.S. federal corporate income tax on our net taxable income that is currently distributed to our common stockholders.27While we intend to operate so that we remain qualified as a REIT, given the highly complex nature of the rules governing REITs, the importance of ongoing factual determinations, the possibility of future changes in our circumstances, and the potential impact of future changes to laws and regulations impacting REITs, no assurance can be given that we will qualify as a REIT for any particular year.
In addition, the present U.S. federal tax treatment of REITs is subject to change, possibly with retroactive effect, by legislative, judicial or administrative action at any time, and any such change might adversely affect our REIT status or benefits. We cannot predict the impact, if any, that such changes, if enacted, might have on our business. However, it is possible that such changes could adversely affect our business, including our REIT status.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under certain provisions of the Code, then:
• we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income;
• we will be subject to federal and state income tax on our taxable income at regular corporate tax rates and, for years beginning before January 1, 2018, any applicable alternative minimum tax; and
• we would be disqualified from re-electing REIT status for the four taxable years following the year during which we were so disqualified.
Although we may have federal NOLs available to reduce any taxable income, to the extent our federal NOLs have been utilized or are otherwise unavailable, any such corporate tax liability could be substantial, would reduce the amount of cash available for other purposes and might necessitate the borrowing of additional funds or the liquidation of some investments to pay any additional tax liability. Accordingly, funds available for investment would be reduced.Under the Code, for taxable years beginning in or after 2018, no more than 20% of the value of the assets of a REIT may be represented by securities of one or more TRSs. This limitation is increased to 25% beginning in 2026. These limitations may affect our ability to make additional investments in non-REIT qualifying operations or assets, or in any operations held through TRSs. The net income of our TRSs is not required to be distributed to us, and income that is not distributed to us generally will not be subject to the REIT income distribution requirement. However, there may be limitations on our ability to accumulate earnings in our TRSs and the accumulation or reinvestment of significant earnings in our TRSs could result in adverse tax treatment. In particular, if the accumulation of cash in our TRSs causes the fair market value of our securities in our TRSs to exceed current or future limitations of the fair market value of our assets at the end of any quarter, then we may fail to remain qualified as a REIT.Complying with REIT requirements, including the 90% distribution requirement, may limit our flexibility or cause us to forgo otherwise attractive opportunities, including certain discretionary investments and potential financing alternatives.To remain qualified and be taxed as a REIT, we are required to satisfy the 90% distribution requirement as described above. We commenced declaring regular quarterly dividends to our common stockholders beginning with the first quarter of 2014. See note 11 to our consolidated financial statements. Whether dividends are to be declared and the amount and timing thereof remain subject to the discretion of our board of directors based on then-current and anticipated future conditions, including our earnings, net cash generated by operating activities, capital requirements, financial condition, our relative market capitalization, our existing federal NOLs of approximately $1.4 billion or other factors deemed relevant by our board of directors.To the extent that we satisfy the 90% distribution requirement but distribute less than 100% of our REIT taxable income (determined without regard to the dividends paid deduction, excluding net capital gain and after the utilization of any available NOLs), we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay to our stockholders for a calendar year is less than a minimum amount specified under the Code.
From time to time, we may generate REIT taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments. If we do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices, or distribute amounts that would otherwise be invested in future acquisitions to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT dividend requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect the value of our common stock. Furthermore, the REIT dividend requirements may increase the financing we need to fund capital expenditures, future growth, or expansion initiatives, which would increase our total leverage.28In addition to satisfying the 90% distribution requirement, to remain qualified as a REIT for tax purposes, we are required to continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets and the ownership of our capital stock. Compliance with these tests will require us to refrain from certain activities and may hinder our ability to make certain attractive investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities, or investments in the businesses to be conducted by our TRSs, and to that extent, limit our opportunities and our flexibility to change our business strategy. Furthermore, acquisition opportunities in domestic or international markets may be adversely affected if we need or require the target company to comply with some REIT requirements prior to completing any such acquisition. In addition, our status as a REIT may result in investor pressures not to pursue growth opportunities that are not immediately accretive.
Moreover, if we fail to comply with certain asset ownership tests, at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate assets in adverse market conditions or forgo otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders.REIT related ownership limitations and transfer restrictions may prevent or restrict certain transfers of our capital stock.
In order for us to continue to satisfy the requirements for REIT qualification, our capital stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer "individuals" (as defined in the Code to include certain entities such as private foundations) during the last half of a taxable year. In order to facilitate compliance with the REIT rules, our Charter includes provisions regarding REIT-related ownership limitations and transfer restrictions that generally prohibit any "person" (as defined in our Charter) from beneficially or constructively owning, or being deemed to beneficially or constructively own by virtue of the attribution provisions of the Code, more than (1) 9.8%, by value or number of shares, whichever is more restrictive, of the outstanding shares of our common stock, or (2) 9.8% in aggregate value of the outstanding shares of all classes and series of our capital stock. In addition, our Charter provides for certain other ownership limitations and transfer restrictions. Under applicable constructive ownership rules, any shares of capital stock owned by certain affiliated owners generally would be added together for purposes of the ownership limitations. These ownership limitations and transfer restrictions could have the effect of delaying, deferring or preventing a transaction or a change in control of our company that might involve a premium price for our capital stock or otherwise might be in the best interest of our stockholders.29
Item 7 · Management's Discussion & Analysis
+210 paragraphs −247 paragraphs ~210 changed
FY 2024-12-31 (earlier)
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
General Overview
Overview
We own, operate and lease shared communications infrastructure. See "Item 1. Business" for a further discussion of our business, including our long-term strategy, our REIT status, certain key terms of our tenant contracts and growth trends in the demand for data.
On March 13, 2025, management signed the Strategic Fiber Agreement to sell our Fiber Business, with Zayo acquiring the fiber solutions business and EQT acquiring the small cell business. Under the Strategic Fiber Agreement, we will receive $8.5 billion in aggregate, subject to certain closing adjustments. The Strategic Fiber Transaction is expected to close in the first half of 2026, subject to certain closing conditions and regulatory approvals. See "Item 1. Business—Overview" for further discussion of the pending sale of the Fiber Business.The Fiber Business did not meet the criteria for assets held for sale as of December 31, 2024, and therefore remains presented as a component of continuing operations. As a result, this document, unless otherwise noted, does not contemplate the planned sale of the Fiber Business.Highlights of Business Fundamentals and Results• Site rental revenues represented 97% of our 2024 consolidated net revenues. The vast majority of our site rental revenues is of a recurring nature and has been contracted for in prior years.
• We operate as a REIT for U.S. federal income tax purposes (see "Item 1. Business—REIT Status" and notes 2 and 9 to our consolidated financial statements)• Potential growth resulting from the increasing demand for data◦ We expect existing and potential new tenant demand for our communications infrastructure will result from (1) new technologies, (2) increased usage of mobile entertainment, mobile internet, and machine-to-machine applications, (3) adoption of other emerging and embedded wireless devices (including smartphones, laptops, tablets, wearables and other devices), (4) increasing smartphone penetration, (5) wireless carrier focus on expanding both network quality and capacity, including the use of both towers and small cells, (6) the adoption of other bandwidth-intensive applications (such as cloud services, artificial intelligence and video communications), (7) the availability of additional spectrum and (8) increased government initiatives to support connectivity throughout the U.S.
◦ We expect U.S. wireless carriers will continue to focus on improving network quality and expanding capacity (including through 5G initiatives) by utilizing a combination of towers and small cells. We believe our product offerings of towers and small cells provide a comprehensive solution to our wireless tenants' growing communications infrastructure needs.
◦ We expect organizations will continue to increase the usage of high-bandwidth applications that will require the utilization of more fiber infrastructure and fiber solutions, such as those we provide.
◦ Within our Fiber segment, we are able to generate growth and returns for our stockholders by deploying our fiber for both small cells and fiber solutions tenants.
◦ Tenant additions on our existing communications infrastructure are achieved at a low incremental operating cost, delivering high incremental returns.
◦ Substantially all of our communications infrastructure can accommodate additional tenancy, either as currently constructed or with appropriate modifications.• Returning cash flows provided by operations to stockholders in the form of dividends (see also "Item 1. Business—Strategy" )◦ During 2024, we paid common stock dividends totaling approximately $2.7 billion.
• Investing capital efficiently to grow long-term dividends per share
◦ We had discretionary capital expenditures of $1.1 billion for the year ended December 31, 2024, predominately resulting from the construction of new communications infrastructure and improvements to existing communications infrastructure in order to support additional tenants.
◦ We expect to continue to construct and acquire new communications infrastructure based on our tenants' needs and generate attractive long-term returns by adding additional tenants over time. See note 16 to our consolidated financial statements for a discussion of the 2024 Restructuring Plan, which resulted in, among other things, an
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increase in return thresholds on new growth opportunities in the Fiber segment and a reduction in Fiber segment capital expenditures for the year ended December 31, 2024.• Site rental revenues under long-term tenant contracts◦ Our wireless tenant contracts have initial terms generally between five to 15 years with contractual escalators and multiple renewal periods generally between five to 10 years each, exercisable at the option of the tenant.
◦ Our fiber solutions tenant contracts' initial terms generally vary between one to 20 years.
◦ As of December 31, 2024, our weighted-average remaining term was approximately six years, exclusive of renewals exercisable at the tenants' option, currently representing approximately $35.9 billion of expected future cash inflows.• Majority of our revenues from large wireless carriers◦ For the year ended December 31, 2024, approximately three-fourths of our site rental revenues were derived from T-Mobile, AT&T and Verizon Wireless. See "Item 1A. Risk Factors" and note 14 to our consolidated financial statements for a further discussion of our largest customers.• Majority of land under our towers under long-term control◦ For the year ended December 31, 2024, approximately 90% of our towers site rental gross margin and approximately 80% of our towers site rental gross margin was derived from towers located on land that we own or control for greater than 10 and 20 years, respectively. The aforementioned percentages include towers located on land that is owned, including through fee interests and perpetual easements, which represented approximately 40% of our towers site rental gross margin.
• Majority of our fiber assets are located in major metropolitan areas and are on public rights-of-way• Minimal sustaining capital expenditure requirements◦ For the year ended December 31, 2024, sustaining capital expenditures represented approximately 1% of net revenues.
• Debt portfolio with long-dated maturities extended over multiple years, with the vast majority of such debt having a fixed rate (see note 7 to our consolidated financial statements and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt)
◦ As of December 31, 2024, our outstanding debt had a weighted average interest rate of 3.9% and weighted average maturity of approximately eight years (assuming anticipated repayment dates on certain debt).
◦ As of December 31, 2024, 90% of our debt has fixed rate coupons.◦ Our debt service coverage and leverage ratios are within their respective financial maintenance covenants. See "Item 7. MD&A—Liquidity and Capital Resources—Debt Covenants" for a further discussion of our debt covenants.• During 2024, we refinanced and extended the maturities of certain of our debt (see note 7 to our consolidated financial statements and "Item 7. MD&A—Liquidity and Capital Resources—Financing Activities" for further discussion of our debt transactions)• Significant cash flows from operations◦ Net cash provided by operating activities was $2.9 billion for the year ended December 31, 2024.
◦ In addition to the positive impact of contractual escalators, we expect to grow our core business of providing access to our communications infrastructure as a result of future anticipated additional demand for our communications infrastructure.
• When compared to full year 2023, full year 2024 results were impacted by a reduction of the small cell and fiber solutions lease cancellations ("Sprint Cancellations") related to the previously disclosed T-Mobile and Sprint network consolidation. For full year 2024, there was a reduction in cash payments related to Sprint Cancellations of $165 million to satisfy the remaining rental obligations. Additionally, $59 million in accelerated amortization of prepaid rent from the remaining deferred revenues was recognized for the year ended December 31, 2023 that did not recur for the year ended December 31, 2024.
• Restructuring Plan
◦ In July 2023, we initiated the 2023 Restructuring Plan as part of our efforts to reduce costs to better align our operational needs with lower tower activity. See note 16 to our consolidated financial statements and " Item 2. MD&A—Results of Operations " for further discussion of the 2023 Restructuring Plan.
◦ In June 2024, we initiated the 2024 Restructuring Plan as part of our efforts to drive operational efficiencies, enhance returns by increasing return thresholds on new growth opportunities and reduce operating costs and capital expenditures, with a primary focus on our Fiber segment. See note 16 to our consolidated financial statements and " Item 2. MD&A—Results of Operations " for further discussion of the 2024 Restructuring Plan.
• In December 2023, we announced a strategic and operating review of our Fiber business, and in the second quarter of 2024, we concluded our operating review and implemented changes to our operating plans and strategy based on the findings. Additionally, in March 2025, we concluded the strategic review following the announcement of the Strategic Fiber Transaction, as discussed above. See note 16 to our consolidated financial statements and " Item 2.
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MD&A—Results of Operations " for further discussion of the 2024 Restructuring Plan and " Item 1. Business—Overview" for further discussion of the pending sale of the Fiber Business.
◦ As part of the announced plans to enhance returns in the Fiber segment, during the fourth quarter of 2024 we completed discussions with certain of our tenants regarding approximately 7,000 previously-identified greenfield small cell nodes in our contracted backlog that we mutually agreed to cancel. We wrote off property and equipment deemed to have no alternative future use, and as a result, recognized approximately $106 million as "Asset write-down charges" on our consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2024.
• Goodwill Impairment
◦ Management performed its annual goodwill impairment test in the fourth quarter of 2024. The quantitative impairment test indicated that the carrying amount of our Fiber reporting unit exceeded its estimated fair value. As such, management recorded a goodwill impairment charge of $5.0 billion for the year ended December 31, 2024, resulting in no goodwill remaining for the Fiber reporting unit. See "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 5 to our consolidated financial statements.Common Stock DividendDuring each of the quarters in the year ended 2024, we paid a common stock dividend of $1.565 per share, totaling approximately $2.7 billion. We are updating our capital allocation framework to focus more on free cash flow generation and financial flexibility, which we currently expect to result in a reduction to our dividend, beginning with our expected second quarter 2025 dividend. As we grow cash flows thereafter, we expect to increase our dividend per share. Whether dividends are to be declared and the amount and timing thereof remain subject to the discretion of our board of directors. See notes 10 and 17 to our consolidated financial statements.Outlook Highlights
The following are certain highlights of our outlook that impact our business fundamentals described above.• Beginning in the first quarter 2025, the Fiber Business will be presented as a discontinued operation, and its net assets will be classified as held for sale and comparable prior periods will be recast to reflect this change. Upon classification as held for sale in the first quarter of 2025, we expect to recognize a loss of between $700 and $800 million, inclusive of estimated transaction fees.
• We expect a year over year reduction in site rental revenues in our Towers segment related to (1) higher Towers non-renewals in 2025, which are expected to reduce site rental revenues by approximately $200 million as a result of the T-Mobile US, Inc. and Sprint network consolidation and (2) a decline in long-term deferred revenue amortization.
• As part of the aforementioned 2024 Restructuring Plan:
◦ We expect to realize approximately $100 million annualized run-rate labor and facilities cost savings, of which approximately $65 million was realized in 2024. The remaining savings of approximately $35 million are expected to be realized in 2025, with $30 million expected in selling, general and administrative and $5 million in site rental costs of operations. See "Item 1A. Risk Factors" for a discussion of risks related to our restructuring activities.
• Notwithstanding the plan to sell our Fiber Business, we expect to continue to invest a significant amount of our available capital in the form of discretionary capital expenditures until the closing of the Strategic Fiber Transaction.
• We also expect sustaining capital expenditures of approximately 1-2% of net revenues, including with respect to the Fiber Business, for full year 2025, relatively consistent with historical annual levels.36
Results of OperationsThe following discussion of our results of operations for 2024 compared to 2023 should be read in conjunction with "Item 1. Business," "Item 7. MD&A—Liquidity and Capital Resources" and our consolidated financial statements. For a discussion of our results of operations and financial condition for 2023 compared to 2022 that is not included in this 2024 Form 10-K, see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 23, 2024.
The following discussion of our results of operations is based on our consolidated financial statements prepared in accordance with GAAP, which requires us to make estimates and judgments that affect the reported amounts (see "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 2 to our consolidated financial statements). See "Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures" for a discussion of our use of (1) segment operating profit (loss), including its definition, (2) Segment Adjusted Site Rental Gross Margin and (3) Segment Adjusted Services and Other Gross Margin, including their respective definitions and reconciliations to segment operating profit (loss) and (4) Adjusted EBITDA, including its definition and a reconciliation to net income (loss).
Our operating segments consist of (1) Towers and (2) Fiber. See note 14 to our consolidated financial statements for further discussion of our operating segments.
Highlights of our results of operations for 2024, 2023 and 2022 are depicted below:Years Ended December 31, Percent Change(In millions of dollars) 2024 2023 2022 2024 vs. 2023
2023 vs. 2022
Site rental revenues:
Towers site rental revenues $ 4,266 $ 4,313 $ 4,322 (1) % — %
Fiber site rental revenues 2,092 2,219 1,967 (6) % 13 %
Total site rental revenues 6,358 6,532 6,289 (3) % 4 %
Adjusted Site Rental Gross Margin (a) :
Towers Adjusted Site Rental Gross Margin
3,307 3,370 3,404 (2) % (1) %
Fiber Adjusted Site Rental Gross Margin
1,358 1,533 1,317 (11) % 16 %
Adjusted Services and Other Gross Margin (a) :
Towers Adjusted Services and Other Gross Margin
91 127 238 (28) % (47) %
Fiber Adjusted Services and Other Gross Margin
6 16 3 (63) % 433 %
Segment operating profit (loss) (b) :
Towers operating profit (loss)
3,322 3,393 3,527 (2) % (4) %
Fiber operating profit (loss)
1,188 1,355 1,130 (12) % 20 %
Net income (loss) (3,903) 1,502 1,675 (360) % (10) %
Adjusted EBITDA (c)
4,161 4,415 4,340 (6) % 2 %
(a) See reconciliations of these non-GAAP financial measures to segment operating profit (loss) and definitions included in "Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP.
(b) See "Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures" and note 14 to our consolidated financial statements for our definition of segment operating profit.
(c) See reconciliation of this non-GAAP financial measure to net income (loss) and definition included in "Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP and Segment Financial Measures."372024 and 2023
Total site rental revenues for 2024 decreased by $174 million, or 3%, from 2023. This decrease was predominately comprised of the factors depicted in the chart below:
(In millions of dollars)
(a) Represents site rental revenues growth from tenant additions across our entire portfolio and renewals or extensions of tenant contracts, exclusive of the impacts from both straight-line accounting and amortization of prepaid rent in accordance with GAAP and change in payments for Sprint Cancellations.
(b) Includes $9 million of non-renewals associated with Sprint Cancellations.
(c) Represents $170 million of payments associated with Sprint Cancellations received in 2023 and not recurring in 2024, which were partially offset by approximately $5 million of payments associated with Sprint Cancellations received in 2024.
(d) Prepaid rent amortization includes amortization of upfront payments received from long-term tenants and other deferred credits. Prepaid rent amortization includes $59 million of accelerated prepaid rent amortization associated with the Sprint Cancellations that was recognized in 2023 that did not recur in 2024.
Towers site rental revenues and Towers Adjusted Site Rental Gross Margin for 2024 were $4.3 billion and $3.3 billion, respectively, compared to $4.3 billion and $3.4 billion, respectively, from 2023. The decrease of $47 million and $63 million in Towers site rental revenue and Towers Adjusted Site Rental Gross Margin, respectively, was primarily due to a decrease in prepaid rent amortization, as new leasing activity and contractual cash escalators were substantially offset by a decline in the associated straight-line accounting adjustment.
Fiber site rental revenues and Fiber Adjusted Site Rental Gross Margin for 2024 were $2.1 billion and $1.4 billion, respectively, and decreased by $127 million and $175 million, respectively, from 2023. Both Fiber site rental revenues and Fiber Adjusted Site Rental Gross Margin were predominately impacted by a $165 million reduction in site rental revenues and an absence of $59 million of accelerated prepaid rent amortization, both related to Sprint Cancellations, which were partially offset by increased demand for small cells and fiber solutions.
Towers Adjusted Services and Other Gross Margin was $91 million for 2024 and decreased by $36 million from $127 million from 2023, which is a reflection of (1) the lower volume of activity from carriers' network enhancements, (2) the volume and mix of services and other work and (3) the discontinuation of installation services as a Towers product offering. Our services and other offerings are of a variable nature as these revenues are not under long-term tenant contracts. See note 16 to our consolidated financial statements for a discussion of the 2023 Restructuring Plan, which included discontinuing installation services as a Towers product offering.
Fiber Adjusted Services and Other Gross Margin was $6 million for 2024 and decreased by $10 million from $16 million from 2023 primarily as a result of the absence of payments received for site abandonment fees associated with the Sprint Cancellations that were received during 2023.38Selling, general and administrative expenses for 2024 were $706 million and decreased by $53 million, or 7%, from $759 million from 2023. The decrease in selling, general and administrative expenses was primarily related to a decrease in employee- and facility-related costs as a result of our aforementioned restructuring activities, which was partially offset by an increase in advisory fees, mostly stemming from our recent proxy contest and the Fiber strategic review.
Asset write-down charges for 2024 increased by $115 million, or 348% from 2023. The increase was primarily related to the $106 million charge due to the cancellation of approximately 7,000 greenfield small cell nodes in our contracted backlog, as was mutually agreed upon with certain of our tenants. See "Item 7. MD&A—General Overview" for additional information.
Towers operating profit (loss) for 2024 decreased by $71 million, or 2%, from 2023. The decrease in Towers operating profit (loss) was primarily related to the previously-mentioned decreases in both Towers Adjusted Site Rental Gross Margin and Towers Adjusted Services and Other Gross Margin, which were partially offset by a decrease in Towers selling, general and administrative expenses as a result of the 2023 Restructuring Plan.
Fiber operating profit (loss) for 2024 decreased by $167 million, or 12%, from 2023. The decrease in Fiber operating profit (loss) was primarily related to the previously-mentioned decreases in both Fiber Adjusted Site Rental Gross Margin and Fiber Adjusted Services and Other Gross Margin, which were partially offset by a decrease in Fiber selling, general and administrative expenses following the 2024 Restructuring Plan.
Depreciation, amortization and accretion was approximately $1.7 billion for 2024 and decreased by $16 million, or 1%, from 2023. This decrease predominately resulted from certain site rental contracts and tenant relationships intangible assets becoming fully amortized.
Restructuring charges in connection with the Restructuring Plans for 2024 were $109 million and increased by $24 million, or 28%, from $85 million in 2023. This increase primarily resulted from an increase in office closure or consolidation costs in connection with the 2024 Restructuring Plan, when compared to the 2023 Restructuring Plan. This increase was partially offset by lower employee headcount reduction charges in connection with the 2024 Restructuring Plan, when compared to the 2023 Restructuring Plan. See note 16 to our consolidated financial statements for further discussion of our Restructuring Plans.
Goodwill impairment charges of $5.0 billion were recorded for our Fiber reporting unit for 2024. See "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 5 to our consolidated financial statements.
Interest expense and amortization of deferred financing costs, net was $932 million for 2024 and increased by $82 million, or 10%, from $850 million during 2023. The increase predominately resulted from an increase in our outstanding indebtedness due to the financing of our discretionary capital expenditures. See note 7 to our consolidated financial statements, "Item 1A. Risk Factors" and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt and interest rate exposure.
The provisions for income taxes for 2024 and 2023 were $24 million and $26 million, respectively. For both 2024 and 2023, the effective tax rate differs from the federal statutory rate predominately due to our REIT status, including the dividends paid deduction. See "Item 1. Business—REIT Status," "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 9 to our consolidated financial statements.
Net income (loss) was $(3.9) billion during 2024 compared to $1.5 billion during 2023. The decrease was related to the previously-mentioned decreases in Towers and Fiber operating profits, the previously-mentioned increases in goodwill impairment charges, asset write-down charges and interest expense and amortization of deferred financing costs, net, while being partially offset by a decrease in selling, general and administrative expenses.
Adjusted EBITDA decreased by $254 million, or 6%, from 2023 to 2024, reflecting the previously mentioned decreases in Towers and Fiber operating profits.39
Liquidity and Capital Resources
OverviewGeneral. Our core business generates revenues under long-term tenant contracts (see "Item 1. Business—Overview" and "Item 7. MD&A—General Overview—Overview" ) from (1) the largest U.S. wireless carriers and (2) other towers and fiber solutions tenants. As a leading provider of shared communications infrastructure in the U.S., our strategy is to create long-term stockholder value via a combination of (1) growing cash flows generated from our portfolio of communications infrastructure, (2) returning a meaningful portion of our cash generated by operating activities to our stockholders in the form of dividends, and (3) investing capital efficiently to grow cash flows and long-term dividends per share. Our strategy is based, in part, on our belief that the U.S. is the most attractive market for shared communications infrastructure investment with the greatest long-term growth potential. We measure our efforts to create "long-term stockholder value" by the combined payment of dividends to stockholders and growth in our per share results. See "Item 1. Business—Strategy" for a further discussion of our strategy.
We have engaged, and expect to continue to engage, in discretionary investments that we believe will maximize long-term stockholder value. Our historical discretionary investments include (in no particular order): constructing communications infrastructure, acquiring communications infrastructure, acquiring land interests (which primarily relate to land assets under towers), improving and structurally enhancing our existing communications infrastructure, purchasing shares of our common stock, and purchasing, repaying, or redeeming our debt. We have recently spent, and expect to continue to spend, a significant percentage of our discretionary investments on the construction of small cells and fiber through the closing of the sale of the Fiber Business. See " Item 1. Business—Overview " for further detail. See note 16 to our consolidated financial statements and " Item 2. MD&A—Results of Operations " for further discussion of the 2024 Restructuring Plan, which resulted in, among other things, an increase in return thresholds on new growth opportunities in the Fiber segment and a reduction in Fiber segment capital expenditures for full year 2024. We seek to fund our discretionary investments with both cash generated by operating activities and cash available from financing capacity, such as the use of our availability under our 2016 Revolver, issuances under our CP Program, debt financings and issuances of equity or equity-related securities, including under our 2024 ATM Program or any similar successor program.
We seek to maintain a capital structure that we believe drives long-term stockholder value and optimizes our weighted-average cost of capital. Additionally, we expect to maintain an investment grade credit profile. Our contractual debt maturities over the next 12 months, consist of (1) Commercial Paper Notes, of which we had $1.1 billion outstanding as of March 12, 2025, (2) the 1.350% senior unsecured notes due July 2025 ("1.350% Senior Notes") and (3) principal payments on certain outstanding debt. We currently expect to refinance $700 million of Tower Revenue Notes, Series 2015-2 on or prior to the anticipated repayment date on May 15, 2025. Amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding.
We operate as a REIT for U.S. federal income tax purposes. We expect to continue to pay minimal cash income taxes as a result of our REIT status and our NOLs. See "Item 1. Business—REIT Status," "Item 7. MD&A—General Overview" and note 9 to our consolidated financial statements.
Liquidity Position. The following is a summary of our capitalization and liquidity position as of December 31, 2024. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" and note 7 to our consolidated financial statements for additional information regarding our debt as well as note 10 to our consolidated financial statements for additional information regarding our 2024 ATM Program.(In millions of dollars)
Cash and cash equivalents and restricted cash and cash equivalents (a)$ 295Undrawn 2016 Revolver availability (b)6,961
Total debt and other obligations (current and non-current) 24,081Total deficit(133)(a) Inclusive of $5 million included within "Other assets, net" on our consolidated balance sheet.(b) Availability at any point in time is subject to certain restrictions based on the maintenance of financial covenants contained in our 2016 Credit Facility. At any point in time, we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of outstanding Commercial Paper Notes. See note 7 to our consolidated financial statements.
Over the next 12 months:
• Our liquidity sources may include (1) cash on hand, (2) cash generated by our operating activities, (3) availability under our 2016 Revolver, (4) issuances under our CP Program, and (5) issuances of equity pursuant to our 2024 ATM40Program or any similar successor program. Our liquidity uses over the next 12 months are expected to include (1) debt obligations of $2.0 billion (consisting of Commercial Paper Notes, the 1.350% Senior Notes and principal payments on certain outstanding debt), (2) common stock dividend payments, subject to declaration by our board of directors (see "Item 7. MD&A—General Overview—Common Stock Dividend" ), and (3) capital expenditures. We currently expect to refinance the Tower Revenue Notes, Series 2015-2 on or prior to the anticipated repayment date of May 15, 2025, see " Item 7a. Quantitative and Qualitative Disclosures About Market Risk " for further discussion.
• We may also purchase shares of our common stock. Additionally, amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding. During the next 12 months, while our liquidity uses are expected to exceed our cash generated by operating activities, we expect that our liquidity sources described above should be sufficient to cover our expected uses. Historically, from time to time, we have accessed the capital markets to issue debt and equity.
• See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a discussion of interest rate risk and note 7 to our consolidated financial statements for a tabular presentation of our debt maturities and a discussion of anticipated repayment dates.Summary Cash Flows Information
Years Ended December 31,(In millions of dollars) 2024 2023 2022
Operating activities $ 2,943 $ 3,126 $ 2,878
Investing activities (1,220) (1,519) (1,352)
Financing activities (1,708) (1,654) (1,665)Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents15 (47) (139)
Effect of exchange rate changes on cash (1) 1 —Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents$ 14 $ (46) $ (139)Operating ActivitiesThe decrease in net cash provided by operating activities of $183 million for 2024 from 2023 was due primarily to the aforementioned decrease in Towers operating profit and the reduction in Fiber site rental revenues related to the absence of Sprint Cancellation payments, which was partially offset by a net increase from changes in working capital. Changes in working capital contribute to variability in net cash provided by operating activities, largely due to the timing of advanced payments by us and advanced receipts from tenants. We expect to grow our net cash provided by operating activities in the future (exclusive of changes in working capital) if we realize expected growth in our core business.Investing ActivitiesNet cash used for investing activities for 2024 decreased by $299 million from 2023 primarily as a result of a decrease in discretionary capital expenditures in both our Towers and Fiber segments and a decrease in payments for acquisitions in our Towers segment.Our capital expenditures are categorized as discretionary or sustaining as described below.• Discretionary capital expenditures are made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. They primarily consist of expansion or development of communications infrastructure (including capital expenditures related to (1) enhancing communications infrastructure in order to add new tenants for the first time or support subsequent tenant equipment augmentations or (2) modifying the structure of a communications infrastructure asset to accommodate additional tenants) and construction of new communications infrastructure. Discretionary capital expenditures also include purchases of land interests (which primarily relate to land assets under towers as we seek to manage our interests in the land beneath our towers), certain technology-related investments necessary to support and scale future customer demand for our communications infrastructure, and other capital projects. The expansion or development of existing communications infrastructure to accommodate new leasing typically varies based on, among other factors: (1) the type of communications infrastructure, (2) the scope, volume, and mix of work performed on the communications infrastructure, (3) existing capacity prior to installation, or (4) changes in structural engineering regulations and standards. Currently, construction of new communications infrastructure is predominately comprised of the construction of small cells and fiber (including certain construction projects that may take 18 to 36 months to complete). Our decisions regarding discretionary capital expenditures are influenced by the availability and cost of capital and expected returns on alternative uses of cash, such as payments of dividends and investments.41• Sustaining capital expenditures consist of those capital expenditures not otherwise categorized as discretionary capital expenditures, such as (1) maintenance capital expenditures on our communications infrastructure assets that enable our tenants' ongoing quiet enjoyment of the communications infrastructure and (2) ordinary corporate capital expenditures.
A summary of our capital expenditures for the last three years is as follows:For the Years EndedDecember 31, 2024 December 31, 2023 December 31, 2022
(In millions of dollars) Towers Fiber Other Total Towers Fiber Other Total Towers Fiber Other TotalDiscretionary:Communications infrastructure improvements and other capital projects (a)
$ 65 $ 992 $ 20 $ 1,077 $ 122 $ 1,131 $ 24 $ 1,277 $ 121 $ 1,017 $ 24 $ 1,162
Purchases of land interests 58 — — 58 64 — — 64 53 — — 53
Sustaining 10 53 24 87 8 44 31 83 11 41 43 95
Total $ 133 $ 1,045 $ 44 $ 1,222 $ 194 $ 1,175 $ 55 $ 1,424 $ 185 $ 1,058 $ 67 $ 1,310
(a) Towers segment includes $12 million, $32 million and $48 million of capital expenditures incurred during the years ended December 31, 2024, 2023 and 2022, respectively, in connection with tenant installations and upgrades on our towers.
The reduction in discretionary capital expenditures for the Fiber segment was primarily related to the higher return thresholds on new growth opportunities in the Fiber segment as a result of the Fiber operating review completed in the second quarter of 2024, while the reduction in discretionary capital expenditures for the Towers segment was primarily impacted by the discontinuation of installation services as a Towers product offering and the timing of Towers tenant activity during full year 2024 compared to full year 2023. See "Item 7. MD&A—General Overview—Outlook Highlights" for a discussion of our expectations surrounding 2025 capital expenditures.Financing ActivitiesWe seek to allocate cash generated by our operations in a manner that will enhance long-term stockholder value, which may include various financing activities such as (in no particular order): (1) paying dividends on our common stock, subject to declaration by our board of directors, (2) purchasing our common stock or (3) purchasing, repaying, or redeeming our debt. See "Item 7. MD&A—General Overview—Common Stock Dividend," "Item 7. MD&A—Liquidity and Capital Resources—Overview" and notes 7, 10 and 17 to our consolidated financial statements.In 2024, our financing activities predominately related to the following:
• paying an aggregate of $2.7 billion in dividends on our common stock;
• repaying in full the previously outstanding 3.200% senior unsecured notes on the contractual maturity date in September 2024; and
• issuing $550 million aggregate principal amount of 4.900% senior unsecured notes and $700 million aggregate principal amount of 5.200% senior unsecured notes in August 2024, the net proceeds of which were used to repay a portion of the outstanding indebtedness under our CP Program and pay related fees and expenses.In 2023, our financing activities predominately related to the following:
• paying an aggregate of $2.7 billion in dividends on our common stock;
• issuing $1.5 billion aggregate principal amount of senior unsecured notes in December 2023, the net proceeds of which were used to repay a portion of the outstanding indebtedness under our CP Program and pay related fees and expenses;
• repaying in full the previously outstanding 3.150% senior unsecured notes on the contractual maturity date in July 2023;
• issuing $600 million aggregate principal amount of 4.800% senior unsecured notes and $750 million aggregate principal amount of 5.100% senior unsecured notes in April 2023, the net proceeds of which were used to repay a portion of the outstanding indebtedness under the 2016 Revolver and pay related fees and expenses; and
• issuing $1.0 billion aggregate principal amount of senior unsecured notes in January 2023, the net proceeds of which were used to repay a portion of the outstanding indebtedness under the 2016 Revolver and pay related fees and expenses.
Incurrence, Purchases and Repayments of Debt. See note 7 to our consolidated financial statements, "Item 7. MD&A—General Overview" and "Item 7. MD&A—Liquidity and Capital Resources—Overview—Liquidity Position" for further discussion of our recent issuances, purchases, redemptions and repayments of debt.42Common Stock. See notes 10 and 17 to our consolidated financial statements for further information regarding our common stock as well as dividends declared and paid.ATM Program. We previously maintained a 2021 ATM Program through which we had the right to issue and sell shares of our common stock having an aggregate gross sales price of up to $750 million to or through sales agents. In March 2024, we terminated the formerly outstanding 2021 ATM Program with the entire gross sales price of $750 million remaining unsold.In March 2024, we established the 2024 ATM Program through which we may issue and sell shares of our common stock having an aggregate gross sales price of up to $750 million. Sales under the 2024 ATM Program, or any similar successor program, may be made by means of ordinary brokers' transactions on the New York Stock Exchange ("NYSE") or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or, subject to our specific instructions, at negotiated prices. We intend to use the net proceeds from any sales under the 2024 ATM Program, or any similar successor program, for general corporate purposes, which may include (1) the funding of future acquisitions or investments or (2) the repayment or repurchase of any outstanding indebtedness. We have not sold any shares of common stock under the 2024 ATM Program. See also note 10 to our consolidated financial statements. As of March 12, 2025, we had $750 million of gross sales of common stock availability remaining on our 2024 ATM Program.
Credit Facility. See note 7 to our consolidated financial statements for further information regarding our 2016 Credit Facility. As of March 12, 2025, we did not have an outstanding balance under our 2016 Revolver and maintained $7.0 billion in undrawn availability. The proceeds from our 2016 Revolver may be used for general corporate purposes, which may include the financing of capital expenditures, acquisitions, the repayment or repurchase of any outstanding indebtedness and purchases of our common stock.
Commercial Paper Program. See note 7 to our consolidated financial statements for further information regarding our CP Program. As of March 12, 2025, there was $1.1 billion outstanding under our CP Program. The proceeds from our Commercial Paper Notes may be used for general corporate purposes, which may include the financing of capital expenditures, acquisitions, the repayment or repurchase of any outstanding indebtedness and purchases of our common stock.Restricted Cash and Cash Equivalents . Pursuant to the indentures governing certain of our operating companies' debt securities, all rental cash receipts of the issuers of these debt instruments and their subsidiaries are restricted and held by an indenture trustee. The restricted cash and cash equivalents in excess of required reserve balances is subsequently released to us in accordance with the terms of the indentures. See also note 2 to our consolidated financial statements.
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Material Cash RequirementsThe following table summarizes our material cash requirements as of December 31, 2024. These material cash requirements relate primarily to our outstanding borrowings or lease obligations for land interests under our towers. The debt maturities reflect contractual maturity dates and do not consider the impact of the principal payments that will commence following the anticipated repayment dates of certain debt (see footnote (b)).(In millions of dollars) Years Ending December 31,Material Cash Requirements 2025 2026 2027 2028 2029 Thereafter TotalsDebt and other long-term obligations (a)$ 1,951 $ 2,787 $ 3,258 $ 2,635 $ 2,478 $ 11,130 $ 24,239Interest payments on debt and other long-term obligations (b)(c)897 859 759 646 558 5,396 9,115Lease obligations (d)558 551 547 543 538 5,682 8,419
Total material cash requirements $ 3,406 $ 4,197 $ 4,564 $ 3,824 $ 3,574 $ 22,208 $ 41,773
(a) The impact of principal payments that will commence following the anticipated repayment dates of our Tower Revenue Notes, Series 2015-2 and 2018-2 (collectively, "Tower Revenue Notes") is not considered. The Tower Revenue Notes, Series 2015-2 and 2018-2 have principal amounts of $700 million and $750 million, with anticipated repayment dates in 2025 and 2028, respectively. See note 7 to our consolidated financial statements for our definition of and additional information regarding the Tower Revenue Notes.
(b) If the Tower Revenue Notes are not repaid in full by the applicable anticipated repayment dates, the applicable interest rate increases by approximately 5% per annum and monthly principal payments commence using the Excess Cash Flow (as defined in the indenture governing the applicable Tower Revenue Notes) of the issuers of the Tower Revenue Notes. The Tower Revenue Notes are presented based on their contractual maturity dates ranging from 2045 to 2048 and include the impact of an assumed 5% increase in interest rate that would occur following the anticipated repayment dates but exclude the impact of monthly principal payments that would commence using Excess Cash Flow of the issuers of the Tower Revenue Notes. The full year 2024 Excess Cash Flow of the issuers of the Tower Revenue Notes was approximately $1.0 billion. We currently expect to refinance these notes on or prior to the respective anticipated repayment dates.
(c) Includes the unused commitment fees on our 2016 Credit Facility. Interest payments on the variable rate debt are based on estimated rates currently in effect. See note 7 to our consolidated financial statements for information regarding potential upward or downward adjustments to the interest rate spread and unused commitment fee percentage on our 2016 Credit Facility if we achieve specified annual sustainability targets or fail to meet annual sustainability thresholds. Each annual period presented assumes the downward adjustments in the interest rate spread and unused commitment fee percentage on our 2016 Credit Facility. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a discussion of our interest rate risk.
(d) Amounts relate primarily to lease obligations for the land on which our towers are located and are based on the assumption that payments will be made for certain renewal periods exercisable at our option that are reasonably certain to be exercised and excludes our contingent payments for operating leases (such as payments based on revenues derived from the communications infrastructure located on the leased asset) as such arrangements are excluded from our operating lease liability. See note 13 to our consolidated financial statements for further discussion of our operating lease obligations. See also the table below summarizing remaining terms to expiration.44The following chart summarizes our rights to the land interests under our towers, including renewal terms exercisable at our option, as of December 31, 2024. As of December 31, 2024, the leases for land interests under our towers had an average remaining life of approximately 35 years, weighted based on towers site rental gross margin. See "Item 1A. Risk Factors" for a discussion of retaining the rights to land under our towers.(a) Inclusive of land owned through fee interests and perpetual easements.(b) For the three months ended December 31, 2024, without consideration of the term of the tenant contract.Debt CovenantsOur 2016 Credit Agreement contains financial maintenance covenants. We are currently in compliance with these financial maintenance covenants and, based upon our current expectations, we believe we will continue to comply with our financial maintenance covenants. In addition, certain of our debt agreements contain restrictive covenants that place restrictions on us and may limit our ability to, among other things, incur additional debt and liens, purchase our securities, make capital expenditures, dispose of assets, undertake transactions with affiliates, make other investments, pay dividends or distribute excess cash flow. See note 7 to our consolidated financial statements for further discussion of our debt covenants. See also "Item 1A. Risk Factors" for a discussion of compliance with our debt covenants. The following are ratios applicable to the financial maintenance covenants under the 2016 Credit Agreement as of December 31, 2024.Borrower / Issuer Financial Maintenance Covenant (a)(b)Covenant Level Requirement As of December 31, 2024
CCI Total Net Leverage Ratio ≤ 6.50x 5.7x
CCI Total Senior Secured Leverage Ratio ≤ 3.50x 0.4xCCI Consolidated Interest Coverage Ratio (c)
N/A N/A
(a) Failure to comply with the financial maintenance covenants would, absent a waiver, result in an event of default under the 2016 Credit Agreement.
(b) As defined in the 2016 Credit Agreement.
(c) Applicable solely to the extent that the senior unsecured debt rating by any two of S&P, Moody's and Fitch is lower than BBB-, Baa3 or BBB-, respectively. If applicable, the consolidated interest coverage ratio must be greater than or equal to 2.50.
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Accounting and Reporting Matters
Critical Accounting Policies and EstimatesOur critical accounting policies and estimates are those that we believe (1) are most important to the portrayal of our financial condition and results of operations or (2) require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. In many cases, the accounting treatment of a particular transaction is specifically prescribed by GAAP. In other cases, management is required to exercise judgment in the application of accounting principles with respect to particular transactions. Accordingly, actual results could differ materially from our estimates. The critical accounting policies and estimates for 2024 are not intended to be a comprehensive list of our accounting policies and estimates. See note 2 to our consolidated financial statements for a summary of our significant accounting policies.
Lease Accounting—Lessee. For our Towers segment, our lessee arrangements primarily consist of ground leases for land under our towers and are for an initial term generally between five to 15 years. We also enter into ground leases, such as term easements, in which we prepay the entire term. For our Fiber segment, our lessee arrangements primarily include leases of fiber assets to facilitate our small cells and fiber solutions. The majority of our lease agreements have certain termination rights that provide for cancellation after a notice period and multiple renewal options exercisable at our option. We include certain renewal option periods in the lease term when we determine that the options are reasonably certain to be exercised.
For both our Towers and Fiber segments, operating lease expense is recognized on a ratable basis, regardless of whether the payment terms require us to make payments annually, semi-annually, quarterly, monthly, or for the entire term in advance. Certain of our ground lease and fiber access agreements contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the change in consumer price index ("CPI")). If the payment terms include fixed escalators, upfront payments, or rent-free periods, the effect of such increases is recognized on a straight-line basis. When calculating straight-line ground lease and fiber access expenses, we consider all fixed elements of contractual escalation provisions, even if such escalation provisions contain a variable element in addition to a minimum. We calculate the straight-line expense over the contract's estimated lease term, including any renewal option periods that we deem reasonably certain to be exercised.We recognize a right-of-use ("ROU") asset (and, as applicable, a corresponding lease liability) for each of our operating leases. ROU assets represent our right to use an underlying asset for the estimated lease term, and lease liabilities represent the present value of our future lease payments. In assessing our leases and determining our lease liability at lease commencement or upon modification, we are not able to readily determine the rate implicit for our lessee arrangements and thus use our incremental borrowing rate on a collateralized basis to determine the present value of our lease payments. Our ROU assets are measured as the balance of the lease liability plus any prepaid or accrued lease payments and any unamortized initial direct costs.
We review the carrying value of our ROU assets for impairment, similar to our other long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We could record impairments in the future if there are changes in (1) long-term market conditions, (2) expected future operating results or (3) the utility of the assets that negatively impact the fair value of our ROU assets.Revenue Recognition. 97% of our total revenue for 2024 consisted of site rental revenues, which are recognized on a ratable basis over the fixed, non-cancelable term of the relevant tenant contract, generally between five to 15 years for site rental revenues derived from wireless tenants and generally between one to 20 years for site rental revenues derived from fiber solutions tenants, regardless of whether the payments from the tenant are received in equal monthly amounts during the life of a tenant contract. Certain of our tenant contracts contain (1) fixed escalation clauses (such as fixed-dollar or fixed-percentage increases) or inflation-based escalation clauses (such as those tied to the change in CPI), (2) multiple renewal periods exercisable at the tenant's option and (3) only limited termination rights at the applicable tenant's option through the current term. If the payment terms call for fixed escalators, upfront payments, or rent-free periods, the revenue is recognized on a straight-line basis over the fixed, non-cancelable term of the tenant contract. When calculating our straight-line rental revenues, we consider all fixed elements of tenant contractual escalation provisions, even if such escalation provisions contain a variable element (such as an escalator tied to an inflation-based index) in addition to a minimum. To the extent we acquire below-market tenant leases for contractual interests with tenants on the acquired communications infrastructure (for example with respect to small cells and fiber), we record the fair value as deferred credits and amortize such deferred credits to site rental revenues over their estimated lease term. Since we recognize revenue on a straight-line basis, a portion of the site rental revenues in a given period represents cash collected or contractually collectible in other periods. Our assets related to straight-line site rental revenues are recorded within "Current portion of deferred site rental receivables" and "Deferred site rental receivables" on the consolidated balance sheet. Amounts billed or received prior to being earned are deferred and reflected in "Deferred revenues"46and "Other long-term liabilities" on the consolidated balance sheet. Amounts to which we have an unconditional right to payment, which are related to both satisfied or partially satisfied performance obligations, are recorded within "Receivables, net" on the consolidated balance sheet.
As part of our effort to provide comprehensive communications infrastructure solutions, as an ancillary business, we also offer certain services primarily relating to our Towers segment, which represented 3% of our total revenues for 2024. For the periods presented, such services and other revenues consisted predominately of (1) site development services relating to existing or new tenant equipment installations, including: site acquisition, architectural and engineering, or zoning and permitting (collectively, "site development services") and (2) installation services. See note 16 to our consolidated financial statements for a discussion of the 2023 Restructuring Plan, which included discontinuing installation services as a Towers product offering. Our services generally have a duration of one year or less. Upon contract commencement, we assess our services to tenants and identify performance obligations for each promise to provide a distinct service.We may have multiple performance obligations for site development services, which primarily include: structural analysis, zoning, permitting and construction drawings. For each of the above performance obligations, services revenues are recognized at completion of the applicable performance obligation, which represents the point at which we believe we have transferred goods or services to the tenant. The revenue recognized is based on an allocation of the transaction price among the performance obligations in a respective contract based on estimated standalone selling price.
The transaction price for tower installation services consists of amounts for (1) permanent improvements to our towers that represent a lease component and (2) the performance of the service. Amounts under our tower installation services agreements that represent a lease component are recognized as site rental revenues on a ratable basis over the length of the associated estimated lease term. For the performance of the tower installation service, we have one performance obligation, which is satisfied at the time of the applicable installation or augmentation and recognized as services and other revenues.
Since performance obligations are typically satisfied prior to receiving payment from tenants, the unconditional right to payment is recorded within "Receivables, net" on our consolidated balance sheet.Accounting for Acquisitions—General. The majority of our towers have been acquired directly or indirectly from the three largest wireless carriers (or their predecessors) through transactions consummated since 1999 while most of our fiber assets were acquired through transactions dating back to 2012, with the largest transactions occurring in 2017. We evaluate each of our acquisitions to determine if it should be accounted for as a business combination or as an acquisition of assets. For our business combinations, we allocate the purchase price to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition. Any purchase price in excess of the net fair value of the assets acquired and liabilities assumed is allocated to goodwill. See "Item 7. MD&A—Accounting and Reporting Matters—Accounting for Acquisitions—Valuation" below.
The determination of the final purchase price allocation could extend over several quarters resulting in the use of preliminary estimates that are subject to adjustment until finalized. Such changes could have a significant impact on our consolidated financial statements.
Accounting for Acquisitions—Leases. With respect to business combinations that include towers that we lease and operate, such as the AT&T and T-Mobile leased and subleased towers (including those which T-Mobile assumed in its merger with Sprint), we evaluate such agreements to determine treatment as finance or operating leases. The evaluation of such agreements for finance or operating lease treatment previously included consideration of each of the lease classification criteria under ASC 840-10-25, namely (1) the transfer of ownership provisions, (2) the existence of bargain purchase options, (3) the length of the remaining lease term, and (4) the present value of the minimum lease payments. With respect to the AT&T and T-Mobile leased and subleased towers (including those which T-Mobile assumed in its merger with Sprint), we determined that the tower leases were finance leases and the underlying land leases were operating leases based upon the lease term criterion, after considering the fragmentation criteria applicable under ASC 840-10-25 to leases involving both land and buildings (i.e., towers). We determined that the fragmentation criteria was met, and the tower leases could be accounted for as finance leases apart from the land leases, which are accounted for as operating leases, since (1) the fair value of the land in the aforementioned business combinations was greater than 25% of the total fair value of the leased property at inception and (2) the tower lease expirations occur beyond 75% of the estimated economic life of the tower assets.
Accounting for Acquisitions—Valuation. As of December 31, 2024, our largest asset was property and equipment (which primarily consists of communications infrastructure) followed by operating lease ROU assets, goodwill and intangible assets. Our identifiable intangible assets predominately relate to the site rental contracts and tenant relationships intangible assets.
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The fair value of the vast majority of our assets and liabilities is determined by using either:
(1) discounted cash flow valuation methods (for estimating identifiable intangibles such as site rental contracts and tenant relationships or operating lease right-of-use assets and lease liabilities acquired); or
(2) estimates of replacement costs (for tangible fixed assets such as communications infrastructure).
The purchase price allocation requires subjective estimates that, if incorrectly estimated, could be material to our consolidated financial statements, including the amount of depreciation, amortization and accretion expense. The most important estimates for measurement of tangible fixed assets are (1) the cost to replace the asset with a new asset and (2) the economic useful life after giving effect to age, quality, and condition. The most important estimates for measurement of intangible assets are (1) discount rates and (2) timing and amount of cash flows including estimates regarding tenant renewals and cancellations. The most important estimates for measurement of operating lease ROU assets and lease liabilities acquired are (1) present value of our future lease payments, including whether renewals or extensions should be measured, and (2) favorability or unfavorability to the current market terms. With respect to business combinations that include towers that we lease and operate, such as the AT&T and T-Mobile leased and subleased towers (including those which T-Mobile assumed in its merger with Sprint), we evaluate such agreements to determine treatment as finance or operating leases and identification of any bargain purchase options.
We record the fair value of obligations to perform certain asset retirement activities, including requirements, pursuant to our ground leases, leased facility and certain pole attachment agreements, to remove communications infrastructure or remediate the space upon which certain of our communications infrastructure resides. In determining the fair value of these asset retirement obligations we must make several subjective and highly judgmental estimates such as those related to: (1) timing of cash flows, (2) future costs, (3) discount rates and (4) the probability of enforcement to remove the towers or small cells or remediate the land. We do not record an obligation for asset retirement activities related to our fiber, as a settlement date is indeterminable and therefore a reasonable estimation of fair value cannot be made.
Accounting for Long-Lived Assets—Useful Lives. We are required to make subjective assessments as to the useful lives of our tangible and intangible assets for purposes of determining depreciation, amortization and accretion expense that, if incorrectly estimated, could be material to our consolidated financial statements. Depreciation expense for our property and equipment is computed using the straight-line method over the estimated useful lives of our various classes of tangible assets. A substantial portion of our property and equipment represents the cost of our communications infrastructure, the majority of which is depreciated with an estimated useful life equal to the shorter of 20 years or the term of the underlying ground lease (where applicable and including optional renewals).
The useful lives of our intangible assets are estimated based on the period over which the intangible asset is expected to benefit us and gives consideration to the expected useful life of other assets to which the useful life may relate. We review the expected useful lives of our intangible assets on an ongoing basis and adjust if necessary. Amortization expense for intangible assets is computed using the straight-line method over the estimated useful life of each of the intangible assets. The useful lives of site rental contracts and tenant relationships intangible assets are limited by the maximum depreciable life of the communications infrastructure (20 years), as a result of the interdependency of the communications infrastructure and the site rental contracts and tenant relationships. In contrast, the site rental contracts and tenant relationships are estimated to provide economic benefits for several decades because of the low rate of tenant cancellations and high rate of tenant retention experienced to date. Thus, while site rental contracts and tenant relationships intangible assets are valued based upon the fair value of the site rental contracts and tenant relationships which includes assumptions regarding both (1) tenants' exercise of optional renewals contained in the acquired leases and (2) renewals of the acquired leases past the contractual term including exercisable options, site rental contracts and tenant relationships intangible assets are amortized over a period not to exceed 20 years as a result of the useful life being limited by the depreciable life of the communications infrastructure.Accounting for Long-Lived Assets—Impairment Evaluation. We review the carrying values of property and equipment, intangible assets, or other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.For purposes of our Towers segment, we utilize the following dual grouping policy for purposes of determining the unit of account for testing impairment of site rental contracts and tenant relationships intangible assets:(1) we pool site rental contracts and tenant relationships intangible assets and property and equipment into portfolio groups; and
(2) we separately pool the site rental contracts and tenant relationships by significant tenant or by tenant grouping for individually insignificant tenants, as appropriate.48We first pool site rental contracts and tenant relationships intangible assets and property and equipment into portfolio groups for purposes of determining the unit of account for impairment testing, because we view communications infrastructure as portfolios and communications infrastructure in a given portfolio and its related tenant contracts are not largely independent of the other communications infrastructure in the portfolio. We re-evaluate the appropriateness of the pooled groups at least annually. This use of grouping is based in part on (1) our limitations regarding disposal of communications infrastructure, (2) the interdependencies of communications infrastructure portfolios, and (3) the manner in which communications infrastructure is traded in the marketplace. The vast majority of our site rental contracts and tenant relationships intangible assets and property and equipment are pooled into the U.S. owned communications infrastructure group. Secondly, and separately, we pool the site rental contracts and tenant relationships by significant tenant or by tenant grouping for individually insignificant tenants, as appropriate, for purposes of determining the unit of account for impairment testing because we associate the value ascribed to site rental contracts and tenant relationships intangible assets to the underlying contracts and related tenant relationships acquired.
For purposes of our Fiber segment, we evaluate financial performance of major U.S. markets where we have made significant investments. In addition, as discrete cash flows (including projected cash flows) are most readily available at the segment level, we also review the undiscounted cash flows at this level to evaluate potential impairment of our long-lived assets.
Our determination that an adverse event or change in circumstance has occurred that indicates that the carrying amounts may not be recoverable will generally involve (1) a deterioration in an asset's financial performance compared to historical results, (2) a shortfall in an asset's financial performance compared to forecasted results, or (3) changes affecting the utility and estimated future demands for the asset. When considering the utility of our assets, we consider events that would meaningfully impact (1) our communications infrastructure or (2) our tenant relationships. For example, consideration would be given to events that impact (1) the structural integrity and longevity of our communications infrastructure or (2) our ability to derive benefit from our existing tenant relationships, including events such as tenant's bankruptcy or insolvency or loss of a significant tenant.
If the sum of the associated estimated future cash flows (undiscounted) from an asset group is less than its carrying amount, an impairment loss may be recognized. If the carrying value were to exceed the undiscounted cash flows, measurement of an impairment loss would be based on the fair value of the asset, which is based on an estimate of discounted future cash flows. The most important estimates for such calculations of undiscounted cash flows are (1) the expected additions of new tenants and equipment on our communications infrastructure and (2) estimates regarding tenant cancellations and renewals of tenant contracts. We could record impairments in the future if changes in long-term market conditions, expected future operating results or the utility of the assets results in changes for our impairment test calculations which negatively impact the fair value of our property and equipment and intangible assets, or if we changed our unit of account in the future.
In light of the aforementioned impairment of the Fiber segment goodwill balance, we conducted a review during the fourth quarter of 2024, including analysis of both market-level and segment-level information, and determined there was no impairment of Fiber segment long-lived assets. In regard to our Towers segment, there were no events or circumstances that caused us to review the carrying value of our intangible assets or property and equipment due in part to our assets performing consistently with or better than our expectations.
The Fiber Business did not meet the criteria for assets held for sale as of December 31, 2024, and therefore remains presented as a component of continuing operations. Following the announcement of the Strategic Fiber Transaction and beginning with the Company's filing of Form 10-Q for the quarter ended March 31, 2025, the Fiber Business will be presented as a discontinued operation, and its net assets will be classified as held for sale and comparable prior periods will be recast to reflect this change. Upon classification as held for sale, we expect to recognize a loss of between $700 and $800 million, inclusive of estimated transaction fees.
Approximately 5% of our total towers currently have no tenants. We continue to pay operating expenses on these towers in anticipation of obtaining tenants on these towers in the future, primarily because of the demographics and continuing increase in demand for data in the areas around these individual towers. We estimate, based on current visibility, potential tenants on a majority of these towers. To the extent we do not believe there are long-term prospects of obtaining tenants on an individual asset and all other possible avenues for recovering the carrying value have been exhausted, including sale of the asset, we appropriately reduce the carrying value of such assets to fair value.
Accounting for Goodwill—Impairment Evaluation. Management tests goodwill for impairment at least annually or whenever events or circumstances indicate the carrying amount may not be recoverable. The annual test begins with goodwill and all intangible assets being allocated to applicable reporting units. We then perform a qualitative assessment to determine whether it is "more likely than not" that the fair value of the reporting unit is less than its carrying amount. If we conclude that it
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is "more likely than not" that the fair value of a reporting unit is less than its carrying amount, we would be required to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test compares the estimated fair value of the reporting unit and the carrying value of the reporting unit. If the carrying amount of a reporting unit is greater than its fair value, an impairment loss shall be recognized in an amount equal to such excess, limited to the total amount of goodwill allocated to the reporting unit. Our reporting units are the same as our operating segments (Towers and Fiber). See note 14 to our consolidated financial statements.
For the year ended December 31, 2024, we recorded an impairment charge of approximately $5.0 billion related to the goodwill associated with our Fiber segment, which represents a reporting unit for purposes of evaluating goodwill, which resulted in no goodwill remaining for the Fiber reporting unit.
Management performed its annual goodwill impairment test in the fourth quarter of 2024. The means of estimating the fair value of our reporting units is using discounted cash flow ("DCF") models developed by management. Key assumptions and estimates used in the DCF models included projected future revenues, operating cash flows, capital expenditures (net of certain payments received from customers), an exit multiple and a discount rate. With respect to the Towers reporting unit, there was no indication of impairment following the quantitative assessment, as the estimated fair value was well in excess of the corresponding carrying amount.
The quantitative impairment test indicated that the carrying amount of our Fiber reporting unit exceeded its estimated fair value. The impairment was due to a number of factors, one of which was a reduction in management’s assumptions for long-term revenue growth as actual demand, particularly related to small cells, has continued to be lower than previous expectations. In the face of this reduced demand, and consistent with the recently concluded operating review of the Fiber business, management implemented operational and strategic changes targeted at reducing future capital investment in the Fiber business by focusing primarily on colocation opportunities which require less capital expenditures than new-build opportunities. Although this more targeted strategy is focused on higher-return projects, the lower capital investment is expected to result in lower overall revenues and operating cash flows in the Fiber business. Following implementation of these changes, and consistent with the ongoing developments surrounding the Company's strategic review of its Fiber business, during the fourth quarter of 2024, management incorporated the anticipated impact of these changes in expectations into its long-term forecasts, which decreased the estimated fair value of the Fiber reporting unit. Additionally, management’s expectations regarding the terminal value of the projections decreased due to several factors, including lower operating cash flows forecasted by management in the terminal year as well as lower exit multiples derived from industry research firms' outlook reports, which management uses in its DCF models. Finally, changes in the macroeconomic environment, including elevated interest rates, resulted in an increase in the discount rate used in the valuation model, which had a negative impact on estimated fair value.
The impairment charges for the Fiber reporting unit are recorded in "Goodwill impairment charges" on the consolidated statement of operations and comprehensive income (loss).
Deferred Income Taxes. We operate as a REIT for U.S. federal income tax purposes. Our REIT taxable income is generally not subject to federal and state income taxes as a result of the deduction for dividends paid and any usage of our remaining NOLs. Accordingly, the only provision or benefit for federal income taxes for the year ended December 31, 2024 relates to TRSs. Furthermore, as a result of the deduction for dividends paid, some or all of our NOLs related to our REIT may expire without utilization. See "Item 1. Business—REIT Status" for a discussion of the impact of our REIT status.
Our TRSs will continue to be subject, as applicable, to federal and state income taxes and foreign taxes in the jurisdictions in which such assets and operations are located. Our foreign assets and operations (including its tower operations in Puerto Rico) are subject to foreign income taxes in the jurisdictions in which such assets and operations are located, regardless of whether they are included in a TRS or not. Our ability to utilize our NOLs is dependent, in part, upon us having sufficient future earnings to utilize our NOLs before they expire. If market conditions change materially and we determine that we will be unable to generate sufficient taxable income in the future to utilize our NOLs, we would be required to record an additional valuation allowance, which would reduce our earnings. The change in our valuation allowance has no effect on our cash flows. For a further discussion of our benefit (provision) for income taxes, see "Item 7. MD&A—Results of Operations" and note 9 to our consolidated financial statements.Accounting Pronouncements
Recently Adopted Accounting Pronouncements. See note 2 to our consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted. See note 2 to our consolidated financial statements.50
Non-GAAP and Segment Financial Measures
In addition to the non-GAAP measures used herein and as discussed in note 14 to our consolidated financial statements, we also provide segment operating profit (loss), which is a key measure used by management to evaluate the performance of our operating segments. This segment measure is provided pursuant to GAAP requirements related to segment reporting.
We define segment operating profit (loss) as segment site rental revenues plus segment services and other revenues, less segment site rental costs of operations, segment services and other costs of operations, and segment selling, general and administrative expenses, each of which excludes stock-based compensation, net, and prepaid lease purchase price adjustments, which are recorded in the respective consolidated figures.
We define Segment Adjusted 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. We define Segment Adjusted 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.
The three aforementioned segment performance measurements are exclusive of depreciation, amortization and accretion, which are shown separately. Additionally, certain costs are shared across segments and are reflected in our segment measures through allocations that management believes to be reasonable.
We use Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin, which are non-GAAP financial measures, as indicators of segment financial performance. Our measures of Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin may not be comparable to similarly titled measures of other companies, including companies in the communications infrastructure sector or other REITs, and are not measures of performance calculated in accordance with GAAP. Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin should not be considered in isolation or as substitutes for segment operating profit (loss) or other income statement or cash flow statement data prepared in accordance with GAAP and should be considered only as supplements to segment operating profit (loss) computed in accordance with GAAP as measures of our performance. There are material limitations to using measures such as Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin, including the difficulty associated with comparing results among more than one company, including our competitors, and the inability to analyze certain significant items, including stock-based compensation expense, net, prepaid lease purchase price adjustments and depreciation, amortization, and accretion, that directly affect our net income (loss). Management compensates for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with their analysis of net income (loss). The reconciliations of Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin to our segment operating profit (loss) are set forth below:Years Ended December 31,(In millions of dollars) 2024 2023 2022
Towers Fiber Towers Fiber Towers Fiber
Segment operating profit (loss)
$ 3,322 $ 1,188 $ 3,393 $ 1,355 $ 3,527 $ 1,130
Adjustments to increase (decrease) segment operating profit (loss):
Segment services and other revenues
(192) (18) (421) (28) (685) (12)
Segment services and other costs of operations (a)
101 12 294 12 447 9
Segment selling, general and administrative expenses (b)
76 176 104 194 115 190
Segment Adjusted Site Rental Gross Margin
$ 3,307 $ 1,358 $ 3,370 $ 1,533 $ 3,404 $ 1,317Years Ended December 31,2024 2023 2022
Towers Fiber Towers Fiber Towers Fiber
Segment operating profit (loss)
$ 3,322 $ 1,188 $ 3,393 $ 1,355 $ 3,527 $ 1,130
Adjustments to increase (decrease) segment operating profit (loss):
Segment site rental revenues
(4,266) (2,092) (4,313) (2,219) (4,322) (1,967)
Segment site rental costs of operations (c)(d)
959 734 943 686 918 650
Segment selling, general and administrative expenses (b)
76 176 104 194 115 190
Segment Adjusted Services and Other Gross Margin
$ 91 $ 6 $ 127 $ 16 $ 238 $ 3
(a) Segment services and other costs of operations for the year ended December 31, 2024 excludes stock-based compensation expense, net of $6 million, and for the years ended December 31, 2023 and 2022, excludes $10 million of stock-based compensation expense, net in each year.
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(b) Segment selling, general and administrative expenses for the years ended December 31, 2024, 2023 and 2022 excludes stock-based compensation expense, net of $44 million, $50 million and $47 million, respectively.
(c) Segment site rental costs of operations for the years ended December 31, 2024 and 2023 excludes stock-based compensation expense, net of $19 million in each year, and for the year ended December 31, 2022, excludes $18 million of stock-based compensation expense, net. Additionally, segment site rental costs of operations excludes prepaid lease purchase price adjustments of $16 million in each of the three years ended December 31, 2024, 2023 and 2022.
(d) Exclusive of depreciation, amortization and accretion shown separately.
We believe Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin are useful to investors or other interested parties in evaluating our financial performance because:
i. they are measures used by our management (1) to evaluate the economic productivity of our operating segments, (2) to identify underlying business trends that are impacting our performance, and (3) for purposes of making decisions about allocating resources to, and assessing the performance of, our operating segments; andii. we believe it helps investors and other interested parties meaningfully evaluate and compare the results of our operations from period to period.Our management uses Segment Adjusted Site Rental Gross Margin and Segment Adjusted Services and Other Gross Margin:
i. as a measurement of financial performance because it assists us in comparing our financial performance excluding the impact of certain non-cash items such as stock-based compensation expense, net and amortization of prepaid lease purchase price adjustments and asset base (primarily depreciation, amortization and accretion) from our operating results and before consideration of segment selling, general and administrative expenses; and
ii. for planning purposes, including preparation of our annual operating budget by operating segment.We define earnings before interest, taxes, depreciation, amortization and accretion, as adjusted ("Adjusted EBITDA") as net income (loss) plus restructuring charges (credits), asset write-down charges, goodwill impairment, 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, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, net (income) loss from discontinued operations, (gain) loss on sale of discontinued operations, cumulative effect of a change in accounting principle, stock-based compensation expense, net and net (gain) loss from disposal of discontinued operations, net of tax.We use Adjusted EBITDA, which is a non-GAAP financial measure, as an indicator of consolidated financial performance. Our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including companies in the communications infrastructure sector or other REITs, and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income (loss), net income (loss), net cash provided by (used for) operating, investing and financing activities or other income statement or cash flow statement data prepared in accordance with GAAP and should be considered only as a supplement to net income (loss) computed in accordance with GAAP as a measure of our performance. There are material limitations to using a measure such as Adjusted EBITDA, including the difficulty associated with comparing results among more than one company, including our competitors, and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income (loss). Management compensates for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with their analysis of net income (loss). The reconciliation of Adjusted EBITDA to our net income (loss) is set forth below:
52Years Ended December 31,(In millions of dollars) 2024 2023 2022
Net income (loss) $ (3,903) $ 1,502 $ 1,675Adjustments to increase (decrease) net income (loss):Asset write-down charges 148 33 34
Goodwill impairment
4,958 — —
Acquisition and integration costs — 1 2Depreciation, amortization and accretion1,738 1,754 1,707Restructuring charges109 85 —Amortization of prepaid lease purchase price adjustments16 16 16
Interest expense and amortization of deferred financing costs, net 932 850 699
(Gains) losses on retirement of long-term obligations
— — 28
Interest income (19) (15) (3)
Other (income) expense 28 6 10
(Benefit) provision for income taxes 24 26 16
Stock-based compensation expense, net 131 157 156Adjusted EBITDA (a)$ 4,161 $ 4,415 $ 4,340(a) The above reconciliation excludes the items included in our Adjusted EBITDA definition which are not applicable to the periods shown.
We believe Adjusted EBITDA is useful to investors or other interested parties in evaluating our financial performance because:• it is the primary measure used by our management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of, our operations;
• although specific definitions may vary, it is widely used by investors or other interested parties in evaluation of the communications infrastructure sector and other REITs to measure financial performance without regard to items such as depreciation, amortization and accretion, which can vary depending upon accounting methods and the book value of assets;• we believe it helps investors and other interested parties meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results; and• it is similar to the measure of current financial performance generally used in our debt covenant calculations.Our management uses Adjusted EBITDA:• as a performance goal in employee annual incentive compensation;• as a measurement of financial performance because it assists us in comparing our financial performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our operating results;
• in presentations to our board of directors to enable it to have the same measurement of financial performance used by management;
• for planning purposes, including preparation of our annual operating budget;
• as a valuation measure in strategic analyses in connection with the purchase and sale of assets;
• in determining self-imposed limits on our debt levels, including the evaluation of our leverage ratio; and
• with respect to compliance with our debt covenants, which require us to maintain certain financial ratios that incorporate concepts such as, or similar to, Adjusted EBITDA.53
FY 2025-12-31 (later)
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
General Overview
Overview
We own, operate and lease shared communications infrastructure. See "Item 1. Business" for a further discussion of our business, including our long-term strategy, our REIT status, certain key terms of our tenant contracts and growth trends in the demand for data.
On March 13, 2025, management signed the Strategic Fiber Agreement to sell our Fiber Business, with Zayo acquiring the fiber solutions business and EQT acquiring the small cell business. Under the Strategic Fiber Agreement, we will receive $8.5 billion in aggregate, subject to certain closing adjustments. The Strategic Fiber Transaction is expected to close in the first half of 2026, subject to certain closing conditions and regulatory approvals. See "Item 1. Business—Overview" for further discussion of the pending sale of the Fiber Business.As the aforementioned sale represents a material strategic shift for the Company, the Fiber Business' results and net assets are presented herein as discontinued operations and comparable prior periods have been recast to reflect this change. Related to the classification of the Fiber Business as "held for sale", we have recognized a loss from disposal of discontinued operations of approximately $1.6 billion, inclusive of estimated transaction fees, for the year ended December 31, 2025.
Following the classification of the Fiber Business as discontinued operations, we have one reportable segment that constitutes consolidated results of our tower operations. See notes 3 and 15 to our consolidated financial statements for a discussion of discontinued operations and our operating segment. Unless otherwise noted, all activities and amounts reported in this document relate to continuing operations and exclude activities and amounts related to discontinued operations.Highlights of Business Fundamentals and Results• Site rental revenues represented 95% of our 2025 net revenues. The vast majority of our site rental revenues is of a recurring nature and has been contracted for in prior years.
• We operate as a REIT for U.S. federal income tax purposes (see "Item 1. Business—REIT Status" and notes 2 and 10 to our consolidated financial statements)• Potential growth resulting from the increasing demand for data◦ We expect existing and potential new tenant demand for our towers will result from (1) new technologies, (2) increased usage of mobile entertainment, mobile internet, and machine-to-machine applications, (3) adoption of other emerging and embedded wireless devices (including smartphones, laptops, tablets, wearables and other devices), (4) increasing smartphone penetration, (5) wireless carrier focus on expanding both network quality and capacity, (6) the adoption of other bandwidth-intensive applications (such as cloud services, artificial intelligence and video communications), (7) the availability of additional spectrum and (8) increased government initiatives to support connectivity throughout the U.S.
◦ We expect U.S. wireless carriers will continue to focus on improving network quality and expanding capacity (including through 5G initiatives). We believe our towers provide an efficient and cost-effective solution to our wireless tenants' growing infrastructure needs.
◦ Tenant additions on our towers are achieved at a low incremental operating cost, delivering high incremental returns.
◦ Substantially all of our towers can accommodate additional tenancy, either as currently constructed or with appropriate modifications.• Returning cash flows provided by operations to stockholders in the form of dividends (see also "Item 1. Business—Strategy" )◦ During 2025, we paid common stock dividends totaling approximately $2.1 billion.
• Investing capital efficiently to grow cash flows
◦ We had discretionary capital expenditures of $149 million for the year ended December 31, 2025, predominately related to improvements to existing towers to support additional tenants and purchases of land underneath our towers.
◦ We expect to continue to construct and acquire new towers that we expect will generate future cash flow growth and attractive long-term returns by adding tenants to those assets over time.
◦ We expect to continue to acquire land interests relating to land under our towers.• Site rental revenues under long-term tenant contracts34
◦ Our tenant contracts have initial terms generally between five to 15 years with contractual escalators and multiple renewal periods generally between five to 10 years each, exercisable at the option of the tenant.
◦ As of December 31, 2025, our weighted-average remaining term was approximately six years, exclusive of renewals exercisable at the tenants' option, currently representing approximately $23.7 billion of expected future cash inflows, exclusive of amounts due under the Master Lease Agreement and underlying agreements with DISH. See "Item 7. MD&A—General Overview—Outlook Highlights" for further discussion.• Majority of our revenues from large wireless carriers◦ For the year ended December 31, 2025, approximately 90% of our site rental revenues were derived from T-Mobile, AT&T and Verizon Wireless. See "Item 1A. Risk Factors" and note 15 to our consolidated financial statements for a further discussion of our largest customers.
◦ During 2025, our site rental revenues decreased approximately $200 million as a result of non-renewals related to the network consolidation of T-Mobile and Sprint.• Majority of land under our towers under long-term control◦ For the year ended December 31, 2025, approximately 90% of our towers Adjusted Site Rental Gross Margin and approximately 80% of our towers Adjusted Site Rental Gross Margin was derived from towers located on land that we own or control for greater than 10 and 20 years, respectively. The aforementioned percentages include towers located on land that is owned, including through fee interests and perpetual easements, which represented approximately 40% of our towers Adjusted Site Rental Gross Margin.• Minimal sustaining capital expenditure requirements◦ For the year ended December 31, 2025, sustaining capital expenditures represented less than 1% of net revenues.
• Debt portfolio with long-dated maturities extended over multiple years, with the vast majority of such debt having a fixed rate (see note 8 to our consolidated financial statements and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt)
◦ As of December 31, 2025, our outstanding debt had a weighted average interest rate of 3.9% and weighted average maturity of approximately six years (assuming anticipated repayment dates on certain debt).
◦ As of December 31, 2025, 84% of our debt has fixed rate coupons.◦ Our debt service coverage and leverage ratios are within their respective financial maintenance covenants. See "Item 7. MD&A—Liquidity and Capital Resources—Debt Covenants" for a further discussion of our debt covenants.• During 2025, we repaid in full certain of our debt (see note 8 to our consolidated financial statements and "Item 7. MD&A—Liquidity and Capital Resources—Financing Activities" for further discussion of our debt transactions)• Significant cash flows from operations◦ Net cash provided by operating activities was $3.1 billion for the year ended December 31, 2025.
◦ In addition to the positive impact of contractual escalators, we expect to grow our core business of providing access to our towers as a result of future anticipated additional demand.
• 2023 and 2024 Restructuring Plans
◦ There were no restructuring charges in 2025 relating to either the 2023 Restructuring Plan or the 2024 Restructuring Plan. See note 17 to our consolidated financial statements for further discussion of the 2023 Restructuring Plan and 2024 Restructuring Plan.Common Stock DividendDuring the first quarter of the year ended 2025, we paid a common stock dividend of $1.565 per share and during each of the following three quarters, we paid a common stock dividend of $1.0625 per share, totaling approximately $2.1 billion. We have updated our capital allocation framework to focus more on free cash flow generation and financial flexibility, which primarily drove our decision to reduce our dividend in the second quarter of 2025. As we grow cash flows, we expect to increase our dividend per share. Whether dividends are to be declared and the amount and timing thereof remain subject to the discretion of our board of directors. See note 11 to our consolidated financial statements.Outlook Highlights
The following are certain highlights of our outlook that impact our business fundamentals described above.• In January 2026, we delivered a notice of default and termination to DISH relating to our Master Lease Agreement and underlying agreements with DISH as a result of DISH failing to make required payments and defaulting on its obligations under the agreements. As a result of the termination, we assert in the notice that DISH owes us all remaining payments under the agreements, which total in excess of $3.5 billion. Our 2026 Outlook does not include any revenues from DISH.
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• We expect a year over year reduction in site rental revenues related to (1) approximately $220 million from the aforementioned DISH termination, and (2) a decline in long-term deferred revenue amortization.
• In February 2026, we initiated a restructuring plan ("2026 Restructuring Plan") as part of our efforts to enhance the efficiency and effectiveness of our tower business.
◦ We expect to realize approximately $65 million annualized run-rate savings in operating costs, of which approximately $55 million will be realized in 2026 due to timing. The remaining savings of approximately $10 million will be realized in 2027. We expect to incur aggregate restructuring charges of approximately $30 million in 2026 as a result of the 2026 Restructuring Plan, most of which we expect to incur in the first and second quarters of 2026. See "Item 1A. Risk Factors" for a discussion of risks related to our restructuring activities.
• Following the closure of the Strategic Fiber Transaction, which is expected to occur in the first half of 2026, we expect to use the proceeds from the sale to repurchase approximately $1 billion of shares and approximately $7 billion of debt.
◦ As a result of the expected $7 billion repayment of debt, our 2026 interest expense is expected to decrease.
• Notwithstanding the plan to sell our Fiber Business, we expect to continue to invest a significant amount of our available capital in the form of discretionary capital expenditures in the Fiber Business until the closing of the Strategic Fiber Transaction.36
Results of OperationsThe following discussion of our results of operations for 2025 compared to 2024 should be read in conjunction with "Item 1. Business," "Item 7. MD&A—Liquidity and Capital Resources" and our consolidated financial statements. For a discussion of our results of operations and financial condition for 2024 compared to 2023 that is not included in this 2025 Form 10-K, see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 14, 2025.
The following discussion of our results of operations is based on our consolidated financial statements prepared in accordance with GAAP, which requires us to make estimates and judgments that affect the reported amounts (see "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 2 to our consolidated financial statements). See "Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP Financial Measures" for a discussion of our use of (1) Adjusted Site Rental Gross Margin and (2) Adjusted Services and Other Gross Margin, including their respective definitions and (3) Adjusted EBITDA, including its definition and a reconciliation to net income (loss).
Highlights of our results of operations for 2025, 2024 and 2023 are depicted below:Years Ended December 31, Percent Change(In millions of dollars) 2025 2024 2023 2025 vs. 2024
2024 vs. 2023
Site rental revenues: $ 4,049 $ 4,268 $ 4,313 (5) % (1) %
Income (loss) from continuing operations 1,103 1,162 1,237 (5) % (6) %
Net income (loss) 444 (3,903) 1,502 111 % (360) %
Adjusted EBITDA (a)
2,863 3,035 3,084 (6) % (2) %
Adjusted Site Rental Gross Margin (a)
3,076 3,307 3,370 (7) % (2) %
Adjusted Services and Other Gross Margin (a)
107 91 127 18 % (28) %
(a) See reconciliations of these non-GAAP financial measures to net income (loss) and definitions included in "Item 7. MD&A—Accounting and Reporting Matters—Non-GAAP.372025 and 2024
Total site rental revenues for 2025 decreased by $219 million, or 5%, from 2024. This decrease was predominately comprised of the factors depicted in the chart below:
(In millions of dollars; components may not sum to totals due to rounding)
(a) Represents site rental revenues growth from tenant additions across our entire portfolio and renewals or extensions of tenant contracts, exclusive of the impacts from both straight-line accounting and amortization of prepaid rent in accordance with GAAP.
(b) Includes $204 million of non-renewals associated with the T-Mobile and Sprint network consolidation.
Site rental revenues and Adjusted Site Rental Gross Margin for 2025 were $4.0 billion and $3.1 billion, respectively, compared to $4.3 billion and $3.3 billion, respectively, for 2024. The decrease of $219 million and $231 million in site rental revenue and Adjusted Site Rental Gross Margin, respectively, was primarily due to higher non-renewals of $204 million as a result of the T-Mobile and Sprint network consolidation, as well as a decrease in prepaid rent amortization of $61 million, as new leasing activity and contractual cash escalators were substantially offset by a decline in the associated straight-line accounting adjustment.
Adjusted Services and Other Gross Margin was $107 million for 2025 and increased by $16 million from $91 million from 2024, which is a reflection of the volume and mix of services and other offerings. Our services and other offerings are of a variable nature as these revenues are not under long-term tenant contracts.
Selling, general and administrative expenses for 2025 were $383 million and decreased by $52 million, or 12%, from $435 million from 2024. The decrease in selling, general and administrative expenses was related to a decrease in legal and consulting expense, primarily related to our recent proxy contest in 2024, and a decrease in employee- and facility-related costs as a result of our aforementioned restructuring activities of the 2023 and 2024 Restructuring Plans.
Depreciation, amortization and accretion was approximately $690 million for 2025 and decreased by $46 million, or 6%, from 2024. This decrease predominately resulted from certain fixed assets and site rental contracts and tenant relationships intangible assets becoming fully depreciated or amortized, respectively.
There were no restructuring charges recorded in connection with the 2023 and 2024 Restructuring Plans during 2025 compared to $70 million recorded during 2024. The actions associated with the 2023 and 2024 Restructuring Plans were substantially completed and the related charges were recorded by December 31, 2024. See note 17 to our consolidated financial statements for further discussion of our 2023 and 2024 Restructuring Plans.
Interest expense and amortization of deferred financing costs, net was $972 million for 2025 and increased by $40 million, or 4%, from $932 million during 2024. The increase predominately resulted from an increase in our outstanding38indebtedness due to the financing of our discretionary capital expenditures, including those presented within discontinued operations. See note 8 to our consolidated financial statements, "Item 1A. Risk Factors" and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a further discussion of our debt and interest rate exposure.
The provision for income taxes for 2025 and 2024 were $16 million and $18 million, respectively. For both 2025 and 2024, the effective tax rate differs from the federal statutory rate predominately due to our REIT status, including the dividends paid deduction. See "Item 1. Business—REIT Status," "Item 7. MD&A—Accounting and Reporting Matters—Critical Accounting Policies and Estimates" and note 10 to our consolidated financial statements.
Income (loss) from continuing operations was $1.1 billion during 2025 compared to $1.2 billion during 2024. The decrease was related to the previously-mentioned decreases in site rental revenues, the previously-mentioned increases in interest expense and amortization of deferred financing costs, net, while being partially offset by a decrease in restructuring charges, depreciation, amortization and accretion expense and selling, general, and administrative expenses.
Income (loss) from discontinuing operations before gain (loss) from disposal, net of tax, was $916 million during 2025 compared to $(5,065) million during 2024. The increase was primarily driven by the absence of a $106 million asset write-down charge and $5.0 billion goodwill impairment charge, both of which occurred in 2024. In addition, there was a decrease in depreciation, amortization and accretion related to the ceasing of depreciation and amortization of the Fiber Business long-lived assets classified as "held for sale."
Gain (loss) from disposal of discontinued operations was $(1.6) billion during 2025. The loss was primarily related to the classification during the first quarter of 2025 of the Fiber Business as "held for sale" and the additional investment in the Fiber Business during the remainder of 2025. The loss represents the excess of the carrying value of the Fiber Business over the purchase price, less estimated costs to sell.
Net income (loss) was $444 million during 2025 compared to $(3,903) million during 2024. The increase was primarily due to the change in income (loss) from discontinued operations, net of tax of $4.4 billion, primarily due to the absence of the previously mentioned $5.0 billion goodwill impairment charge recorded in 2024.
Adjusted EBITDA decreased by $172 million, or 6%, from 2024 to 2025, reflecting the previously mentioned decreases in site rental revenue, partially offset by previously mentioned decreases in selling, general, and administrative expenses and increase in Adjusted Services and Other Gross Margin.39
Liquidity and Capital Resources
OverviewGeneral. Our core business generates revenues under long-term tenant contracts (see "Item 1. Business—Overview" and "Item 7. MD&A—General Overview—Overview" ) from the largest U.S. wireless carriers and other towers tenants. As a leading provider of towers in the U.S., our strategy is to create long-term stockholder value via a combination of (1) growing cash flows generated from our existing towers, (2) returning a meaningful portion of our cash generated by operating activities to our stockholders in the form of dividends and share repurchases, and (3) investing capital efficiently to grow cash flows. Our strategy is based, in part, on our belief that the U.S. is the most attractive market for towers investment with the greatest long-term growth potential. We measure our efforts to create "long-term stockholder value" by the growth in our per share results. See "Item 1. Business—Strategy" for a further discussion of our strategy.
We have engaged, and expect to continue to engage, in discretionary investments that we believe will maximize long-term stockholder value. These investments include the acquisition of land interests, making improvements, structural enhancements to our existing towers, and constructing and acquiring new towers that we expect will generate future cash flow growth and attractive long-term returns by adding tenants to those assets over time. We have recently spent, and expect to continue to spend, a significant percentage of our discretionary investments on the construction of small cells and fiber until the closing of the sale of the Fiber Business. See note 3 to our consolidated financial statements and "Item 7. MD&A—General Overview" for further discussion of the pending sale of the Fiber Business. We seek to fund our discretionary investments with both cash generated by operating activities and cash available from financing capacity, such as the use of our availability under our 2016 Revolver, issuances under our CP Program, debt financings and issuances of equity or equity-related securities, including under our 2024 ATM Program or any similar successor program.
We seek to maintain a capital structure that we believe drives long-term stockholder value and optimizes our weighted-average cost of capital. Additionally, we expect to maintain an investment grade credit profile. As of December 31, 2025, our contractual debt maturities over the next 12 months consist of (1) Commercial Paper Notes, of which we had $1.9 billion outstanding as of February 19, 2026, (2) the 4.450%, 3.700%, and 1.050% senior unsecured notes due February, June and July 2026, respectively ("4.450% Senior Notes", "3.700% Senior Notes", and "1.050% Senior Notes") and (3) principal payments on certain outstanding debt. Amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding.
We operate as a REIT for U.S. federal income tax purposes. We expect to continue to pay minimal cash income taxes as a result of our REIT status and our NOLs. See "Item 1. Business—REIT Status," "Item 7. MD&A—General Overview" and note 10 to our consolidated financial statements.
Liquidity Position. The following is a summary of our capitalization and liquidity position as of December 31, 2025. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" and note 8 to our consolidated financial statements for additional information regarding our debt as well as note 11 to our consolidated financial statements for additional information regarding our 2024 ATM Program.(In millions of dollars)
Cash and cash equivalents and restricted cash and cash equivalents (a)$ 274Undrawn 2016 Revolver availability (b)6,015
Total debt and other obligations (current and non-current) 24,337Total deficit(1,635)(a) Inclusive of $5 million included within "Other assets, net" on our consolidated balance sheet.(b) Availability at any point in time is subject to certain restrictions based on the maintenance of financial covenants contained in our 2016 Credit Facility. At any point in time, we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of outstanding Commercial Paper Notes. See note 8 to our consolidated financial statements.
As of December 31, 2025, over the next 12 months:
• Following the closure of the Strategic Fiber Transaction, which is expected to occur in the first half of 2026, we expect to use the proceeds from the sale to repurchase approximately $1 billion of shares and repay approximately $7 billion of debt. Future share repurchases are subject to the discretion and approval of our board of directors.
◦ Upon closure, we do not expect that the absence of cash flows from the Fiber Business will have an adverse impact on our liquidity position. While the Fiber Business generated cash inflows from operating activities, such cash inflows were generally offset by cash used for investing activities due to significant discretionary capital expenditures. As a result, the Fiber Business did not historically provide net liquidity to our Company.40• In addition to the aforementioned proceeds from the sale, our liquidity sources may include (1) cash on hand, (2) cash generated by our operating activities, (3) availability under our 2016 Revolver, (4) issuances under our CP Program, and (5) issuances of equity pursuant to our 2024 ATM Program or any similar successor program. Our liquidity uses are expected to include (1) maturing debt obligations of $4.7 billion (consisting of Commercial Paper Notes, the 4.450% Senior Notes, the 3.700% Senior Notes, the 1.050% Senior Notes and principal payments on certain outstanding debt), (2) additional debt paydowns using the proceeds from the sale discussed above, (3) share repurchases as discussed above, (4) common stock dividend payments, subject to declaration by our board of directors (see "Item 7. MD&A—General Overview—Common Stock Dividend" ), and (5) capital expenditures.
• Amounts available under our CP Program may be repaid and re-issued from time to time and we intend to maintain available commitments under our 2016 Revolver in an amount at least equal to the amount of Commercial Paper Notes outstanding. Historically, from time to time, we have accessed the capital markets to issue debt and equity.
• See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a discussion of interest rate risk and note 8 to our consolidated financial statements for a tabular presentation of our debt maturities and a discussion of anticipated repayment dates.Summary Cash Flows Information
Years Ended December 31,(In millions of dollars) 2025 2024 2023
Operating activities $ 3,057 $ 2,943 $ 3,126
Investing activities (1,158) (1,220) (1,519)
Financing activities (1,886) (1,708) (1,654)Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents13 15 (47)
Effect of exchange rate changes on cash — (1) 1Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents$ 13 $ 14 $ (46)Operating ActivitiesThe increase in net cash provided by operating activities of $114 million from 2024 to 2025 was driven by a $52 million increase in net cash provided by continuing operations and $62 million increase in net cash provided by discontinued operations. The $52 million increase in net cash provided by continuing operations is due primarily to a net increase from changes in working capital partially offset by the aforementioned decrease in Adjusted Site Rental Gross Margin. Changes in working capital contribute to variability in net cash provided by operating activities, largely due to the timing of advanced payments by us and advanced receipts from tenants. We expect to grow our net cash provided by operating activities in the future (exclusive of changes in working capital) if we realize expected growth in our core business.
The increase of $62 million in net cash provided by discontinued operations is due primarily to increased operating profit of our Fiber Business and a net increase from changes in working capital.Investing ActivitiesNet cash used for investing activities for 2025 decreased by $62 million from 2024, driven by a $3 million increase in net cash used for investing by continuing operations and $65 million decrease in net cash used for discontinuing operations.Our capital expenditures are categorized as discretionary or sustaining as described below.• Discretionary capital expenditures relating to continuing operations are those made with respect to activities which we believe exhibit sufficient potential to enhance long-term stockholder value. Discretionary capital expenditures, including with respect to discontinued operations, primarily consist of expansion or development of our communications infrastructure (including capital expenditures related to (1) enhancing communications infrastructure in order to add new tenants for the first time or support subsequent tenant equipment augmentations or (2) modifying the structure of a communications infrastructure asset to accommodate additional tenants) and construction of new communications infrastructure. Discretionary capital expenditures also include purchases of land interests (which primarily relate to land assets under towers as we seek to manage our interests in the land beneath our towers), certain technology-related investments necessary to support and scale future customer demand for our communications infrastructure, and other capital projects. The expansion or development of existing communications infrastructure to accommodate new leasing typically varies based on, among other factors: (1) the type of communications infrastructure, (2) the scope, volume, and mix of work performed on the communications infrastructure, (3) existing capacity prior to installation, or (4) changes in structural engineering regulations and standards. Currently, construction of new communications infrastructure is predominately comprised of the construction of small cells and fiber (including certain construction projects that may take 18 to 36 months to complete). Our decisions regarding41discretionary capital expenditures are influenced by the availability and cost of capital and expected returns on alternative uses of cash, such as payments of dividends and investments.
• Sustaining capital expenditures consist of those capital expenditures (including with respect to discontinued operations) not otherwise categorized as discretionary capital expenditures, such as (1) maintenance capital expenditures on our communications infrastructure assets that enable our tenants' ongoing quiet enjoyment of the communications infrastructure and (2) ordinary corporate capital expenditures.
A summary of our capital expenditures for continuing operations for the last three years is as follows:For the Years EndedDecember 31,
(In millions of dollars) 2025
2024
2023Discretionary:Tower improvements and other capital projects (a)
$ 72 $ 84 $ 146
Purchases of land interests 77 58 64
Sustaining 33 34 33
Total $ 182 $ 176 $ 243
(a) Includes $7 million, $12 million and $32 million of capital expenditures incurred during the years ended December 31, 2025, 2024 and 2023, respectively, in connection with tenant installations and upgrades on our towers.
The $65 million reduction in discretionary capital expenditures for our discontinued operations during 2025 compared to the same period in 2024 was primarily related to the higher return thresholds on new growth opportunities as a result of the review of the Fiber Business completed in the second quarter of 2024. The discretionary capital expenditures for our continuing operations were relatively stable as tower investments related to tenant activity were offset by an increase in land purchases under our towers.Financing ActivitiesWe seek to allocate cash generated by our operations in a manner that will enhance long-term stockholder value, which may include various financing activities such as (in no particular order): (1) paying dividends on our common stock, subject to declaration by our board of directors, (2) purchasing our common stock or (3) purchasing, repaying, or redeeming our debt. See "Item 7. MD&A—General Overview—Common Stock Dividend," "Item 7. MD&A—Liquidity and Capital Resources—Overview" and notes 8 and 11 to our consolidated financial statements.
In 2025, our financing activities predominately related to the following:
• paying an aggregate of $2.1 billion in dividends on our common stock;
• repaying in full the previously outstanding Tower Revenue Notes, Series 2015-2 on the anticipated repayment date in May 2025;
• repaying in full the previously outstanding 1.350% senior unsecured notes on the contractual maturity date in July 2025; and
• net borrowings under our revolving credit facility and net issuances under our commercial paper program, which collectively were used for general corporate purposes.In 2024, our financing activities predominately related to the following:
• paying an aggregate of $2.7 billion in dividends on our common stock;
• repaying in full the previously outstanding 3.200% senior unsecured notes on the contractual maturity date in September 2024; and
• issuing $550 million aggregate principal amount of 4.900% senior unsecured notes and $700 million aggregate principal amount of 5.200% senior unsecured notes in August 2024, the net proceeds of which were used to repay a portion of the outstanding indebtedness under our CP Program and pay related fees and expenses.Incurrence, Purchases and Repayments of Debt. See note 8 to our consolidated financial statements, "Item 7. MD&A—General Overview" and "Item 7. MD&A—Liquidity and Capital Resources—Overview—Liquidity Position" for further discussion of our recent issuances, purchases, redemptions and repayments of debt.
Common Stock. See note 11 to our consolidated financial statements for further information regarding our common stock as well as dividends declared and paid.42ATM Program. We previously maintained a 2021 ATM Program through which we had the right to issue and sell shares of our common stock having an aggregate gross sales price of up to $750 million to or through sales agents. In March 2024, we terminated the formerly outstanding 2021 ATM Program with the entire gross sales price of $750 million remaining unsold.In March 2024, we established the 2024 ATM Program through which we may issue and sell shares of our common stock having an aggregate gross sales price of up to $750 million. Sales under the 2024 ATM Program, or any similar successor program, may be made by means of ordinary brokers' transactions on the New York Stock Exchange ("NYSE") or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or, subject to our specific instructions, at negotiated prices. We intend to use the net proceeds from any sales under the 2024 ATM Program, or any similar successor program, for general corporate purposes, which may include (1) the funding of future acquisitions or investments or (2) the repayment or repurchase of any outstanding indebtedness. We have not sold any shares of common stock under the 2024 ATM Program. See also note 11 to our consolidated financial statements. As of February 19, 2026, we had $750 million of gross sales of common stock availability remaining on our 2024 ATM Program.
Credit Facility. See note 8 to our consolidated financial statements for further information regarding our 2016 Credit Facility. As of February 19, 2026, we had an outstanding balance under our 2016 Revolver of $1.8 billion and maintained $5.2 billion in undrawn availability. The proceeds from our 2016 Revolver may be used for general corporate purposes, which may include the financing of capital expenditures, acquisitions, the repayment or repurchase of any outstanding indebtedness and purchases of our common stock.
Commercial Paper Program. See note 8 to our consolidated financial statements for further information regarding our CP Program. As of February 19, 2026, there was $1.9 billion outstanding under our CP Program. The proceeds from our Commercial Paper Notes may be used for general corporate purposes, which may include the financing of capital expenditures, acquisitions, the repayment or repurchase of any outstanding indebtedness and purchases of our common stock.Restricted Cash and Cash Equivalents . Pursuant to the indentures governing certain of our operating companies' debt securities, all rental cash receipts of the issuers of these debt instruments and their subsidiaries are restricted and held by an indenture trustee. The restricted cash and cash equivalents in excess of required reserve balances is subsequently released to us in accordance with the terms of the indentures. See also note 2 to our consolidated financial statements.
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Material Cash RequirementsThe following table summarizes our material cash requirements as of December 31, 2025. These material cash requirements relate primarily to our outstanding borrowings or lease obligations for land interests under our towers. The debt maturities reflect contractual maturity dates and do not consider the impact of the principal payments that will commence following the anticipated repayment dates of certain debt (see footnote (b)). The debt and interest payments on debt below do not consider the aforementioned expected use of proceeds from the closure of the Strategic Fiber Transaction.(In millions of dollars) Years Ending December 31,Material Cash Requirements 2026 2027 2028 2029 2030 Thereafter TotalsDebt and other long-term obligations (a)$ 4,714 $ 4,199 $ 2,634 $ 2,479 $ 772 $ 9,669 $ 24,467Interest payments on debt and other long-term obligations (b)(c)905 865 765 651 562 5,360 9,108Lease obligations (d)521 523 526 527 524 5,108 7,729
Total material cash requirements $ 6,140 $ 5,587 $ 3,925 $ 3,657 $ 1,858 $ 20,137 $ 41,304
(a) The impact of principal payments that will commence following the anticipated repayment date of our Tower Revenue Notes, Series 2018-2 is not considered. The Tower Revenue Notes, Series 2018-2 has a principal amount of $750 million, with an anticipated repayment date in 2028. See note 8 to our consolidated financial statements for our definition of and additional information regarding the 2018 Tower Revenue Notes.
(b) If the Tower Revenue Notes, Series 2018-2 are not repaid in full by the anticipated repayment date, the interest rate increases by approximately 5% per annum and monthly principal payments commence using the Excess Cash Flow (as defined in the indenture governing the Tower Revenue Notes, Series 2018-2) of the issuers of the Tower Revenue Notes, Series 2018-2. The Tower Revenue Notes, Series 2018-2 are presented based on their contractual maturity date in 2048 and include the impact of an assumed 5% increase in interest rate that would occur following the anticipated repayment date but exclude the impact of monthly principal payments that would commence using Excess Cash Flow of the issuers of the Tower Revenue Notes, Series 2018-2. The full year 2025 Excess Cash Flow of the issuers of the Tower Revenue Notes, Series 2018-2 was approximately $1.0 billion. We currently expect to refinance or repay these notes on or prior to the anticipated repayment date.
(c) Includes the unused commitment fees on our 2016 Credit Facility. Interest payments on the variable rate debt are based on estimated rates currently in effect. See note 8 to our consolidated financial statements for information regarding potential upward or downward adjustments to the interest rate spread and unused commitment fee percentage on our 2016 Credit Facility if we achieve specified annual sustainability targets or fail to meet annual sustainability thresholds. Each annual period presented assumes the downward adjustments in the interest rate spread and unused commitment fee percentage on our 2016 Credit Facility. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for a discussion of our interest rate risk.
(d) Amounts relate primarily to lease obligations for the land on which our towers are located and are based on the assumption that payments will be made for certain renewal periods exercisable at our option that are reasonably certain to be exercised and excludes our contingent payments for operating leases (such as payments based on revenues derived from the tower located on the leased asset) as such arrangements are excluded from our operating lease liability. See note 14 to our consolidated financial statements for further discussion of our operating lease obligations. See also the table below summarizing remaining terms to expiration.44The following chart summarizes our rights to the land interests under our towers, including renewal terms exercisable at our option, as of December 31, 2025. As of December 31, 2025, the leases for land interests under our towers had an average remaining life of approximately 35 years, weighted based on towers Adjusted Site Rental Gross Margin. See "Item 1A. Risk Factors" for a discussion of retaining the rights to land under our towers.(a) Inclusive of land owned through fee interests and perpetual easements.(b) For the three months ended December 31, 2025, without consideration of the term of the tenant contract.Debt CovenantsOur 2016 Credit Agreement contains financial maintenance covenants. We are currently in compliance with these financial maintenance covenants and, based upon our current expectations, we believe we will continue to comply with our financial maintenance covenants. In addition, certain of our debt agreements contain restrictive covenants that place restrictions on us and may limit our ability to, among other things, incur additional debt and liens, purchase our securities, make capital expenditures, dispose of assets, undertake transactions with affiliates, make other investments, pay dividends or distribute excess cash flow. See note 8 to our consolidated financial statements for further discussion of our debt covenants. See also "Item 1A. Risk Factors" for a discussion of compliance with our debt covenants. The following are ratios applicable to the financial maintenance covenants under the 2016 Credit Agreement as of December 31, 2025.Borrower / Issuer Financial Maintenance Covenant (a)(b)Covenant Level Requirement As of December 31, 2025
CCI Total Net Leverage Ratio ≤ 6.50x 5.9x
CCI Total Senior Secured Leverage Ratio ≤ 3.50x 0.2xCCI Consolidated Interest Coverage Ratio (c)
N/A N/A
(a) Failure to comply with the financial maintenance covenants would, absent a waiver, result in an event of default under the 2016 Credit Agreement.
(b) As defined in the 2016 Credit Agreement.
(c) Applicable solely to the extent that the senior unsecured debt rating by any two of S&P, Moody's and Fitch is lower than BBB-, Baa3 or BBB-, respectively. If applicable, the consolidated interest coverage ratio must be greater than or equal to 2.50.
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Accounting and Reporting Matters
Critical Accounting Policies and EstimatesOur critical accounting policies and estimates are those that we believe (1) are most important to the portrayal of our financial condition and results of operations or (2) require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. In many cases, the accounting treatment of a particular transaction is specifically prescribed by GAAP. In other cases, management is required to exercise judgment in the application of accounting principles with respect to particular transactions. Accordingly, actual results could differ materially from our estimates. The critical accounting policies and estimates for 2025 are not intended to be a comprehensive list of our accounting policies and estimates. See note 2 to our consolidated financial statements for a summary of our significant accounting policies.
Lease Accounting—Lessee. Our lessee arrangements primarily consist of ground leases for land under our towers and are for an initial term generally between five to 15 years. We also enter into ground leases, such as term easements, in which we prepay the entire term. The majority of our lease agreements have certain termination rights that provide for cancellation after a notice period and multiple renewal options exercisable at our option. We include certain renewal option periods in the lease term when we determine that the options are reasonably certain to be exercised.
Operating lease expense is recognized on a ratable basis, regardless of whether the payment terms require us to make payments annually, semi-annually, quarterly, monthly, or for the entire term in advance. Certain of our ground lease agreements contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses (such as those tied to the change in consumer price index ("CPI")). If the payment terms include fixed escalators, upfront payments, or rent-free periods, the effect of such increases is recognized on a straight-line basis. When calculating straight-line ground lease expense, we consider all fixed elements of contractual escalation provisions, even if such escalation provisions contain a variable element in addition to a minimum. We calculate the straight-line expense over the contract's estimated lease term, including any renewal option periods that we deem reasonably certain to be exercised.We recognize a right-of-use ("ROU") asset (and, as applicable, a corresponding lease liability) for each of our operating leases. ROU assets represent our right to use an underlying asset for the estimated lease term, and lease liabilities represent the present value of our future lease payments. In assessing our leases and determining our lease liability at lease commencement or upon modification, we are not able to readily determine the rate implicit for our lessee arrangements and thus use our incremental borrowing rate on a collateralized basis to determine the present value of our lease payments. Our ROU assets are measured as the balance of the lease liability plus any prepaid or accrued lease payments and any unamortized initial direct costs.
We review the carrying value of our ROU assets for impairment, similar to our other long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. We could record impairments in the future if there are changes in (1) long-term market conditions, (2) expected future operating results or (3) the utility of the assets that negatively impact the fair value of our ROU assets.Revenue Recognition. 95% of our total revenue for 2025 consisted of site rental revenues, which are recognized on a ratable basis over the fixed, non-cancelable term of the relevant tenant contract, generally between five to 15 years, regardless of whether the payments from the tenant are received in equal monthly amounts during the life of a tenant contract. Certain of our tenant contracts contain (1) fixed escalation clauses (such as fixed-dollar or fixed-percentage increases) or inflation-based escalation clauses (such as those tied to the change in CPI), (2) multiple renewal periods exercisable at the tenant's option and (3) only limited termination rights at the applicable tenant's option through the current term. If the payment terms call for fixed escalators, upfront payments, or rent-free periods, the revenue is recognized on a straight-line basis over the fixed, non-cancelable term of the tenant contract. When calculating our straight-line rental revenues, we consider all fixed elements of tenant contractual escalation provisions, even if such escalation provisions contain a variable element (such as an escalator tied to an inflation-based index) in addition to a minimum. Since we recognize revenue on a straight-line basis, a portion of the site rental revenues in a given period represents cash collected or contractually collectible in other periods. Our assets related to straight-line site rental revenues are recorded within "Current portion of deferred site rental receivables" and "Deferred site rental receivables" on the consolidated balance sheet. Amounts billed or received prior to being earned are deferred and reflected in "Deferred revenues" and "Other long-term liabilities" on the consolidated balance sheet. Amounts to which we have an unconditional right to payment, which are related to both satisfied or partially satisfied performance obligations, are recorded within "Receivables, net" on the consolidated balance sheet.
As part of our effort to provide comprehensive tower solutions, as an ancillary business, we also offer certain services, which represented 5% of our total revenues for 2025. For the periods presented, such services and other revenues consisted predominately of (1) site development services relating to existing or new tenant equipment installations, including: site46acquisition, architectural and engineering, or zoning and permitting (collectively, "site development services") and (2) installation services. See note 17 to our consolidated financial statements for a discussion of the 2023 Restructuring Plan, which included discontinuing installation services as a towers product offering. Our services generally have a duration of one year or less. Upon contract commencement, we assess our services to tenants and identify performance obligations for each promise to provide a distinct service.We may have multiple performance obligations for site development services, which primarily include: structural analysis, zoning, permitting and construction drawings. For each of the above performance obligations, services revenues are recognized at completion of the applicable performance obligation, which represents the point at which we believe we have transferred goods or services to the tenant. The revenue recognized is based on an allocation of the transaction price among the performance obligations in a respective contract based on estimated standalone selling price.
The transaction price for tower installation services consists of amounts for (1) permanent improvements to our towers that represent a lease component and (2) the performance of the service. Amounts under our tower installation services agreements that represent a lease component are recognized as site rental revenues on a ratable basis over the length of the associated estimated lease term. For the performance of the tower installation service, we have one performance obligation, which is satisfied at the time of the applicable installation or augmentation and recognized as services and other revenues.
Since performance obligations are typically satisfied prior to receiving payment from tenants, the unconditional right to payment is recorded within "Receivables, net" on our consolidated balance sheet.Accounting for Long-Lived Assets—Useful Lives. We are required to make subjective assessments as to the useful lives of our tangible and intangible assets for purposes of determining depreciation, amortization and accretion expense that, if incorrectly estimated, could be material to our consolidated financial statements. Depreciation expense for our property and equipment is computed using the straight-line method over the estimated useful lives of our various classes of tangible assets. A substantial portion of our property and equipment represents the cost of our towers, the majority of which is depreciated with an estimated useful life equal to the shorter of 20 years or the term of the underlying ground lease (where applicable and including optional renewals).
The useful lives of our intangible assets are estimated based on the period over which the intangible asset is expected to benefit us and gives consideration to the expected useful life of other assets to which the useful life may relate. We review the expected useful lives of our intangible assets on an ongoing basis and adjust if necessary. Amortization expense for intangible assets is computed using the straight-line method over the estimated useful life of each of the intangible assets. The useful lives of site rental contracts and tenant relationships intangible assets are limited by the maximum depreciable life of the tower (20 years), as a result of the interdependency of the tower and the site rental contracts and tenant relationships. In contrast, the site rental contracts and tenant relationships are estimated to provide economic benefits for several decades because of the low rate of tenant cancellations and high rate of tenant retention experienced to date. Thus, while site rental contracts and tenant relationships intangible assets are valued based upon the fair value of the site rental contracts and tenant relationships which includes assumptions regarding both (1) tenants' exercise of optional renewals contained in the acquired leases and (2) renewals of the acquired leases past the contractual term including exercisable options, site rental contracts and tenant relationships intangible assets are amortized over a period not to exceed 20 years as a result of the useful life being limited by the depreciable life of the tower.Accounting for Long-Lived Assets—Impairment Evaluation. We review the carrying values of property and equipment, intangible assets, or other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.We utilize the following dual grouping policy for purposes of determining the unit of account for testing impairment of site rental contracts and tenant relationships intangible assets:(1) we pool site rental contracts and tenant relationships intangible assets and property and equipment into portfolio groups; and
(2) we separately pool the site rental contracts and tenant relationships by significant tenant or by tenant grouping for individually insignificant tenants, as appropriate.We first pool site rental contracts and tenant relationships intangible assets and property and equipment into portfolio groups for purposes of determining the unit of account for impairment testing, because we view towers as portfolios and towers in a given portfolio and its related tenant contracts are not largely independent of the other towers in the portfolio. We re-evaluate the appropriateness of the pooled groups at least annually. This use of grouping is based in part on (1) our limitations regarding disposal of towers, (2) the interdependencies of tower portfolios, and (3) the manner in which towers are traded in the marketplace. The vast majority of our site rental contracts and tenant relationships intangible assets and property and equipment
47
are pooled into the U.S. owned tower group. Secondly, and separately, we pool the site rental contracts and tenant relationships by significant tenant or by tenant grouping for individually insignificant tenants, as appropriate, for purposes of determining the unit of account for impairment testing because we associate the value ascribed to site rental contracts and tenant relationships intangible assets to the underlying contracts and related tenant relationships acquired.
Our determination that an adverse event or change in circumstance has occurred that indicates that the carrying amounts may not be recoverable will generally involve (1) a deterioration in an asset's financial performance compared to historical results, (2) a shortfall in an asset's financial performance compared to forecasted results, or (3) changes affecting the utility and estimated future demands for the asset. When considering the utility of our assets, we consider events that would meaningfully impact (1) our towers or (2) our tenant relationships. For example, consideration would be given to events that impact (1) the structural integrity and longevity of our towers or (2) our ability to derive benefit from our existing tenant relationships, including events such as tenant's bankruptcy or insolvency or loss of a significant tenant.
If the sum of the associated estimated future cash flows (undiscounted) from an asset group is less than its carrying amount, an impairment loss may be recognized. If the carrying value were to exceed the undiscounted cash flows, measurement of an impairment loss would be based on the fair value of the asset, which is based on an estimate of discounted future cash flows. The most important estimates for such calculations of undiscounted cash flows are (1) the expected additions of new tenants and equipment on our towers and (2) estimates regarding tenant cancellations and renewals of tenant contracts. We could record impairments in the future if changes in long-term market conditions, expected future operating results or the utility of the assets results in changes for our impairment test calculations which negatively impact the fair value of our property and equipment and intangible assets, or if we changed our unit of account in the future.
There were no events or circumstances that caused us to review the carrying value of our intangible assets or property and equipment due in part to our assets performing consistently with or better than our expectations.
Approximately 5% of our total towers currently have no tenants. We continue to pay operating expenses on these towers in anticipation of obtaining tenants on these towers in the future, primarily because of the demographics and continuing increase in demand for data in the areas around these individual towers. To the extent we do not believe there are long-term prospects of obtaining tenants on an individual asset and all other possible avenues for recovering the carrying value have been exhausted, including sale of the asset, we appropriately reduce the carrying value of such assets to fair value.
Accounting for Goodwill—Impairment Evaluation. Management tests goodwill for impairment at least annually or whenever events or circumstances indicate the carrying amount may not be recoverable. The annual test begins with goodwill and all intangible assets being allocated to our single reporting unit which is the same as our single operating segment. We then perform a qualitative assessment to determine whether it is "more likely than not" that the fair value of the reporting unit is less than its carrying amount. If we conclude that it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount, we would be required to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test compares the estimated fair value of the reporting unit and the carrying value of the reporting unit. If the carrying amount of a reporting unit is greater than its fair value, an impairment loss shall be recognized in an amount equal to such excess, limited to the total amount of goodwill allocated to the reporting unit. See note 6 to our consolidated financial statements. We performed our most recent annual goodwill impairment test as of October 1, 2025, which resulted in no impairment.
Deferred Income Taxes. We operate as a REIT for U.S. federal income tax purposes. Our REIT taxable income is generally not subject to federal and state income taxes as a result of the deduction for dividends paid and any usage of our remaining NOLs. Accordingly, the only provision or benefit for federal income taxes for the year ended December 31, 2025 relates to TRSs. Furthermore, as a result of the deduction for dividends paid, some or all of our NOLs related to our REIT may expire without utilization. See "Item 1. Business—REIT Status" for a discussion of the impact of our REIT status.
Our TRSs will continue to be subject, as applicable, to federal and state income taxes and foreign taxes in the jurisdictions in which such assets and operations are located. Our foreign assets and operations (including our tower operations in Puerto Rico) are subject to foreign income taxes in the jurisdictions in which such assets and operations are located, regardless of whether they are included in a TRS or not. Our ability to utilize our NOLs is dependent, in part, upon us having sufficient future earnings to utilize our NOLs before they expire. Our federal and state NOLs are valued at a tax rate of 0% for deferred income tax purposes due to our REIT status. Additionally, our foreign NOLs are offset by a valuation allowance. As such, a change to market conditions that impacts our ability to generate sufficient future taxable income to utilize our NOLs would not require us to record an additional valuation allowance. For a further discussion of our benefit (provision) for income taxes, see "Item 7. MD&A—Results of Operations" and note 10 to our consolidated financial statements.48Accounting Pronouncements
Recently Adopted Accounting Pronouncements. See note 2 to our consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted. See note 2 to our consolidated financial statements.Non-GAAP Financial Measures
In addition to the financial results we present that have been prepared in accordance with generally accepted accounting principles ("GAAP"), we also provide information about three non-GAAP financial measures: Adjusted Site Rental Gross Margin, Adjusted Services and Other Gross Margin and Adjusted EBITDA..
We define Adjusted Site Rental Gross Margin as net income (loss) plus services and other costs of operations, selling, general and administrative expenses, restructuring charges (credits), asset write-down charges, goodwill impairment, 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, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, (income) loss from discontinued operations, net of tax, cumulative effect of a change in accounting principle and stock-based compensation expense, net, recorded in consolidated site rental costs of operations, less services and other revenues.
We define Adjusted Services and Other Gross Margin as net income (loss) plus site rental costs of operations, selling, general and administrative expenses, restructuring charges (credits), asset write-down charges, goodwill impairment, acquisition and integration costs, depreciation, amortization and accretion, interest expense and amortization of deferred financing costs, net, (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, (benefit) provision for income taxes, (income) loss from discontinued operations, net of tax, cumulative effect of a change in accounting principle and stock-based compensation expense, net, recorded in consolidated services and other costs of operations, less site rental revenues.
We use Adjusted Site Rental Gross Margin and Adjusted Services and Other Gross Margin, which are non-GAAP financial measures, as indicators of financial performance. Our measures of Adjusted Site Rental Gross Margin and Adjusted Services and Other Gross Margin may not be comparable to similarly titled measures of other companies, including companies in the towers sector or other REITs, and are not measures of performance calculated in accordance with GAAP. There are material limitations to using measures such as Adjusted Site Rental Gross Margin and Adjusted Services and Other Gross Margin, including the difficulty associated with comparing results among more than one company, including our competitors, and the inability to analyze certain significant items, including selling, general and administrative expenses and depreciation, amortization, and accretion, that directly affect our net income (loss). Management compensates for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with their analysis of net income (loss). The reconciliations of Adjusted Site Rental Gross Margin and Adjusted Services and Other Gross Margin to our net income (loss) are set forth below:
49Years Ended December 31,(In millions of dollars; components may not sum to totals due to rounding) 2025 2024 2023
Net income (loss) $ 444 $ (3,903) $ 1,502
Adjustments to increase (decrease) net income (loss):
Services and other revenues (215) (192) $ (421)
Services and other costs of operations 113 107 304
Selling, general and administrative expenses
383 435 502
Asset write-down charges 11 11 9
Acquisition and integration costs — — 1
Depreciation, amortization and accretion 690 736 787
Restructuring charges — 70 73
Amortization of prepaid lease purchase price adjustments 15 16 16
Interest expense and amortization of deferred financing costs, net 972 932 849
Interest income
(13) (20) (15)
Other (income) expense
(3) 26 5
(Benefit) provision for income taxes
16 18 21
Stock-based compensation expense, net recorded in site rental costs of operations
4 4 3
(Income) loss from discontinued operations, net of tax
659 5,065 (265)
Adjusted Site Rental Gross Margin
$ 3,076 $ 3,307 $ 3,370Years Ended December 31,(In millions of dollars; components may not sum to totals due to rounding) 2025 2024 2023
Net income (loss) $ 444 $ (3,903) $ 1,502
Adjustments to increase (decrease) net income (loss):
Site rental revenues (4,049) (4,268) (4,313)
Site rental costs of operations
992 983 961
Selling, general and administrative expenses
383 435 502
Asset write-down charges 11 11 9
Acquisition and integration costs — — 1
Depreciation, amortization and accretion 690 736 787
Restructuring charges — 70 73
Interest expense and amortization of deferred financing costs, net 972 932 849
Interest income (13) (20) (15)
Other (income) expense
(3) 26 5
(Benefit) provision for income taxes 16 18 21
Stock-based compensation expense, net recorded in services and other costs of operations
5 6 10
(Income) loss from discontinued operations, net of tax
659 5,065 (265)
Adjusted Services and Other Gross Margin
$ 107 $ 91 $ 127
We believe Adjusted Site Rental Gross Margin and Adjusted Services and Other Gross Margin are useful to investors or other interested parties in evaluating our financial performance because:
i. they are measures used by our management (1) to evaluate the economic productivity of our business, (2) to identify underlying business trends that are impacting our performance, and (3) for purposes of making decisions about allocating resources to, and assessing the performance of, our business; andii. we believe it helps investors and other interested parties meaningfully evaluate and compare the results of our operations from period to period.Our management uses Adjusted Site Rental Gross Margin and Adjusted Services and Other Gross Margin:
i. as a measurement of financial performance because it assists us in comparing our financial performance excluding the impact of certain non-cash items such as stock-based compensation expense, net and amortization of prepaid lease purchase price adjustments and asset base (primarily depreciation, amortization and accretion) from our operating results and before consideration of selling, general and administrative expenses;
ii. in the evaluation pricing of new projects and new tenant agreements; and
iii. for planning purposes, including preparation of our annual operating budget.
50We define earnings before interest, taxes, depreciation, amortization and accretion, as adjusted ("Adjusted EBITDA") as net income (loss) plus restructuring charges (credits), asset write-down charges, goodwill impairment, 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, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, net (income) loss from discontinued operations, (gain) loss on sale of discontinued operations, cumulative effect of a change in accounting principle, stock-based compensation expense, net and net (gain) loss from disposal of discontinued operations, net of tax.We use Adjusted EBITDA, which is a non-GAAP financial measure, as an indicator of consolidated financial performance. Our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including companies in the tower sector or other REITs, and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income (loss), net income (loss), net cash provided by (used for) operating, investing and financing activities or other income statement or cash flow statement data prepared in accordance with GAAP and should be considered only as a supplement to net income (loss) computed in accordance with GAAP as a measure of our performance. There are material limitations to using a measure such as Adjusted EBITDA, including the difficulty associated with comparing results among more than one company, including our competitors, and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income (loss). Management compensates for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with their analysis of net income (loss). The reconciliation of Adjusted EBITDA to our net income (loss) is set forth below:Years Ended December 31,(In millions of dollars; components may not sum to totals due to rounding)
2025 2024 2023
Net income (loss) $ 444 $ (3,903) $ 1,502Adjustments to increase (decrease) net income (loss):Asset write-down charges 11 11 9
Acquisition and integration costs — — 1Depreciation, amortization and accretion690 736 787Restructuring charges— 70 73Amortization of prepaid lease purchase price adjustments15 16 16
Interest expense and amortization of deferred financing costs, net 972 932 849
Interest income (13) (20) (15)
Other (income) expense (3) 26 5
(Benefit) provision for income taxes 16 18 21
Stock-based compensation expense, net 73 84 102
Net (gain) loss from disposal of discontinued operations, net of tax 659 5,065 (265)Adjusted EBITDA (a)$ 2,863 $ 3,035 $ 3,084(a) The above reconciliation excludes the items included in our Adjusted EBITDA definition which are not applicable to the periods shown.
We believe Adjusted EBITDA is useful to investors or other interested parties in evaluating our financial performance because:• they are frequently used by our management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of, our operations;
• although specific definitions may vary, it is widely used by investors or other interested parties in evaluation of the tower sector and other REITs to measure financial performance without regard to items such as depreciation, amortization and accretion, which can vary depending upon accounting methods and the book value of assets;• we believe it helps investors and other interested parties meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results; and• they are similar to the measure of current financial performance generally used in our debt covenant calculations.Our management uses Adjusted EBITDA:• as a component in the employee annual incentive compensation calculation;
51• as a measurement of financial performance because it assists us in comparing our financial performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our operating results;
• in presentations to our board of directors to enable it to have the same measurement of financial performance used by management;
• for planning purposes, including preparation of our annual operating budget;
• as a valuation measure in strategic analyses in connection with the purchase and sale of assets;
• in determining self-imposed limits on our debt levels, including the evaluation of our leverage ratio; and
• with respect to compliance with our debt covenants, which require us to maintain certain financial ratios that incorporate concepts such as, or similar to, Adjusted EBITDA.52