What changed in this filing

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2022-04-29 compared with 2021-11-05 · 22 added, 24 removed, 76 unchanged (38% of the section changed)

2 unchanged sentences

These instruments arise from transactions entered into in the normal course of business.

The following table presents the future principal payment obligations and fair values associated with our long-term debt instruments assuming our actual level of long-term indebtedness as of September 30, 2021:

(in thousands)

Revolving Credit Facility

2018 Term Loan

6 unchanged sentences

2021-2C Tower Securities (1)

2016 Senior Notes (3)

2021-3C Tower Securities (1)

2020 Senior Notes

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(1) For information on the anticipated repayment date and final maturity date for each tower security, refer to “Debt Instruments and Debt Service Requirements” above.

(2) On October 14, 2021, we repaid the entire aggregate principal amount of the 2013-2C Tower Securities ($575.0 million).

For further discussion, refer to “Secured Tower Revenue Securities” above.

(3) Total debt service excludes interest payments on the $895.0 million 2021-2C Tower Securities and the $895.0 million 2021-3C Tower Securities issued October 27, 2021, proceeds from which were used to repay amounts outstanding under the Revolving Credit Facility and remaining proceeds will be used to redeem the entire aggregate principal amount of the 2016 Senior Notes ($1.1 billion).

For further discussion, refer to “Debt Instruments and Debt Service Requirements” above.

Our current primary market risk exposure is (1) interest rate risk relating to our ability to refinance our debt at commercially reasonable rates, if at all, and (2) interest rate risk relating to the impact of interest rate movements on the variable portion of our 2018 Term Loan and any borrowings that we may incur under our Revolving Credit Facility, which are at floating rates.

2 unchanged sentences

While we cannot predict our ability to refinance existing debt or the impact interest rate movements will have on our existing debt, we continue to evaluate our financial position on an ongoing basis.

The IBA intends to cease the publication of USD LIBOR as follows:

the 1 week and 2 month tenors on December 31, 2021 and all other tenors on June 30, 2023.

The discontinuation of LIBOR and the replacement with an alternative reference rate may adversely impact interest rates and our interest expense could increase.

The IBA ceased the publication of USD LIBOR for the 1 week and 2 month tenors on December 31, 2021 and will cease all other tenors on June 30, 2023.

The discontinuation of LIBOR during 2023 and the replacement with an alternative reference rate may adversely impact interest rates and our interest expense could increase.

On July 7, 2021, we amended our Revolving Credit Facility to provide mechanics relating to a transition away from LIBOR as a benchmark interest rate and the replacement of LIBOR by an alternative benchmark rate.

We are exposed to market risk from changes in foreign currency exchange rates in connection with our operations in Brazil, Canada, Chile, Peru, Argentina, Colombia, South Africa, and to a lesser extent, our markets in Central America.

We are exposed to market risk from changes in foreign currency exchange rates in connection with our operations in Brazil, Canada, Chile, Peru, Argentina, Colombia, South Africa, the Philippines, Tanzania, and to a lesser extent, our markets in Central America.

In each of these countries, we pay most of our selling, general, and administrative expenses and a portion of our operating expenses, such as taxes and utilities incurred in the country in local currency.

In addition, in Brazil, Canada, Chile, and South Africa, we receive significantly all of our revenue and pay significantly all of our operating expenses in local currency.

In Colombia, Argentina, and Peru, we receive our revenue and pay our operating expenses in a mix of local currency and U.S.

In addition, in Brazil, Canada, Chile, South Africa, and the Philippines, we receive significantly all of our revenue and pay significantly all of our operating expenses in local currency.

In Colombia, Argentina, Peru, and Tanzania, we receive our revenue and pay our operating expenses in a mix of local currency and U.S.

All transactions denominated in currencies other than the U.S.

4 unchanged sentences

The cumulative translation effect is included in equity as a component of Accumulated other comprehensive income (loss).

For the nine months ended September 30, 2021, approximately 13.5% of our revenues and approximately 17.7% of our total operating expenses were denominated in foreign currencies.

We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian Real from the quoted foreign currency exchange rates at September 30, 2021.

As of September 30, 2021, the analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 0.9% and 0.5%, respectively, for the nine months ended September 30, 2021.

As of September 30, 2021, we had intercompany debt, which is denominated in a currency other than the functional currency of the subsidiary in which it is recorded.

As settlement of this debt is anticipated or planned in the foreseeable future, any changes in the foreign currency exchange rates will result in unrealized gains or losses, which will be included in our determination of net

A change of 10% in the underlying exchange rates of our unsettled intercompany debt at September 30, 2021 would have resulted in approximately $81.2 million of unrealized gains or losses that would have been included in Other income (expense), net in our Consolidated Statements of Operations for the nine months ended September 30, 2021.

For the three months ended March 31, 2022, approximately 16.2% of our revenues and approximately 20.4% of our total operating expenses were denominated in foreign currencies.

We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian Real from the quoted foreign currency exchange rates at March 31, 2022.

As of March 31, 2022, the analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 1.0% and 0.6%, respectively, for the three months ended March 31, 2022.

As of March 31, 2022, we had intercompany debt, which is denominated in a currency other than the functional currency of the subsidiary in which it is recorded.

A change of 10% in the underlying exchange rates of our unsettled intercompany debt at March 31, 2022 would have resulted in approximately $75.4 million of unrealized gains or losses that would have been included in Other income (expense), net in our Consolidated Statements of Operations for the three months ended March 31, 2022.

Special Note Regarding Forward-Looking Statements

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Specifically, this quarterly report contains forward-looking statements regarding:

 our expectations on the future growth and financial health of the wireless industry and the industry participants, the drivers of such growth, the demand for our towers, the future capital investments of our customers, future spectrum auctions, the trends developing in our industry, and competitive factors;

 our expectations on the future growth and financial health of the wireless industry and the industry participants, the drivers of such growth, the demand for our towers, the future capital investments of our customers (including with respect to the roll-out of 5G), future spectrum auctions, the trends developing in our industry, and competitive factors;

 our ability to capture and capitalize on industry growth and the impact of such growth on our financial and operational results;

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 our expectation that we will grow our cash flows by adding tenants to our towers at minimal incremental costs and executing monetary amendments;

 our expectations regarding churn rates;

 our expectations regarding churn rates, including with respect to legacy Sprint leases and Oi leases;

 our belief that DISH Wireless will become a nationwide carrier, and its expectations regarding the capital expenditures necessary to deploy its network;

 our expectations regarding timing for closing of pending acquisitions;

 our election to be subject to tax as a REIT and our intent to continue to operate as a REIT;

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We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement.

important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

 the impact of consolidation among wireless service providers, including the impact of T-Mobile and Sprint;

 the ability of DISH Network to become and compete as a nationwide carrier;

 the ability of DISH Wireless to become and compete as a nationwide carrier;

 our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures;

1 unchanged sentence

 our ability to successfully manage the risks associated with our acquisition initiatives, including our ability to satisfactorily complete due diligence on acquired towers, the amount and quality of due diligence that we are able to complete prior to closing of any acquisition, our ability to accurately anticipate the future performance of the acquired towers, our ability to receive required regulatory approval, the ability and willingness of each party to fulfill their respective closing conditions and their contractual obligations, and, once acquired, our ability to effectively integrate acquired towers into our business and to achieve the financial results projected in our valuation models for the acquired towers;

 the health of the South Africa economy and wireless communications market, and the willingness of carriers to invest in their networks in that market;

 the health of the South African and Tanzanian economies and wireless communications market, and the willingness of carriers to invest in their networks in that market;

 developments in the wireless communications industry in general, and for wireless communications infrastructure providers in particular, that may slow growth or affect the willingness or ability of the wireless service providers to expend capital to fund network expansion or enhancements;

7 unchanged sentences

 the impact of rising interest rates on our results of operations and our ability to refinance our existing indebtedness at commercially reasonable rates or at all;

 the extent and duration of the impact of the COVID-19 crisis on the global economy, on our business and results of operations, and on foreign currency exchange rates;

 the extent and duration of the impact of the COVID-19 pandemic on the global economy, on our business and results of operations, and on foreign currency exchange rates;

 our ability to successfully estimate the impact of regulatory and litigation matters;

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk