Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following section updates "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in the 2021 Form 10-K and should be read in conjunction with that report as well as our condensed consolidated financial statements included in Part 1, Item 1 of this Form 10-Q.

Interest Rate Risk

Our interest rate risk as of June 30, 2022 relates primarily to the impact of interest rate movements on the following:

• the potential refinancing of our existing debt ($21.4 billion outstanding at June 30, 2022 and $20.8 billion at December 31, 2021);

• our $3.3 billion and $2.2 billion of floating rate debt at June 30, 2022 and December 31, 2021, respectively, which represented approximately 15% and 10% of our total debt, as of June 30, 2022 and December 31, 2021, respectively; and

• potential future borrowings of incremental debt, including borrowings under our 2016 Credit Facility and issuances under the CP Program.

During the first seven months of 2022, the Federal Reserve raised the federal funds rate four times for a cumulative increase of 2.25%, and has signaled that they expect to further increase the federal funds rate in the near-term, which could increase our costs of borrowing. Prior to 2022, the Federal Reserve had not raised the federal funds rate since December 2018.

In July 2022, we entered into the 2022 Credit Agreement Amendment that, among other things, replaced LIBOR with Term SOFR as the benchmark rate for both the 2016 Revolver and 2016 Term Loan A.

We currently have no interest rate swaps.

Sensitivity Analysis

We manage our exposure to market interest rates on our existing debt by controlling the mix of fixed and floating rate debt. As of June 30, 2022, we had $3.3 billion of floating rate debt, none of which had LIBOR floors. As a result, a hypothetical unfavorable fluctuation in market interest rates on our existing debt of 1/8 of a percent point over a 12 month period would increase our interest expense by approximately $4 million.

Tabular Information

The following table provides information about our market risk related to changes in interest rates. The future principal payments and weighted-average interest rates are presented as of June 30, 2022, after giving effect to the 2022 Credit Agreement Amendment and the change to the pricing benchmark from LIBOR to Term SOFR. These debt maturities reflect final maturity dates and do not consider the impact of the principal payments that commence following the anticipated repayment dates of certain debt (see footnotes (b) and (d)). The information presented below regarding the variable rate debt is supplementary to our sensitivity analysis regarding the impact of changes in the interest rates. See notes 4, 5 and 12 to our condensed consolidated financial statements and the 2021 Form 10-K for additional information regarding our debt.

(a)The fair value of our debt is based on indicative quotes (that is, non-binding quotes) from brokers that require judgment to interpret market information, including implied credit spreads for similar borrowings on recent trades or bid/ask offers. These fair values are not necessarily indicative of the amount which could be realized in a current market exchange.

(b)The impact of principal payments that will commence following the anticipated repayment dates is not considered. The Tower Revenue Notes Series 2015-2 and Series 2018-2 have principal amounts of $700 million and $750 million, with anticipated repayment dates in 2025 and 2028, respectively.

(c)The average interest rate represents the weighted-average stated coupon rate (see footnote (d)).

(d)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 2021 Excess Cash Flow of the issuers of the Tower Revenue Notes was approximately $933 million. We currently expect to refinance these notes on or prior to the respective anticipated repayment dates.

(e)See note 7 to our consolidated financial statements in the 2021 Form 10-K 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 metrics. Each period presented assumes the downward adjustments in the interest rate spread and unused commitment fee percentage on our 2016 Credit Facility.

(f)Predominately consists of outstanding indebtedness under our CP Program. Such amounts may be issued, repaid or re-issued from time to time.