ANNUAL
REPORT
2016
Corporate Profile
Founded in 1995, American Tower is one of the largest global Real Estate Investment
Trusts (REITs) and a leading independent owner, operator and developer of multitenant
communications real estate. Our primary business is the leasing of space on communications
sites to wireless service providers, radio and television broadcast companies, wireless data
providers, government agencies and municipalities and tenants in a number of other industries.
In addition, we offer tower-related services in the United States, including site acquisition,
zoning and permitting and structural analysis, which primarily support our site-leasing business,
including the addition of new tenants and equipment on our sites.
Our portfolio consists of towers we own and towers we operate pursuant to long-term lease
arrangements, as well as Distributed Antenna System (DAS) networks, which provide seamless
coverage solutions in certain in-building and outdoor wireless environments. In addition to
the communications sites in our portfolio, we manage rooftop and tower sites for property
owners under various contractual arrangements. We also hold other telecommunications
infrastructure and property interests that we lease to communications service providers and
third-party tower operators. Our communications real estate portfolio of approximately
147,0001 sites includes over 40,000 communications sites in the United States, nearly 58,000
communications sites in Asia, over 15,0001 communications sites in Europe, Middle East and
Africa (EMEA) and nearly 34,000 communications sites in Latin America.
1
Includes FPS Towers transaction, which closed on February 15, 2017
To Our Shareholders
April 19, 2017
The mobile phone has emerged as an indispensable part of our daily lives. It has evolved from a simple
talk and text device to a multifunctional necessity capable of internet access, entertainment, travel,
health monitoring, document delivery and personal navigation, among countless other functions. As
these handsets and their capabilities have grown and evolved, so too have the mobile networks upon
which they rely.
American Tower provides the foundation of these mobile networks by developing, acquiring and
operating communications real estate and making it available for multitenant use. And, as one would
expect, as the capabilities of mobile devices have grown dramatically and steadily over the past two
decades, so too has our business. In 2016, we took important steps to expand and further diversify our
portfolio and position ourselves for long-term growth, including several strategic acquisitions and the
strengthening of our capital structure. Further, we grew our common stock dividend by approximately
20% and delivered another year of double-digit growth across key financial metrics.
Property
Revenue
$5.7B
$4.7B
Adjusted
EBITDA
Consolidated
AFFO
Return on Invested
Capital (ROIC)
Common Stock
Dividend Per Share
$3.6B
$3.1B
$2.5B
$2.2B
9.9%
9.4%
$2.17
$1.81
‘15
‘16
‘15
‘16
‘15
‘16
‘15
‘16
‘15
‘16
>22%
~16%
~16%
>50 Basis
Points
~20%
Definitions and reconciliations to non-GAAP metrics are provided at the end of this document.
2016 ANNUAL REPORT 1
After many years of disciplined, deliberate investment across a wide variety of markets at staggered
stages of wireless technology development, we are positioned as the only globally diversified
independent owner and operator of mission-critical communications real estate. We view this strategic
positioning as a crucial competitive advantage, particularly in an increasingly interconnected and mobile
world, and remain focused on maximizing the value of our existing asset base while continuing to seek
additional compelling investment opportunities. We expect these efforts will enable us to deliver strong
financial and operational performance for many years to come.
~147,000 sites
in 15 markets
around the world1
Leading wireless connectivity around
the globe
From our entry into Mexico in 1999 to our recent
acquisition of FPS Towers in France in February 2017,
we have expanded our global portfolio to encompass
approximately 147,000 sites in a total of 15 markets.
During 2016, we meaningfully enhanced the scale of our
business in a number of these markets, particularly through
the acquisition of a majority stake in Viom Networks
Limited in India. This transaction nearly quadrupled
the size of our portfolio in that country, positioning
American Tower as the largest independent tower
company in the most populous free-market democracy.
Importantly, with less than 2% of India’s population
connected to the internet via wired networks, mobile
devices are expected to be the sole method of accessing
the internet for most Indians.2 With just 8% of these
connections currently being made on a 4G network, the
mobile revolution, and anticipated explosion in demand for
mobile data that will accompany it, is just getting started.3
In fact, Indian smartphone subscriptions and total mobile
data traffic are projected to increase four-fold and
fifteen-fold, respectively, by 2021.4 We expect this rapid
growth in mobile connectivity to result in significant
demand for our expanded real estate portfolio in India.
1
Includes FPS Towers transaction, which closed on February 15, 2017
2 World Bank
3 Cisco 2016 VNI Report
4 Ericsson Mobility Report, June 2016
2 TO OUR SHAREHOLDERS
To help bridge the current mobile connectivity gap, the Indian government has established
the “Digital India” program in an effort to “transform India into an empowered society
and knowledge economy.”5 At American Tower, we are proud to be key participants in this
initiative and expect to not only generate strong returns for our shareholders through our
Indian real estate, but to also help connect the unconnected by bringing mobile broadband
to the underserved populations who need it most.
As part of our contribution to the “Digital India” program, we have constructed 51 Digital
Village Squares across rural India, each of which includes a digital learning center and two
internet access kiosks in close proximity to local schools. As of year-end 2016, thousands
of children ages 6 to 14 have accessed the kiosks, many of them experiencing the world
of computing and the internet for the first time. We have also helped to certify nearly
400 people on how to use computers, the internet and various other electronic services in
partnership with the NIIT Foundation.
This training and newly available internet access is improving the lives of people in these
communities in very tangible ways. For example, a recent study conducted at a school with
a nearby Digital Village Square showed a 20% increase in students’ computer literacy and
problem solving abilities attributed to educational content delivered there.6 It is also our goal
to provide digital education to at least one adult family member in each of the households
served by these Digital Village Squares. To extend the reach of this important program, we
expect to increase the number of Digital Village Squares by nearly a third in 2017.
5
6
Government of India's ”Digital India” program
NIIT Foundation study
2016 ANNUAL REPORT 3
Driving efficiencies
throughout the industry
As mobile connectivity continues to
expand and mobile usage increases
rapidly, our portfolio of physical capital,
including macro towers, small cell
systems and other communications real
estate, is well positioned to serve as a
key infrastructure solution underlying
this mobile revolution. Our real estate
assets have high structural capacity and
are in attractive locations to support
wireless network operators as they
further build out their mobile networks.
Meanwhile, our intellectual capital,
American Tower’s Involvement
in Driving Mobile Connectivity
World Economic Forum’s Internet for All
Initiative: Seeks to increase internet access,
initially across Northern Africa, Argentina and
India. Internet for All will also document the
processes and methodologies used to enable other
countries to launch similar projects in the future.
1 World Connected: Research project of the
Center for Technology, Innovation and Competition
at the University of Pennsylvania. Governments, civil
composed of the systems and processes
society organizations and businesses around the
we have developed since our inception,
world have initiated numerous efforts to improve
ensures the efficient management
of our asset base and seamless
integration of new portfolios in diverse
geographies. Finally, our organizational,
or human, capital, composed of the
highly skilled professionals we have
recruited and trained across all levels
of the Company, helps ensure we
continue to successfully manage our
business and adapt as required to
broadband adoption globally. Currently, no one
is empirically analyzing this information. 1 World
Connected seeks to consolidate, extend and share
information about these efforts by collecting and
disseminating case studies on practices that have
proven effective in improving broadband adoption
and conducting empirical evaluations of grassroots
connectivity projects.
retain a leadership position within the
U.S. Department of State’s Global Connect
communications real estate industry.
Initiative (GCI): Aims to bring an additional 1.5
billion people online by 2020. This program is
based on the principle that internet connectivity is
as vital to economic development as other forms
of infrastructure. GCI is supported by 40 countries,
including many of our existing markets, and many
other stakeholders who have a common mission
to facilitate access to mobile broadband for all.
4 TO OUR SHAREHOLDERS
Historical Financial Performance
Property Revenue
$5.7B
$1.4B
‘07
~17% CAGR
Adjusted EBITDA
$1.0B
‘07
~15% CAGR
Consolidated AFFO Per Share
‘16
$3.6B
‘16
$5.80
$1.51
‘07
‘16
~16% CAGR
Definitions and reconciliations to non-GAAP metrics are provided
at the end of this document.
Focused on delivering superior
results for our shareholders
The success of our long-term strategy is
demonstrated by the consistency of our
financial results. 2016, for example, was the
seventh consecutive year of simultaneous
double-digit growth in our Property Revenue,
Adjusted EBITDA and Consolidated AFFO per
Share. In addition to the strong sustained
growth in these key financial metrics, we have
increased our ROIC by approximately 90 basis
points since 2007. Further, we have more than
doubled our common stock dividend in just
the past five years, resulting in compelling total
shareholder return. Today, we believe we are
well positioned to continue to deliver attractive
growth rates and returns over the long-term.
A foundation of our financial capacity
to support this level of growth has been
our commitment to maintaining a strong,
investment-grade balance sheet and prudent
financial leverage, which was approximately
4.7x net debt to Adjusted EBITDA as of
year-end 2016. This financial strength,
paired with a proven, comprehensive capital
allocation strategy, will continue to play a
pivotal role in our future growth.
2016 ANNUAL REPORT 5
Return on Invested Capital (ROIC)
Common Stock Dividend Per Share
9.0%
9.9%
$2.17
$0.90
‘07
‘16
‘12
‘16
Solid ROIC despite increasing
site count over 6x since ‘07
~25% CAGR
Definitions and reconciliations to non-GAAP metrics are provided at the end of this document.
At American Tower, we continue to plan for and invest in the global proliferation of mobile
connectivity, driven by the belief that mobile technology is fundamentally transforming our world for
the better. Our comprehensive communications real estate portfolio, strong balance sheet, mutually
beneficial relationships with multinational carriers and commitment to help bring broadband internet to
billions of people across the globe have positioned us for long-term success. Our dedicated managers
and employees around the world, from Boston to São Paolo to Johannesburg to Paris to Delhi, are fully
prepared and tremendously motivated to deliver this success.
James D. Taiclet, Jr.
Chairman, President & Chief Executive Officer
6 TO OUR SHAREHOLDERS
At American Tower, we are focused on driving
compelling, long-term total returns for
our shareholders.
2016 ANNUAL REPORT
7
Our Focus on
Corporate Responsibility
At American Tower, our commitment to responsible corporate citizenship is woven into all aspects of
our global culture:
Our Vision and Mission focus on continuing to grow our business while also taking a
leadership role in the mobile internet industry in a way that contributes to the
public good.
Our Core Principles guide us to take action and help develop solutions that bring value
not only to our business but also to the communities where we live and work.
Our four strategic pillars of corporate responsibility—ethics, environment, people
and philanthropy—inform the sustainable actions we take and help us ensure we are
making a positive impact.
Our Mission
We make wireless
communication
1. Lead wireless connectivity around the globe.
2. Innovate for a mobile future.
possible everywhere.
3. Drive efficiency throughout the industry.
4. Grow our assets and capabilities to meet customer needs.
American Tower’s corporate responsibility actions support our belief that being a good corporate citizen
is a key driver of our success and remind us of the important role private enterprise can and should play
to make a difference in our communities, both locally and globally.
8 OUR FOCUS ON CORPORATE RESPONSIBILITY
ethics
Our success depends on doing business the
right way—with integrity and transparency.
Everything we do at American Tower—from how we treat each other, to the way we build relationships
with our tenants, to the way we interact with vendors and our communities—is underpinned by our
commitment to doing business ethically and with integrity. This global culture, guided by our Code of
Ethics and Business Conduct Policy, extends from our Board of Directors and Executive team to each
employee in the organization.
Corporate Governance
Our Focus: Good corporate
governance starts with quality
leadership provided by the Board
of Directors and Executive team.
We believe sound corporate
governance practices lead to
the creation of value for our
shareholders in the long-term. Our
Board of Directors is composed of
leaders who have held key roles
with companies in the wireless,
REIT and technology sectors and
in international operations. This
range of skills is a key focus of
our Nominating and Corporate
Governance Committee, which ensures the composition of the Board continues to match the
Company’s long-term vision and strategic objectives. The Board’s diversity and independence foster a
wide range of thought, resulting in a broader perspective that is critical to the Company’s success.
2016 ANNUAL REPORT 9
In 2016, in response to shareholder feedback and a review of current market trends and practices,
we amended our bylaws to give our shareholders an even greater voice in director elections through
proxy access. In addition, over the past few years, our Board has conducted extensive outreach efforts
to learn about the governance matters that are important to our shareholders. As part of that effort,
we redesigned our executive compensation program to further align our compensation philosophy
with both short- and long-term Company performance. Establishing and maintaining a best-in-class
governance and compensation environment continues to be a top priority for our Board.
We hold our vendors to high
ethics and compliance standards.
Our teams across the globe
work to ensure our vendor
selection processes are rigorous
and transparent, and our
procurement policies meet or
exceed applicable regulations.
Employee Training:
The Foundation of our Culture of Ethics
Our Focus: Maintaining a global culture of ethics and
integrity begins with our comprehensive employee
development programs. All new employees complete
a number of ethics and compliance-related courses,
including a case-based classroom course called
Excellence through Ethics. We also provide in-person
training and courses to educate our regional teams on
our Company policies, including our Foreign Corrupt
Practices Act and Code of Ethics and Business
Conduct Policy. This training reflects the importance
management places on doing business the right way
throughout our served markets. Further, employees
are always encouraged to “raise their hands” and
speak up if they see or hear something that doesn’t
seem right. This can be done by contacting the Ethics
Committee, reporting a violation to their managers or
Human Resources team or submitting a confidential
report through a third-party compliance vendor. These
programs continually reinforce that ethics and integrity
are the cornerstone of our Company culture.
10 OUR FOCUS ON CORPORATE RESPONSIBILITY
environment
We are committed to environmental
responsibility in all aspects of our operations.
Environmental sustainability is a foundational element of American Tower’s infrastructure sharing
business model. By colocating multiple tenants on a single structure, we are fundamentally reducing
the environmental footprint of today’s modern wireless networks. While our towers consume
relatively little energy and produce minimal waste, we actively seek to further reduce American Tower’s
environmental impact and support our communities, our industry and our planet.
Energy Management
Our Focus: Our teams in Africa and India are at the forefront of developing power solutions that
not only preserve the industry-leading site uptimes our tenants have come to expect, but also reduce
American Tower’s and mobile network operators’ reliance on fossil fuels. For example, in recent years in
our emerging markets, we have installed advanced batteries at select sites without grid power with the
ultimate goal of displacing diesel generators while maintaining connectivity.
Nigeria
UGANDA AND NIGERIA
Since 2014, our Uganda team has been working on
a project to reduce generator hours from 115,000
hours per week to less than 80,000 hours per week.
In 2016, we achieved this goal, despite increased
demand from additional sites and colocations. At
the same time, we increased our generator lifespan
from an average of 20,000 hours per unit in 2014
Uganda
to an average of 28,000 hours per unit today. As
a result, we have effectively doubled the average
life of our generator, thereby materially reducing
their environmental impact. Our Nigeria team
has employed these methods as well, extending
average generator lifespans by more than 30%
from 18,000 hours to 24,500 hours across 4,700
deployed generators.
2016 ANNUAL REPORT 11
Ghana
GHANA
In Ghana, American Tower deploys hybrid power
solutions at a number of sites (battery systems
that charge as generators are running), which
reduces the amount of diesel needed to power
the sites and helps move away from exclusive
reliance on diesel. This shareable DC backup
power solution allows network operators to
minimize their investments in power equipment
and increases efficiencies, thereby reducing
the overall carbon footprint of tower sites. Our
Ghana team has also implemented a battery
recycling program to help reduce pollution and
conserve natural resources.
INDIA
In 2016, our India team reduced diesel consumption by
nearly 9% per site per month as compared to 2015 by:
Continuing to pioneer alternative power solutions,
including more than 3MW of installed solar capacity
Deploying 17,000+ Free Cooling Units (FCUs) to date,
which reduced the need for air conditioning within
telecom equipment rooms; the team is also working
on a zero-power cooling solution for equipment
shelters using ambient wind flow
Deploying 300,000 amp-hours of quick recharge storage batteries
Integrating fuel optimization policies and practices into daily operations
India
As part of our commitment to encouraging sustainability throughout our business, we recently
completed a detailed needs analysis of our U.S. field vehicles and have begun to replace the
fleet with smaller, more energy-efficient vehicles.
12 OUR FOCUS ON CORPORATE RESPONSIBILITY
U.S. Bird Watch Program
Comprehensive protection of endangered
species nesting on our towers
Well-established method for identifying
and tracking bird nest sites
Nearly 2,600 protected bird sites currently
on our towers
Over 4,500 bird site work advisories issued
in 2016
150 wildlife biologist visits to nest sites in
the past year to verify species and nest
activity status
Compliance and Our
Environmental Responsibility
Our Focus: At American Tower, we treat
the environmental compliance process as
an integral component of responsible tower
siting and maintenance.
In the U.S., we have a dedicated team of
employees with educational and operational
expertise that revolves around all elements
of environmental design, operations and
sustainability. This team has been trained
in the most stringent federal environmental
requirements and works daily with
regulators to facilitate our full compliance.
Another important aspect of sustainable
design is active involvement in the
communities where we operate. Through
public notices and community meetings,
we are able to provide a forum for
interested parties to understand, evaluate
and comment on build plans in their
communities. These meetings are a
valuable source for community education
and discussion of any environmental
questions, and we are committed to being
as responsive as possible to community
members through a variety of channels.
2016 ANNUAL REPORT 13
people
Our empowered workforce allows us to
do what we say we’re going to do.
American Tower’s success can be attributed to our people, whom we view as our greatest asset. As
we continued to expand in 2016, a major priority was ensuring our culture of respect and inclusion,
empowerment through continuous professional development and above all, safety as a shared
responsibility, remained strong in all of our markets.
Diversity and Inclusion
Our Focus: From engineers, site managers and
field operations technicians to sales representatives,
accountants and analysts, American Tower
employs a diverse and talented cross section of
the industry’s top business, technical and field
professionals. Our employee base grew in 2016
to over 4,500 team members in 14 countries on
five continents. Across the globe, American Tower
is committed to ensuring that all employees are
treated with respect and have equal access to
professional development opportunities.
Our employee
population grew in 2016
to over 4,500 employees
in 14 countries on
5 continents.
Our Diversity Statement
We believe that what makes us different also makes us stronger. Our philosophy of inclusion
guides us in how we interact with each other, how we hire and manage our people and how
we serve our customers. To ensure our workplace is free from discrimination and intolerance,
we must leverage the diverse talent and skill of our team members, provide equal access to
growth and advancement and treat each other with respect.
14 OUR FOCUS ON CORPORATE RESPONSIBILITY
Professional Development
Our Focus: American Tower invests
in a number of tools and resources
to help employees with their career
goals, including web-based courses
in our online Development Center
and in-classroom training. In 2016,
for example, our team members
completed nearly 45,000 hours of
training and development. In addition,
employees work with their managers
on professional growth through an
annual performance review and less
formal performance conversations
throughout the year.
Our teams have also developed
market-specific training programs. In
Brazil, the team introduced three new
programs: Trilhas do Conhecimento
(Knowledge Paths), aimed at
developing skills related to people
management and leadership; a
graduate trainee program, which brings
recent graduates to the Company
to work in different areas; and a job
rotation program to provide unique
opportunities and challenges to existing
employees. Meanwhile, in Colombia,
the team participated in an extensive
training program focused on improving
communication, leadership skills,
innovation and development.
In 2016, our team
members
completed
nearly
45,000
hours of training and
development.
2016 ANNUAL REPORT 15
Health and Safety
Our Focus: The health and safety of our employees, business partners and communities continue to be
a top priority for American Tower. Our commitment to safety and comprehensive training programs for
employees is reflected in our low rate of recordable injuries in the U.S., which decreased from 0.64 per
100 employees in 2015 to 0.55 per 100 employees in 2016. This compares favorably with the Bureau
of Labor Statistics rates of 3.3 per 100 employees for all industries and 2.2 per 100 employees for the
telecommunications industry.
In our international markets, our
teams are also demonstrating their
continuous focus on safety. ATC Ghana’s
comprehensive environmental health
and safety management system, for
example, conforms to both OHSAS
18001:2007 and ISO 14001:2015
standards. Currently, we employ five
internal auditors to ensure the system is
compliant with those international safety
standards. Field operations supervisors
receive training in working at height,
rescue and first aid, and Company
drivers receive driver management
science training, which is much broader
than typical defensive driving training.
Meanwhile, at ATC Colombia, we
launched a health and safety program
to ensure our contractors comply with
Colombian health and safety regulations
at all of our sites. We also provide all
employees with a refresher course on
identifying and reporting safety risks.
Enabling Economic Sustainability in
Our Communities
American Tower’s communications
infrastructure facilitates the expansion of
broadband networks—currently one of
the largest enablers of global economic
growth—and the operation of the mobile and
IT applications, devices and technologies that
drive productivity across industries. Access
to mobile and wireless services increases
opportunity for career development, creates
jobs, boosts economic activity through
e-commerce and e-banking and strengthens
the economies of developing countries.
16 OUR FOCUS ON CORPORATE RESPONSIBILITY
philanthropy
We strive to make connections with
communities everywhere we operate.
American Tower’s philanthropy program consists of two major efforts:
1. Our signature program to promote technology in education and help students, teachers and
communities in need through technology improvements in classrooms.
2. Our Company-sponsored volunteer days around the globe and Matching Gift program in the U.S.,
through which employees can have charitable donations matched by the Company.
Technology and Education
Our Focus: We are committed to improving
educational opportunities in our markets through
technology. This is exemplified by our Digital Village
Squares initiative undertaken by our ATC India team.
Through strategic partnerships, ATC India is playing
a significant role in the Indian government’s “Digital
India” program to improve lives in rural communities
by enabling digital connectivity and promoting
education. After bringing e-learning access to over
10,000 schoolchildren in remote villages through
a partnership with the Hole-in-the-Wall Education
Project, ATC India is now actively encouraging the
development of digital literacy throughout rural India.
Digital Village Squares are learning centers anchored
by our tower sites that provide computer and internet
access and technology training. In addition, ATC India
is in the process of partnering with agencies that can
provide financial and healthcare literacy programs,
telemedicine, banking services, Wi-Fi, ATMs and more
at these same locations.
2016 ANNUAL REPORT 17
By the end of 2017, ATC India aims to launch enough
Digital Village Squares across the country to reach
individuals in thousands of households.
In 2016, 23 Digital Village Squares were opened in rural areas of the states of Chhattisgarh, Odisha,
Gujarat, Tamil Nadu, Haryana and Bihar and nearly 400 people have already been trained in basic
digital literacy and certified by the NIIT Foundation, ATC India’s non-profit partner in this endeavor. By
the end of 2017, ATC India aims to launch enough Digital Village Squares across the country to reach
individuals in thousands of households.
Meanwhile, ATC South Africa has partnered with the
Click Foundation, an organization using technology-
based solutions to improve educational outcomes,
to bring their Reading Eggs program to schools in
need. The goal of the self-paced program is to help
younger students achieve English literacy to further
enable their academic success. The program follows
students from grades R through 4 (ages 4-8) and
supports the development of foundational literacy skills
through reading games, activities, songs and rewards.
Furthermore, the program provides job opportunities
for community members who serve as facilitators in
computer classrooms. Facilitators, as well as teachers,
are also expected to use the program to improve their
computer and English language skills. By partnering
with the Click Foundation on programs like Reading
Eggs, ATC South Africa hopes to make a sustainable
difference in its community.
18 OUR FOCUS ON CORPORATE RESPONSIBILITY
Advancing Education with Technology
GHANA
As part of ATC Ghana’s partnership with the Demonstration School for the Deaf, the team
donated refurbished laptops and worked with students on an IT challenge where students
built upon their PowerPoint and public address skills, all via sign language. The team provided
other local schools with laptops and learning materials, including science equipment to
promote STEM education, and facilitated a career and technology day, inviting students to its
Accra office and assigning each student a mentor for the day.
NIGERIA
ATC Nigeria commissioned a state-of-the-art water facility at the Bakin Kasuwa Primary School
in Dange Shuni, a rural community that has faced acute shortages of potable water over the
past three decades. In addition, the team addressed the most pressing needs of Lagos City
College, providing them with laboratory supplies, equipment and furniture for students. With
the help of the Supply Chain team, ATC engaged a carpenter to make 145 desks, 145 chairs
and 24 laboratory stools.
PERU
Through a partnership with Enseña Peru, an organization whose goal is to improve education
across the country by training high-quality teachers, employee volunteers participated in
workshops and facilitated a game designed to develop leadership skills at a school in Lima.
2016 ANNUAL REPORT 19
looking forward
As we seek to continue to grow our business and generate
compelling shareholder returns, we remain focused on
promoting the highest standards of corporate governance,
social responsibility and ethics across our global operations
while maintaining our strong commitment to supporting
the communities in which we operate.
In 2017, our teams will continue to improve the efficiency
of our current systems and look for opportunities to
implement new technologies, increase our use of
alternative energy sources and minimize waste from
our operations. Through our recent establishment of
the American Tower Charitable Foundation, Inc., we
also expect to proactively work with a number of local
organizations in our served markets to improve education
and technology opportunities.
Fundamentally, we believe that our strong commitment
to ethics, integrity and our Core Principles will continue to
allow us to sustainably and responsibly grow our business,
help provide increasing levels of mobile connectivity and
make a positive difference in our world.
20 OUR FOCUS ON CORPORATE RESPONSIBILITY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One):
Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the fiscal year ended December 31, 2016
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the transition period from to
Commission File Number: 001-14195
American Tower Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
Incorporation or Organization)
65-0723837
(I.R.S. Employer
Identification No.)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of principal executive offices)
Telephone Number (617) 375-7500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class
Common Stock, $0.01 par value
5.25% Mandatory Convertible Preferred Stock, Series A,
$0.01 par value
Depositary Shares, each representing a 1/10th ownership
interest in a share of 5.50% Mandatory Convertible
Preferred Stock, Series B, $0.01 par value
Name of exchange on which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days: Yes
No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form
10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check One):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes
No
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of June 30, 2016 was
$47.9 billion, based on the closing price of the registrant’s common stock as reported on the New York Stock Exchange as of the last business
day of the registrant’s most recently completed second quarter.
As of February 17, 2017, there were 427,195,037 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement (the “Definitive Proxy Statement”) to be filed with the Securities and Exchange Commission
relative to the registrant’s 2017 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.
AMERICAN TOWER CORPORATION
TABLE OF CONTENTS
FORM 10-K ANNUAL REPORT
FISCAL YEAR ENDED DECEMBER 31, 2016
Special Note Regarding Forward-Looking Statements
PART I
ITEM 1.
Business
Page
Overview
Products and Services
Strategy
Recent Transactions
Regulatory Matters
Competition
Customer Demand
Employees
Available Information
ITEM 1A. Risk Factors
ITEM 1B. Unresolved Staff Comments
ITEM 2.
ITEM 3.
ITEM 4. Mine Safety Disclosures
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
Properties
Legal Proceedings
of Equity Securities
Dividends
Performance Graph
Selected Financial Data
ITEM 6.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Overview
Non-GAAP Financial Measures
Results of Operations: Years Ended December 31, 2016, 2015 and 2014
Liquidity and Capital Resources
Critical Accounting Policies and Estimates
Accounting Standards Updates
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
ITEM 8.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
ITEM 9.
ii
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2
4
5
6
7
8
8
8
9
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17
19
20
21
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22
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i
AMERICAN TOWER CORPORATION
TABLE OF CONTENTS—(Continued)
FORM 10-K ANNUAL REPORT
FISCAL YEAR ENDED DECEMBER 31, 2016
ITEM 9A. Controls and Procedures
Disclosure Controls and Procedures
Management’s Annual Report on Internal Control over Financial Reporting
Changes in Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
ITEM 14. Principal Accounting Fees and Services
PART IV
ITEM 15. Exhibits, Financial Statement Schedules
ITEM 16. Form 10-K Summary
Signatures
Index to Consolidated Financial Statements
Index to Exhibits
Page
54
54
54
55
56
57
58
59
59
59
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F-1
EX-1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) contains statements about future events and expectations, or
forward-looking statements, all of which are inherently uncertain. We have based those forward-looking statements on our
current expectations and projections about future results. When we use words such as “anticipates,” “intends,” “plans,”
“believes,” “estimates,” “expects” or similar expressions, we do so to identify forward-looking statements. Examples of
forward-looking statements include, but are not limited to, statements we make regarding future prospects of growth in the
communications site leasing industry, the level of future expenditures by companies in this industry and other trends in this
industry, the effects of consolidation among companies in our industry and among our tenants and other competitive pressures,
changes in zoning, tax and other laws and regulations, economic, political and other events, particularly those relating to our
international operations, our future capital expenditure levels, our plans to fund our future liquidity needs, our substantial
leverage and debt service obligations, our future financing transactions, our ability to maintain or increase our market share, our
future operating results, our ability to remain qualified for taxation as a real estate investment trust (REIT), the amount and
timing of any future distributions including those we are required to make as a REIT, our ability to protect our rights to the land
under our towers and natural disasters and similar events. These statements are based on our management’s beliefs and
assumptions, which in turn are based on currently available information. These assumptions could prove inaccurate. These
forward-looking statements may be found under the captions “Business” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” as well as in this Annual Report generally.
ii
You should keep in mind that any forward-looking statement we make in this Annual Report or elsewhere speaks only as
of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these
events or how they may affect us. In any event, these and other important factors, including those set forth in Item 1A of this
Annual Report under the caption “Risk Factors,” may cause actual results to differ materially from those indicated by our
forward-looking statements. We have no duty, and do not intend, to update or revise the forward-looking statements we make in
this Annual Report, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the
future events or circumstances described in any forward-looking statement we make in this Annual Report or elsewhere might
not occur. References in this Annual Report to “we,” “our” and the “Company” refer to American Tower Corporation and its
predecessor, as applicable, individually and collectively with its subsidiaries as the context requires.
iii
ITEM 1. BUSINESS
Overview
PART I
We are one of the largest global real estate investment trusts and a leading independent owner, operator and developer of
multitenant communications real estate. Our primary business is the leasing of space on communications sites to wireless
service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities
and tenants in a number of other industries. We refer to this business as our property operations, which accounted for 99% of
our total revenues for the year ended December 31, 2016. We also offer tower-related services in the United States, including
site acquisition, zoning and permitting and structural analysis, which primarily support our site leasing business, including the
addition of new tenants and equipment on our sites. We refer to this business as our services operations.
Our portfolio primarily consists of towers that we own and towers that we operate pursuant to long-term lease
arrangements, as well as distributed antenna system (“DAS”) networks, which provide seamless coverage solutions in certain
in-building and outdoor wireless environments. In addition to the communications sites in our portfolio, we manage rooftop
and tower sites for property owners under various contractual arrangements. We also hold other telecommunications
infrastructure and property interests that we lease to communications service providers and third-party tower operators. Our
communications real estate portfolio of 144,884 communications sites, as of December 31, 2016, included 40,414
communications sites in the U.S., 57,945 communications sites in Asia, 12,861 communications sites in Europe, Middle East
and Africa (“EMEA”) and 33,664 communications sites in Latin America.
American Tower Corporation was originally created as a subsidiary of American Radio Systems Corporation in 1995 and
was spun off into a free-standing public company in 1998. We are a holding company and conduct our operations through our
directly and indirectly owned subsidiaries and joint ventures. Our principal domestic operating subsidiaries are American
Towers LLC and SpectraSite Communications, LLC. We conduct our international operations primarily through our subsidiary,
American Tower International, Inc., which in turn conducts operations through its various international holding and operating
subsidiaries and joint ventures.
Since inception, we have grown our communications real estate portfolio through acquisitions, long-term lease
arrangements and site development. In 2016, we significantly expanded our Asia segment portfolio by acquiring a 51%
controlling ownership interest in Viom Networks Limited (“Viom”), a telecommunications infrastructure company that owns
and operates approximately 42,000 wireless communications towers and 200 indoor DAS networks in India (the “Viom
Acquisition”). Subsequent to the closing, Viom was renamed ATC Telecom Infrastructure Private Limited (“ATC TIPL”). In
2016, we launched operations in Argentina, a new market for us. In December 2016, our newly formed joint venture in Europe
entered into a definitive agreement to acquire a tower company in France, which is also a new market for us. This acquisition
closed in February 2017.
We operate as a real estate investment trust for U.S. federal income tax purposes (“REIT”). Accordingly, we generally are
not subject to U.S. federal income taxes on income generated by our REIT operations, including the income derived from
leasing space on our towers, as we receive a dividends paid deduction for distributions to stockholders that generally offsets our
income and gains. However, we remain obligated to pay U.S. federal income taxes on earnings from our domestic taxable REIT
subsidiaries (“TRSs”). In addition, our international assets and operations, regardless of their designation for U.S. tax purposes,
continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted.
The use of TRSs enables us to continue to engage in certain businesses while complying with REIT qualification
requirements. We may, from time to time, change the election of previously designated TRSs to be included as part of the
REIT. As of December 31, 2016, our REIT qualified businesses included our U.S. tower leasing business, most of our
operations in Costa Rica, Germany and Mexico and a majority of our services segment and indoor DAS networks business.
We report our results in five segments – U.S. property (formerly referred to as “domestic rental and management”), Asia
property, EMEA property, Latin America property (Asia property, EMEA property and Latin America property were formerly
referred to as “international rental and management”) and services (formerly referred to as “network development services”).
For more information about our business segments, as well as financial information about the geographic areas in which
we operate, see Item 7 of this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and note 20 to our consolidated financial statements included in this Annual Report.
1
Products and Services
Property Operations
Our property operations accounted for 99%, 98% and 98% of our total revenues for each of the years ended
December 31, 2016, 2015 and 2014, respectively. Our revenue is primarily generated from tenant leases. Our tenants lease
space on our communications real estate, where they install and maintain their equipment. Rental payments vary considerably
depending upon numerous factors, including, but not limited to, tower location, amount, type and position of tenant equipment
on the tower, ground space required by the tenant and remaining tower capacity. Our costs typically include ground rent (which
is primarily fixed, with annual cost escalations) and power and fuel costs, some or all of which may be passed through to our
tenants, as well as property taxes and repairs and maintenance expenses. Our property operations have generated consistent
incremental growth in revenue and typically have low cash flow volatility due to the following characteristics:
• Long-term tenant leases with contractual rent escalations. In general, a tenant lease has an initial non-cancellable
term of ten years with multiple renewal terms, with provisions that periodically increase the rent due under the lease,
typically annually, based on a fixed escalation percentage (averaging approximately 3% in the United States) or an
inflationary index in our international markets, or a combination of both. Based upon foreign currency exchange rates
and the tenant leases in place as of December 31, 2016, we expect to generate over $31 billion of non-cancellable
tenant lease revenue over future periods, absent the impact of straight-line lease accounting.
• Consistent demand for our sites. As a result of rapidly growing usage of wireless services and the corresponding
wireless industry capital spending trends in the markets we serve, we anticipate consistent demand for our
communications sites. We believe that our global asset base positions us well to benefit from the increasing
proliferation of advanced wireless devices and the increasing usage of high bandwidth applications on those devices.
We have the ability to add new tenants and new equipment for existing tenants on our sites, which typically results in
incremental revenue and modest incremental costs. Our site portfolio and our established tenant base provide us with a
solid platform for new business opportunities, which has historically resulted in consistent and predictable organic
revenue growth.
• High lease renewal rates. Our tenants tend to renew leases because suitable alternative sites may not exist or be
available and repositioning a site in their network may be expensive and may adversely affect the quality of their
network. Historically, churn has been approximately 1% to 2% of total property revenue per year. We define churn as
revenue lost when a tenant cancels or does not renew its lease or, in limited circumstances, when the lease rates on
existing leases are reduced. We derive our churn rate for a given year by dividing our revenue lost on this basis by our
prior year property segment revenue.
• High operating margins. Incremental operating costs associated with adding new tenants to an existing
communications site are relatively minimal. Therefore, as tenants are added, the substantial majority of incremental
revenue flows through to gross margin and operating profit. In addition, in many of our international markets certain
expenses, such as ground rent or power and fuel costs, are reimbursed or shared by our tenant base.
• Low maintenance capital expenditures. On average, we require relatively low amounts of annual capital
expenditures to maintain our communications sites.
Our property business includes the operation of communications sites, managed networks, the leasing of property
interests, fiber and the provision of backup power through shared generators. Our presence in a number of markets at different
relative stages of wireless development provides us with significant diversification and long-term growth potential. Our
property segments accounted for the following percentage of total revenue for the years ended December 31,:
U.S.
Asia
EMEA
Latin America
2016
2015
2014
59%
14%
9%
17%
66%
5%
8%
19%
64%
6%
8%
20%
Communications Sites. Approximately 95% of revenue in our property segments was attributable to our communications
sites for each of the years ended December 31, 2016, 2015 and 2014.
2
We lease space on our communications sites to tenants providing a diverse range of communications services, including
cellular voice and data, broadcasting, mobile video and a number of other applications. In addition, in many of our international
markets, we receive additional pass-through revenue from our tenants to cover certain costs, including power and fuel costs and
ground rent. Our top tenants by revenue for each region are as follows for the year ended December 31, 2016:
• U.S.: AT&T, Verizon Wireless, Sprint and T-Mobile US accounted for an aggregate of 88% of U.S. property segment
revenue.
• Asia: TATA, Idea Cellular, Vodafone and Bharti Airtel Limited (“Airtel”) accounted for an aggregate of 66% of Asia
property segment revenue.
• EMEA: Airtel and MTN Group Limited accounted for an aggregate of 70% of EMEA property segment revenue.
• Latin America: Telefónica, AT&T, Telecom Italia and Nextel International accounted for an aggregate of 71% of
Latin America property segment revenue.
Accordingly, we are subject to certain risks, as set forth in Item 1A of this Annual Report under the caption “Risk Factors
—A substantial portion of our revenue is derived from a small number of tenants, and we are sensitive to changes in the
creditworthiness and financial strength of our tenants.” In addition, we are subject to risks related to our international
operations, as set forth under the caption “Risk Factors—Our foreign operations are subject to economic, political and other
risks that could materially and adversely affect our revenues or financial position, including risks associated with fluctuations in
foreign currency exchange rates.”
Managed Networks, Property Interests, Fiber and Shared Generators. In addition to our communications sites, we also
own and operate several types of managed network solutions, provide communications site management services to third
parties, manage and lease property interests under carrier or other third-party communications sites, lease fiber and provide
back-up power sources to tenants at our sites.
• Managed Networks. We own and operate DAS networks in the United States and certain international markets. We
obtain rights from property owners to install and operate in-building DAS networks, and we grant rights to wireless
service providers to attach their equipment to our installations. We also offer outdoor DAS networks as a
complementary shared infrastructure solution for our tenants in the United States and in certain international markets.
Typically, we design, build and operate our outdoor DAS networks in areas in which zoning restrictions or other
barriers may prevent or delay deployment of more traditional wireless communications sites. We also hold lease rights
and easement interests on rooftops capable of hosting communications equipment in locations where towers are
generally not a viable solution based on area characteristics. In addition, we provide management services to property
owners in the United States who elect to retain full rights to their property while simultaneously marketing the rooftop
for wireless communications equipment installation. As the demand for advanced wireless devices in urban markets
evolves, we continue to evaluate a variety of infrastructure solutions, including small cells, that may support our
tenants’ networks in these areas.
• Property Interests. We own a portfolio of property interests in the United States under carrier or other third-party
communications sites, which provides recurring cash flow under complementary leasing arrangements.
• Fiber. We own and operate fiber in Argentina, which we currently lease to operators to support their urban
telecommunications infrastructure and expect to lease to operators in the future for additional fourth generation (4G)
and fifth generation (5G) deployments.
•
Shared Generators. We have contracts with certain of our tenants in the United States pursuant to which we provide
access to shared backup power generators.
Services Operations
We offer tower-related services, including site acquisition, zoning and permitting and structural analysis services. Our
services operations primarily support our site leasing business, including through the addition of new tenants and equipment on
our sites. This segment accounted for 1%, 2% and 2% of our total revenue for each of the years ended December 31, 2016,
2015 and 2014, respectively.
Site Acquisition, Zoning and Permitting. We engage in site acquisition services on our own behalf in connection with our
tower development projects, as well as on behalf of our tenants. We typically work with our tenants’ engineers to determine the
geographic areas where new communications sites will best address the tenants’ needs and meet their coverage objectives.
Once a new site is identified, we acquire the rights to the land or structure on which the site will be constructed, and we manage
the permitting process to ensure all necessary approvals are obtained to construct and operate the communications site.
3
Structural Analysis. We offer structural analysis services to wireless carriers in connection with the installation of their
communications equipment on our towers. Our team of engineers can evaluate whether a tower structure can support the
additional burden of the new equipment or if an upgrade is needed, which enables our tenants to better assess potential sites
before making an installation decision. Our structural analysis capabilities enable us to provide higher quality service to our
existing tenants by, among other things, reducing the time required to achieve on-air readiness, while also providing
opportunities to offer structural analysis services to third parties.
Strategy
Operational Strategy
Our operational strategy is to capitalize on the global growth in the use of wireless services and the evolution of advanced
wireless handsets, tablets and other mobile devices, and the corresponding expansion of communications infrastructure
required to deploy current and future generations of wireless communications technologies. To achieve this, our primary focus
is to (i) increase the occupancy of our existing communications real estate portfolio, (ii) invest in and selectively grow our
communications real estate portfolio, (iii) further improve upon our operational performance and (iv) maintain a strong balance
sheet. We believe these efforts will further support and enhance our ability to capitalize on the growth in demand for wireless
infrastructure. In addition, we expect to explore new and broader opportunities to enhance or extend our shared
communications infrastructure businesses, including those that may make our assets incrementally more attractive to new
tenants, or to existing tenants for additional uses, and those that increase our operational efficiency.
•
•
Increase the occupancy of our existing communications real estate portfolio. We believe that our highest returns
will be achieved by leasing additional space on our existing communications sites. Increasing demand for wireless
services in our served markets has resulted in significant capital spending by major wireless carriers. As a result, we
anticipate consistent demand for our communications sites because they are attractively located for wireless service
providers and typically have capacity available for additional tenants. In the United States, incremental carrier network
activity is being driven primarily by the build-out and densification of 4G networks, while in our international
markets, carriers are deploying a combination of second generation (2G), third generation (3G) and 4G networks,
depending on the specific market. As of December 31, 2016, we had a global average of approximately 1.9 tenants per
tower. We believe that the majority of our towers have capacity for additional tenants and that substantially all of our
towers that are currently at or near full structural capacity can be upgraded or augmented to meet future tenant demand
with relatively modest capital investment. Therefore, we will continue to target our sales and marketing activities to
increase the utilization and return on investment of our existing communications sites.
Invest in and selectively grow our communications real estate portfolio. We seek opportunities to invest in and
grow our operations through our capital expenditure program, new site construction and acquisitions. We believe we
can achieve attractive risk-adjusted returns by pursuing such investments. In addition, we seek to secure property
interests under our communications sites to improve operating margins as we reduce our cash operating expense
related to ground leases. A significant portion of our inorganic growth has been focused on properties with lower
initial tenancy because we believe that over time, we can significantly increase tenancy levels, and therefore, drive
strong returns on those assets.
• Further improve upon our operational performance and efficiency. We continue to seek opportunities to improve
our operational performance throughout the organization. This includes investing in our systems and people as we
strive to improve efficiency and provide superior service to our tenants. To achieve this, we intend to continue to focus
on customer service, such as reducing cycle times for key functions, including lease processing and tower structural
analysis.
• Maintain a strong balance sheet. We remain committed to disciplined financial policies, which we believe result in
our ability to maintain a strong balance sheet and will support our overall strategy and focus on asset growth and
operational excellence. As a result of these policies, we currently have investment grade credit ratings. We continue to
focus on maintaining a robust liquidity position and, as of December 31, 2016, had $3.6 billion of available liquidity.
We believe that our investment grade credit ratings provide us consistent access to the capital markets and our liquidity
provides us the ability to selectively invest in our portfolio.
Capital Allocation Strategy
The objective of our capital allocation strategy is to simultaneously increase adjusted funds from operations and our
return on invested capital over the long term. To maintain our qualification for taxation as a REIT, we are required to distribute
to our stockholders annually an amount equal to at least 90% of our REIT taxable income (determined before the deduction for
4
distributed earnings and excluding any net capital gain). After complying with our REIT distribution requirements and paying
dividends on our preferred stock, we plan to continue to allocate our available capital among investment alternatives that meet
or exceed our return on investment criteria.
• Capital expenditure program. We will continue to invest in and expand our existing communications real estate
portfolio through our annual capital expenditure program. This includes capital expenditures associated with
maintenance, increasing the capacity of our existing sites, and projects such as new site construction, land interest
acquisitions and shared generator installations.
• Acquisitions. We intend to pursue acquisitions of communications sites in our existing or new markets where we can
meet or exceed our risk-adjusted return on investment criteria. Our risk-adjusted hurdle rates consider additional risks
such as the country and counterparties involved, investment and economic climate, legal and regulatory conditions and
industry risk.
• Return excess capital to stockholders. If we have excess capital available after funding (i) our required distributions,
(ii) capital expenditures and (iii) anticipated future investments, including acquisition opportunities, we will seek to
return such excess capital to stockholders, including through our stock repurchase program.
International Growth Strategy
We believe that, in certain international markets, we can create substantial value by either establishing a new, or
expanding our existing, communications real estate leasing business. Therefore, we expect we will continue to seek
international growth opportunities where we believe our risk-adjusted return objectives can be achieved. We strive to maintain
a diversified approach to our international growth strategy by operating in a geographically diverse array of markets in a variety
of stages of wireless network development. Our international growth strategy includes a disciplined, individualized market
evaluation, in which we conduct the following analyses, among others:
• Country analysis. Prior to entering a new market, we conduct an extensive review of the country’s historical and
projected macroeconomic fundamentals, including inflation outlook and foreign currency exchange rate trends, capital
markets, tax regime and investment alternatives, and the general business, political and legal environments, including
property rights and regulatory regime.
• Wireless industry analysis. To confirm the presence of sufficient demand to support an independent tower leasing
model, we analyze the competitiveness of the country’s wireless market, such as the pricing environment, past and
potential industry consolidation and the stage of its wireless network development. Characteristics that result in an
attractive investment opportunity include (i) multiple competitive wireless service providers who are actively seeking
to invest in deploying voice and data networks and (ii) ongoing or expected deployment of incremental spectrum from
recent or anticipated auctions.
• Opportunity and counterparty analysis. Once an investment opportunity is identified within a geographic area with
an attractive wireless industry, we conduct a multifaceted opportunity and counterparty analysis. This includes
evaluating (i) the type of transaction, (ii) its ability to meet our risk-adjusted return criteria given the country and the
counterparties involved, including the anticipated anchor tenant and (iii) how the transaction fits within our long-term
strategic objectives, including future potential investment and expansion within the region.
Recent Transactions
Acquisitions and Joint Venture
We increased our communications site portfolio by 45,309 sites in 2016, including 1,869 build-to-suits. We believe these
assets will be an important component of our long-term growth. In 2016, we completed the Viom Acquisition, which included
approximately 42,000 wireless communications towers and 200 indoor DAS networks in India. We also launched operations in
Argentina through the acquisition of Comunicaciones y Consumos, S.A. (“CyCSA”), which owned or operated urban
telecommunications assets, fiber and the rights to utilize certain existing utility infrastructure for future telecommunications
equipment installation. In addition, we acquired an aggregate of 891 communications sites in the United States, Brazil, Chile,
Germany, Mexico, Nigeria and South Africa in 2016.
In December 2016, we entered into a joint venture (“ATC Europe”) to which we contributed our German business in
exchange for an investment from our partner, PGGM. ATC Europe will focus on pursuing telecommunications real estate
investment opportunities in select countries in Europe. In December 2016, ATC Europe entered into a definitive agreement to
purchase FPS Towers (“FPS”), which owns and operates approximately 2,400 wireless tower sites in France. This transaction
closed on February 15, 2017.
5
We continue to evaluate opportunities to acquire communications real estate portfolios that we believe we can effectively
integrate into our existing business and generate returns that meet or exceed our criteria. For more information about our
acquisitions, see note 6 to our consolidated financial statements included in this Annual Report.
Financing Transactions
During 2016, to complement our operational strategy to selectively invest in and grow our communications real estate
portfolio while maintaining our long-term financial policies, we completed a number of key financing initiatives, which, among
others, included the following:
• Completing registered public offerings of an aggregate of $3.25 billion of senior unsecured notes, the proceeds of
which were used primarily to repay indebtedness under our existing revolving credit facilities and term loan.
Borrowings under our revolving credit facilities were primarily used to fund acquisitions and for general corporate
purposes.
• Amending our existing revolving credit facilities and term loan to, among other things, extend each of the maturity
dates by one year.
For more information about our financing transactions, see Item 7 of this Annual Report under the caption
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”
and note 8 to our consolidated financial statements included in this Annual Report.
Regulatory Matters
Towers and Antennas. Our U.S. and international tower leasing business is subject to national, state and local regulatory
requirements with respect to the registration, siting, construction, lighting, marking and maintenance of our towers. In the
United States, which accounted for 59% of our total property segment revenue for the year ended December 31, 2016, the
construction of new towers or modifications to existing towers may require pre-approval by the Federal Communications
Commission (“FCC”) and the Federal Aviation Administration (“FAA”), depending on factors such as tower height and
proximity to public airfields. Towers requiring pre-approval must be registered with the FCC and maintained in accordance
with FAA standards. Similar requirements regarding pre-approval of the construction and modification of towers are imposed
by regulators in other countries. Non-compliance with applicable tower-related requirements may lead to monetary penalties or
site deconstruction orders.
Certain of our international operations are subject to regulatory requirements with respect to licensing, registration and
permitting. In India, each of our operating subsidiaries holds an Infrastructure Provider Category-I (“IP-I”) Registration
Certificate issued by the Indian Ministry of Communications and Information Technology, which permits us to provide tower
space to companies licensed as telecommunications service providers under the Indian Telegraph Act of 1885. As a condition to
the IP-I, the Indian government has the right to take over telecommunications infrastructure in the case of emergency or war. In
Ghana, our subsidiary holds a Communications Infrastructure License, issued by the National Communications Authority
(“NCA”), which permits us to establish and maintain passive telecommunications infrastructure services and DAS networks for
communications service providers licensed by the NCA. In Uganda, our subsidiary holds a Public Infrastructure Service
License, issued by the Uganda Communications Commission (“UCC”), which permits us to establish and maintain passive
telecommunications infrastructure and DAS networks for communication service providers licensed by the UCC. In Nigeria,
our subsidiary holds a license for Infrastructure Sharing and Collocation Services, issued by the Nigerian Communications
Authority (“NCC”), which permits us to establish and maintain passive telecommunications infrastructure for communication
service providers licensed by the NCC. In Chile, our subsidiary is classified as a Telecom Intermediate Service Provider. We
have received a number of site specific concessions and are working with the Chilean Subsecretaria de Telecommunicaciones
to receive concessions on our remaining sites in Chile. CyCSA holds a telecom license for a number of services it provides and
is regulated by the Ente Nacional de Comunicaciones (ENACOM) in Argentina. In many of the markets in which we operate
we are required to provide tower space to service providers on a non-discriminatory basis, subject to negotiation of mutually
agreeable terms.
Our international business operations may be subject to increased licensing fees or ownership restrictions. For example,
in South Africa, the Broad-Based Black Economic Empowerment Act, 2003 (the “BBBEE Act”) has established a legislative
framework for the promotion of economic empowerment of South African citizens disadvantaged by Apartheid. Accordingly,
the BBBEE Act and related codes measure BBBEE Act compliance and good corporate practice by the inclusion of certain
ownership, management control, employment equity and other metrics for companies that do business there. In addition,
6
certain municipalities have sought to impose permit fees based upon structural or operational requirements of towers. Our
foreign operations may be affected if a country’s regulatory authority restricts or revokes spectrum licenses of certain wireless
service providers or implements limitations on foreign ownership.
In all countries where we operate, we are subject to zoning restrictions and restrictive covenants imposed by local
authorities or community organizations. While these regulations vary, they typically require tower owners or tenants to obtain
approval from local authorities or community standards organizations prior to tower construction or the addition of a new
antenna to an existing tower. Local zoning authorities and community residents often oppose construction in their communities,
which can delay or prevent new tower construction, new antenna installation or site upgrade projects, thereby limiting our
ability to respond to tenant demand. This opposition and existing or new zoning regulations can increase costs associated with
new tower construction, tower modifications and additions of new antennas to a site or site upgrades, as well as adversely affect
the associated timing or cost of such projects. Further, additional regulations may be adopted that cause delays or result in
additional costs to us. These factors could materially and adversely affect our operations. In the United States, the
Telecommunications Act of 1996 prohibits any action by state and local authorities that would discriminate between different
providers of wireless services or ban altogether the construction, modification or placement of communications sites. It also
prohibits state or local restrictions based on the environmental effects of radio frequency emissions to the extent the facilities
comply with FCC regulations. Further, in February 2012, the United States government adopted regulations requiring that local
and state governments approve modifications or colocations that qualify as eligible facilities under the regulations.
Portions of our business are subject to additional regulations, for example, in a number of states throughout the United
States, certain of our subsidiaries hold Competitive Local Exchange Carrier (CLEC) or other status, in connection with the
operation of our outdoor DAS networks business. In addition, we, or our tenants, may be subject to new regulatory policies in
certain jurisdictions from time to time that may materially and adversely affect our business or the demand for our
communications sites. For example, there are pending tower marking regulations in the United States, compliance with which
may result in a substantial increase in our costs.
Environmental Matters. Our U.S. and international operations are subject to various national, state and local
environmental laws and regulations, including those relating to the management, use, storage, disposal, emission and
remediation of, and exposure to, hazardous and non-hazardous substances, materials and wastes and the siting of our towers.
We may be required to obtain permits, pay additional property taxes, comply with regulatory requirements and make certain
informational filings related to hazardous substances or devices used to provide power such as batteries, generators and fuel at
our sites. Violations of these types of regulations could subject us to fines or criminal sanctions.
Additionally, in the United States and other international markets where we do business, before constructing a new tower
or adding an antenna to an existing site, we must review and evaluate the impact of the action to determine whether it may
significantly affect the environment and whether we must disclose any significant impacts in an environmental assessment. If a
tower or new antenna might have a material adverse impact on the environment, FCC or other governmental approval of the
tower or antenna could be significantly delayed.
Health and Safety. In the United States and in other countries where we operate, we are subject to various national, state
and local laws regarding employee health and safety, including protection from radio frequency exposure.
Competition
We compete, both for new business and for the acquisition of assets, with other public tower companies, such as Crown
Castle International Corp., SBA Communications Corporation, Telesites S.A.B. de C.V. and Cellnex Telecom, S.A., wireless
carrier tower consortia such as Indus Towers Limited and private tower companies, private equity sponsored firms, carrier-
affiliated tower companies, independent wireless carriers, tower owners, broadcasters and owners of non-communications sites,
including rooftops, utility towers, water towers and other alternative structures. We believe that site location and capacity,
network density, price, quality and speed of service have been, and will continue to be, significant competitive factors affecting
owners, operators and managers of communications sites.
Our services business competes with a variety of companies offering individual, or combinations of, competing services.
The field of competitors includes site acquisition consultants, zoning consultants, real estate firms, right-of-way consultants,
structural engineering firms, tower owners/managers, telecommunications equipment vendors who can provide turnkey site
development services through multiple subcontractors and our tenants’ personnel. We believe that our tenants base their
decisions for services on various criteria, including a company’s experience, local reputation, price and time for completion of a
project.
7
Customer Demand
Our strategy is predicated on the belief that wireless service providers will continue to invest in the coverage, quality and
capacity of their networks in both our U.S. and international markets, while also investing in next generation data networks,
which will drive demand for our communications sites. To meet these network objectives, we believe wireless carriers will
continue to outsource their communications site infrastructure needs as a means to accelerate network development and more
efficiently use their capital, rather than construct and operate their own communications sites and maintain their own
communications site operation and development capabilities. In addition, because our services operations are complementary to
our property business, we believe demand for our services will continue, consistent with industry trends.
• U.S. wireless network investments. According to industry data, aggregate annual wireless capital spending in the
United States has averaged $30 billion, resulting in consistent demand for our sites. Demand for our U.S.
communications sites is driven by:
•
•
Increasing wireless data usage, which continues to incentivize wireless service providers to focus on network
quality and make incremental investments in the coverage and capacity of their networks;
Subscriber adoption of advanced wireless data applications, particularly mobile video, increasingly advanced
devices and the corresponding deployments and densification of advanced networks by wireless service providers
to satisfy this incremental demand for high-bandwidth wireless data;
• Deployment of newly acquired spectrum; and
• Deployment of wireless and backhaul networks by new market entrants.
As consumer demand for and use of advanced wireless services in the United States grow, wireless service providers
may be compelled to deploy new technology and equipment, further increase the cell density of their existing networks and
expand their network coverage.
•
International (Asia, EMEA and Latin America) wireless network investments. The wireless networks in most of
our international markets are typically less advanced than those in our U.S. market with respect to the density of voice
networks and the current technologies generally deployed for wireless services. Accordingly, demand for our
international communications sites is primarily driven by:
•
•
•
Incumbent wireless service providers investing in existing voice networks to improve or expand their coverage
and increase capacity;
In certain of our international markets, increasing subscriber adoption of wireless data applications, such as
email, Internet and video;
Spectrum auctions, which result in new market entrants, as well as initial and incremental data network
deployments; and
• The increasing availability of lower cost smartphones.
Demand for our communications sites could be negatively impacted by a number of factors, including an increase in
network sharing or consolidation among our tenants, as set forth in Item 1A of this Annual Report under the caption “Risk
Factors—If our tenants share site infrastructure to a significant degree or consolidate or merge, our growth, revenue and ability
to generate positive cash flows could be materially and adversely affected.” In addition, the emergence and growth of new
technologies could reduce demand for our sites, as set forth under the caption “Risk Factors—New technologies or changes in a
tenant’s business model could make our tower leasing business less desirable and result in decreasing revenues.” Further, our
tenants may be subject to new regulatory policies from time to time that materially and adversely affect the demand for our
communications sites.
Employees
As of December 31, 2016, we employed 4,507 full-time individuals and consider our employee relations to be
satisfactory.
Available Information
Our Internet website address is www.americantower.com. Information contained on our website is not incorporated by
reference into this Annual Report, and you should not consider information contained on our website as part of this Annual
8
Report. You may access, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, plus amendments to such reports as filed or furnished pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”), through the “Investor Relations” portion of our website as
soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange
Commission (“SEC”).
We have adopted a written Code of Ethics and Business Conduct Policy (the “Code of Conduct”) that applies to all of our
employees and directors, including, but not limited to, our principal executive officer, principal financial officer and principal
accounting officer or controller or persons performing similar functions. The Code of Conduct is available on the “Corporate
Responsibility” portion of our website and our Corporate Governance Guidelines and the charters of the audit, compensation
and nominating and corporate governance committees of our Board of Directors are available on the “Investor Relations”
portion of our website. In the event we amend the Code of Conduct, or provide any waivers of the Code of Conduct to our
directors or executive officers, we will disclose these events on our website as required by the regulations of the New York
Stock Exchange (the “NYSE”) and applicable law.
In addition, paper copies of these documents may be obtained free of charge by writing us at the following address: 116
Huntington Avenue, Boston, Massachusetts 02116, Attention: Investor Relations; or by calling us at (617) 375-7500.
ITEM 1A.
RISK FACTORS
Decrease in demand for our communications infrastructure would materially and adversely affect our operating results,
and we cannot control that demand.
A significant reduction in leasing demand for our communications infrastructure could materially and adversely affect
our business, results of operations or financial condition. Factors that may affect such demand include:
•
•
•
•
•
•
•
•
increased use of network sharing or mergers or consolidations among wireless service providers;
zoning, environmental, health, tax or other government regulations or changes in the application and enforcement
thereof;
governmental licensing of spectrum or restricting or revoking our tenants’ spectrum licenses;
a decrease in consumer demand for wireless services, including due to general economic conditions or disruption
in the financial and credit markets;
the ability and willingness of wireless service providers to maintain or increase capital expenditures on network
infrastructure;
the financial condition of wireless service providers;
delays or changes in the deployment of next generation wireless technologies; and
technological changes.
Increasing competition for tenants in the tower industry may materially and adversely affect our revenue.
Our industry is highly competitive and our tenants have numerous alternatives in leasing antenna space. Competitive
pricing from competitors could materially and adversely affect our lease rates. We may not be able to renew existing tenant
leases or enter into new tenant leases, or if we are able to renew or enter into new leases, they may be at rates lower than our
current rates, resulting in a material adverse impact on our results of operations and growth rate. In addition, should inflation
rates exceed our fixed escalator percentages in markets where our leases include fixed escalators, our income could be
adversely affected.
If our tenants share site infrastructure to a significant degree or consolidate or merge, our growth, revenue and ability to
generate positive cash flows could be materially and adversely affected.
Extensive sharing of site infrastructure, roaming or resale arrangements among wireless service providers as an
alternative to leasing our communications sites, without compensation to us, may cause new lease activity to slow if carriers
utilize shared equipment rather than deploy new equipment, or may result in the decommissioning of equipment on certain
existing sites because portions of the tenants’ networks may become redundant. In addition, significant consolidation among
our tenants may materially and adversely affect our growth and revenues. Certain combined companies have rationalized
duplicative parts of their networks or modernized their networks, and these and other tenants could determine not to renew, or
attempt to cancel, avoid or limit leases with us or related payments. In the event a tenant terminates its business or separately
sells its spectrum, we may experience increased churn as a result. Our ongoing contractual revenues and our future results may
be negatively impacted if a significant number of these leases are not renewed.
9
Our business is subject to government and tax regulations and changes in current or future laws or regulations could
restrict our ability to operate our business as we currently do.
Our business and that of our tenants are subject to federal, state, local and foreign regulations. In certain jurisdictions,
these regulations could be applied or enforced retroactively, which could require that we modify or dismantle existing towers at
significant costs. Zoning authorities and community organizations are often opposed to the construction of communications
sites in their communities, which can delay, prevent or increase the cost of new tower construction, modifications, additions of
new antennas to a site or site upgrades, thereby limiting our ability to respond to tenant demands. Existing regulatory policies
may materially and adversely affect the timing or cost of construction projects associated with our communications sites and
new regulations may be adopted that increase delays or result in additional costs to us, or that prevent such projects in certain
locations, and noncompliance could result in the imposition of fines or an award of damages to private litigants. In certain
jurisdictions, there may be changes to zoning regulations or construction laws based on site location, which may result in
increased costs to modify certain of our existing towers or decreased revenue due to the removal of certain towers to ensure
compliance with such changes. In addition, in certain jurisdictions, we are required to pay annual license fees, which may be
subject to substantial increases by the government, or new fees may be enacted and apply retroactively. Furthermore, the tax
laws, regulations and interpretations governing our business in jurisdictions where we operate may change at any time, perhaps
with retroactive effect. This includes potential changes in tax laws or the interpretation of tax laws arising out of the “base
erosion profit shifting” or “BEPS” project initiated by the Organization for Economic Co-operation and Development (OECD).
In addition, some of these changes could have a more significant impact on us as a REIT relative to other REITs due to the
nature of our business and our use of TRSs. These factors could materially and adversely affect our business, results of
operations or financial condition.
Our foreign operations are subject to economic, political and other risks that could materially and adversely affect our
revenues or financial position, including risks associated with fluctuations in foreign currency exchange rates.
Our international business operations and our expansion into new markets in the future exposes us to potential adverse
financial and operational problems not typically experienced in the United States. We anticipate that revenues from our
international operations will continue to grow. Accordingly, our business is subject to risks associated with doing business
internationally, including:
•
•
•
•
•
•
•
changes to existing laws or new laws or methodologies impacting our existing and anticipated international
operations, fees directed specifically at the ownership and operation of communications sites or our international
acquisitions, any of which laws or fees may be applied retroactively, or failure to obtain an expected tax status
for which we have applied;
expropriation or governmental regulation restricting foreign ownership or requiring reversion or divestiture;
laws or regulations that tax or otherwise restrict repatriation of earnings or other funds or otherwise limit
distributions of capital;
changes in a specific country’s or region’s political or economic conditions, including inflation or currency
devaluation;
changes to zoning regulations or construction laws, which could be applied retroactively to our existing
communications sites;
actions restricting or revoking our tenants’ spectrum licenses or suspending or terminating business under prior
licenses;
failure to comply with anti-bribery laws such as the Foreign Corrupt Practices Act or similar local anti-bribery
laws, or the Office of Foreign Assets Control requirements;
• material site issues related to security, fuel availability and reliability of electrical grids;
significant increases in, or implementation of new, license surcharges on our revenue;
•
price setting or other similar laws or regulations for the sharing of passive infrastructure; and
•
uncertain or inconsistent laws, regulations, rulings or results from legal or judicial systems, which may be
•
applied retroactively, and delays in the judicial process.
We also face risks associated with changes in foreign currency exchange rates, including those arising from our
operations, investments and financing transactions related to our international business. Volatility in foreign currency exchange
rates can also affect our ability to plan, forecast and budget for our international operations and expansion efforts. Our revenues
earned from our international operations are primarily denominated in their respective local currencies. We have not historically
engaged in significant currency hedging activities relating to our non-U.S. Dollar operations, and a weakening of these foreign
currencies against the U.S. Dollar would negatively impact our reported revenues, operating profits and income.
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In addition, as we continue to invest in joint venture opportunities internationally, our partners may have business or
economic goals that are inconsistent with ours, be in positions to take action contrary to our interests, policies or objectives,
have competing interests in our, or other, markets that could create conflict of interest issues, withhold consents contrary to our
requests or become unable or unwilling to fulfill their commitments, any of which could expose us to additional liabilities or
costs, including requiring us to assume and fulfill the obligations of that joint venture.
Our expansion initiatives involve a number of risks and uncertainties, including those related to integrating acquired or
leased assets, that could adversely affect our operating results, disrupt our operations or expose us to additional risk.
As we continue to acquire communications sites in our existing markets and expand into new markets, we are subject to a
number of risks and uncertainties, including not meeting our return on investment criteria and financial objectives, increased
costs, assumed liabilities and the diversion of managerial attention due to acquisitions. Achieving the benefits of acquisitions
depends in part on timely and efficiently integrating operations, communications tower portfolios and personnel. Integration
may be difficult and unpredictable for many reasons, including, among other things, portfolios without requisite permits,
differing systems, cultural differences, and conflicting policies, procedures and operations. Significant acquisition-related
integration costs, including certain nonrecurring charges, could materially and adversely affect our results of operations in the
period in which such charges are recorded or our cash flow in the period in which any related costs are actually paid. For
example, the integration of Viom into our operations is a significant undertaking, and we anticipate that we will continue to
incur certain nonrecurring charges associated with that integration, including costs associated with onboarding employees and
visiting and upgrading tower sites. In addition, integration may significantly burden management and internal resources,
including through the potential loss or unavailability of key personnel. If we fail to successfully integrate the assets we acquire
or fail to utilize such assets to their full capacity, we may not realize the benefits we expect from our acquired portfolios, and
our business, financial condition and results of operations will be adversely affected. Our international expansion initiatives are
subject to additional risks such as those described in the preceding risk factor.
As a result of acquisitions, we have a substantial amount of intangible assets and goodwill. In accordance with
accounting principles generally accepted in the United States (“GAAP”), we are required to assess our goodwill and other
intangible assets annually or more frequently in the event of circumstances indicating potential impairment to determine if they
are impaired. If the testing performed indicates that an asset may not be recoverable, we are required to record a non-cash
impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair
value of the goodwill or the estimated fair value of other intangible assets in the period the determination is made.
Our expansion initiatives may not be successful or we may be required to record impairment charges for our goodwill or
for other intangible assets, which could have a material adverse effect on our business, results of operations or financial
condition.
Competition for assets could adversely affect our ability to achieve our return on investment criteria.
We may experience increased competition for the acquisition of assets or contracts to build new communications sites for
tenants, which could make the acquisition of high quality assets significantly more costly or prohibitive or cause us to lose
contracts to build new sites. Some of our competitors are larger and may have greater financial resources than we do, while
other competitors may apply less stringent investment criteria than we do. In addition, we may not anticipate increased
competition entering a particular market or competing for the same assets. Higher prices for assets or the failure to add new
assets to our portfolio could make it more difficult to achieve our anticipated returns on investment or future growth, which
could materially and adversely affect our business, results of operations or financial condition.
New technologies or changes in a tenant’s business model could make our tower leasing business less desirable and
result in decreasing revenues.
The development and implementation of new technologies designed to enhance the efficiency of wireless networks or
changes in a tenant’s business model could reduce the need for tower-based wireless services, decrease demand for tower space
or reduce previously obtainable lease rates. In addition, tenants may allocate less of their budgets to leasing space on our
towers, as the industry is trending towards deploying increased capital to the development and implementation of new
technologies. Examples of these technologies include spectrally efficient technologies, which could relieve a portion of our
tenants’ network capacity needs and, as a result, could reduce the demand for tower-based antenna space. Additionally, certain
small cell complementary network technologies could shift a portion of our tenants’ network investments away from the
traditional tower-based networks, which may reduce the need for carriers to add more equipment at certain communications
sites. Moreover, the emergence of alternative technologies could reduce the need for tower-based broadcast services
transmission and reception. Further, a tenant may decide to no longer outsource tower infrastructure or otherwise change its
business model, which would result in a decrease in our revenue. Our failure to innovate in response to the development and
11
implementation of these or similar technologies to any significant degree or changes in a tenant’s business model could have a
material adverse effect on our business, results of operations or financial condition.
Our leverage and debt service obligations may materially and adversely affect our ability to raise additional financing to
fund capital expenditures, future growth and expansion initiatives and to satisfy our distribution requirements.
Our leverage and debt service obligations could have significant negative consequences to our business, results of
operations or financial condition, including:
•
•
•
•
requiring the dedication of a substantial portion of our cash flow from operations to service our debt, thereby
reducing the amount of our cash flow available for other purposes, including capital expenditures, REIT
distributions and preferred stock dividends;
impairing our ability to meet one or more of the financial ratio covenants contained in our debt agreements or to
generate cash sufficient to pay interest or principal due under those agreements, which could result in an
acceleration of some or all of our outstanding debt and the loss of the towers securing such debt if a default
remains uncured;
limiting our ability to obtain additional debt or equity financing, thereby placing us at a possible competitive
disadvantage to less leveraged competitors and competitors that may have better access to capital resources,
including with respect to acquiring assets; and
limiting our flexibility in planning for, or reacting to, changes in our business and the markets in which we
compete.
We may need to raise additional capital through debt financing activities, asset sales or equity issuances, even if the then-
prevailing market conditions are not favorable, to fund capital expenditures, future growth and expansion initiatives and to
satisfy our distribution requirements and debt service obligations. An increase in our total leverage could lead to a downgrade
of our credit rating below investment grade, which could negatively impact our ability to access credit markets or preclude us
from obtaining funds on investment grade terms and conditions. Further, certain of our current debt instruments limit the
amount of indebtedness we and our subsidiaries may incur. Additional financing, therefore, may be unavailable, more
expensive or restricted by the terms of our outstanding indebtedness.
A substantial portion of our revenue is derived from a small number of tenants, and we are sensitive to changes in the
creditworthiness and financial strength of our tenants.
A substantial portion of our total operating revenues is derived from a small number of tenants. If any of these tenants is
unwilling or unable to perform its obligations under our agreements with it, our revenues, results of operations, financial
condition and liquidity could be materially and adversely affected. In the ordinary course of our business, we do occasionally
experience disputes with our tenants, generally regarding the interpretation of terms in our leases. Historically, we have
resolved these disputes in a manner that did not have a material adverse effect on us or our tenant relationships. However, it is
possible that such disputes could lead to a termination of our leases with tenants, a material modification of the terms of those
leases or a failure to obtain new business from existing tenants, any of which could have a material adverse effect on our
business, results of operations or financial condition. If we are forced to resolve any of these disputes through litigation, our
relationship with the applicable tenant could be terminated or damaged, which could lead to decreased revenue or increased
costs, resulting in a corresponding adverse effect on our business, results of operations or financial condition.
Due to the long-term nature of our tenant leases, we depend on the continued financial strength of our tenants. Many
wireless service providers operate with substantial leverage. Sometimes our tenants, or their parent companies, face financial
difficulty or file for bankruptcy.
In our international operations, many of our tenants are subsidiaries of global telecommunications companies. These
subsidiaries may not have the explicit or implied financial support of their parent entities.
In addition, many of our tenants and potential tenants rely on capital raising activities to fund their operations and capital
expenditures, which may be more difficult or expensive in the event of downturns in the economy or disruptions in the
financial and credit markets. If our tenants or potential tenants are unable to raise adequate capital to fund their business plans,
they may reduce their spending, which could materially and adversely affect demand for our communications sites and our
services business. If, as a result of a prolonged economic downturn or otherwise, one or more of our significant tenants
experiences financial difficulties or files for bankruptcy, it could result in uncollectible accounts receivable and an impairment
of our deferred rent asset, tower asset, network location intangible asset or tenant-related intangible asset. The loss of
significant tenants, or the loss of all or a portion of our anticipated lease revenues from certain tenants, could have a material
adverse effect on our business, results of operations or financial condition.
12
If we fail to remain qualified for taxation as a REIT, we will be subject to tax at corporate income tax rates, which may
substantially reduce funds otherwise available, and even if we qualify for taxation as a REIT, we may face tax liabilities that
impact earnings and available cash flow.
Commencing with the taxable year beginning January 1, 2012, we have operated as a REIT for federal income tax
purposes.
Qualification for taxation as a REIT requires the application of certain highly technical and complex provisions of the
Internal Revenue Code of 1986, as amended (the “Code”), which provisions may change from time to time, to our operations as
well as various factual determinations concerning matters and circumstances not entirely within our control. Further, tax reform
proposals, if enacted, may adversely affect our ability to remain qualified for taxation as a REIT or the benefits or desirability
of remaining so qualified. There are few judicial or administrative interpretations of the relevant provisions of the Code.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Code:
• we will not be allowed a deduction for distributions to stockholders in computing our taxable income;
• we will be subject to federal and state income tax, including any applicable alternative minimum tax, on our
taxable income at regular corporate tax rates; and
• we will be disqualified from REIT tax treatment for the four taxable years immediately following the year during
which we were so disqualified.
We are subject to certain federal, state, local and foreign taxes on our income and assets, including alternative minimum
taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. While state
and local income tax regimes often parallel the U.S. federal income tax regime for REITs, many of these jurisdictions do not
completely follow U.S. federal rules and some may not follow them at all. For example, some state and local jurisdictions
currently or in the future may limit or eliminate a REIT’s deduction for dividends paid, which could increase our income tax
expense. We are also subject to the continual examination of our income tax returns by the U.S. Internal Revenue Service and
state, local and foreign tax authorities. The results of an audit and examination of previously filed tax returns and continuing
assessments of our tax exposures may have an adverse effect on our provision for income taxes and cash tax liability.
Our domestic TRS assets and operations are subject, as applicable, to federal and state corporation income taxes. Our
foreign operations, whether in the REIT or TRSs, are subject to foreign taxes in jurisdictions in which those assets and
operations are located.
Any corporate tax liability could be substantial and would reduce the amount of cash available for other purposes. If we
fail to qualify for taxation as a REIT, we may need to borrow additional funds or liquidate some investments to pay any
additional tax liability. Accordingly, funds available for investment, operations and distribution would be reduced.
Furthermore, as a result of our acquisition of MIP Tower Holdings LLC (“MIPT”), we owned an interest in a subsidiary
REIT. Effective July 25, 2015, we filed a tax election, pursuant to which MIPT no longer operates as a separate REIT. The
statute of limitations is still open for certain years and MIPT’s qualification as a REIT could still be challenged. As such, for all
open years, we must demonstrate that the subsidiary REIT complied with the same REIT requirements that we must satisfy in
order to qualify as a REIT, together with all other rules applicable to REITs. If the subsidiary REIT is determined to have failed
to qualify as a REIT for any of the open years, and certain relief provisions do not apply, then (i) the subsidiary REIT would
have been subject to federal income tax for such year, which tax we would inherit along with applicable penalties and interest;
(ii) the subsidiary REIT would be disqualified from treatment as a REIT for the remaining taxable years following the year
during which qualification was lost; (iii) for those years in which the subsidiary REIT failed to qualify as a REIT, our
ownership of shares in such subsidiary REIT would have failed to be a qualifying asset for purposes of the asset tests applicable
to REITs and any dividend income or gains derived by us from such subsidiary REIT may cease to be treated as income that
qualifies for purposes of the 75% gross income test; and (iv) we may have failed certain of the asset tests applicable to REITs,
in which event we would fail to qualify as a REIT for those periods unless we are able to avail ourselves of specified relief
provisions.
Complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities.
Our use of TRSs enables us to engage in non-REIT qualifying business activities. Under the Code, no more than 25% of
the value of the assets of a REIT may be represented by securities of one or more TRSs and other non-qualifying assets.
Effective January 1, 2018, this limitation is reduced to 20%. This limitation may hinder our ability to make certain attractive
investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities and investments in the
13
businesses to be conducted by our TRSs, and to that extent limit our opportunities and our flexibility to change our business
strategy.
Specifically, this limitation may affect our ability to make additional investments in our managed networks business or
services segment as currently structured and operated, in other non-REIT qualifying operations or assets, or in international
operations conducted through TRSs that we do not elect to bring into the REIT structure. Further, acquisition opportunities in
the United States and international markets may be adversely affected if we need or require the target company to comply with
certain REIT requirements prior to closing.
Further, as a REIT, we must distribute to our stockholders an amount equal to at least 90% of the REIT taxable income
(determined before the deduction for distributed earnings and excluding any net capital gain). To meet our annual distribution
requirements, we may be required to distribute amounts that may otherwise be used for our operations, including amounts that
may otherwise be invested in future acquisitions, capital expenditures or repayment of debt. As no more than 25% of our gross
income may consist of dividend income from our TRSs and other non-qualifying types of income, our ability to receive
distributions from our TRSs may be limited, which may impact our ability to fund distributions to our stockholders or to use
income of our TRSs to fund other investments.
In addition, the majority of our income and cash flows from our TRSs are generated from our international operations. In
many cases, there are local withholding taxes and currency controls that may impact our ability or willingness to repatriate
funds to the United States to help satisfy REIT distribution requirements.
Restrictive covenants in the agreements related to our securitization transactions, our credit facilities and our debt
securities and the terms of our preferred stock could materially and adversely affect our business by limiting flexibility, and
we may be prohibited from paying dividends on our common stock, which may jeopardize our qualification for taxation as a
REIT.
The agreements related to our securitization transactions include operating covenants and other restrictions customary for
loans subject to rated securitizations. Among other things, the borrowers under the agreements are prohibited from incurring
other indebtedness for borrowed money or further encumbering their assets. A failure to comply with the covenants in the
agreements could prevent the borrowers from taking certain actions with respect to the secured assets and could prevent the
borrowers from distributing any excess cash from the operation of such assets to us. If the borrowers were to default on any of
the loans, the servicer on such loan could seek to foreclose upon or otherwise convert the ownership of the secured assets, in
which case we could lose such assets and the cash flow associated with such assets.
The agreements for our credit facilities also contain restrictive covenants and leverage and other financial maintenance
tests that could limit our ability to take various actions, including incurring additional debt, guaranteeing indebtedness or
making distributions to stockholders, including our required REIT distributions, and engaging in various types of transactions,
including mergers, acquisitions and sales of assets. Additionally, our debt agreements restrict our and our subsidiaries’ ability to
incur liens securing our or their indebtedness. These covenants could have an adverse effect on our business by limiting our
ability to take advantage of financing, new tower development, mergers and acquisitions or other opportunities. Further,
reporting and information covenants in our credit agreements and indentures require that we provide financial and operating
information within certain time periods. If we are unable to provide the required information on a timely basis, we would be in
breach of these covenants. For more information regarding the covenants and requirements discussed above, please see Item 7
of this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources-Factors Affecting Sources of Liquidity” and note 8 to our consolidated financial
statements included in this Annual Report.
The terms of our preferred stock provide that, unless full cumulative dividends have been paid or set aside for payment
on all outstanding preferred stock for all prior dividend periods, no dividends may be declared or paid on our common stock. A
failure to pay dividends on both our preferred and our common stock might jeopardize our qualification for taxation as a REIT
for federal income tax purposes. Even if these limits do not jeopardize our qualification for taxation as a REIT, they may
prevent us from distributing 100% of our REIT taxable income, making us subject to federal corporate income tax, and
potentially a nondeductible excise tax, on the retained amounts.
If we are unable to protect our rights to the land under our towers, it could adversely affect our business and operating
results.
Our real property interests relating to our towers consist primarily of leasehold and sub-leasehold interests, fee interests,
easements, licenses and rights-of-way. A loss of these interests at a particular tower site may interfere with our ability to operate
that tower site and generate revenues. For various reasons, we may not always have the ability to access, analyze and verify all
14
information regarding titles and other issues prior to completing an acquisition of communications sites, which can affect our
rights to access and operate a site. From time to time we also experience disputes with landowners regarding the terms of
ground agreements for land under towers, which can affect our ability to access and operate tower sites. Further, for various
reasons, landowners may not want to renew their ground agreements with us, they may lose their rights to the land, or they may
transfer their land interests to third parties, including ground lease aggregators, which could affect our ability to renew ground
agreements on commercially viable terms. A significant number of the communications sites in our portfolio are located on
land we lease pursuant to long-term operating leases. Further, for various reasons, title to property interests in some of the
foreign jurisdictions in which we operate may not be as certain as title to our property interests in the United States. Our
inability to protect our rights to the land under our towers may have a material adverse effect on our business, results of
operations or financial condition.
If we are unable or choose not to exercise our rights to purchase towers that are subject to lease and sublease
agreements at the end of the applicable period, our cash flows derived from such towers will be eliminated.
Our communications real estate portfolio includes towers that we operate pursuant to lease and sublease agreements that
include a purchase option at the end of each lease period. We may not have the required available capital to exercise our right to
purchase leased or subleased towers at the end of the applicable period, or we may choose, for business or other reasons, not to
exercise our right to purchase such towers. 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. In the event that we decide to exercise these purchase rights, the benefits of acquiring a
significant number of towers may not exceed the associated acquisition, compliance and integration costs, which could have a
material adverse effect on our business, results of operations or financial condition.
Our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially
if these perceived risks are substantiated.
Public perception of possible health risks associated with cellular and other wireless communications technology could
slow the growth of wireless companies, which could in turn slow our growth. In particular, negative public perception of, and
regulations regarding, these perceived health risks could undermine the market acceptance of wireless communications services
and increase opposition to the development and expansion of tower sites. If a scientific study or court decision resulted in a
finding that radio frequency emissions pose health risks to consumers, it could negatively impact our tenants and the market for
wireless services, which could materially and adversely affect our business, results of operations or financial condition. We do
not maintain any significant insurance with respect to these matters.
We could have liability under environmental and occupational safety and health laws.
Our operations are subject to the requirements of various federal, state, local and foreign environmental and occupational
safety and health laws and regulations, including those relating to the management, use, storage, disposal, emission and
remediation of, and exposure to, hazardous and non-hazardous substances, materials and wastes. As the owner, lessee or
operator of real property and facilities, including generators, we may be liable for substantial costs of investigation, removal or
remediation of soil and groundwater contaminated by hazardous materials, and for damages and costs relating to off-site
migration of hazardous materials, without regard to whether we, as the owner, lessee or operator, knew of, or were responsible
for, the contamination. We may also be liable for certain costs of remediating contamination at third-party sites to which we
sent waste for disposal, even if the original disposal may have complied with all legal requirements at the time. Many of these
laws and regulations contain information reporting and record keeping requirements. We may not be at all times in compliance
with all environmental requirements. We may be subject to potentially significant fines or penalties if we fail to comply with
any of these requirements. The requirements of these laws and regulations are complex, change frequently and could become
more stringent in the future. In certain jurisdictions these laws and regulations could be applied retroactively. It is possible that
these requirements will change or that liabilities will arise in the future in a manner that could have a material adverse effect on
our business, results of operations or financial condition. While we maintain environmental insurance, we may not have
adequate insurance to cover all remediation costs, fines or penalties.
Our towers, data centers or computer systems may be affected by natural disasters and other unforeseen events for which
our insurance may not provide adequate coverage.
Our towers are subject to risks associated with natural disasters, such as ice and wind storms, tornadoes, floods,
hurricanes and earthquakes, as well as other unforeseen events, such as acts of terrorism. Any damage or destruction to, or
inability to access, our towers or data centers may impact our ability to provide services to our tenants and lead to tenant loss,
which could have a material adverse effect on our business, results of operations or financial condition.
15
As part of our normal business activities, we rely on information technology and other computer resources to carry out
important operational, reporting and compliance activities and to maintain our business records. Our computer systems, or
those of our cloud or Internet-based providers, could fail on their own accord and are subject to interruption or damage from
power outages, computer and telecommunications failures, computer viruses, security breaches (including through cyber attack
and data theft), usage errors, catastrophic events such as natural disasters and other events beyond our control. Although we and
our vendors have disaster recovery programs and security measures in place, if our computer systems and our backup systems
are compromised, degraded, damaged, or breached, or otherwise cease to function properly, we could suffer interruptions in our
operations or unintentionally allow misappropriation of proprietary or confidential information (including information about
our tenants or landlords), which could damage our reputation and require us to incur significant costs to remediate or otherwise
resolve these issues.
While we maintain insurance coverage for natural disasters, business interruption and cybersecurity, we may not have
adequate insurance to cover the associated costs of repair or reconstruction of sites for a major future event, lost revenue,
including from new tenants that could have been added to our towers but for the event, or other costs to remediate the impact of
a significant event. Further, we may be liable for damage caused by towers that collapse for any number of reasons including
structural deficiencies, which could harm our reputation and require us to incur costs for which we may not have adequate
insurance coverage.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
16
ITEM 2.
PROPERTIES
Details of each of our principal offices as of December 31, 2016 are provided below:
Country
U.S. Offices
Boston, MA
Function
Corporate Headquarters
Boca Raton, FL
Managed Sites Headquarters
Miami, FL
Atlanta, GA
Latin America Operations Center
Network Operations and Program Management
Office Field Personnel
Marlborough, MA
Information Technology Headquarters
Woburn, MA
Cary, NC
Asia Offices
Delhi, India
Gurgaon, India
Singapore
EMEA Offices
Ratingen, Germany
Accra, Ghana
Amsterdam, Netherlands
Lagos, Nigeria
Johannesburg, South Africa
Kampala, Uganda
Latin America Offices
Buenos Aires, Argentina
Sao Paulo, Brazil
Santiago, Chile
Bogota, Colombia
San Jose, Costa Rica
Mexico City, Mexico
Lima, Peru
U.S. Tower Division Headquarters, Accounting,
Lease Administration, Site Leasing Management
and Broadcast Division Headquarters
U.S. Tower Division, Network Operations Center
and Engineering Services Headquarters
India Headquarters
India Operations Center
Asia Finance and Administration
Germany Headquarters
Ghana Headquarters
American Tower International Headquarters
Nigeria Headquarters
South Africa Headquarters
Uganda Headquarters
Argentina Headquarters
Brazil Headquarters
Chile Headquarters
Colombia Headquarters
Costa Rica Headquarters
Mexico Headquarters
Peru Headquarters
Size (approximate
square feet)
Property Interest
39,800 Leased
22,400 Leased
6,300 Leased
21,400 Leased
24,000 Leased
163,200 Owned
44,300 Owned(1)
7,200 Leased
78,800 Leased
90 Leased
12,500 Leased(2)
18,500 Leased
2,400 Leased
8,900 Leased
18,800 Leased(3)
8,800 Leased
4,200 Leased
38,400 Leased
6,900 Leased
13,800 Leased
2,400 Leased
32,700 Leased
3,700 Leased
_______________
(1) The Cary facility is approximately 48,300 square feet. Currently, our offices occupy approximately 44,300 square feet. We lease the remaining space to an
unaffiliated tenant.
(2) We lease two office spaces that together occupy an aggregate of approximately 12,500 square feet.
(3) We lease two office spaces that together occupy an aggregate of approximately 18,800 square feet.
In addition to the principal offices set forth above, we maintain offices in the geographic areas we serve through which
we operate our tower leasing and services businesses. We believe that our owned and leased facilities are suitable and adequate
to meet our anticipated needs.
As of December 31, 2016, we owned and operated a portfolio of 144,884 communications sites. See the table in Item 7 of
this Annual Report, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Executive Overview” for more detailed information on the geographic locations of our communications sites. In
addition, we own property interests that we lease to communications service providers and third-party tower operators in the
United States, which are included in our U.S. property segment.
17
Our interests in our communications sites are comprised of a variety of ownership interests, including leases created by
long-term ground lease agreements, easements, licenses or rights-of-way granted by government entities.
A typical tower site consists of a compound enclosing the tower site, a tower structure and one or more equipment
shelters that house a variety of transmitting, receiving and switching equipment. In addition, our international sites typically
include backup or auxiliary power generators and batteries. The principal types of our towers are guyed, self-supporting lattice
and monopole, and rooftops in our international markets.
• A guyed tower includes a series of cables attaching separate levels of the tower to anchor foundations in the ground
and can reach heights of up to 2,000 feet. A guyed tower site for a typical broadcast tower can consist of a tract of land
of up to 20 acres.
• A self-supporting lattice tower typically tapers from the bottom up and usually has three or four legs. A lattice tower
can reach heights of up to 1,000 feet. Depending on the height of the tower, a lattice tower site for a typical wireless
communications tower can consist of a tract of land of 10,000 square feet for a rural site or fewer than 2,500 square
feet for a metropolitan site.
• A monopole tower is a tubular structure that is used primarily to address space constraints or aesthetic concerns.
Monopoles typically have heights ranging from 50 to 200 feet. A monopole tower site used in metropolitan areas for a
typical wireless communications tower can consist of a tract of land of fewer than 2,500 square feet.
• Rooftop towers are primarily used in metropolitan areas in our Asia, EMEA and Latin America markets, where
locations for traditional tower structures are unavailable. Rooftop towers typically have heights ranging from 10 to 100
feet.
U.S. Property Segment Encumbered Sites. As of December 31, 2016, the loan underlying the securitization transaction
completed in March 2013 (the “2013 Securitization”) is secured by mortgages, deeds of trust and deeds to secure the loan on
substantially all of the 5,181 towers owned by the borrowers (the “2013 Secured Towers”) and the secured revenue notes issued
in a private transaction completed in May 2015 (the “2015 Securitization”) are secured by mortgages, deeds of trust and deeds
to secure debt on substantially all of the 3,596 communications sites owned by subsidiaries of the issuer (the “2015 Secured
Sites”). 264 towers and 433 property interests and other related assets secure three separate classes of Secured Cellular Site
Revenue Notes, Series 2012-2 Class A, Series 2012-2 Class B and Series 2012-2 Class C (the “2012 GTP Notes”), issued by
GTP Cellular Sites, LLC in securitization transactions that we assumed in connection with our acquisition of MIPT. In addition,
1,417 property interests are subject to mortgages and deeds of trust to secure two separate classes of Secured Cellular Site
Revenue Notes, Series 2010-2, Class C and Series 2010-2, Class F (the “Unison Notes”) issued by Unison Ground Lease
Funding, LLC and assumed in connection with the acquisition of certain legal entities from Unison Holdings LLC and Unison
Site Management II, L.L.C. (the “Unison Acquisition”). On February 15, 2017, we repaid all amounts outstanding under the
2012 GTP Notes and the Unison Notes and released the security interests on the encumbered assets.
Asia Property Segment Encumbered Sites. Certain of the outstanding indebtedness assumed in the Viom Acquisition is
secured by ATC TIPL’s short-term and long-term assets, including an aggregate of 41,786 towers.
EMEA Property Segment Encumbered Sites. Our outstanding indebtedness in South Africa is secured by an aggregate of
1,899 towers.
Latin America Property Segment Encumbered Sites. In Brazil, the debentures issued by BR Towers S.A. (“BR Towers”)
are secured by an aggregate of 1,912 towers and the Brazil credit facility is secured by an aggregate of 145 towers. Our
outstanding indebtedness in Colombia is secured by an aggregate of 3,563 towers.
Ground Leases. Of the 144,119 towers in our portfolio as of December 31, 2016, 91% were located on land we lease.
Typically, we seek to enter ground leases with terms of twenty to twenty-five years, which have initial terms of approximately
five to ten years with one or more automatic or exercisable renewal periods. As a result, 51% of the ground agreements for our
sites have a final expiration date of 2026 and beyond.
Tenants. Our tenants are primarily wireless service providers, broadcasters and other companies in a variety of industries.
As of December 31, 2016, our top four tenants by total revenue were AT&T (21%), Verizon Wireless (15%), Sprint (11%) and
T-Mobile (9%). In general, our tenant leases have an initial non-cancellable term of ten years, with multiple renewal terms. As a
result, 50% of our current tenant leases have a renewal date of 2022 or beyond.
18
ITEM 3.
LEGAL PROCEEDINGS
We periodically become involved in various claims and lawsuits that are incidental to our business. In the opinion of
management, after consultation with counsel, there are no matters currently pending that would, in the event of an adverse
outcome, have a material impact on our consolidated financial position, results of operations or liquidity.
19
ITEM 4.
MINE SAFETY DISCLOSURES
N/A.
20
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The following table presents reported quarterly high and low per share sale prices of our common stock on the NYSE for
PART II
the years 2016 and 2015.
2016
Quarter ended March 31
Quarter ended June 30
Quarter ended September 30
Quarter ended December 31
2015
Quarter ended March 31
Quarter ended June 30
Quarter ended September 30
Quarter ended December 31
High
$102.93
113.63
118.26
118.09
High
$101.88
98.64
101.54
104.12
Low
$83.07
101.87
107.57
99.72
Low
$93.21
91.99
86.83
87.23
On February 17, 2017, the closing price of our common stock was $108.11 per share as reported on the NYSE. As of
February 17, 2017, we had 427,195,037 outstanding shares of common stock and 153 registered holders.
Dividends
As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT taxable income
(determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we have distributed
and expect to continue to distribute all or substantially all of our REIT taxable income after taking into consideration our
utilization of net operating losses (“NOLs”).
We have two series of preferred stock outstanding, 5.25% Mandatory Convertible Preferred Stock, Series A (the “Series A
Preferred Stock”), issued in May 2014, with a dividend rate of 5.25%, and the 5.50% Mandatory Convertible Preferred Stock,
Series B (the “Series B Preferred Stock”), issued in March 2015, with a dividend rate of 5.50%. Dividends are payable
quarterly in arrears, subject to declaration by our Board of Directors.
The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will
depend upon various factors, a number of which may be beyond our control, including our financial condition and operating
cash flows, the amount required to maintain our qualification for taxation as a REIT and reduce any income and excise taxes
that we otherwise would be required to pay, limitations on distributions in our existing and future debt and preferred equity
instruments, our ability to utilize NOLs to offset our distribution requirements, limitations on our ability to fund distributions
using cash generated through our TRSs and other factors that our Board of Directors may deem relevant.
We have distributed an aggregate of approximately $3.2 billion to our common stockholders, including the dividend paid
in January 2017, primarily subject to taxation as ordinary income.
21
During the year ended December 31, 2016, we declared the following cash distributions:
Declaration Date
Payment Date
Record Date
Distribution per
share
Aggregate
Payment
Amount
(in millions) (1)
Common Stock
March 9, 2016
June 2, 2016
September 16, 2016
December 14, 2016
Series A Preferred Stock
January 14, 2016
April 16, 2016
July 22, 2016
October 15, 2016
Series B Preferred Stock
January 14, 2016
April 16, 2016
July 22, 2016
October 15, 2016
April 28, 2016
July 15, 2016
October 17, 2016
January 13, 2017
April 12, 2016
$
June 17, 2016
September 30, 2016
December 28, 2016
$
0.51
0.53
0.55
0.58
February 16, 2016
February 1, 2016
$
1.3125
$
May 16, 2016
August 15, 2016
May 1, 2016
August 1, 2016
November 15, 2016
November 1, 2016
1.3125
1.3125
1.3125
February 16, 2016
February 1, 2016
$
13.75
$
May 16, 2016
August 15, 2016
May 1, 2016
August 1, 2016
November 15, 2016
November 1, 2016
13.75
13.75
13.75
216.5
225.4
234.1
247.7
7.9
7.9
7.9
7.9
18.9
18.9
18.9
18.9
_______________
(1) For common stock, aggregate payment does not include amounts accrued for distributions payable related to unvested restricted stock units.
During the year ended December 31, 2015, we declared the following cash distributions:
Declaration Date
Payment Date
Record Date
Distribution
per share
Aggregate
Payment
Amount
(in millions) (1)
Common Stock
March 5, 2015
May 21, 2015
September 10, 2015
December 3, 2015
Series A Preferred Stock
April 14, 2015
July 15, 2015
October 20, 2015
Series B Preferred Stock
April 14, 2015
July 15, 2015
October 20, 2015
April 28, 2015
July 16, 2015
April 10, 2015
$
June 17, 2015
October 7, 2015
September 23, 2015
January 13, 2016
December 16, 2015
$
0.42
0.44
0.46
0.49
May 15, 2015
May 1, 2015
$
1.3125
$
August 17, 2015
November 16, 2015
August 1, 2015
November 1, 2015
1.3125
1.3125
May 15, 2015
August 17, 2015
May 1, 2015
$
11.1528
$
August 1, 2015
November 16, 2015
November 1, 2015
13.75
13.75
177.7
186.2
194.8
207.7
7.9
7.9
7.9
15.3
18.9
18.9
_______________
(1) For common stock, aggregate payment does not include amounts accrued for distributions payable related to unvested restricted stock units.
Performance Graph
This performance graph is furnished and shall not be deemed ‘‘filed’’ with the SEC or subject to Section 18 of the
Exchange Act, nor shall it be deemed incorporated by reference in any of our filings under the Securities Act of 1933, as
amended.
The following graph compares the cumulative total stockholder return on our common stock with the cumulative total
return of the S&P 500 Index, the Dow Jones U.S. Telecommunications Equipment Index and the FTSE NAREIT All Equity
REITs Index. The performance graph assumes that on December 31, 2011, $100 was invested in each of our common stock, the
S&P 500 Index, the Dow Jones U.S. Telecommunications Equipment Index and the FTSE NAREIT All Equity REITs Index.
22
The cumulative return shown in the graph assumes reinvestment of all dividends. The performance of our common stock
reflected below is not necessarily indicative of future performance.
American Tower Corporation
S&P 500 Index
Dow Jones U.S. Telecommunications Equipment Index
FTSE NAREIT All Equity REITs Index
Cumulative Total Returns
12/11
$100.00
12/12
$130.43
12/13
$136.68
12/14
$171.89
12/15
$171.88
12/16
$191.16
100.00
100.00
100.00
116.00
109.75
119.70
153.58
133.28
123.12
174.60
153.54
157.63
177.01
136.95
162.08
198.18
163.17
176.07
23
ITEM 6.
SELECTED FINANCIAL DATA
The selected financial data should be read in conjunction with our “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” and our audited consolidated financial statements and the related notes to those
consolidated financial statements included in this Annual Report.
Year-over-year comparisons are significantly affected by our acquisitions, dispositions and construction of towers. Our
acquisition of MIPT, our transaction with Verizon Communications Inc. (“Verizon” and the transaction, the “Verizon
Transaction”) and the Viom Acquisition, which closed in October 2013, March 2015 and April 2016, respectively, significantly
impact the comparability of reported results between periods. Our principal acquisitions are described in note 6 to our
consolidated financial statements included in this Annual Report.
24
Statements of Operations Data:
Revenues:
Property
Services
Total operating revenues
Operating expenses:
Cost of operations (exclusive of items shown
separately below)
Property
Services
Depreciation, amortization and accretion
Selling, general, administrative and
development expense
Other operating expenses
Total operating expenses
Operating income
Interest income, TV Azteca, net
Interest income
Interest expense
Gain (loss) on retirement of long-term obligations
Other expense (1)
Income from continuing operations before income
taxes and income on equity method investments
Income tax provision
Income on equity method investments
Net income
Net (income) loss attributable to noncontrolling
interests
Net income attributable to American Tower
Corporation stockholders
Dividends on preferred stock
Net income attributable to American Tower
Corporation common stockholders
Net income per common share amounts:
Basic net income attributable to American
Tower Corporation common stockholders
Diluted net income attributable to American
Tower Corporation common stockholders
Weighted average common shares outstanding:
Basic
Diluted
$
$
$
Distribution declared per common share
$
Distribution declared per preferred share, Series A $
Distribution declared per preferred share, Series B $
Other Operating Data:
Ratio of earnings to fixed charges (2)
Ratio of earnings to combined fixed charges and
preferred stock dividends (2)
2016
Year Ended December 31,
2015
2013
2014
(In thousands, except per share data)
2012
$
5,713,126
72,542
5,785,668
$
4,680,388
91,128
4,771,516
$
4,006,854
93,194
4,100,048
$
3,287,090
74,317
3,361,407
$
2,803,490
72,470
2,875,960
1,762,694
27,695
1,525,635
543,395
73,220
3,932,639
1,853,029
10,960
25,618
(717,125)
1,168
(47,790)
1,125,860
(155,501)
—
970,359
1,275,436
33,432
1,285,328
497,835
66,696
3,158,727
1,612,789
11,209
16,479
(595,949)
(79,606)
(134,960)
829,962
(157,955)
—
672,007
1,056,177
38,088
1,003,802
446,542
68,517
2,613,126
1,486,922
10,547
14,002
(580,234)
(3,473)
(62,060)
865,704
(62,505)
—
803,199
828,742
31,131
800,145
415,545
71,539
2,147,102
1,214,305
22,235
9,706
(458,296)
(38,701)
(207,500)
541,749
(59,541)
—
482,208
686,681
35,798
644,276
327,301
62,185
1,756,241
1,119,719
14,258
7,680
(401,665)
(398)
(38,300)
701,294
(107,304)
35
594,025
(13,934)
13,067
21,711
69,125
43,258
956,425
(107,125)
685,074
(90,163)
824,910
(23,888)
551,333
—
637,283
—
849,300
$
594,911
$
801,022
$
551,333
$
637,283
$
$
$
$
$
2.00
1.98
425,143
429,283
2.17
5.25
55.00
2.11x
1.91x
$
$
$
$
$
1.42
1.41
418,907
423,015
1.81
3.94
38.65
1.99x
1.80x
2.02
2.00
$
$
1.40
1.38
$
$
1.61
1.60
395,958
400,086
1.40
3.98
$
$
— $
395,040
399,146
1.10
$
— $
— $
2.11x
2.05x
1.89x
1.89x
394,772
399,287
0.90
—
—
2.32x
2.32x
25
2016
2015
As of December 31,
2014 (3)
(In thousands)
2013 (3)
2012 (3)
Balance Sheet Data: (4)
Cash and cash equivalents (including restricted cash) (5)
$
Property and equipment, net
Total assets
Long-term obligations, including current portion
Redeemable noncontrolling interest
Total American Tower Corporation equity
936,442
10,517,258
30,879,150
18,533,465
1,091,220
6,763,895
$
462,879
9,866,424
26,904,272
17,119,009
—
6,651,679
$
473,698
7,590,112
21,263,565
14,540,341
—
3,953,560
$
446,492
7,177,728
20,213,937
14,408,550
—
3,534,165
$
437,934
5,765,856
14,045,810
8,709,757
—
3,573,101
_______________
(1) For the years ended December 31, 2016, 2015, 2014, 2013 and 2012, amount includes unrealized foreign currency losses of $23.4 million, $71.5 million,
$49.3 million, $211.7 million and $34.3 million, respectively.
(2) For the purpose of this calculation, “earnings” consists of income from continuing operations before income taxes and income on equity method
investments, as well as fixed charges (excluding interest capitalized and amortization of interest capitalized). “Fixed charges” consists of interest
expensed and capitalized, amortization of debt discounts, premiums and related issuance costs and the component of rental expense associated with
operating leases believed by management to be representative of the interest factor thereon.
(3) Balances have been revised to reflect debt issuance cost adjustments.
(4) Balances have been revised to reflect purchase accounting measurement period adjustments for the years ended December 31, 2014, 2013 and 2012.
(5) As of December 31, 2016, 2015, 2014, 2013 and 2012, amount includes $149.3 million, $142.2 million, $160.2 million, $152.9 million and $69.3 million,
respectively, of restricted funds pledged as collateral to secure obligations and cash, the use of which is otherwise limited by contractual provisions.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The discussion and analysis of our financial condition and results of operations that follow are based upon our
consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our financial
statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and
expenses and the related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may
differ from these estimates and such differences could be material to the financial statements. This discussion should be read in
conjunction with our consolidated financial statements included in this Annual Report and the accompanying notes, and the
information set forth under the caption “Critical Accounting Policies and Estimates” below.
We report our results in five segments: U.S. property, Asia property, EMEA property, Latin America property and Services.
In evaluating financial performance in each business segment, management uses, among other factors, segment gross margin
and segment operating profit (see note 20 to our consolidated financial statements included in this Annual Report).
Executive Overview
We are one of the largest global REITs and a leading independent owner, operator and developer of multitenant
communications real estate. Our primary business is the leasing of space on communications sites to wireless service providers,
radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a
number of other industries. In addition to the communications sites in our portfolio, we manage rooftop and tower sites for
property owners under various contractual arrangements. We also hold other telecommunications infrastructure and property
interests that we lease to communications service providers and third-party tower operators. We refer to this business as our
property operations, which accounted for 99% of our total revenues for the year ended December 31, 2016 and includes our
U.S. property segment, Asia property segment, EMEA property segment and Latin America property segment.
We also offer tower-related services, including site acquisition, zoning and permitting and structural analysis services,
which primarily support our site leasing business, including the addition of new tenants and equipment on our sites.
26
The following table details the number of communications sites, excluding managed sites, we owned or operated as of
December 31, 2016:
Domestic:
United States
Asia:
India
EMEA:
Germany
Ghana
Nigeria
South Africa
Uganda
EMEA total
Latin America (2):
Brazil
Chile
Colombia
Costa Rica
Mexico
Peru
Latin America total
Number of
Owned Towers
Number of
Operated
Towers (1)
Number of
Owned DAS
Sites
23,385
16,685
57,687
2,201
2,145
4,742
2,362
1,393
12,843
16,279
1,253
3,067
486
8,616
645
30,346
—
—
—
—
—
—
—
2,268
—
706
—
199
—
3,173
344
258
—
18
—
—
—
18
67
8
1
1
68
—
145
_______________
(1) Approximately 97% of the operated towers are held pursuant to long-term capital leases, including those subject to purchase options.
(2)
In Argentina, we own or operate urban telecommunications assets, fiber and the rights to utilize certain existing utility infrastructure for future
telecommunications equipment installation.
In general, our tenant leases with wireless carriers have an initial non-cancellable term of at least ten years, with multiple
renewal terms. Accordingly, nearly all of the revenue generated by our property operations during the year ended December 31,
2016 was recurring revenue that we should continue to receive in future periods. Based upon foreign currency exchange rates
and the tenant leases in place as of December 31, 2016, we expect to generate over $31 billion of non-cancellable tenant lease
revenue over future periods, absent the impact of straight-line lease accounting. Most of our tenant leases have provisions that
periodically increase the rent due under the lease, typically annually based on a fixed escalation (averaging approximately 3%
in the United States) or an inflationary index in our international markets, or a combination of both. In addition, certain of our
tenant leases provide for additional revenue to cover costs, such as ground rent or power and fuel costs.
The revenues generated by our property operations may be affected by cancellations of existing tenant leases. As
discussed above, most of our tenant leases with wireless carriers and broadcasters are multiyear contracts, which typically are
non-cancellable; however, in some instances, a lease may be cancelled upon the payment of a termination fee.
Revenue lost from either cancellations of leases at the end of their terms or rent negotiations historically has not had a
material adverse effect on the revenues generated by our property operations. During the year ended December 31, 2016, loss
of revenue from tenant lease cancellations or renegotiations represented less than 2% of our property operations revenues.
Property Operations Revenue Growth. Due to our diversified communications site portfolio, our tenant lease rates vary
considerably depending upon numerous factors, including, but not limited to, amount, type and position of tenant equipment on
the tower, remaining tower capacity and tower location. We measure the remaining tower capacity by assessing several factors,
including tower height, tower type, environmental conditions, existing equipment on the tower and zoning and permitting
regulations in effect in the jurisdiction where the tower is located. In many instances, tower capacity can be increased with
relatively modest tower augmentation expenditures.
The primary factors affecting the revenue growth in our property segments are:
27
• Growth in tenant billings, including:
• New revenue attributable to leases in place on day one on sites acquired or constructed since the beginning of the
prior-year period;
• New revenue attributable to leasing additional space on our sites (“colocations”) and lease amendments; and
• Contractual rent escalations on existing tenant leases, net of churn.
• Revenue growth from other items, including additional tenant payments to cover costs, such as ground rent or power
and fuel costs (“pass-through”) included in certain tenant leases, straight-line revenue and decommissioning.
We continue to believe that our site leasing revenue is likely to increase due to the growing use of wireless services and
our ability to meet the corresponding incremental demand for our wireless real estate. By adding new tenants and new
equipment for existing tenants on our sites, we are able to increase these sites’ utilization and profitability. We believe the
majority of our site leasing activity will continue to come from wireless service providers. Our site portfolio and our established
tenant base provide us with new business opportunities, which have historically resulted in consistent and predictable organic
revenue growth as wireless carriers seek to increase the coverage and capacity of their existing networks, while also deploying
next generation wireless technologies. In addition, we intend to continue to supplement our organic growth by selectively
developing or acquiring new sites in our existing and new markets where we can achieve our risk-adjusted return on investment
objectives. In our international markets, certain pass-through revenue amounts may fluctuate with changing power and fuel
costs.
Property Operations Organic Revenue Growth. Consistent with our strategy to increase the utilization and return on
investment of our sites, our objective is to add new tenants and new equipment for existing tenants through colocation and lease
amendments. Our ability to lease additional space on our sites is primarily a function of the rate at which wireless carriers
deploy capital to improve and expand their wireless networks. This rate, in turn, is influenced by the growth of wireless
services, the penetration of advanced wireless devices, the financial performance of our tenants and their access to capital and
general economic conditions.
Based on industry research and projections, we expect that a number of key industry trends will result in incremental
revenue opportunities for us:
•
•
In less advanced wireless markets where initial voice and data networks are still being deployed, we expect these
deployments to drive demand for our tower space as carriers seek to expand their footprints and increase the scope
and density of their networks. We have established operations in many of these markets at the early stages of wireless
development, which we believe will enable us to meaningfully participate in these deployments over the long term.
Subscribers’ use of wireless data continues to grow rapidly given increasing smartphone and other advanced device
penetration, the proliferation of bandwidth-intensive applications on these devices and the continuing evolution of the
mobile ecosystem. We believe carriers will be compelled to deploy additional equipment on existing networks while
also rolling out more advanced wireless networks to address coverage and capacity needs resulting from this
increasing wireless data usage.
• The deployment of advanced wireless technology across existing wireless networks will provide higher speed data
services and further enable fixed broadband substitution. As a result, we expect that our tenants will continue
deploying additional equipment across their existing networks.
• Wireless service providers compete based on the quality of their existing wireless networks, which is driven by
capacity and coverage. To maintain or improve their network performance as overall network usage increases, our
tenants continue deploying additional equipment across their existing sites while also adding new cell sites. We
anticipate increasing network densification over the next several years, as existing network infrastructure is
anticipated to be insufficient to account for rapidly increasing levels of wireless data usage.
• Wireless service providers continue to acquire additional spectrum, and as a result are expected to add additional sites
and equipment to their networks as they seek to optimize their network configuration and utilize additional spectrum.
As part of our international expansion initiatives, we have targeted markets in various stages of network development to
diversify our international exposure and position us to benefit from a number of different wireless technology deployments over
the long term. In addition, we have focused on building relationships with large multinational carriers such as Airtel, Telefónica
S.A. and Vodafone Group PLC. We believe that consistent carrier investments in their networks across our international
markets position us to generate meaningful organic revenue growth going forward.
28
In emerging markets, such as Ghana, India, Nigeria and Uganda, wireless networks tend to be significantly less advanced
than those in the United States, and initial voice networks continue to be deployed in underdeveloped areas. A majority of
consumers in these markets still utilize basic wireless services, predominantly on feature phones, while advanced device
penetration remains low. In more developed urban locations within these markets, early-stage data network deployments are
underway. Carriers are focused on completing voice network build-outs while also investing in initial data networks as wireless
data usage and smartphone penetration within their customer bases begin to accelerate.
In markets with rapidly evolving network technology, such as South Africa and most of the countries in Latin America
where we do business, initial voice networks, for the most part, have already been built out, and carriers are focused on 3G and
4G network build outs. Consumers in these regions are increasingly adopting smartphones and other advanced devices, and, as
a result, the usage of bandwidth-intensive mobile applications is growing materially. Recent spectrum auctions in these rapidly
evolving markets have allowed incumbent carriers to accelerate their data network deployments and have also enabled new
entrants to begin initial investments in data networks. Smartphone penetration and wireless data usage in these markets are
growing rapidly, which typically requires that carriers continue to invest in their networks in order to maintain and augment
their quality of service.
Finally, in markets with more mature network technology, such as Germany and France, carriers are focused on deploying
4G data networks to account for rapidly increasing wireless data usage among their customer base. With higher smartphone and
advanced device penetration and significantly higher per capita data usage, carrier investment in networks is focused on 4G
coverage and capacity.
We believe that the network technology migration we have seen in the United States, which has led to significantly denser
networks and meaningful new business commencements for us over a number of years, will ultimately be replicated in our less
advanced international markets. As a result, we expect to be able to leverage our extensive international portfolio of
approximately 104,470 communications sites and the relationships we have built with our carrier customers to drive
sustainable, long-term growth.
We have master lease agreements with certain of our tenants that provide for consistent, long-term revenue and reduce the
likelihood of churn. Our master lease agreements build and augment strong strategic partnerships with our tenants and have
significantly reduced colocation cycle times, thereby providing our tenants with the ability to rapidly and efficiently deploy
equipment on our sites.
Property Operations New Site Revenue Growth. During the year ended December 31, 2016, we grew our portfolio of
communications real estate through the acquisition and construction of approximately 45,310 sites. In a majority of our Asia,
EMEA and Latin America markets, the revenue generated from newly acquired or constructed sites resulted in increases in both
tenant and pass-through revenues (such as ground rent or power and fuel costs) and expenses. We continue to evaluate
opportunities to acquire communications real estate portfolios, both domestically and internationally, to determine whether they
meet our risk-adjusted hurdle rates and whether we believe we can effectively integrate them into our existing portfolio.
New Sites (Acquired or Constructed)
U.S.
Asia
EMEA
Latin America
2016
2015
2014
65
43,865
665
715
11,595
2,330
4,910
6,535
900
1,560
190
5,800
Property Operations Expenses. Direct operating expenses incurred by our property segments include direct site level
expenses and consist primarily of ground rent and power and fuel costs, some or all of which may be passed through to our
tenants, as well as property taxes, repairs and maintenance. These segment direct operating expenses exclude all segment and
corporate selling, general, administrative and development expenses, which are aggregated into one line item entitled Selling,
general, administrative and development expense in our consolidated statements of operations. In general, our property
segments’ selling, general, administrative and development expenses do not significantly increase as a result of adding
incremental tenants to our sites and typically increase only modestly year-over-year. As a result, leasing additional space to new
tenants on our sites provides significant incremental cash flow. We may, however, incur additional segment selling, general,
administrative and development expenses as we increase our presence in our existing markets or expand into new markets. Our
profit margin growth is therefore positively impacted by the addition of new tenants to our sites but can be temporarily diluted
by our development activities.
29
Services Segment Revenue Growth. As we continue to focus on growing our property operations, we anticipate that our
services revenue will continue to represent a small percentage of our total revenues.
Non-GAAP Financial Measures
Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation,
amortization and accretion, as adjusted (“Adjusted EBITDA”), Funds From Operations, as defined by the National Association
of Real Estate Investment Trusts (“NAREIT FFO”) attributable to American Tower Corporation common stockholders,
Consolidated Adjusted Funds From Operations (“Consolidated AFFO”) and AFFO attributable to American Tower Corporation
common stockholders.
We define Adjusted EBITDA as Net income before Income (loss) from equity method investments; Income tax benefit
(provision); Other income (expense); Gain (loss) on retirement of long-term obligations; Interest expense; Interest income;
Other operating income (expense); Depreciation, amortization and accretion; and stock-based compensation expense.
NAREIT FFO attributable to American Tower Corporation common stockholders is defined as net income before gains or
losses from the sale or disposal of real estate, real estate related impairment charges, real estate related depreciation,
amortization and accretion and dividends on preferred stock, and including adjustments for (i) unconsolidated affiliates and
(ii) noncontrolling interest. In this section, we refer to NAREIT FFO attributable to American Tower Corporation common
stockholders as “NAREIT FFO (common stockholders).”
We define Consolidated AFFO as NAREIT FFO (common stockholders) before (i) straight-line revenue and expense;
(ii) stock-based compensation expense; (iii) the deferred portion of income tax; (iv) non-real estate related depreciation,
amortization and accretion; (v) amortization of deferred financing costs, capitalized interest, debt discounts and premiums and
long-term deferred interest charges; (vi) other income (expense); (vii) gain (loss) on retirement of long-term obligations;
(viii) other operating income (expense); and adjustments for (ix) unconsolidated affiliates and (x) noncontrolling interests, less
cash payments related to capital improvements and cash payments related to corporate capital expenditures.
We define AFFO attributable to American Tower Corporation common stockholders for the year ended December 31,
2016 as Consolidated AFFO, excluding the impact of noncontrolling interests on both NAREIT FFO (common stockholders)
as well as the other adjustments included in the calculation of Consolidated AFFO. In this section, we refer to AFFO
attributable to American Tower Corporation common stockholders as “AFFO (common stockholders).”
Adjusted EBITDA, NAREIT FFO (common stockholders), Consolidated AFFO and AFFO (common stockholders) are
not intended to replace net income or any other performance measures determined in accordance with GAAP. None of Adjusted
EBITDA, NAREIT FFO (common stockholders), Consolidated AFFO or AFFO (common stockholders) represent cash flows
from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash
flows from operating activities, as a measure of liquidity or a measure of funds available to fund our cash needs, including our
ability to make cash distributions. Rather, Adjusted EBITDA, NAREIT FFO (common stockholders), Consolidated AFFO and
AFFO (common stockholders) are presented as we believe each is a useful indicator of our current operating performance. We
believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure
used by our management team for decision making purposes and for evaluating our operating segments’ performance; (2)
Adjusted EBITDA is a component underlying our credit ratings; (3) Adjusted EBITDA is widely used in the
telecommunications real estate sector to measure operating performance as depreciation, amortization and accretion may vary
significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-
operating factors are involved; (4) Consolidated AFFO is widely used in the telecommunications real estate sector to adjust
NAREIT FFO (common stockholders) for items that may otherwise cause material fluctuations in NAREIT FFO (common
stockholders) growth from period to period that would not be representative of the underlying performance of property assets in
those periods; (5) each provides investors with a meaningful measure for evaluating our period-to-period operating
performance by eliminating items that are not operational in nature; and (6) each provides investors with a measure for
comparing our results of operations to those of other companies, particularly those in our industry.
Our measurement of Adjusted EBITDA, NAREIT FFO (common stockholders), Consolidated AFFO and AFFO
(common stockholders) may not, however, be fully comparable to similarly titled measures used by other companies.
Reconciliations of Adjusted EBITDA, NAREIT FFO (common stockholders), Consolidated AFFO and AFFO (common
stockholders) to net income, the most directly comparable GAAP measure, have been included below.
30
Results of Operations
Years Ended December 31, 2016, 2015 and 2014
(in thousands, except percentages)
Revenue
Property
U.S.
Asia
EMEA
Latin America
Total property
Services
Total revenues
Year Ended December 31,
2016
2015
2014
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
$ 3,370,033
$ 3,157,501
$ 2,639,790
7%
20%
827,627
529,531
985,935
242,223
395,092
885,572
219,566
315,053
832,445
5,713,126
4,680,388
4,006,854
72,542
91,128
93,194
$ 5,785,668
$ 4,771,516
$ 4,100,048
242
34
11
22
(20)
21%
10
25
6
17
(2)
16%
Year ended December 31, 2016 - Revenue
U.S. property segment revenue growth of $212.5 million, or 7%, was attributable to:
• Tenant billings growth of $257.1 million, which was driven by:
• $128.8 million due to colocations and amendments;
• $91.3 million generated from newly acquired or constructed sites, including sites associated with the Verizon
Transaction;
• $34.1 million from contractual escalations, net of churn; and
• $2.9 million from other tenant billings.
Segment revenue growth was partially offset by a decrease of $44.6 million, primarily due to the impact of straight-line
accounting.
Asia property segment revenue growth of $585.4 million, or 242%, was attributable to:
• Tenant billings growth of $368.9 million, which was driven by:
•
•
•
•
$341.2 million generated from newly acquired sites, primarily due to the Viom Acquisition;
$22.2 million due to colocations and amendments;
$8.6 million generated from newly constructed sites;
Partially offset by,
A decrease of $2.2 million from churn in excess of contractual escalations;
A decrease of $0.9 million from other tenant billings;
• Pass-through revenue growth of $243.6 million, primarily due to the Viom Acquisition; and
• $6.3 million of other revenue growth, primarily due to the impact of straight-line accounting.
Segment revenue growth was partially offset by a decrease of $33.4 million attributable to the negative impact of foreign
currency translation related to fluctuations in Indian Rupee (“INR”).
EMEA property segment revenue growth of $134.4 million, or 34%, was attributable to:
• Tenant billings growth of $124.1 million, which was driven by:
$82.8 million generated from newly acquired or constructed sites, including sites acquired from Airtel in Nigeria;
$22.1 million due to colocations and amendments;
$17.4 million from contractual escalations, net of churn;
•
•
•
• $1.8 million from other tenant billings; and
• Pass-through revenue growth of $65.6 million;
• Partially offset by a decrease of $4.6 million, attributable in part to the impact of straight-line accounting.
31
Segment revenue growth was partially offset by a decrease of $50.7 million attributable to the negative impact of foreign
currency translation, which included, among others, $29.0 million related to fluctuations in Nigerian Naira (“NGN”), $12.1
million related to fluctuations in South African Rand (“ZAR”) and $5.5 million related to fluctuations in Ghanaian Cedi
(“GHS”).
Latin America property segment revenue growth of $100.4 million, or 11%, was attributable to:
• Tenant billings growth of $131.3 million, which was driven by:
•
•
•
•
$49.5 million generated from newly acquired or constructed sites;
$42.5 million from contractual escalations, net of churn;
$37.2 million due to colocations and amendments;
$2.1 million from other tenant billings;
• Pass-through revenue growth of $60.6 million; and
• An increase of $5.7 million in other revenue, primarily due to a $12.8 million impact of straight-line accounting offset
in part by a $7.0 million reduction in revenue resulting from a judicial reorganization of a tenant in Brazil.
Segment revenue growth was partially offset by a decrease of $97.2 million attributable to the negative impact of foreign
currency translation, which included, among others, $57.5 million related to fluctuations in Mexican Pesos (“MXN”), $28.2
million related to fluctuations in Brazilian Reais (“BRL”) and $9.4 million related to fluctuations in Colombian Peso (“COP”).
The decrease in services segment revenue of $18.6 million, or 20%, was primarily attributable to a decrease in zoning,
permitting and site acquisition projects.
Year ended December 31, 2015 - Revenue
U.S. property segment revenue growth of $517.7 million, or 20%, was attributable to:
• Tenant billings growth of $458.6 million, which was driven by:
• $296.5 million generated from newly acquired sites, primarily due to the Verizon Transaction;
• $141.3 million due to colocations and amendments;
• $19.0 million from contractual escalations, net of churn;
• $7.2 million generated from newly constructed sites;
• Partially offset by a decrease of $5.4 million in other tenant billings; and
• $59.1 million of other revenue growth, attributable in part to the impact of straight-line accounting.
Asia property segment revenue growth of $22.7 million, or 10%, was attributable to:
• Tenant billings growth of $25.7 million, which was driven by:
•
•
•
$11.2 million generated from newly acquired or constructed sites;
$17.4 million due to colocations and amendments;
Partially offset by,
A decrease of $2.8 million from churn in excess of contractual escalations;
A decrease of $0.1 million from other tenant billings;
• Pass-through revenue growth of $9.2 million; and
• $0.2 million of other revenue growth, primarily due to the impact of straight-line accounting.
Segment revenue growth was partially offset by a decrease of $12.4 million attributable to the negative impact of foreign
currency translation related to fluctuations in INR.
EMEA property segment revenue growth of $80.0 million, or 25%, was attributable to:
• Tenant billings growth of $113.6 million, which was driven by:
•
•
•
$80.5 million generated from newly acquired or constructed sites;
$16.7 million due to colocations and amendments;
$16.4 million from contractual escalations, net of churn; and
• Pass-through revenue growth of $33.1 million;
• Partially offset by a decrease of $4.4 million, primarily due to the $3.4 million impact of straight-line accounting.
32
Segment revenue growth was partially offset by a decrease of $62.3 million attributable to the negative impact of foreign
currency translation, which included $24.5 million related to fluctuations in GHS, $13.8 million related to fluctuations in ZAR,
$13.1 million related to fluctuations in Ugandan Shilling (“UGX”) and $10.9 million related to fluctuations in Euro.
Latin America property segment revenue growth of $53.1 million, or 6%, was attributable to:
• Tenant billings growth of $204.4 million, which was driven by:
•
•
•
•
$134.4 million generated from newly acquired or constructed sites, primarily due to the TIM Celular S.A.
(“TIM”) acquisition;
$41.6 million due to colocations and amendments;
$24.5 million from contractual escalations, net of churn;
$3.9 million from other tenant billings;
• Pass-through revenue growth of $103.3 million; and
• An increase of $13.2 million in other revenue, primarily due to a $14.5 million impact of straight-line accounting.
Segment revenue growth was partially offset by a decrease of $267.8 million attributable to the negative impact of foreign
currency translation, which included, among others, $168.3 million related to fluctuations in BRL, $63.9 million related to
fluctuations in MXN and $28.5 million related to fluctuations in COP.
The decrease in services segment revenue of $2.1 million, or 2%, was primarily attributable to a decrease in structural
engineering services.
Gross Margin
Property
U.S.
Asia
EMEA
Latin America
Total property
Services
Year Ended December 31,
2016
2015
2014
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
$ 2,636,630
$ 2,479,002
$ 2,124,048
6 %
17%
361,689
305,815
659,008
115,349
231,272
592,152
97,769
188,339
552,465
3,963,142
3,417,775
2,962,621
214
32
11
16
18
23
7
15
45,535
58,135
55,546
(22)%
5%
Year ended December 31, 2016 - Gross Margin
• The increase in U.S. property segment gross margin was primarily attributable to the increase in revenue described
above, partially offset by an increase in direct expenses of $54.9 million. Direct expense growth was primarily due to
sites associated with the Verizon Transaction.
• The increase in Asia property segment gross margin was primarily attributable to the increase in revenue described
above and a benefit of $18.6 million attributable to the impact of foreign currency translation on direct expenses,
partially offset by an increase in direct expenses of $357.7 million. Direct expense growth was primarily due to sites
associated with the Viom Acquisition.
• The increase in EMEA property segment gross margin was primarily attributable to the increase in revenue described
above and a benefit of $32.8 million attributable to the impact of foreign currency translation on direct expenses,
partially offset by an increase in direct expenses of $92.7 million. Direct expense growth was primarily due to sites
acquired from Airtel.
• The increase in Latin America property segment gross margin was primarily attributable to the increase in revenue
described above and a benefit of $32.3 million attributable to the impact of foreign currency translation on direct
expenses, partially offset by an increase in direct expenses of $65.6 million. Direct expense growth was primarily due
to newly acquired or constructed sites.
• The decrease in services segment gross margin was attributable to the decrease in revenue described above.
33
Year ended December 31, 2015 - Gross Margin
• The increase in U.S. property segment gross margin was primarily attributable to the increase in revenue described
above, partially offset by an increase in direct expenses of $162.8 million. Direct expense growth was primarily due to
sites associated with the Verizon Transaction.
• The increase in Asia property segment gross margin was primarily attributable to the increase in revenue described
above and a benefit of $6.5 million attributable to the impact of foreign currency translation on direct expenses. Gross
margin growth was partially offset by an increase in direct expenses of $11.6 million. Direct expense growth was
primarily due to newly acquired or constructed sites.
• The increase in EMEA property segment gross margin was primarily attributable to the increase in revenue described
above and a benefit of $23.9 million attributable to the impact of foreign currency translation on direct expenses,
partially offset by an increase in direct expenses of $61.0 million. Direct expense growth was primarily due to sites
acquired from Airtel.
• The increase in Latin America property segment gross margin was primarily attributable to the increase in revenue
described above and a benefit of $95.5 million attributable to the impact of foreign currency translation on direct
expenses, partially offset by an increase in direct expenses of $109.6 million. Direct expense growth was primarily due
to sites acquired from TIM.
• The increase in services segment gross margin was primarily attributable to efficiencies in our tower services.
Selling, General, Administrative and Development Expense (“SG&A”)
Year Ended December 31,
2016
2015
2014
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
Property
U.S.
Asia
EMEA
Latin America
Total property
Services
Other (1)
$
$
147,559
48,238
60,903
60,690
317,390
12,510
213,495
$
138,617
22,771
48,672
62,111
272,171
15,724
209,940
124,944
19,632
39,553
66,890
251,019
12,469
183,054
6%
112
25
(2)
17
(20)
2
Total selling, general, administrative and
development expense
$
543,395
$
497,835
$
446,542
9%
11%
16
23
(7)
8
26
15
11%
_______________
(1) Certain expenses previously reflected in segment SG&A for the year ended December 31, 2014 have been reclassified and are now reflected as Other
SG&A.
Year Ended December 31, 2016 - SG&A
• The increases in each of our U.S., Asia and EMEA property segments’ SG&A were primarily driven by increased
personnel costs to support our business, including additional costs associated the Viom Acquisition in our Asia
property segment. The EMEA property segment SG&A increase also included an increase in bad debt expense of $2.2
million and was partially offset by the impact of foreign currency fluctuations. The increase in the Asia property
segment SG&A was partially offset by the reversal of bad debt expense of $1.4 million.
• The decrease in our Latin America property segment SG&A was primarily due to the impacts of foreign currency
fluctuations and a decrease in bad debt expense, partially offset by increased personnel costs to support the growth of
our business.
• The decrease in our services segment SG&A was primarily attributable to a decrease in personnel costs from a lower
volume of business in our tower services group.
• The increase in other SG&A of $4.6 million was attributable to an increase in corporate and international headquarters
SG&A, partially offset by a decrease in stock-based compensation expense of $1.0 million.
34
Year Ended December 31, 2015 - SG&A
• The increases in our U.S., Asia and EMEA property segments’ SG&A were primarily driven by increasing personnel
costs to support our business, including additional costs associated with transactions such as the Verizon Transaction in
the U.S. and the Airtel acquisition in EMEA. The EMEA property SG&A increase included an increase in bad debt
expense and was partially offset by a decrease attributable to the impacts of foreign currency fluctuations.
• The decrease in our Latin America property segment SG&A was primarily due to the impact of foreign currency
fluctuations, partially offset by increased personnel costs to support the growth of our business and an increase in bad
debt expense.
• The increase in services segment SG&A was primarily due to increased personnel costs.
• The increase in other SG&A was due to an increase in corporate SG&A of $16.7 million and an increase in stock-
based compensation expense of $10.2 million. Corporate SG&A reflects an increase in legal costs, as corporate SG&A
during the year ended December 31, 2014 was favorably impacted by the recovery of legal expenses. In addition,
during the year ended December 31, 2015, corporate SG&A increased due to an increase in personnel costs to support
our business.
Operating Profit
Property
U.S.
Asia
EMEA
Latin America
Total property
Services
Year Ended December 31,
2016
2015
2014
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
$ 2,489,071
313,451
244,912
598,318
3,645,752
33,025
$ 2,340,385
92,578
182,600
530,041
3,145,604
42,411
$ 1,999,104
78,137
148,786
485,575
2,711,602
43,077
6 %
239
34
13
16
(22)%
17 %
18
23
9
16
(2)%
Year Ended December 31, 2016 - Operating Profit
The growth in operating profit for each of our property segments was primarily attributable to an increase in our segment
gross margin. The increases in our U.S., Asia and EMEA property segments were partially offset by increases in our segment
SG&A. The growth in operating profit in our Latin America property segment was also attributable to a slight decrease in our
segment SG&A.
The decrease in operating profit for our services segment was primarily attributable to a decrease in our segment gross
margin, partially offset by a decrease in our segment SG&A.
Year Ended December 31, 2015 - Operating Profit
The growth in operating profit for each of our U.S., Asia and EMEA property segments was primarily attributable to an
increase in our segment gross margin, partially offset by an increase in our segment SG&A.
The growth in operating profit in our Latin America property segment was primarily attributable to an increase in our
segment gross margin and a decrease in our segment SG&A.
The decrease in services segment operating profit was primarily attributable to an increase in our services segment SG&A
and was partially offset by an increase in our segment gross margin.
35
Depreciation, Amortization and Accretion
Depreciation, amortization and accretion
Year Ended December 31,
2016
$ 1,525,635
2015
$ 1,285,328
2014
$ 1,003,802
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
19%
28%
The increases in depreciation, amortization and accretion expense were primarily attributable to costs associated with the
acquisition, lease or construction of new sites since the beginning of the prior-year period, which resulted in an increase in
property and equipment and intangible assets subject to amortization.
Other Operating Expenses
Other operating expenses
$
73,220
$
66,696
$
68,517
10%
(3)%
Year Ended December 31,
2016
2015
2014
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
The increase in other operating expenses for the year ended December 31, 2016 was primarily attributable to an increase
of $23.8 million in losses on sales or disposals of assets and impairments, partially offset by a decrease of $17.3 million in
integration, acquisition and merger related expenses.
The decrease in other operating expenses for the year ended December 31, 2015 was primarily attributable to a net
decrease of $3.1 million in integration, acquisition and merger related expenses, partially offset by an increase of $1.3 million
in losses on sales or disposals of assets and impairments.
Total Other Expense
Total Other expense
Year Ended December 31,
2016
727,169
$
2015
782,827
$
2014
621,218
$
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
(7)%
26%
Total other expense consists primarily of interest expense and realized and unrealized foreign currency gains and losses.
We record unrealized foreign currency gains or losses as a result of foreign currency fluctuations primarily associated with our
intercompany notes and similar unaffiliated balances denominated in a currency other than the subsidiaries’ functional
currencies.
The decrease in total other expense during the year ended December 31, 2016 was primarily due to foreign currency
losses of $48.9 million in the current period, compared to foreign currency losses of $134.7 million in the prior-year period, and
a gain on retirement of long-term obligations of $1.2 million in the current period attributable to the repayment of the Secured
Cellular Site Revenue Notes, Series 2012-1 Class A and the Secured Cellular Site Revenue Notes, Series 2010-1, Class C
compared to the year ended December 31, 2015, where we recorded a loss of $79.6 million, primarily due to the redemption of
the 7.000% senior notes due 2017 and 4.625% senior notes due 2015. This decrease was partially offset by incremental interest
expense of $121.2 million, due to an increase of $2.1 billion in our average debt outstanding and an increase in our annualized
weighted average cost of borrowing from 3.67% to 3.92%.
The increase in total other expense during the year ended December 31, 2015 was primarily due to foreign currency
losses of $134.7 million in the year ended December 31, 2015, compared to foreign currency losses of $63.2 million in the
prior-year period, and a loss on retirement of long-term obligations of $79.6 million during the year ended December 31, 2015,
primarily due to the redemption of the 7.000% senior notes due 2017 and 4.625% senior notes due 2015, compared to the year
ended December 31, 2014, where we recorded a loss of $3.5 million. The increase in total other expense was also attributable to
incremental interest expense of $15.7 million, due to an increase of $1.9 billion in our average debt outstanding, partially offset
by a decrease in our annualized weighted average cost of borrowing from 4.06% to 3.67%.
36
Income Tax Provision
Income tax provision
Effective tax rate
Year Ended December 31,
2016
$ 155,501
2015
$ 157,955
2014
62,505
$
13.8%
19.0%
7.2%
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
(2)%
153%
As a REIT, we may deduct earnings distributed to stockholders against the income generated by our REIT operations. In
addition, we are able to offset certain income by utilizing our NOLs, subject to specified limitations. Consequently, the
effective tax rate (“ETR”) on income from continuing operations for each of the years ended December 31, 2016, 2015 and
2014 differs from the federal statutory rate.
The decrease in the income tax provision for the year ended December 31, 2016 was primarily attributable to the non-
recurrence of the one-time charge related to the MIPT tax election described below, offset by an increase in 2016 foreign
taxable earnings, largely due to the Viom Acquisition, as well as uncertain tax positions.
Effective July 25, 2015, we filed a tax election, pursuant to which MIPT no longer operates as a separate REIT for federal
and state income tax purposes. In connection with this and related elections, we incurred a one-time cash tax charge of $93.0
million and a one-time deferred income tax benefit of $5.8 million in the year ended December 31, 2015. We also recorded a
charge of $13.1 million resulting from a change in income tax law in Ghana. These items caused an increase in the income tax
provision for the year ended December 31, 2015.
Net Income / Adjusted EBITDA and Net Income / NAREIT FFO attributable to American Tower Corporation common
stockholders / Consolidated AFFO / AFFO attributable to American Tower Corporation common stockholders
Net income
Income tax provision
Other expense
(Gain) loss on retirement of long-term obligations
Interest expense
Interest income
Other operating expenses
$
Year Ended December 31,
$
2016
970,359
155,501
47,790
(1,168)
717,125
(25,618)
73,220
2015
672,007
157,955
134,960
79,606
595,949
(16,479)
66,696
2014
803,199
$
62,505
62,060
3,473
580,234
(14,002)
68,517
Depreciation, amortization and accretion
1,525,635
1,285,328
1,003,802
Stock-based compensation expense
Adjusted EBITDA
89,898
$ 3,552,742
90,537
$ 3,066,559
80,153
$ 2,649,941
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
44%
(2)
(65)
(101)
20
55
10
19
(1)
16%
(16)%
153
117
2,192
3
18
(3)
28
13
16 %
37
Net income
Real estate related depreciation, amortization
and accretion
Losses from sale or disposal of real estate and
real estate related impairment charges
Dividends on preferred stock
Adjustments for unconsolidated affiliates and
noncontrolling interest
Year Ended December 31,
2016
970,359
$
2015
672,007
$
2014
803,199
$
Percent
Change 2016
vs 2015
Percent
Change 2015
vs 2014
44%
(16)%
1,358,927
1,128,340
878,714
54,465
(107,125)
29,427
(90,163)
18,160
(23,888)
20
85
19
28
62
277
(88,133)
(6,429)
(1,815)
(1,271)
(254)
NAREIT FFO attributable to American
Tower Corporation common stockholders $ 2,188,493
(131,660)
Straight-line revenue
Straight-line expense
Stock-based compensation expense
Deferred portion of income tax
Non-real estate related depreciation,
amortization and accretion
Amortization of deferred financing costs,
capitalized interest, debt discounts and
premiums and long-term deferred interest
charges
Other expense (1)
(Gain) loss on retirement of long-term
obligations
Other operating expenses (2)
Capital improvement capital expenditures
Corporate capital expenditures
Adjustments for unconsolidated affiliates and
noncontrolling interest
MIPT one-time cash tax charge (3)
$ 1,733,182
(154,959)
56,076
$ 1,674,370
(123,716)
38,378
90,537
897
80,153
(6,707)
26
(15)
21
(1)
6,506
67,764
89,898
59,260
166,708
156,988
125,088
6
23,139
47,790
22,575
134,960
(1,168)
18,755
(110,249)
(16,438)
88,133
—
79,606
37,269
(89,867)
(16,447)
6,429
93,044
8,622
62,060
3,473
50,357
(75,041)
(24,146)
1,815
—
2
(65)
(101)
(50)
23
—
1,271
(100)
16%
Consolidated AFFO
$ 2,490,425
$ 2,150,290
$ 1,814,706
Adjustments for unconsolidated affiliates and
noncontrolling interests (4)
AFFO attributable to American Tower
Corporation common stockholders
(90,266)
(33,982)
(23,554)
166%
$ 2,400,159
$ 2,116,308
$ 1,791,152
13%
_______________
(1) Primarily includes realized and unrealized losses on foreign currency exchange rate fluctuations.
(2) Primarily includes acquisition-related costs and integration costs.
(3) As the one-time tax charge incurred in connection with the MIPT tax election is nonrecurring, we do not believe it is an indication of our operating
performance and believe it is more meaningful to present AFFO excluding this impact. Accordingly, we present AFFO for the year ended December 31,
2015 before this charge.
Includes adjustments for the impact on both NAREIT FFO attributable to American Tower Corporation common stockholders as well as the other line
items included in the calculation of Consolidated AFFO.
(4)
Year Ended December 31, 2016 - Adjusted EBITDA & AFFO metrics
The increase in net income was primarily due to an increase in our operating profit, a decrease in foreign currency losses
included in other expense, a reduction of $80.8 million in loss on retirement of long-term obligations, partially offset by
increases in depreciation, amortization and accretion expense and interest expense.
The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin and was partially offset
by an increase in SG&A of $46.6 million, excluding the impact of stock-based compensation expense.
38
4
25
46
13
113
26
162
117
2,192
(26)
20
(32)
254
N/A
18 %
44 %
18 %
The growth in Consolidated AFFO and AFFO attributable to American Tower Corporation common stockholders was
primarily attributable to the increase in our operating profit, partially offset by increases in cash paid for interest and income
taxes, other than the MIPT one-time cash tax charge, and an increase in capital improvement expenditures.
Year Ended December 31, 2015 - Adjusted EBITDA & AFFO metrics
The decrease in net income was primarily due to increases in depreciation, amortization and accretion expense, income
tax provision, loss on retirement of long-term obligations, other expense, other SG&A and interest expense, which were
partially offset by an increase in our operating profit.
The increase in Adjusted EBITDA was primarily attributable to the increase in our gross margin and was partially offset
by an increase in SG&A of $41.1 million, excluding the impact of stock-based compensation expense.
The growth in Consolidated AFFO and AFFO attributable to American Tower Corporation common stockholders for the
year ended December 31, 2015 was primarily attributable to the increase in our operating profit and was partially offset by
increases in dividends on preferred stock, corporate SG&A and a net increase in capital improvement and corporate capital
expenditures.
39
Liquidity and Capital Resources
Overview
During the year ended December 31, 2016, we increased our financial flexibility and our ability to grow our business
while maintaining our long-term financial policies. Our significant 2016 financing transactions included:
• Registered public offerings of $750.0 million aggregate principal amount of 3.300% senior unsecured notes due 2021
(the “3.300% Notes”) and $500.0 million aggregate principal amount of 4.400% senior unsecured notes due 2026
(the “4.400% Notes”).
• A registered public offering of $1.0 billion aggregate principal amount of 3.375% senior unsecured notes due 2026
(the “3.375% Notes”).
• Registered public offerings of $600.0 million aggregate principal amount of 2.250% senior unsecured notes due 2022
(the “2.250% Notes”) and $400.0 million aggregate principal amount of 3.125% senior unsecured notes due 2027
(the “3.125% Notes”).
• Amendment of our multicurrency senior unsecured revolving credit facility entered into in June 2013, as amended (the
“2013 Credit Facility”), our senior unsecured revolving credit facility entered into in January 2012, as amended and
restated in September 2014, as further amended (the “2014 Credit Facility”) and our unsecured term loan entered into
in October 2013, as amended (the “Term Loan”) to, among other things, extend the maturity dates by one year.
As a holding company, our cash flows are derived primarily from the operations of, and distributions from, our operating
subsidiaries or funds raised through borrowings under our credit facilities and debt or equity offerings.
The following table summarizes our liquidity as of December 31, 2016 (in thousands):
Available under the 2013 Credit Facility
Available under the 2014 Credit Facility
Letters of credit
Total available under credit facilities, net
Cash and cash equivalents (1)
Total liquidity
$ 2,210,025
615,000
(10,512)
2,814,513
787,161
$ 3,601,674
_______________
(1)
Includes $238.7 million from the establishment of our joint venture, ATC Europe, to which we contributed our German business in exchange for an
investment from our partner, PGGM.
Subsequent to December 31, 2016, we had net borrowings of $1.0 billion under the 2013 Credit Facility and the 2014
Credit Facility, which we used to fund the acquisition of FPS in France, the redemption of all outstanding 7.25% senior
unsecured notes due 2019 (the “7.25% Notes”), the repayment of all amounts outstanding under the 2012 GTP Notes and the
Unison Notes and for general corporate purposes.
Summary cash flow information is set forth below for the years ended December 31, (in thousands):
Net cash provided by (used for):
Operating activities
Investing activities
Financing activities
Net effect of changes in foreign currency exchange rates on cash and cash
equivalents
Net increase in cash and cash equivalents
2016
2015
2014
$ 2,703,604
(2,107,446)
(99,294)
$ 2,183,052
(7,741,735)
5,589,101
$ 2,134,589
(1,949,548)
(134,591)
(30,389)
466,475
$
(23,224)
7,194
$
(30,534)
19,916
$
We use our cash flows to fund our operations and investments in our business, including tower maintenance and
improvements, communications site construction and managed network installations and tower and land acquisitions.
Additionally, we use our cash flows to make distributions, including distributions of our REIT taxable income to maintain our
qualification for taxation as a REIT under the Code. We may also repay or repurchase our existing indebtedness from time to
time. We typically fund our international expansion efforts primarily through a combination of cash on hand, intercompany debt
and equity contributions.
40
As of December 31, 2016, we had total outstanding indebtedness of $18.7 billion, with a current portion of $238.8
million. During the year ended December 31, 2016, we generated sufficient cash flow from operations to fund our capital
expenditures and debt service obligations, as well as our required distributions. We believe the cash generated by operating
activities during the year ending December 31, 2017 will be sufficient to fund our required distributions, capital expenditures,
debt service obligations (interest and principal repayments) and signed acquisitions. As of December 31, 2016, we had $423.0
million of cash and cash equivalents held by our foreign subsidiaries, of which $183.9 million was held by our joint ventures.
While certain subsidiaries may pay us interest or principal on intercompany debt, it has not been our practice to repatriate
earnings from our foreign subsidiaries primarily due to our ongoing expansion efforts and related capital needs. However, in the
event that we do repatriate any funds, we may be required to accrue and pay taxes.
Cash Flows from Operating Activities
For the year ended December 31, 2016, cash provided by operating activities increased $520.6 million as compared to the
year ended December 31, 2015. The primary factors that impacted cash provided by operating activities as compared to the
year ended December 31, 2015, include:
• An increase in our operating profit of $490.8 million;
• An increase of approximately $67.1 million in cash paid for interest; and
• A decrease of approximately $60.8 million in cash paid for taxes.
For the year ended December 31, 2015, cash provided by operating activities increased $48.5 million as compared to the
year ended December 31, 2014. The primary factors that impacted cash provided by operating activities as compared to the
year ended December 31, 2014, include:
• An increase in our operating profit of $433.3 million;
• An increase of approximately $87.8 million in cash paid for taxes, driven primarily by the MIPT one-time cash tax
charge of $93.0 million;
• A decrease in capital contributions, tenant settlements and other prepayments of approximately $99.0 million;
• An increase of approximately $29.9 million in cash paid for interest;
• A decrease of approximately $34.9 million in termination and decommissioning fees;
• A decrease of approximately $49.0 million in tenant receipts due to timing; and
• A decrease due to the non-recurrence of a 2014 value added tax refund of approximately $60.3 million.
Cash Flows from Investing Activities
Our significant investing activities during the year ended December 31, 2016 are highlighted below:
• We spent approximately $1.1 billion for the Viom Acquisition.
• We spent $701.4 million for capital expenditures, as follows (in millions):
Discretionary capital projects (1)
Ground lease purchases
Capital improvements and corporate expenditures (2)
Redevelopment
Start-up capital projects
Total capital expenditures
$
$
149.7
153.3
126.7
147.4
124.3
701.4
_______________
(1)
(2)
Includes the construction of 1,869 communications sites globally.
Includes $18.9 million of capital lease payments included in Repayments of notes payable, credit facilities, term loan, senior notes and capital leases in
the cash flow from financing activities in our consolidated statement of cash flows.
Our significant investing transactions in 2015 included the following:
• We spent $5.059 billion for the Verizon Transaction.
• We spent $796.9 million for the acquisition of 5,483 communications sites from TIM in Brazil.
• We spent $1.1 billion for the acquisition of 4,716 communications sites from certain of Airtel’s subsidiaries in Nigeria.
41
• We spent $728.8 million for capital expenditures, as follows (in millions):
Discretionary capital projects (1)
Ground lease purchases
Capital improvements and corporate expenditures
Redevelopment
Start-up capital projects
Total capital expenditures
$
$
245.1
140.5
106.3
162.1
74.8
728.8
_______________
(1)
Includes the construction of 3,235 communications sites globally and the installation of 17 shared generators domestically.
We plan to continue to allocate our available capital, after satisfying our distribution requirements, among investment
alternatives that meet our return on investment criteria, while maintaining our commitment to our long-term financial policies.
Accordingly, we expect to continue to deploy our capital through our annual capital expenditure program, including land
purchases and new site construction, and through acquisitions. We expect that our 2017 total capital expenditures will be
between $800 million and $900 million, as follows (in millions):
Discretionary capital projects (1)
Ground lease purchases
Capital improvements and corporate expenditures
Redevelopment
Start-up capital projects
Total capital expenditures
_______________
(1)
Includes the construction of approximately 2,500 to 3,500 communications sites globally.
Cash Flows from Financing Activities
Our significant financing transactions were as follows (in millions):
$
$
145 to $
150 to
155 to
185 to
165 to
800 to $
175
160
165
215
185
900
Proceeds from issuance of senior notes, net
(Repayments of) proceeds from credit facilities, net
(Repayments of) proceeds from term loan
Distributions paid on common and preferred stock
Repayments of securitized notes
Proceeds from the issuance of common stock, net
Proceeds from the issuance of preferred stock, net
Proceeds from issuance of securitized notes
Repayment of senior notes
Senior Notes
Year ended December 31,
2016
2015
2014
$
3,236.4
(1,277.1)
(1,000.0)
(993.2)
(161.1)
—
—
—
—
$
1,492.3
$
2,105.0
500.0
(795.5)
(964.9)
2,440.3
1,337.9
875.0
(1,100.0)
1,415.8
(841.0)
—
(420.6)
—
—
583.1
—
—
3.300% Notes and 4.400% Notes Offerings. On January 12, 2016, we completed registered public offerings of the 3.300%
Notes and the 4.400% Notes. The net proceeds from these offerings were approximately $1,237.2 million, after deducting
commissions and estimated expenses. We used the proceeds to repay existing indebtedness under the 2013 Credit Facility and
for general corporate purposes.
The 3.300% Notes will mature on February 15, 2021 and bear interest at a rate of 3.300% per annum. The 4.400% Notes
will mature on February 15, 2026 and bear interest at a rate of 4.400% per annum. Accrued and unpaid interest on the notes will
be payable in U.S. Dollars semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2016.
42
Interest on the notes is computed on the basis of a 360-day year comprised of twelve 30-day months and commenced accruing
on January 12, 2016.
3.375% Notes Offering. On May 13, 2016, we completed a registered public offering of the 3.375% Notes. The net
proceeds from this offering were approximately $981.5 million, after deducting commissions and estimated expenses. We used
the proceeds to repay existing indebtedness under the 2013 Credit Facility.
The 3.375% Notes will mature on October 15, 2026 and bear interest at a rate of 3.375% per annum. Accrued and unpaid
interest on the notes will be payable in U.S. Dollars semi-annually in arrears on April 15 and October 15 of each year,
beginning on October 15, 2016. Interest on the notes is computed on the basis of a 360-day year comprised of twelve 30-day
months and commenced accruing on May 13, 2016.
2.250% Notes and 3.125% Notes Offerings. On September 30, 2016, we completed registered public offerings of the
2.250% Notes and the 3.125% Notes. The net proceeds from these offerings were approximately $990.6 million, after
deducting commissions and estimated expenses. We used the proceeds to repay existing indebtedness under the Term Loan.
The 2.250% Notes will mature on January 15, 2022 and bear interest at a rate of 2.250% per annum. The 3.125% Notes
will mature on January 15, 2027 and bear interest at a rate of 3.125% per annum. Accrued and unpaid interest on the notes will
be payable in U.S. Dollars semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2017.
Interest on the notes is computed on the basis of a 360-day year comprised of twelve 30-day months and commenced accruing
on September 30, 2016. We entered into interest rate swaps, which were designated as fair value hedges at inception, to hedge
against changes in fair value of the debt under the 2.250% Notes resulting from changes in interest rates. As of December 31,
2016, the interest rate on the 2.250% Notes, after giving effect to the interest rate swap agreements, was 1.97%.
We may redeem each series of notes at any time, subject to the terms of the applicable supplemental indenture, in whole
or in part, at a redemption price equal to 100% of the principal amount of the notes plus a make-whole premium, together with
accrued interest to the redemption date. If we redeem the 3.300% Notes on or after January 15, 2021, the 4.400% Notes on or
after November 15, 2025, the 3.375% Notes on or after July 15, 2026 or the 3.125% Notes on or after October 15, 2026, we
will not be required to pay a make-whole premium. In addition, if we undergo a change of control and corresponding ratings
decline, each as defined in the applicable supplemental indenture, we may be required to repurchase all of the applicable notes
at a purchase price equal to 101% of the principal amount of such notes, plus accrued and unpaid interest (including additional
interest, if any), up to but not including the repurchase date. The notes rank equally with all of our other senior unsecured debt
and are structurally subordinated to all existing and future indebtedness and other obligations of our subsidiaries.
Each applicable supplemental indenture for the notes contains certain covenants that restrict our ability to merge,
consolidate or sell assets and our (together with our subsidiaries’) ability to incur liens. These covenants are subject to a number
of exceptions, including that we, and our subsidiaries, may incur certain liens on assets, mortgages or other liens securing
indebtedness if the aggregate amount of such liens does not exceed 3.5x Adjusted EBITDA, as defined in the applicable
supplemental indenture.
Redemption of 7.25% Senior Notes. On February 10, 2017, we redeemed all of the outstanding 7.25% Notes. In
accordance with the redemption provisions and the indenture for the 7.25% Notes, the 7.25% Notes were redeemed at a price
equal to 112.0854% of the principal amount, plus accrued and unpaid interest up to, but excluding, February 10, 2017, for an
aggregate redemption price of $341.4 million, including $5.1 million of accrued and unpaid interest, which was funded with
borrowings under the 2013 Credit Facility and cash on hand. Upon completion of this redemption, none of the 7.25% Notes
remained outstanding.
Bank Facilities
In November 2016, we entered into amendment agreements (the “Credit Facility Amendments”) with respect to the 2013
Credit Facility, the 2014 Credit Facility and the Term Loan, which, among other things, (i) extend the maturity dates by one
year to June 28, 2020, January 31, 2022 and January 31, 2022, respectively, (ii) increase the maximum Revolving Loan
Commitments, after giving effect to any Incremental Commitments (each as defined in the loan agreements for each of the
2013 Credit Facility and the 2014 Credit Facility) to $4.25 billion and $3.00 billion under the 2013 Credit Facility and the 2014
Credit Facility, respectively, (iii) amend the limitation on indebtedness of, and guaranteed by, our subsidiaries to the greater of
(x) $2.25 billion and (y) 50% of Adjusted EBITDA (as defined in the agreements for each of the 2013 Credit Facility, the 2014
Credit Facility and the Term Loan) of us and our subsidiaries on a consolidated basis and (iv) amend the limitation of our
permitted ratio of Total Debt to Adjusted EBITDA (each as defined in the agreements for each of the 2013 Credit Facility, the
2014 Credit Facility and the Term Loan) to be no greater than (x) 6.00 to 1.00 as of the end of each fiscal quarter or (y) 7.00 to
43
1.00 as of the specified time periods after the occurrence of a Qualified Acquisition (as defined in each of the Credit Facility
Amendments).
2013 Credit Facility. We have the ability to borrow up to $2.75 billion under the 2013 Credit Facility, which includes
a $1.0 billion sublimit for multicurrency borrowings, a $200.0 million sublimit for letters of credit and a $50.0 million sublimit
for swingline loans. During the year ended December 31, 2016, we borrowed an aggregate of $1.9 billion, which included
borrowings of 38.0 million Euro ($42.9 million at the date of borrowing) by one of our Germany subsidiaries, and repaid an
aggregate of $2.6 billion of revolving indebtedness. We primarily used the borrowings to fund the Viom Acquisition and for
general corporate purposes. We currently have $3.2 million of undrawn letters of credit and maintain the ability to draw down
and repay amounts under the 2013 Credit Facility in the ordinary course.
2014 Credit Facility. We have the ability to borrow up to $2.0 billion under the 2014 Credit Facility, which includes a
$200.0 million sublimit for letters of credit and a $50.0 million sublimit for swingline loans. During the year ended
December 31, 2016, we borrowed an aggregate of $245.0 million and repaid an aggregate of $840.0 million of revolving
indebtedness. We currently have $7.3 million of undrawn letters of credit and maintain the ability to draw down and repay
amounts under the 2014 Credit Facility in the ordinary course.
Term Loan. During the year ended December 31, 2016, we repaid $1.0 billion of indebtedness under the Term Loan.
The Term Loan, the 2013 Credit Facility and the 2014 Credit Facility do not require amortization of principal and may be
paid prior to maturity in whole or in part at our option without penalty or premium. We have the option of choosing either a
defined base rate or the London Interbank Offered Rate (“LIBOR”) as the applicable base rate for borrowings under the Term
Loan, the 2013 Credit Facility and the 2014 Credit Facility. The interest rates range between 1.000% to 2.000% above LIBOR
for LIBOR based borrowings or up to 1.000% above the defined base rate for base rate borrowings, in each case based upon
our debt ratings. The current margin over LIBOR and the base rate for each of the Term Loan, the 2013 Credit Facility and the
2014 Credit Facility is 1.250% and 0.250%, respectively.
The 2013 Credit Facility and the 2014 Credit Facility are subject to two optional renewal periods. We must pay a
quarterly commitment fee on the undrawn portion of the 2013 Credit Facility and the 2014 Credit Facility, which ranges from
0.100% to 0.400% per annum, based upon our debt ratings, and is currently 0.150%.
The loan agreements for each of the Term Loan, the 2013 Credit Facility and the 2014 Credit Facility contain certain
reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt,
guaranties, sales of assets and liens) with which we must comply. Failure to comply with the financial and operating covenants
of the loan agreements could not only prevent us from being able to borrow additional funds under the revolving credit
facilities, but may constitute a default, which could result in, among other things, the amounts outstanding, including all
accrued interest and unpaid fees, becoming immediately due and payable.
India indebtedness. Amounts outstanding and key terms of the India indebtedness consisted of the following as of
December 31, 2016 (in millions, except percentages):
Amount
Outstanding
(INR)
Amount
Outstanding
(USD)
Term loans
Debenture
Working capital facilities
31,326
6,000
0
$
$
$
Interest Rate (Range)
8.15% - 11.15%
Maturity Date (Range)
March 31, 2017 - November 30, 2024
9.90%
April 28, 2020
461.2
88.3
0
8.70% - 11.70%
January 31, 2017 - October 23, 2017
The India indebtedness includes several term loans, ranging from one to ten years, which are generally secured by the
borrower’s short-term and long-term assets. Each of the term loans bear interest at the applicable bank’s Marginal Cost of
Funds based Lending Rate (as defined in the applicable agreement) or base rate, plus a spread. Interest rates on the term loans
are fixed until certain reset dates. Generally, the term loans can be repaid without penalty on the reset dates; repayments at dates
other than the reset dates are subject to prepayment penalties, typically of 1% to 2%. Scheduled repayment terms include either
ratable or staggered amortization with repayments typically commencing between six and 36 months after the initial
disbursement of funds.
44
The debenture is secured by the borrower’s long-term assets, including property and equipment and intangible assets. The
debenture bears interest at a base rate plus a spread of 0.6%. The base rate is set in advance for each quarterly coupon period.
Should the actual base rate be between 9.75% and 10.25%, the revised base rate is assumed to be 10.00% for purposes of the
reset. Additionally, the spread is subject to reset 36 and 48 months from the issuance date of April 27, 2015. The holders of the
debenture must reach a consensus on the revised spread and the borrower must redeem all of the debentures held by holders
from whom consensus is not achieved. Additionally, the debenture is required to be redeemed by the borrower if it does not
maintain a minimum credit rating.
The India indebtedness includes several working capital facilities, most of which are subject to annual renewal, and which
are generally secured by the borrower’s short-term and long-term assets. The working capital facilities bear interest at rates that
are comprised of the applicable bank’s Marginal Cost of Funds based Lending Rate (as defined in the applicable agreement) or
base rate, plus a spread. Generally, the working capital facilities are payable on demand prior to maturity.
Viom preference shares. As of December 31, 2016, ATC TIPL had 166,666,666 mandatorily redeemable preference
shares (the “Preference Shares”) outstanding, which are required to be redeemed in cash. Accordingly, we recognized debt of
1.67 billion INR ($24.5 million) related to the Preference Shares.
Unless redeemed earlier, the Preference Shares will be redeemed in two equal installments on March 26, 2017 and March
26, 2018 in an amount equal to ten INR per share along with a redemption premium, as defined in the investment agreement,
which equates to a compounded return of 13.5% per annum. ATC TIPL, at its option, may redeem the Preference Shares prior
to the aforementioned dates, subject to an additional 2% redemption premium.
Stock Repurchase Program. In March 2011, our Board of Directors approved a $1.5 billion stock repurchase program,
pursuant to which we are authorized to purchase up to an additional $1.1 billion of our common stock. Since September 2013,
we have temporarily suspended repurchases under the program. However, we may, at any time, elect to resume repurchases
under the program.
Sales of Equity Securities. We receive proceeds from sales of our equity securities pursuant to our employee stock
purchase plan (the “ESPP”) and upon exercise of stock options granted under our equity incentive plans. For the year ended
December 31, 2016, we received an aggregate of $92.5 million in proceeds upon exercises of stock options and from the ESPP.
Distributions. As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT
taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we
have distributed, and expect to continue to distribute, all or substantially all of our REIT taxable income after taking into
consideration our utilization of NOLs.
The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will
depend on various factors, a number of which may be beyond our control, including our financial condition and operating cash
flows, the amount required to maintain our qualification for taxation as a REIT and reduce any income and excise taxes that we
otherwise would be required to pay, limitations on distributions in our existing and future debt and preferred equity instruments,
our ability to utilize NOLs to offset our distribution requirements, limitations on our ability to fund distributions using cash
generated through our TRSs and other factors that our Board of Directors may deem relevant.
We have two series of preferred stock outstanding, the Series A Preferred Stock, with a dividend rate of 5.25%, and the
Series B Preferred Stock, with a dividend rate of 5.50%. Dividends are payable quarterly in arrears, subject to declaration by
our Board of Directors. During the year ended December 31, 2016, we paid dividends of $5.25 per share, or $31.5 million, to
holders of record of the Series A Preferred Stock and $55.00 per share, or $75.6 million, to holders of record of the Series B
Preferred Stock.
In addition, on February 15, 2017, we paid dividends of $1.3125 per share, or $7.9 million, to Series A preferred
stockholders of record at the close of business on February 1, 2017 and $13.75 per share, or $18.9 million, to Series B preferred
stockholders of record at the close of business on February 1, 2017.
During the year ended December 31, 2016, we paid $2.08 per share, or $883.7 million, to common stockholders of record.
In addition, we declared a distribution of $0.58 per share, or $247.7 million, payable on January 13, 2017 to our common
stockholders of record at the close of business on December 28, 2016.
We accrue distributions on unvested restricted stock units, which are payable upon vesting. As of December 31, 2016, the
amount accrued for distributions payable related to unvested restricted stock units was $6.7 million. During the year ended
December 31, 2016, we paid $2.4 million of distributions upon the vesting of restricted stock units.
45
For more details on the cash distributions paid to our common and preferred stockholders during the year ended
December 31, 2016, see note 15 to our consolidated financial statements included in this Annual Report.
Contractual Obligations. The following table summarizes our contractual obligations as of December 31, 2016 (in
thousands):
Contractual Obligations
2017
2018
2019
2020
2021
Thereafter
Total
Long-term debt, including current portion:
American Tower subsidiary
debt:
Series 2013-1A Securities (1) $
— $
500,000
$
— $
Series 2013-2A Securities (2)
Series 2015-1 Notes (3)
Series 2015-2 Notes (4)
2012 GTP Notes (5)
Unison Notes (6)
India indebtedness (7)
Viom preference shares (8)
Shareholder loans (9)
Other subsidiary debt (10)
Total American Tower
subsidiary debt
American Tower Corporation debt:
Term Loan
2013 Credit Facility
2014 Credit Facility
4.500% senior notes
3.40% senior notes
7.25% senior notes (11)
2.800% senior notes
5.050% senior notes
3.300% senior notes
3.450% senior notes
5.900% senior notes
2.250% senior notes
4.70% senior notes
3.50% senior notes
5.00% senior notes
4.000% senior notes
4.400% senior notes
3.375% senior notes
3.125% senior notes
Total American Tower
Corporation debt
Long-term obligations,
excluding capital leases
Cash interest expense
Capital lease payments
(including interest)
Total debt service obligations
Operating lease payments (12)
Other non-current liabilities
(13)(14)
—
—
—
751
—
158,876
12,269
—
49,012
—
—
—
—
—
73,211
12,268
—
51,234
—
—
—
172,987
—
67,323
—
151,045
55,611
— $
—
350,000
—
—
129,000
139,217
—
—
58,826
— $
— $
500,000
—
—
—
—
—
31,008
—
—
38,340
1,300,000
1,300,000
—
525,000
—
—
79,893
—
—
34,712
350,000
525,000
173,738
129,000
549,528
24,537
151,045
287,735
220,908
636,713
446,966
677,043
69,348
1,939,605
3,990,583
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,000,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,000,000
300,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
539,975
—
—
—
—
750,000
700,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
750,000
650,000
500,000
—
—
—
—
—
—
—
—
1,000,000
—
1,385,000
—
—
—
—
—
—
—
—
600,000
700,000
1,000,000
1,000,000
750,000
500,000
1,000,000
400,000
1,000,000
539,975
1,385,000
1,000,000
1,000,000
300,000
750,000
700,000
750,000
650,000
500,000
600,000
700,000
1,000,000
1,000,000
750,000
500,000
1,000,000
400,000
1,000,000
1,300,000
1,989,975
1,900,000
8,335,000
14,524,975
220,908
724,733
27,936
973,577
869,430
1,636,713
659,505
23,724
2,319,942
846,305
1,746,966
2,667,018
1,969,348
10,274,605
18,515,558
594,039
501,546
410,891
743,608
3,634,322
21,985
18,410
14,227
162,765
269,047
2,362,990
3,186,974
2,394,466
11,180,978
816,357
775,650
736,688
6,637,267
22,418,927
10,681,697
22,705
20,977
10,124
8,354
3,133
2,577,230
2,642,523
Total
$
1,865,712
$
3,187,224
$
3,189,471
$
3,970,978
$
3,134,287
$ 20,395,475
$
35,743,147
_______________
(1) Represents anticipated repayment date; final legal maturity is March 15, 2043.
(2) Represents anticipated repayment date; final legal maturity is March 15, 2048.
46
(3) Represents anticipated repayment date; final legal maturity is June 15, 2045.
(4) Represents anticipated repayment date; final legal maturity is June 15, 2050.
(5) Secured debt assumed by us in connection with our acquisition of MIPT. Maturity date represents anticipated repayment date; final legal maturity is
March 15, 2042. On February 15, 2017, we repaid all amounts outstanding under the 2012 GTP Notes.
(6) Secured debt assumed by us in connection with the Unison Acquisition; final legal maturity date is April 15, 2040. On February 15, 2017, we repaid all
amounts outstanding under the Unison Notes.
(7) Debt includes India working capital facility, remaining debt assumed by us in connection with the Viom Acquisition and debt that has been entered into
by ATC TIPL. Maturity dates begin March 31, 2017. Denominated in INR.
(8) Preference Shares classified as debt, assumed by us in connection with the Viom Acquisition. The shares are to be redeemed in equal parts on March 26,
2017 and March 26, 2018.
(9) Reflects balances owed to our joint venture partners in Ghana and Uganda. The Ghana loan is denominated in GHS and the Uganda loan was
denominated in USD. Effective January 1, 2017, this loan, which had an outstanding balance of $80.0 million, was converted by the holder to a new
shareholder note for $31.8 million, bearing interest at 16.6% per annum. The remaining balance of the Uganda loan was converted into equity.
(10) Includes the BR Towers debentures, which are denominated in BRL and amortize through October 15, 2023, the South African credit facility, which is
denominated in ZAR and amortizes through December 17, 2020, the Colombian credit facility, which is denominated in COP and amortizes through April
24, 2021 and the Brazil credit facility, which is denominated in BRL and matures on January 15, 2022.
(11) On February 10, 2017, we redeemed all of the outstanding 7.25% Notes.
(12) Includes payments under non-cancellable initial terms, as well as payments for certain renewal periods at our option, which we expect to renew because
failure to renew could result in a loss of the applicable communications sites and related revenues from tenant leases.
(13) Primarily represents our asset retirement obligations and excludes certain other non-current liabilities included in our consolidated balance sheet,
primarily our straight-line rent liability for which cash payments are included in operating lease payments and unearned revenue that is not payable in
cash.
(14) Excludes $54.0 million of liabilities for unrecognized tax positions and $20.8 million of accrued income tax related interest and penalties included in our
consolidated balance sheet as we are uncertain as to when and if the amounts may be settled. Settlement of such amounts could require the use of cash
flows generated from operations. We expect the unrecognized tax benefits to change over the next 12 months if certain tax matters ultimately settle with
the applicable taxing jurisdiction during this timeframe. However, based on the status of these items and the amount of uncertainty associated with the
outcome and timing of audit settlements, we are currently unable to estimate the impact of the amount of such changes, if any, to previously recorded
uncertain tax positions.
Off-Balance Sheet Arrangements. We have no material off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of
SEC Regulation S-K.
Factors Affecting Sources of Liquidity
Our liquidity depends upon our ability to generate cash flow from operating activities, borrow funds under our credit
facilities and maintain compliance with the contractual agreements governing our indebtedness. We believe that the debt
agreements discussed below represent our material debt agreements that contain covenants, our compliance with which would
be material to an investor’s understanding of our financial results and the impact of those results on our liquidity.
Internally Generated Funds. Because the majority of our tenant leases are multiyear contracts, a significant majority of the
revenues generated by our property operations as of the end of 2016 is recurring revenue that we should continue to receive in
future periods. Accordingly, a key factor affecting our ability to generate cash flow from operating activities is to maintain this
recurring revenue and to convert it into operating profit by minimizing operating costs and fully achieving our operating
efficiencies. In addition, our ability to increase cash flow from operating activities depends upon the demand for our
communications sites and our related services and our ability to increase the utilization of our existing communications sites.
Restrictions Under Loan Agreements Relating to Our Credit Facilities. The loan agreements for the 2014 Credit Facility,
the 2013 Credit Facility and the Term Loan contain certain financial and operating covenants and other restrictions applicable
to us and our subsidiaries that are not designated as unrestricted subsidiaries on a consolidated basis. These restrictions include
limitations on additional debt, distributions and dividends, guaranties, sales of assets and liens. The loan agreements also
contain covenants that establish financial tests with which we and our restricted subsidiaries must comply related to total
leverage and senior secured leverage, as set forth in the table below. In the event that our debt ratings fall below investment
grade, we must maintain an interest coverage ratio of Adjusted EBITDA to Interest Expense (each as defined in the applicable
loan agreement) of at least 2.50:1.00. As of December 31, 2016, we were in compliance with each of these covenants.
47
Consolidated Total Leverage Ratio
Consolidated Senior Secured Leverage Ratio
Ratio (1)
Total Debt to Adjusted EBITDA
6.00:1.00
Senior Secured Debt to Adjusted
EBITDA
3.00:1.00
Compliance Tests For 12 Months Ended
December 31, 2016
($ in billions)
Additional Debt Capacity
Under Covenants (2)
Capacity for Adjusted
EBITDA Decrease
Under Covenants (3)
~ $3.8
~ $0.6
~ $7.1 (4)
~ $2.4 (4)
_______________
(1) Each component of the ratio as defined in the applicable loan agreement.
(2) Assumes no change to Adjusted EBITDA.
(3) Assumes no change to our debt levels.
(4) Effectively, however, the capacity under this ratio would be limited to the capacity under the Consolidated Total Leverage Ratio.
The loan agreements for our credit facilities also contain reporting and information covenants that require us to provide
financial and operating information to the lenders within certain time periods. If we are unable to provide the required
information on a timely basis, we would be in breach of these covenants.
Failure to comply with the financial maintenance tests and certain other covenants of the loan agreements for our credit
facilities could not only prevent us from being able to borrow additional funds under these credit facilities, but may constitute a
default under these credit facilities, which could result in, among other things, the amounts outstanding, including all accrued
interest and unpaid fees, becoming immediately due and payable. If this were to occur, we may not have sufficient cash on hand
to repay such indebtedness. The key factors affecting our ability to comply with the debt covenants described above are our
financial performance relative to the financial maintenance tests defined in the loan agreements for these credit facilities and
our ability to fund our debt service obligations. Based upon our current expectations, we believe our operating results during
the next 12 months will be sufficient to comply with these covenants.
Restrictions Under Agreements Relating to the 2015 Securitization and the 2013 Securitization. The indenture and related
supplemental indentures governing the American Tower Secured Revenue Notes, Series 2015-1, Class A (the “Series 2015-1
Notes”) and the American Tower Secured Revenue Notes, Series 2015-2, Class A (the “Series 2015-2 Notes,” and, together
with the Series 2015-1 Notes, the “2015 Notes”) issued by GTP Acquisition Partners I, LLC (“GTP Acquisition Partners”) in
the 2015 Securitization and the loan agreement related to the 2013 Securitization include certain financial ratios and operating
covenants and other restrictions customary for transactions subject to rated securitizations. Among other things, American
Tower Asset Sub, LLC and American Tower Asset Sub II, LLC (together, the “AMT Asset Subs”) and GTP Acquisition
Partners are prohibited from incurring other indebtedness for borrowed money or further encumbering their assets, subject to
customary carve-outs for ordinary course trade payables and permitted encumbrances (as defined in the applicable agreement).
Under the agreements, amounts due will be paid from the cash flows generated by the assets securing the 2015 Notes or
the assets securing the nonrecourse loan that secures the Secured Tower Revenue Securities, Series 2013-1A and Series
2013-2A issued in the 2013 Securitization (the “Loan”), as applicable, which must be deposited into certain reserve accounts,
and thereafter distributed solely pursuant to the terms of the applicable agreement. On a monthly basis, after payment of all
required amounts under the applicable agreement, subject to the conditions described in the table below, the excess cash flows
generated from the operation of such assets are released to GTP Acquisition Partners or the AMT Asset Subs, as applicable, and
can then be distributed to, and used by, us. As of December 31, 2016, $99.5 million held in such reserve accounts was classified
as restricted cash.
Certain information with respect to the 2015 Securitization and the 2013 Securitization is set forth below ($ in millions).
The debt service coverage ratio (“DSCR”) is generally calculated as the ratio of the net cash flow (as defined in the applicable
agreement) to the amount of interest, servicing fees and trustee fees required to be paid over the succeeding 12 months on the
principal amount of the 2015 Notes or the Loan, as applicable, that will be outstanding on the payment date following such date
of determination.
48
Conditions Limiting
Distributions of Excess Cash
Excess Cash
Distributed
During Year
Ended
December 31,
2016
$182.3
DSCR as of
December
31, 2016
8.12x
Capacity for
Decrease in
Net Cash
Flow Before
Triggering
Cash Trap
DSCR (1)
$182.2
Capacity for
Decrease in
Net Cash Flow
Before
Triggering
Minimum
DSCR (1)
$186.2
Amortization
Period
(3)(4)
(3)(5)
$564.0
11.69x
$499.5
$506.7
2015
Securitization
Issuer or
Borrower
GTP
Acquisition
Partners
2013
Securitization
AMT Asset
Subs
Cash Trap
DSCR
1.30x,
Tested
Quarterly
(2)
1.30x,
Tested
Quarterly
(2)
Notes/Securities
Issued
American
Tower Secured
Revenue
Notes, Series
2015-1 and
Series 2015-2
Secured Tower
Revenue
Securities,
Series
2013-1A and
Series
2013-2A
_______________
(1) Based on the net cash flow of the applicable issuer or borrower as of December 31, 2016 and the expenses payable over the next 12 months on the 2015
Notes or the Loan, as applicable.
(2) Once triggered, a Cash Trap DSCR condition continues to exist until the DSCR exceeds the Cash Trap DSCR for two consecutive calendar quarters.
During a Cash Trap DSCR condition, all cash flow in excess of amounts required to make debt service payments, to fund required reserves, to pay
management fees and budgeted operating expenses and to make other payments required under the loan documents, referred to as excess cash flow, will
be deposited into a reserve account (the “Cash Trap Reserve Account”) instead of being released to the applicable issuer or borrower.
(3) An amortization period commences if the DSCR is equal to or below 1.15x (the “Minimum DSCR”) at the end of any calendar quarter and continues to
exist until the DSCR exceeds the Minimum DSCR for two consecutive calendar quarters.
(4) No amortization period is triggered if the outstanding principal amount of a series has not been repaid in full on the applicable anticipated repayment date.
However, in such event, additional interest will accrue on the unpaid principal balance of the applicable series, and such series will begin to amortize on a
monthly basis from excess cash flow.
(5) An amortization period exists if the outstanding principal amount has not been paid in full on the applicable anticipated repayment date and continues to
exist until such principal has been repaid in full.
A failure to meet the noted DSCR tests could prevent GTP Acquisition Partners or the AMT Asset Subs from distributing
excess cash flow to us, which could affect our ability to fund our capital expenditures, including tower construction and
acquisitions, meet REIT distribution requirements and make preferred stock dividend payments. During an “amortization
period”, all excess cash flow and any amounts then in the applicable Cash Trap Reserve Account would be applied to pay
principal of the 2015 Notes or the Loan, as applicable, on each monthly payment date, and so would not be available for
distribution to us. Further, additional interest will begin to accrue with respect to any series of the 2015 Notes or subclass of
Loan from and after the anticipated repayment date at a per annum rate determined in accordance with the applicable
agreement. With respect to the 2015 Notes, upon the occurrence and during an event of default, the applicable trustee may, in
its discretion or at the direction of holders of more than 50% of the aggregate outstanding principal of any series of the 2015
Notes, declare such series of 2015 Notes immediately due and payable, in which case any excess cash flow would need to be
used to pay holders of such notes. Furthermore, if GTP Acquisition Partners or the AMT Asset Subs were to default on a series
of the 2015 Notes or the Loan, the applicable trustee may seek to foreclose upon or otherwise convert the ownership of all or
any portion of the 2015 Secured Sites or the 2013 Secured Towers, respectively, in which case we could lose such sites and the
revenue associated with those assets.
As discussed above, we use our available liquidity and seek new sources of liquidity to fund capital expenditures, future
growth and expansion initiatives, satisfy our distribution requirements and repay or repurchase our debt. If we determine that it
is desirable or necessary to raise additional capital for these purposes, we may be unable to do so, or such additional financing
may be prohibitively expensive or restricted by the terms of our outstanding indebtedness. If we are unable to raise capital
when our needs arise, we may not be able to fund capital expenditures, future growth and expansion initiatives, satisfy our
REIT distribution requirements and debt service obligations, pay preferred stock dividends or refinance our existing
indebtedness.
In addition, our liquidity depends on our ability to generate cash flow from operating activities. As set forth under Item 1A
of this Annual Report under the caption “Risk Factors,” we derive a substantial portion of our revenues from a small number of
tenants and, consequently, a failure by a significant tenant to perform its contractual obligations to us could adversely affect our
cash flow and liquidity.
49
Critical Accounting Policies and Estimates
Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements
requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as
well as related disclosures of contingent assets and liabilities. We evaluate our policies and estimates on an ongoing basis.
Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.
We have reviewed our policies and estimates to determine our critical accounting policies for the year ended
December 31, 2016. We have identified the following policies as critical to an understanding of our results of operations and
financial condition. This is not a comprehensive list of our accounting policies. See note 1 to our consolidated financial
statements included in this Annual Report for a summary of our significant accounting policies. In many cases, the accounting
treatment of a particular transaction is specifically dictated by GAAP, with no need for management’s judgment in its
application. There are also areas in which management’s judgment in selecting any available alternative would not produce a
materially different result.
•
Impairment of Assets—Assets Subject to Depreciation and Amortization: We review long-lived assets for impairment
at least annually or whenever events, changes in circumstances or other indicators or evidence indicate that the
carrying amount of our assets may not be recoverable.
We review our tower portfolio and network location intangible assets for indicators of impairment at the lowest level
of identifiable cash flows, typically at an individual tower basis. Possible indicators include a tower not having current
tenant leases or having expenses in excess of revenues. A cash flow modeling approach is utilized to assess
recoverability and incorporates, among other items, the tower location, the tower location demographics, the timing of
additions of new tenants, lease rates and estimated length of tenancy and ongoing cash requirements.
We review our tenant-related intangible assets on a tenant by tenant basis for indicators of impairment, such as high
levels of turnover or attrition, non-renewal of a significant number of contracts or the cancellation or termination of a
relationship. We assess recoverability by determining whether the carrying amount of the tenant-related intangible
assets will be recovered primarily through projected undiscounted future cash flows.
If the sum of the estimated undiscounted future cash flows of our long-lived assets is less than the carrying amount of
the assets, an impairment loss may be recognized. An impairment loss would be based on the fair value of the asset,
which is based on an estimate of discounted future cash flows to be provided from the asset. We record any related
impairment charge in the period in which we identify such impairment.
•
Impairment of Assets—Goodwill: We review goodwill for impairment at least annually (as of December 31) or
whenever events or circumstances indicate the carrying amount of an asset may not be recoverable.
Goodwill is recorded in the applicable segment and assessed for impairment at the reporting unit level. We utilize the
two step impairment test when testing goodwill for impairment and we employ a discounted cash flow analysis. The
key assumptions utilized in the discounted cash flow analysis include current operating performance, terminal sales
growth rate, management’s expectations of future operating results and cash requirements, the current weighted
average cost of capital and an expected tax rate. Under the first step of this test, we compare the fair value of the
reporting unit, as calculated under an income approach using future discounted cash flows, to the carrying amount of
the applicable reporting unit. If the carrying amount exceeds the fair value, we conduct the second step of this test, in
which the implied fair value of the applicable reporting unit’s goodwill is compared to the carrying amount of that
goodwill. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss would be recognized
for the amount of the excess.
During the year ended December 31, 2016, no potential impairment was identified under the first step of the test. The
fair value of each of our reporting units was in excess of its carrying amount.
• Asset Retirement Obligations: When required, we recognize the fair value of obligations to remove our tower assets
and remediate the leased land upon which certain of our tower assets are located. Generally, the associated retirement
50
costs are capitalized as part of the carrying amount of the related tower assets and depreciated over their estimated
useful lives and the liability is accreted through the obligation’s estimated settlement date.
We updated our assumptions used in estimating our aggregate asset retirement obligation, which resulted in a net
decrease in the estimated obligation of $14.1 million during the year ended December 31, 2016. The change in 2016
primarily resulted from changes in timing of certain settlement date and cost assumptions. Fair value estimates of
liabilities for asset retirement obligations generally involve discounting of estimated future cash flows. Periodic
accretion of such liabilities due to the passage of time is included in Depreciation, amortization and accretion expense
in the consolidated statements of operations. The significant assumptions used in estimating our aggregate asset
retirement obligation are: timing of tower removals; cost of tower removals; timing and number of land lease
renewals; expected inflation rates; and credit-adjusted risk-free interest rates that approximate our incremental
borrowing rate. While we feel the assumptions are appropriate, there can be no assurances that actual costs and the
probability of incurring obligations will not differ from these estimates. We will continue to review these assumptions
periodically and we may need to adjust them as necessary.
• Acquisitions: For those acquisitions that meet the definition of a business combination, we apply the acquisition
method of accounting where assets acquired and liabilities assumed are recorded at fair value at the date of each
acquisition, and the results of operations are included with our results from the dates of the respective acquisitions.
Any excess of the purchase price paid over the amounts recognized for assets acquired and liabilities assumed is
recorded as goodwill. We continue to evaluate acquisitions for a period not to exceed one year after the applicable
acquisition date of each transaction to determine whether any additional adjustments are needed to the allocation of the
purchase price paid for the assets acquired and liabilities assumed. The fair value of the assets acquired and liabilities
assumed is typically determined by using either estimates of replacement costs or discounted cash flow valuation
methods. When determining the fair value of tangible assets acquired, we must estimate the cost to replace the asset
with a new asset taking into consideration such factors as age, condition and the economic useful life of the asset.
When determining the fair value of intangible assets acquired, we must estimate the applicable discount rate and the
timing and amount of future tenant cash flows, including rate and terms of renewal and attrition.
• Revenue Recognition: Our revenue from leasing arrangements, including fixed escalation clauses present in non-
cancellable lease arrangements, is reported on a straight-line basis over the term of the respective leases when
collectibility is reasonably assured. Escalation clauses tied to the Consumer Price Index or other inflation-based
indices, and other incentives present in lease agreements with our tenants are excluded from the straight-line
calculation. Total property straight-line revenues for the years ended December 31, 2016, 2015 and 2014 were $131.7
million, $155.0 million and $123.7 million, respectively. Amounts billed upfront in connection with the execution of
lease agreements are initially deferred and reflected in Unearned revenue in the accompanying consolidated balance
sheets and recognized as revenue over the terms of the applicable leases. Amounts billed or received for services prior
to being earned are deferred and reflected in Unearned revenue in the accompanying consolidated balance sheets until
the criteria for recognition have been met.
We derive the largest portion of our revenues, corresponding trade receivables and the related deferred rent asset from
a small number of tenants in the telecommunications industry, and 56% of our revenues are derived from four tenants
in the industry. In addition, we have concentrations of credit risk in certain geographic areas. We mitigate the
concentrations of credit risk with respect to notes and trade receivables by actively monitoring the creditworthiness of
our borrowers and tenants. In recognizing tenant revenue we assess the collectibility of both the amounts billed and
the portion recognized on a straight-line basis. This assessment takes tenant credit risk and business and industry
conditions into consideration to ultimately determine the collectibility of the amounts billed. To the extent the
amounts, based on management’s estimates, may not be collectible, recognition is deferred until such point as the
uncertainty is resolved. Any amounts that were previously recognized as revenue and subsequently determined to be
uncollectible are charged to bad debt expense. Accounts receivable are reported net of allowances for doubtful
accounts related to estimated losses resulting from a tenant’s inability to make required payments and allowances for
amounts invoiced whose collectibility is not reasonably assured.
• Rent Expense: Many of the leases underlying our tower sites have fixed rent escalations, which provide for periodic
increases in the amount of ground rent payable over time. In addition, certain of our tenant leases require us to
exercise available renewal options pursuant to the underlying ground lease if the tenant exercises its renewal option.
We calculate straight-line ground rent expense for these leases based on the fixed non-cancellable term of the
underlying ground lease plus all periods, if any, for which failure to renew the lease imposes an economic penalty to
us such that renewal appears to be reasonably assured.
51
•
•
Stock-Based Compensation: The fair value of a stock option is determined using a Black-Scholes option-pricing model
that takes into account a number of assumptions at the accounting measurement date including the stock price, the
exercise price, the expected life of the option, the volatility of the underlying stock, the expected distributions, and the
risk-free interest rate over the expected life of the option. These assumptions are highly subjective and could
significantly impact the value of the option and the compensation expense. In addition, the amount we record as stock-
based compensation expense is impacted by forfeitures, which are accounted for as they occur. The fair value of both
time-based and performance-based restricted stock units is based on the fair value of our common stock on the grant
date. We also make certain assumptions regarding performance relative to grant parameters applicable to performance-
based restricted stock units, which could significantly impact the compensation expense. We recognize stock-based
compensation in either selling, general, administrative and development expense, costs of operations or as part of the
costs associated with the construction of our tower assets.
Income Taxes: Accounting for income taxes requires us to estimate the timing and impact of amounts recorded in our
financial statements that may be recognized differently for tax purposes. To the extent that the timing of amounts
recognized for financial reporting purposes differs from the timing of recognition for tax reporting purposes, deferred
tax assets or liabilities are required to be recorded. Deferred tax assets and liabilities are measured based on the rate at
which we expect these items to be reflected in our tax returns, which may differ from the current rate. We do not
expect to pay federal taxes on our REIT taxable income.
We periodically review our deferred tax assets, and we record a valuation allowance if, based on the available
evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Management
assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated
to use the existing deferred tax assets. Valuation allowances would be reversed as a reduction to the provision for
income taxes, if related deferred tax assets are deemed realizable based on changes in facts and circumstances relevant
to the assets’ recoverability.
We recognize the benefit of uncertain tax positions when, in management’s judgment, it is more likely than not that
positions we have taken in our tax returns will be sustained upon examination, which are measured at the largest
amount that is greater than 50% likely of being realized upon settlement. We adjust our tax liabilities when our
judgment changes as a result of the evaluation of new information or information not previously available. Due to the
complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different
from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income
tax expense in the period in which additional information is available or the position is ultimately settled under audit.
We consider the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States on the
basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Should
we decide to repatriate the foreign earnings, we may have to adjust the income tax provision in the period we
determined that the earnings will no longer be indefinitely invested outside of the United States.
Accounting Standards Update
For a discussion of recent accounting standards updates, see note 1 to our consolidated financial statements included in
this Annual Report.
52
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following table provides information as of December 31, 2016 about our market risk exposure associated with
changing interest rates. For long-term debt obligations, the table presents principal cash flows by maturity date and average
interest rates related to outstanding obligations. For interest rate swaps, the table presents notional principal amounts and
weighted-average interest rates (in thousands, except percentages). For more information, see Item 7 of this Annual Report
under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and
Capital Resources” and note 8 to our consolidated financial statements included in this Annual Report.
Long-Term Debt
Fixed Rate Debt (a)
Weighted-Average Interest
Rate (a)
Variable Rate Debt (b)
Weighted-Average Interest
Rate (b)(c)
2017
2018
2019
2020
2021
Thereafter
Total
Fair Value
$189,794
$1,597,903
$1,704,197
$2,078,793
$1,938,636
$7,930,871
$15,440,194
$15,640,366
10.30%
3.94%
5.49%
4.28%
4.15%
3.81%
$
49,012
$ 51,234
$
55,611
$ 598,801
$
38,340
$2,419,712
$ 3,212,710
$ 3,209,586
9.49%
9.45%
9.29%
2.69%
9.39%
2.33%
Interest Rate Swaps
Hedged Variable-Rate
Notional Amount
Fixed Rate Debt Rate (e)
Hedged Fixed-Rate Notional
Amount
Variable Rate Debt Rate (g)
$
$
4,999
$
4,999
$
4,999
$
6,665
$
6,665
$
— $
28,327
$
(3)
(d)
9.74%
— $
— $
— $
— $
— $ 600,000
$
600,000
$
24,682
(f)
1.97%
_______________
(a) Fixed rate debt consisted of: Securities issued in the 2013 Securitization; the 2012 GTP Notes; the 2015 Notes; the Unison Notes; the 4.500% senior notes
due 2018; the 3.40% senior notes due 2019; the 7.25% Notes; the 2.800% senior notes due 2020; the 5.050% senior notes due 2020; the 3.300% Notes;
the 3.450% senior notes due 2021; the 5.900% senior notes due 2021; the 2.250% Notes; the 4.70% senior notes due 2022; the 3.50% senior notes due
2023; the 5.00% senior notes due 2024; the 4.000% senior notes due 2025; the 4.400% Notes; the 3.375% Notes; the 3.125% Notes; the Ghana loan
which matures December 19, 2019; the Uganda loan which matures on June 29, 2019; the India indebtedness, with maturity dates ranging from March
30, 2017 to November 30, 2024; and other debt including capital leases.
(b) Variable rate debt consisted of: the Term Loan, which matures on January 31, 2022; the 2014 Credit Facility, which matures on January 31, 2022; the
2013 Credit Facility, which matures on June 28, 2020; the BR Towers debentures, which amortize through October 15, 2023, the South African credit
facility, which amortizes through December 17, 2020; the Colombian credit facility, which amortizes through April 24, 2021; and the Brazil credit facility,
which matures on January 15, 2022.
(c) Based on rates effective as of December 31, 2016.
(d) As of December 31, 2016, the interest rate swap agreement in Colombia was included in Notes receivable and other non-current assets on the
consolidated balance sheet.
(e) Represents the fixed rate of interest based on contractual notional amount as a percentage of the total notional amount. The interest rate is comprised of
fixed interest of 5.74%, per the interest rate agreement, and a fixed margin of 4.00%, per the loan agreement for the Colombian credit facility.
(f) As of December 31, 2016, the interest rate swap agreement in the U.S. was included in Other non-current liabilities on the consolidated balance sheet.
(g) Represents the weighted average variable rate of interest based on contractual notional amount as a percentage of total notional amounts.
Interest Rate Risk
As of December 31, 2016, we have one interest rate swap agreement related to debt in Colombia. This swap has been
designated as a cash flow hedge, has a notional amount of $28.3 million and an interest rate of 5.74% and expires in April
2021. We also have three interest rate swap agreements related to the 2.250% Notes. These swaps have been designated as fair
value hedges, have an aggregate notional amount of $600.0 million and an interest rate of one-month LIBOR plus applicable
spreads and expire in January 2022.
Changes in interest rates can cause interest charges to fluctuate on our variable rate debt. Variable rate debt as of
December 31, 2016 consisted of $1,385.0 million under the 2014 Credit Facility, $540.0 million under the 2013 Credit Facility,
$1,000.0 million under the Term Loan, $600.0 million under the interest rate swap agreements related to the 2.250% Notes,
$84.7 million under the South African credit facility, $28.3 million under the Colombian credit facility after giving effect to our
interest rate swap agreements, $101.0 million under the BR Towers debentures and $45.3 million under the Brazil credit
facility. A 10% increase in current interest rates would result in an additional $10.0 million of interest expense for the year
ended December 31, 2016.
Foreign Currency Risk
We are exposed to market risk from changes in foreign currency exchange rates primarily in connection with our foreign
subsidiaries and joint ventures internationally. Any transaction denominated in a currency other than the U.S. Dollar is reported
53
in U.S. Dollars at the applicable exchange rate. All assets and liabilities are translated into U.S. Dollars at exchange rates in
effect at the end of the applicable fiscal reporting period and all revenues and expenses are translated at average rates for the
period. The cumulative translation effect is included in equity as a component of Accumulated other comprehensive loss. We
may enter into additional foreign currency financial instruments in anticipation of future transactions to minimize the impact of
foreign currency fluctuations. For the year ended December 31, 2016, 40% of our revenues and 45% of our total operating
expenses were denominated in foreign currencies.
As of December 31, 2016, we have incurred intercompany debt that is not considered to be permanently reinvested, and
similar unaffiliated balances that were denominated in a currency other than the functional currency of the subsidiary in which
it is recorded. As this debt had not been designated as being a long-term investment in nature, any changes in the foreign
currency exchange rates will result in unrealized gains or losses, which will be included in our determination of net income. An
adverse change of 10% in the underlying exchange rates of our unsettled intercompany debt and similar unaffiliated balances
would result in $38.0 million of unrealized losses that would be included in Other expense in our consolidated statements of
operations for the year ended December 31, 2016.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 15 (a).
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have established disclosure controls and procedures designed to ensure that material information relating to us,
including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of
senior management and the Board of Directors.
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the
effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15
(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Based on this evaluation, our principal
executive officer and principal financial officer concluded that these disclosure controls and procedures were effective as of
December 31, 2016 and designed to ensure that the information required to be disclosed in our reports filed or submitted under
the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable
rules and forms, and that it is accumulated and communicated to our management, including our principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Our management, with the participation of our principal executive officer and principal financial officer, is responsible
for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act. Our internal control system is designed to provide reasonable assurance to our management and Board
of Directors regarding the preparation and fair presentation of published financial statements.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. As
discussed in Item 1 of this Annual Report under the caption “Business” and in note 6 to our consolidated financial statements
included in this Annual Report, we completed our acquisition of Viom (which was subsequently renamed ATC TIPL) in April
2016. As permitted by the rules and regulations of the SEC, we excluded from our assessment the internal control over
financial reporting at ATC TIPL, whose financial statements reflect total assets and revenues constituting 12% and 10%,
respectively, of the consolidated financial statement amounts as of and for the year ended December 31, 2016.
In making its assessment of internal control over financial reporting, our management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).
Based on this assessment, management concluded that, as of December 31, 2016, our internal control over financial reporting is
effective.
54
Deloitte & Touche LLP, an independent registered public accounting firm that audited our financial statements included
in this Annual Report, has issued an attestation report on management’s internal control over financial reporting, which is
included in this Item 9A under the caption “Report of Independent Registered Public Accounting Firm.”
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act) during the fiscal quarter ended December 31, 2016 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting. As set forth above, we excluded from our assessment the internal
control over financial reporting at ATC TIPL for the year ended December 31, 2016. We consider ATC TIPL material to our
results of operations, financial position and cash flows, and we are in the process of integrating the internal control procedures
of ATC TIPL into our internal control structure.
55
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
American Tower Corporation
Boston, Massachusetts
We have audited the internal control over financial reporting of American Tower Corporation and subsidiaries (the
"Company") as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management’s Annual Report
on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial
reporting at ATC Telecom Infrastructure Private Limited (f/k/a Viom Networks Limited), which was acquired on April 21,
2016, and whose financial statements constitute 12% of total assets and 10% of revenues of the consolidated financial
statement amounts as of and for the year ended December 31, 2016. Accordingly, our audit did not include the internal control
over financial reporting at ATC Telecom Infrastructure Private Limited (f/k/a Viom Networks Limited). The Company's
management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on
Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over
financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's
principal executive and principal financial officers, or persons performing similar functions, and effected by the company's
board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that
could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a
timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2016, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2016
of the Company and our report dated February 27, 2017, expressed an unqualified opinion on those financial statements and
financial statement schedule.
/s/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 27, 2017
56
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our executive officers and their respective ages and positions as of February 17, 2017 are set forth below:
PART III
James D. Taiclet, Jr.
Thomas A. Bartlett
Edmund DiSanto
William H. Hess
Steven C. Marshall
Robert J. Meyer, Jr.
Amit Sharma
56 Chairman, President and Chief Executive Officer
58 Executive Vice President and Chief Financial Officer
64 Executive Vice President, Chief Administrative Officer, General Counsel and
Secretary
53 Executive Vice President, International Operations and President, Latin
America and EMEA
55 Executive Vice President and President, U.S. Tower Division
53 Senior Vice President, Finance and Corporate Controller
66 Executive Vice President and President, Asia
James D. Taiclet, Jr. is our Chairman, President and Chief Executive Officer. Mr. Taiclet was appointed President and
Chief Operating Officer in September 2001, was named Chief Executive Officer in October 2003 and was selected as Chairman
of the Board in February 2004. Prior to joining us, Mr. Taiclet served as President of Honeywell Aerospace Services, a unit of
Honeywell International, and prior to that as Vice President, Engine Services at Pratt & Whitney, a unit of United Technologies
Corporation. He was also previously a consultant at McKinsey & Company, specializing in telecommunications and aerospace
strategy and operations. Mr. Taiclet began his career as a United States Air Force officer and pilot. He holds a Master’s Degree
in Public Affairs from Princeton University, where he was awarded a fellowship at the Woodrow Wilson School, and is a
Distinguished Graduate of the United States Air Force Academy with majors in Engineering and International Relations. Mr.
Taiclet is a member of the Council on Foreign Relations, the Business Roundtable and the Commercial Club of Boston. He also
serves as a member of the Executive Board of the National Association of Real Estate Investment Trusts (NAREIT), the Board
of Trustees of Brigham and Women’s Healthcare, Inc., in Boston, Massachusetts, and the Advisory Council for the Princeton
University Woodrow Wilson School of Public and International Affairs. In August 2015, Mr. Taiclet was appointed to the U.S.-
India CEO Forum by the U.S. Department of Commerce.
Thomas A. Bartlett is our Executive Vice President and Chief Financial Officer. Mr. Bartlett joined us in April 2009 as
Executive Vice President and Chief Financial Officer, and assumed the role of Treasurer from February 2012 until December
2013. Prior to joining us, Mr. Bartlett served as Senior Vice President and Corporate Controller with Verizon Communications,
Inc. since November 2005. In this role, he was responsible for corporate-wide accounting, tax planning and compliance, SEC
financial reporting, budget reporting and analysis and capital expenditures planning functions. Mr. Bartlett previously held the
roles of Senior Vice President and Treasurer, as well as Senior Vice President Investor Relations. During his twenty-five year
career with Verizon Communications and its predecessor companies and affiliates, he served in numerous operations and
business development roles, including as the President and Chief Executive Officer of Bell Atlantic International Wireless from
1995 through 2000, where he was responsible for wireless activities in North America, Latin America, Europe and Asia, and
was also an area President in Verizon’s U.S. wireless business responsible for all operational aspects in both the Northeast and
Mid-Atlantic states. Mr. Bartlett began his career at Deloitte, Haskins & Sells. Mr. Bartlett currently serves on the board of
directors of Equinix, Inc. Mr. Bartlett earned an M.B.A. from Rutgers University, a Bachelor of Science in Engineering from
Lehigh University and became a Certified Public Accountant.
Edmund DiSanto is our Executive Vice President, Chief Administrative Officer, General Counsel and Secretary. Prior to
joining us in April 2007, Mr. DiSanto was with Pratt & Whitney, a unit of United Technologies Corporation. Mr. DiSanto
started with United Technologies in 1989, where he first served as Assistant General Counsel of its Carrier subsidiary, then
corporate Executive Assistant to the Chairman and Chief Executive Officer of United Technologies. From 1997, he held
various legal and business roles at its Pratt & Whitney unit, including Deputy General Counsel and most recently, Vice
President, Global Service Partners, Business Development. Prior to joining United Technologies, Mr. DiSanto served in a
number of legal and related positions at United Dominion Industries and New England Electric Systems. Mr. DiSanto earned a
J.D. from Boston College Law School and a Bachelor of Science from Northeastern University. In 2013, Mr. DiSanto became a
member of the board of directors of the Business Council for International Understanding.
William H. Hess is our Executive Vice President, International Operations and President, Latin America and EMEA. Mr.
Hess joined us in March 2001 as Chief Financial Officer of American Tower International and was appointed Executive Vice
President in June 2001. Mr. Hess was appointed Executive Vice President, General Counsel in September 2002, and in
57
February 2007, Mr. Hess was appointed Executive Vice President, International Operations. Mr. Hess relinquished the position
of General Counsel in April 2007 when he was named President of our Latin American operations. In March 2009, Mr. Hess
also became responsible for the Europe, Middle East and Africa (EMEA) territory. Prior to joining us, Mr. Hess had been a
partner in the corporate and finance practice group of the law firm of King & Spalding LLP, which he joined in 1990. Prior to
attending law school, Mr. Hess practiced as a Certified Public Accountant with Arthur Young & Co. Mr. Hess received a J.D.
from Vanderbilt University School of Law and is a graduate of Harding University. Mr. Hess is on the Board of Trustees of the
U.S.-Africa Business Center for the U.S. Chamber of Commerce and a participant of the World Economic Forum.
Steven C. Marshall is our Executive Vice President and President, U.S. Tower Division. Mr. Marshall served as our
Executive Vice President, International Business Development from November 2007 through March 2009, at which time he
was appointed to his current position. Prior to joining us, Mr. Marshall was with National Grid Plc, where he served in a
number of leadership and business development positions since 1997. Between 2003 and 2007, Mr. Marshall was Chief
Executive Officer, National Grid Wireless, where he led National Grid’s wireless tower infrastructure business in the United
States and United Kingdom, and held directorships with Digital UK and FreeView during this period. In addition, while at
National Grid, as well as during earlier tenures at Costain Group Plc and Tootal Group Plc, he led operational and business
development efforts in Latin America, India, Southeast Asia, Africa and the Middle East. Mr. Marshall has served as director
for WIA - The Wireless Infrastructure Association, formerly known as PCIA, since October 2010, and in April 2011, he was
appointed a director of the Competitive Carriers Association, formerly known as the Rural Cellular Association. In January
2017, Mr. Marshall was appointed as a director of CTIA - the Wireless Association. Mr. Marshall earned an M.B.A. from
Manchester Business School in Manchester, England and a Bachelor of Science with honors in Building and Civil Engineering
from the Victoria University of Manchester, England.
Robert J. Meyer, Jr. is our Senior Vice President, Finance and Corporate Controller. Mr. Meyer joined us in August
2008. Prior to joining us, Mr. Meyer was with Bright Horizons Family Solutions since 1998, a provider of child care, early
education and work/life consulting services, where he most recently served as Chief Accounting Officer. Mr. Meyer also
served as Corporate Controller and Vice President of Finance while at Bright Horizons. Prior to that, from 1997 to 1998, Mr.
Meyer served as Director of Financial Planning and Analysis at First Security Services Corp. Mr. Meyer earned a Masters in
Finance from Bentley University and a Bachelor of Science in Accounting from Marquette University, and is also a Certified
Public Accountant.
Amit Sharma is our Executive Vice President and President, Asia. Mr. Sharma joined us in September 2007. Prior to
joining us, since 1992, Mr. Sharma worked at Motorola, where he led country teams in India and Southeast Asia, including as
Country President, India and as Head of Strategy, Asia-Pacific. Mr. Sharma also served on Motorola’s Asia-Pacific Board and
was a member of its senior leadership team. Mr. Sharma also worked at GE Capital, serving as Vice President, Strategy and
Business Development, and prior to that, with McKinsey, New York, serving as a core member of the firm's Electronics and
Marketing Practices. Mr. Sharma earned an M.B.A. in International Business from the Wharton School, University of
Pennsylvania, where he was on the Dean’s List and the Director’s Honors List. Mr. Sharma also holds a Master of Science in
Computer Science from the Moore School, University of Pennsylvania, and a Bachelor of Technology in Mechanical
Engineering from the Indian Institute of Technology.
The information under “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” from the
Definitive Proxy Statement is incorporated herein by reference. Information required by this item pursuant to Item 407(c)(3) of
SEC Regulation S-K relating to our procedures by which security holders may recommend nominees to our Board of Directors,
and pursuant to Item 407(d)(4) and 407(d)(5) of SEC Regulation S-K relating to our audit committee financial experts and
identification of the audit committee of our Board of Directors, is contained in the Definitive Proxy Statement under
“Corporate Governance” and is incorporated herein by reference.
Information regarding our Code of Conduct applicable to our principal executive officer, our principal financial officer,
our controller and other senior financial officers appears in Item 1 of this Annual Report under the caption “Business—
Available Information.”
ITEM 11.
EXECUTIVE COMPENSATION
The information under “Compensation and Other Information Concerning Directors and Officers” from the Definitive
Proxy Statement is incorporated herein by reference.
58
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information under “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized
for Issuance Under Equity Compensation Plans” from the Definitive Proxy Statement is incorporated herein by reference.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Information required by this item pursuant to Item 404 of SEC Regulation S-K relating to approval of related party
transactions is contained in the Definitive Proxy Statement under “Corporate Governance” and is incorporated herein by
reference.
Information required by this item pursuant to Item 407(a) of SEC Regulation S-K relating to director independence is
contained in the Definitive Proxy Statement under “Corporate Governance” and is incorporated herein by reference.
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The information under “Independent Auditor Fees and Other Matters” from the Definitive Proxy Statement is
incorporated herein by reference.
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
The following documents are filed as a part of this report:
PART IV
1. Financial Statements. See Index to Consolidated Financial Statements, which appears on page F-1 hereof. The
financial statements listed in the accompanying Index to Consolidated Financial Statements are filed herewith in response to
this Item.
2. Financial Statement Schedules. American Tower Corporation and Subsidiaries Schedule III – Schedule of Real
Estate and Accumulated Depreciation is filed herewith in response to this Item.
3. Exhibits. See Index to Exhibits. The exhibits listed in the Index to Exhibits immediately preceding the exhibits are
filed herewith in response to this Item.
ITEM 16.
FORM 10-K SUMMARY
None.
59
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 27th day of February,
2017.
SIGNATURES
AMERICAN TOWER CORPORATION
By:
/S/ JAMES D. TAICLET, JR.
James D. Taiclet, Jr.
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been duly signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/S/ JAMES D. TAICLET, JR.
James D. Taiclet, Jr.
/S/ THOMAS A. BARTLETT
Thomas A. Bartlett
/S/ ROBERT J. MEYER, JR
Robert J. Meyer, Jr.
/S/ RAYMOND P. DOLAN
Raymond P. Dolan
/S/ ROBERT D. HORMATS
Robert D. Hormats
/S/ CAROLYN F. KATZ
Carolyn F. Katz
/S/ GUSTAVO LARA CANTU
Gustavo Lara Cantu
/S/ CRAIG MACNAB
Craig Macnab
/S/ JOANN A. REED
JoAnn A. Reed
/S/ PAMELA D. A. REEVE
Pamela D. A. Reeve
/S/ DAVID E. SHARBUTT
David E. Sharbutt
/S/ SAMME L. THOMPSON
Samme L. Thompson
Chairman, President and Chief
Executive Officer (Principal Executive
Officer)
Executive Vice President and Chief
Financial Officer (Principal Financial
Officer)
Senior Vice President, Finance and
Corporate Controller (Principal
Accounting Officer)
Director
Director
Director
Director
Director
Director
Director
Director
Director
60
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
February 27, 2017
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2016 and 2015
Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2016, 2015 and
2014
Consolidated Statements of Equity for the Years Ended December 31, 2016, 2015 and 2014
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014
Notes to Consolidated Financial Statements
Page
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
American Tower Corporation
Boston, Massachusetts
We have audited the accompanying consolidated balance sheets of American Tower Corporation and subsidiaries (the
“Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income
(loss), equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the
financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the Company's internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal
Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission,
and our report dated February 27, 2017 expressed an unqualified opinion on the Company's internal control over financial
reporting.
/s/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 27, 2017
F-2
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31, 2016
December 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Restricted cash
Short-term investments
Accounts receivable, net
Prepaid and other current assets
Total current assets
PROPERTY AND EQUIPMENT, net
GOODWILL
OTHER INTANGIBLE ASSETS, net
DEFERRED TAX ASSET
DEFERRED RENT ASSET
NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS
TOTAL
LIABILITIES
CURRENT LIABILITIES:
Accounts payable
Accrued expenses
Distributions payable
Accrued interest
Current portion of long-term obligations
Unearned revenue
Total current liabilities
LONG-TERM OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS
DEFERRED TAX LIABILITY
OTHER NON-CURRENT LIABILITIES
Total liabilities
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS
EQUITY:
Preferred stock: $.01 par value; 20,000,000 shares authorized;
5.25%, Series A, 6,000,000 shares issued and outstanding; aggregate
liquidation value of $600,000
5.50%, Series B, 1,375,000 shares issued and outstanding; aggregate
liquidation value of $1,375,000
Common stock: $.01 par value; 1,000,000,000 shares authorized;
429,912,536 and 426,695,279 shares issued; and 427,102,510 and
423,885,253 shares outstanding, respectively
Additional paid-in capital
Distributions in excess of earnings
Accumulated other comprehensive loss
Treasury stock (2,810,026 shares at cost)
Total American Tower Corporation equity
Noncontrolling interests
Total equity
TOTAL
$
$
$
$
$
$
$
787,161
149,281
4,026
308,369
441,033
1,689,870
10,517,258
5,070,680
11,274,611
195,678
1,289,530
841,523
30,879,150
118,666
620,563
250,550
157,297
238,806
245,387
1,631,269
18,294,659
965,507
777,572
1,142,723
22,811,730
1,091,220
60
14
4,299
10,043,559
(1,076,965)
(1,999,332)
(207,740)
6,763,895
212,305
6,976,200
30,879,150
$
320,686
142,193
—
227,354
306,235
996,468
9,866,424
4,091,805
9,837,876
212,041
1,166,755
732,903
26,904,272
96,714
516,413
210,027
115,672
50,202
211,001
1,200,029
17,068,807
856,936
106,333
959,349
20,191,454
—
60
14
4,267
9,690,609
(998,535)
(1,836,996)
(207,740)
6,651,679
61,139
6,712,818
26,904,272
See accompanying notes to consolidated financial statements.
F-3
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
REVENUES:
Property
Services
Total operating revenues
OPERATING EXPENSES:
Year Ended December 31,
2016
2015
2014
$ 5,713,126
72,542
5,785,668
$ 4,680,388
91,128
4,771,516
$ 4,006,854
93,194
4,100,048
Costs of operations (exclusive of items shown separately below):
Property (including stock-based compensation expense of $1,750, $1,614
and $1,397, respectively)
Services (including stock-based compensation expense of $688, $439
and $440, respectively)
Depreciation, amortization and accretion
Selling, general, administrative and development expense (including stock-
based compensation expense of $87,460, $88,484 and $78,316,
respectively)
Other operating expenses
Total operating expenses
OPERATING INCOME
OTHER INCOME (EXPENSE):
Interest income, TV Azteca, net of interest expense of $1,163, $820 and
$1,482, respectively
Interest income
Interest expense
Gain (loss) on retirement of long-term obligations
Other expense (including unrealized foreign currency losses of $23,439,
$71,473 and $49,319, respectively)
Total other expense
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
Income tax provision
NET INCOME
Net (income) loss attributable to noncontrolling interests
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION
STOCKHOLDERS
Dividends on preferred stock
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION
COMMON STOCKHOLDERS
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American Tower Corporation common
stockholders
Diluted net income attributable to American Tower Corporation common
stockholders
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
$
$
$
BASIC
DILUTED
1,762,694
1,275,436
1,056,177
27,695
1,525,635
33,432
1,285,328
38,088
1,003,802
543,395
73,220
3,932,639
1,853,029
497,835
66,696
3,158,727
1,612,789
446,542
68,517
2,613,126
1,486,922
10,960
25,618
(717,125)
1,168
(47,790)
(727,169)
1,125,860
(155,501)
970,359
(13,934)
956,425
(107,125)
11,209
16,479
(595,949)
(79,606)
(134,960)
(782,827)
829,962
(157,955)
672,007
13,067
685,074
(90,163)
10,547
14,002
(580,234)
(3,473)
(62,060)
(621,218)
865,704
(62,505)
803,199
21,711
824,910
(23,888)
849,300
$
594,911
$
801,022
2.00
1.98
$
$
1.42
1.41
$
$
2.02
2.00
425,143
429,283
418,907
423,015
395,958
400,086
See accompanying notes to consolidated financial statements.
F-4
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
Net income
Other comprehensive (loss) income:
Changes in fair value of cash flow hedges, net of tax expense (benefit)
of $0, $73 and $(151), respectively
Reclassification of unrealized losses on cash flow hedges to net
income, net of tax expense (benefit) of $0, $84 and $(158),
respectively
Foreign currency translation adjustments, net of tax expense (benefit)
of $3,782, $(24,857) and $(14,247), respectively
Other comprehensive loss
Comprehensive income (loss)
Comprehensive loss attributable to noncontrolling interest
Comprehensive income (loss) attributable to American Tower Corporation
stockholders
Year Ended December 31,
2016
970,359
$
2015
672,007
$
2014
803,199
$
(449)
948
(1,931)
(291)
2,440
3,448
(202,819)
(203,559)
766,800
18,218
(1,078,950)
(1,075,562)
(403,555)
45,854
(526,890)
(525,373)
277,826
64,083
$
785,018
$
(357,701) $
341,909
See accompanying notes to consolidated financial statements.
F-5
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6
-
F
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion
Stock-based compensation expense
Decrease in restricted cash
Loss on investments, unrealized foreign currency loss and other non-cash expense
Impairments, net loss on sale of long-lived assets, non-cash restructuring and merger related
expenses
(Gain) loss on early retirement of long-term obligations
Amortization of deferred financing costs, debt discounts and premiums and other non-cash
interest
Deferred income taxes
Changes in assets and liabilities, net of acquisitions:
Accounts receivable
Prepaid and other assets
Deferred rent asset
Accounts payable and accrued expenses
Accrued interest
Unearned revenue
Deferred rent liability
Other non-current liabilities
Cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchase of property and equipment and construction activities
Payments for acquisitions, net of cash acquired
Payment for Verizon transaction
Proceeds from sale of assets, net of cash
Proceeds from sales of short-term investments and other non-current assets
Payments for short-term investments
Deposits, restricted cash and other
Cash used for investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings, net
Borrowings under credit facilities
Proceeds from issuance of senior notes, net
Proceeds from term loan
Proceeds from other borrowings
Proceeds from issuance of securities in securitization transaction
Repayments of notes payable, credit facilities, term loan, senior notes and capital leases
Contributions from noncontrolling interest holders, net
Proceeds from stock options and stock purchase plan
Distributions paid on common stock
Distributions paid on preferred stock
Proceeds from the issuance of common stock, net
Proceeds from the issuance of preferred stock, net
Purchase of preferred stock assumed in acquisition
Payment for early retirement of long-term obligations
Deferred financing costs and other financing activities
Purchase of noncontrolling interest
Cash (used for) provided by financing activities
Net effect of changes in foreign currency exchange rates on cash and cash equivalents
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
Year Ended December 31,
2015
2014
2016
$
970,359
$
672,007
$
803,199
1,525,635
89,898
5,256
127,377
50,653
(1,168)
17,702
26,957
11,352
(83,229)
(131,660)
(42,862)
34,386
16,557
67,764
18,627
2,703,604
(682,505)
(1,416,373)
(4,748)
—
13,056
(750)
(16,126)
(2,107,446)
—
2,446,845
3,236,383
—
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(5,093,747)
238,480
92,473
(886,116)
(107,125)
—
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(86)
(26,401)
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(30,389)
466,475
320,686
1,285,328
90,537
16,112
146,170
29,852
79,750
6,932
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(91,113)
(154,959)
95,858
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12,945
56,076
1,746
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(1,961,056)
(5,059,462)
—
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(1,968)
(7,741,735)
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7,201
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(84,647)
2,440,327
1,337,946
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(30,021)
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(23,224)
7,194
313,492
$
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$
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$
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26,143
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1,384
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(122,230)
34,711
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218,393
38,378
20,944
2,134,589
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(1,010,637)
—
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(19,486)
(1,949,548)
—
2,187,000
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9,098
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(16,013)
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583,105
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(64,822)
(134,591)
(30,534)
19,916
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313,492
See accompanying notes to consolidated financial statements.
F-7
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business—American Tower Corporation (together with its subsidiaries, “ATC” or the “Company”) is one of the largest global
real estate investment trusts and a leading independent owner, operator and developer of multitenant communications real
estate. The Company’s primary business is the leasing of space on communications sites to wireless service providers, radio and
television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of
other industries, which the Company refers to as its property operations. Additionally, the Company offers tower-related
services in the United States, including site acquisition, zoning and permitting and structural analysis, which primarily support
its site leasing business, including the addition of new tenants and equipment on its sites, which the Company refers to as its
services operations.
The Company’s portfolio primarily consists of towers it owns and towers it operates pursuant to long-term lease arrangements,
as well as distributed antenna system (“DAS”) networks, which provide seamless coverage solutions in certain in-building and
outdoor wireless environments. In addition to the communications sites in its portfolio, the Company manages rooftop and
tower sites for property owners under various contractual arrangements. The Company also holds other telecommunications
infrastructure and property interests that it leases to communications service providers and third-party tower operators.
ATC is a holding company that conducts its operations through its directly and indirectly owned subsidiaries and its joint
ventures. ATC’s principal domestic operating subsidiaries are American Towers LLC and SpectraSite Communications, LLC.
ATC conducts its international operations primarily through its subsidiary, American Tower International, Inc., which in turn
conducts operations through its various international holding and operating subsidiaries and joint ventures.
The Company operates as a real estate investment trust for U.S. federal income tax purposes (“REIT”). Accordingly, the
Company generally is not subject to U.S. federal income taxes on income generated by its REIT operations, including the
income derived from leasing space on its towers, as the Company receives a dividends paid deduction for distributions to
stockholders that generally offsets its income and gains. However, the Company remains obligated to pay U.S. federal income
taxes on earnings from its domestic taxable REIT subsidiaries (“TRSs”). In addition, the Company’s international assets and
operations, regardless of their designation for U.S. tax purposes, continue to be subject to taxation in the foreign jurisdictions
where those assets are held or those operations are conducted.
The use of TRSs enables the Company to continue to engage in certain businesses while complying with REIT qualification
requirements. The Company may, from time to time, change the election of previously designated TRSs to be included as part
of the REIT. As of December 31, 2016, the Company’s REIT qualified businesses included its U.S. tower leasing business,
most of its operations in Costa Rica, Germany and Mexico and a majority of its services segment and indoor DAS networks
business.
Principles of Consolidation and Basis of Presentation—The accompanying consolidated financial statements include the
accounts of the Company and those entities in which it has a controlling interest. Investments in entities that the Company does
not control are accounted for using the equity or cost method, depending upon the Company’s ability to exercise significant
influence over operating and financial policies. All intercompany accounts and transactions have been eliminated. As of
December 31, 2016, the Company has a controlling interest in two joint ventures in Ghana and Uganda with MTN Group
Limited (“MTN Group”). The joint ventures are controlled by a holding company of which a wholly owned subsidiary of the
Company holds a 51% controlling interest and a wholly owned subsidiary of MTN Group holds a 49% noncontrolling interest.
In 2016, the Company established a joint venture (“ATC Europe”) with PGGM in which the Company holds a 51% controlling
interest and PGGM holds a 49% noncontrolling interest. This transaction resulted in a reclassification of $9.1 million of foreign
currency translation adjustment from Accumulated other comprehensive loss (“AOCI”) to additional paid-in capital. In
addition, the Company holds an approximate 75% controlling interest, and South African investors hold an approximate 25%
noncontrolling interest, in a subsidiary of the Company in South Africa. The Company holds a 51% controlling interest in ATC
Telecom Infrastructure Private Limited (“ATC TIPL”), formerly known as Viom Networks Limited (“Viom”), and the
Remaining Shareholders (as defined in note 6) hold a 49% noncontrolling interest.
Significant Accounting Policies and Use of Estimates—The preparation of financial statements in conformity with accounting
principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from
those estimates, and such differences could be material to the accompanying consolidated financial statements. The significant
estimates in the accompanying consolidated financial statements include impairment of long-lived assets (including goodwill),
asset retirement obligations, revenue recognition, rent expense, stock-based compensation, income taxes and accounting for
F-8
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
business combinations and acquisitions of assets. The Company considers events or transactions that occur after the balance
sheet date but before the financial statements are issued as additional evidence for certain estimates or to identify matters that
require additional disclosure.
Accounts Receivable and Deferred Rent Asset—The Company derives the largest portion of its revenues, corresponding
accounts receivable and the related deferred rent asset from a relatively small number of tenants in the telecommunications
industry, and 56% of its current year revenues are derived from four tenants.
The Company’s deferred rent asset is associated with non-cancellable tenant leases that contain fixed escalation clauses over the
terms of the applicable lease in which revenue is recognized on a straight-line basis over the lease term.
The Company mitigates its concentrations of credit risk with respect to notes and trade receivables and the related deferred rent
assets by actively monitoring the creditworthiness of its borrowers and tenants. In recognizing tenant revenue, the Company
assesses the collectibility of both the amounts billed and the portion recognized in advance of billing on a straight-line basis.
This assessment takes tenant credit risk and business and industry conditions into consideration to ultimately determine the
collectibility of the amounts billed. To the extent the amounts, based on management’s estimates, may not be collectible,
recognition is deferred until such point as collectibility is determined to be reasonably assured. Any amounts that were
previously recognized as revenue and subsequently determined to be uncollectible are charged to bad debt expense included in
Selling, general, administrative and development expense in the accompanying consolidated statements of operations.
Accounts receivable is reported net of allowances for doubtful accounts related to estimated losses resulting from a tenant’s
inability to make required payments and allowances for amounts invoiced whose collectibility is not reasonably assured. These
allowances are generally estimated based on payment patterns, days past due and collection history, and incorporate changes in
economic conditions that may not be reflected in historical trends, such as tenants in bankruptcy, liquidation or reorganization.
Receivables are written-off against the allowances when they are determined to be uncollectible. Such determination includes
analysis and consideration of the particular conditions of the account. Changes in the allowances were as follows (in
thousands):
Balance as of January 1
Current year increases
Write-offs, recoveries and other (1)
Balance as of December 31,
Year Ended December 31,
2016
2015
2014
$
$
23,096
49,966
(27,174)
45,888
$
$
17,306
19,878
(14,088)
23,096
$
$
19,895
8,243
(10,832)
17,306
_______________
(1) Recoveries includes recognition of revenue resulting from collections of previously reserved amounts.
Functional Currency—The functional currency of each of the Company’s foreign operating subsidiaries is the respective local
currency, except for Costa Rica, where the functional currency is the U.S. Dollar. All foreign currency assets and liabilities held
by the subsidiaries are translated into U.S. Dollars at the exchange rate in effect at the end of the applicable fiscal reporting
period and all foreign currency revenues and expenses are translated at the average monthly exchange rates. Translation
adjustments are reflected in equity as a component of AOCI in the consolidated balance sheets and included as a component of
Comprehensive income (loss) in the consolidated statements of comprehensive income (loss).
Transactional gains and losses on foreign currency transactions are reflected in Other expense in the consolidated statements of
operations. However, the effect from fluctuations in foreign currency exchange rates on intercompany debt that is considered to
be permanently reinvested is reflected in AOCI in the consolidated balance sheets and included as a component of
comprehensive income (loss). During the year ended December 31, 2016, the Company recorded net foreign currency losses of
$153.9 million, of which $105.0 million was recorded in AOCI and $48.9 million was recorded in Other expense.
Cash and Cash Equivalents—Cash and cash equivalents include cash on hand, demand deposits and short-term investments
with original maturities of three months or less. The Company maintains its deposits at high quality financial institutions and
monitors the credit ratings of those institutions.
Restricted Cash—Restricted cash includes cash pledged as collateral to secure obligations and all cash whose use is otherwise
limited by contractual provisions.
F-9
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Short-Term Investments—Short-term investments consists of highly liquid investments with original maturities in excess of
three months.
Property and Equipment—Property and equipment is recorded at cost or, in the case of acquired properties at estimated fair
value on the date acquired. Cost for self-constructed towers includes direct materials and labor, capitalized interest and certain
indirect costs associated with construction of the tower, such as transportation costs, employee benefits and payroll taxes. The
Company begins the capitalization of costs during the pre-construction period, which is the period during which costs are
incurred to evaluate the site, and continues to capitalize costs until the tower is substantially completed and ready for occupancy
by a tenant. Labor costs capitalized for the years ended December 31, 2016, 2015 and 2014 were $47.7 million, $44.7 million
and $48.5 million, respectively. Interest costs capitalized for the years ended December 31, 2016, 2015 and 2014 were $1.5
million, $1.8 million and $2.8 million, respectively.
Expenditures for repairs and maintenance are expensed as incurred. Augmentation and improvements that extend an asset’s
useful life or enhance capacity are capitalized.
Depreciation expense is recorded using the straight-line method over the assets’ estimated useful lives. Towers and related
assets on leased land are depreciated over the shorter of the estimated useful life of the asset or the term of the corresponding
ground lease, taking into consideration lease renewal options and residual value.
Towers or assets acquired through capital leases are recorded net at the present value of future minimum lease payments or the
fair value of the leased asset at the inception of the lease. Property and equipment and assets held under capital leases are
amortized over the shorter of the applicable lease term or the estimated useful life of the respective assets for periods generally
not exceeding twenty years.
The Company reviews its tower portfolio for indicators of impairment on an individual tower basis. Impairments primarily
result from a tower not having current tenant leases or from having expenses in excess of revenues. The Company reviews other
long-lived assets for impairment whenever events, changes in circumstances or other evidence indicate that the carrying amount
of the Company’s assets may not be recoverable. The Company records impairment charges in Other operating expenses in the
consolidated statements of operations in the period in which the Company identifies such impairment.
Goodwill and Other Intangible Assets—The Company reviews goodwill for impairment at least annually (as of December 31)
or whenever events or circumstances indicate the carrying value of an asset may not be recoverable.
Goodwill is recorded in the applicable segment and assessed for impairment at the reporting unit level. The Company utilizes
the two-step impairment test when testing goodwill for impairment and employs a discounted cash flow analysis. The key
assumptions utilized in the discounted cash flow analysis include current operating performance, terminal sales growth rate,
management’s expectations of future operating results and cash requirements, the current weighted average cost of capital and
an expected tax rate. Under the first step of this test, the Company compares the fair value of the reporting unit, as calculated
under an income approach using future discounted cash flows, to the carrying amount of the applicable reporting unit. If the
carrying amount exceeds the fair value, the Company conducts the second step of this test, in which the implied fair value of
the applicable reporting unit’s goodwill is compared to the carrying amount of that goodwill. If the carrying amount of goodwill
exceeds its implied fair value, an impairment loss would be recognized for the amount of the excess.
During the years ended December 31, 2016, 2015 and 2014, no potential impairment was identified under the first step of the
test, as the fair value of each of the reporting units was in excess of its carrying amount.
Intangible assets that are separable from goodwill and are deemed to have a definite life are amortized over their useful lives,
generally ranging from three to twenty years and are evaluated separately for impairment at least annually or whenever events
or circumstances indicate that the carrying amount of an asset may not be recoverable.
The Company reviews its network location intangible assets for indicators of impairment on an individual tower basis.
Impairments primarily result from a tower not having current tenant leases or from having expenses in excess of revenues. The
Company monitors its tenant-related intangible assets (formerly referred to as customer-related intangible assets) on a tenant by
tenant basis for indicators of impairment, such as high levels of turnover or attrition, non-renewal of a significant number of
contracts or the cancellation or termination of a relationship. The Company assesses recoverability by determining whether the
carrying amount of the related assets will be recovered primarily through projected undiscounted future cash flows. If the
Company determines that the carrying amount of an asset may not be recoverable, the Company measures any impairment loss
based on the projected future discounted cash flows to be provided from the asset or available market information relative to the
F-10
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
asset’s fair value, as compared to the asset’s carrying amount. The Company records impairment charges in Other operating
expenses in the consolidated statements of operations in the period in which the Company identifies such impairment.
Derivative Financial Instruments—Derivatives are recorded on the consolidated balance sheet at fair value. If a derivative is
designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in AOCI, as
well as a component of comprehensive income (loss), and are recognized in the results of operations when the hedged item
affects earnings. Changes in fair value of the ineffective portions of cash flow hedges are recognized in the results of
operations. For derivative instruments that are designated and qualify as fair value hedges, changes in value of the derivatives
are recorded in Other expense in the consolidated statements of operations in the current period, along with the offsetting gain
or loss on the hedged item attributable to the hedged risk. For derivative instruments not designated as hedging instruments,
changes in fair value are recognized in the results of operations in the period that the change occurs.
The primary risks managed through the use of derivative instruments is interest rate risk, exposure to changes in the fair value
of debt attributable to interest rate risk and currency risk. From time to time, the Company enters into interest rate swap
agreements or foreign currency contracts to manage exposure to these risks. Under these agreements, the Company is exposed
to counterparty credit risk to the extent that a counterparty fails to meet the terms of a contract. The Company’s exposure is
limited to the current value of the contract at the time the counterparty fails to perform. The Company assesses, both at the
inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly
effective in offsetting changes in cash flows or fair values of hedged items. The Company does not hold derivatives for trading
purposes.
Fair Value Measurements—The Company determines the fair value of its financial instruments based on the fair value
hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value.
Asset Retirement Obligations—When required, the Company recognizes the fair value of obligations to remove its tower assets
and remediate the leased land upon which certain of its tower assets are located. Generally, the associated retirement costs are
capitalized as part of the carrying amount of the related tower assets and depreciated over their estimated useful lives and the
liability is accreted through the obligation’s estimated settlement date. Fair value estimates of asset retirement obligations
generally involve discounting of estimated future cash flows. Periodic accretion of such liabilities due to the passage of time is
included in Depreciation, amortization and accretion expense in the consolidated statements of operations. Adjustments are also
made to the asset retirement obligation liability to reflect changes in the estimates of timing and amount of expected cash flows,
with an offsetting adjustment made to the related long-lived tangible asset. The significant assumptions used in estimating the
Company’s aggregate asset retirement obligation are: timing of tower removals; cost of tower removals; timing and number of
land lease renewals; expected inflation rates; and credit-adjusted, risk-free interest rates that approximate the Company’s
incremental borrowing rate.
Income Taxes—As a REIT, the Company generally is not subject to U.S. federal income taxes on income generated by its U.S.
REIT operations. However, the Company remains obligated to pay U.S. federal income taxes on certain earnings and continues
to be subject to taxation in its foreign jurisdictions. Accordingly, the consolidated financial statements reflect provisions for
federal, state, local and foreign income taxes. The Company recognizes deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis, as well as operating loss and tax credit carryforwards. The Company measures deferred tax assets and
liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and
carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities as a result of a change in
tax rates is recognized in income in the period that includes the enactment date.
The Company periodically reviews its deferred tax assets, and provides valuation allowances if, based on the available
evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Management assesses the
available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing
deferred tax assets. Valuation allowances would be reversed as a reduction to the provision for income taxes if related deferred
tax assets are deemed realizable based on changes in facts and circumstances relevant to the assets’ recoverability.
The Company classifies uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year.
The Company reports penalties and tax-related interest expense as a component of the income tax provision and interest income
from tax refunds as a component of Other expense in the consolidated statements of operations.
F-11
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Other Comprehensive Income (Loss)—Other comprehensive income (loss) refers to items excluded from net income that are
recorded as an adjustment to equity, net of tax. The Company’s other comprehensive income (loss) primarily consisted of
changes in fair value of effective derivative cash flow hedges, foreign currency translation adjustments and reclassification of
unrealized losses on effective derivative cash flow hedges. The AOCI balance included foreign currency translation losses of
$2.0 billion, $1.8 billion and $0.8 billion for the years ended December 31, 2016, 2015 and 2014, respectively.
Distributions—As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its
REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally,
the Company has distributed, and expects to continue to distribute, all or substantially all of its REIT taxable income after
taking into consideration its utilization of net operating losses (“NOLs”).
The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will depend
upon various factors, a number of which may be beyond the Company’s control, including the Company’s financial condition
and operating cash flows, the amount required to maintain its qualification for taxation as a REIT and reduce any income and
excise taxes that the Company otherwise would be required to pay, limitations on distributions in the Company’s existing and
future debt and preferred equity instruments, the Company’s ability to utilize NOLs to offset the Company’s distribution
requirements, limitations on its ability to fund distributions using cash generated through its TRSs and other factors that the
Board of Directors may deem relevant.
Acquisitions—For acquisitions that meet the definition of a business combination, the Company applies the acquisition method
of accounting where assets acquired and liabilities assumed are recorded at fair value at the date of each acquisition, and the
results of operations are included with those of the Company from the dates of the respective acquisitions. Any excess of the
purchase price paid by the Company over the amounts recognized for assets acquired and liabilities assumed is recorded as
goodwill. The Company continues to evaluate acquisitions for a period not to exceed one year after the applicable acquisition
date of each transaction to determine whether any additional adjustments are needed to the allocation of the purchase price paid
for the assets acquired and liabilities assumed. The fair value of the assets acquired and liabilities assumed is typically
determined by using either estimates of replacement costs or discounted cash flow valuation methods. When determining the
fair value of tangible assets acquired, the Company must estimate the cost to replace the asset with a new asset taking into
consideration such factors as age, condition and the economic useful life of the asset. When determining the fair value of
intangible assets acquired, the Company must estimate the applicable discount rate and the timing and amount of future tenant
cash flows, including rate and terms of renewal and attrition.
Revenue Recognition—The Company’s revenue from leasing arrangements, including fixed escalation clauses present in non-
cancellable lease agreements, is reported on a straight-line basis over the term of the respective leases when collectibility is
reasonably assured. Escalation clauses tied to the Consumer Price Index (“CPI”) or other inflation-based indices, and other
incentives present in lease agreements with the Company’s tenants are excluded from the straight-line calculation. Total
property straight-line revenues for the years ended December 31, 2016, 2015 and 2014 were $131.7 million, $155.0 million and
$123.7 million, respectively. Amounts billed upfront in connection with the execution of lease agreements are initially deferred
and reflected in Unearned revenue in the accompanying consolidated balance sheets and recognized as revenue over the terms
of the applicable leases. Amounts billed or received for services prior to being earned are deferred and reflected in Unearned
revenue in the accompanying consolidated balance sheets until the criteria for recognition have been met.
Services revenues are derived under contracts or arrangements with customers that provide for billings either on a fixed price
basis or a variable price basis, which includes factors such as time and expenses. Revenues are recognized as services are
performed, and include estimates for percentage completed. Amounts billed or received for services prior to being earned are
deferred and reflected in Unearned revenue in the accompanying consolidated balance sheets until the criteria for recognition
have been met.
Rent Expense—Many of the leases underlying the Company’s tower sites have fixed rent escalations, which provide for
periodic increases in the amount of ground rent payable by the Company over time. In addition, certain of the Company’s
tenant leases require the Company to exercise available renewal options pursuant to the underlying ground lease if the tenant
exercises its renewal option. The Company calculates straight-line ground rent expense for these leases based on the fixed non-
cancellable term of the underlying ground lease plus all periods, if any, for which failure to renew the lease imposes an
economic penalty to the Company such that renewal appears to be reasonably assured.
Total property straight-line ground rent expense for the years ended December 31, 2016, 2015 and 2014 was $67.8 million,
$56.1 million and $38.4 million, respectively. The Company records a liability for straight-line ground rent expense in Other
F-12
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
non-current liabilities. The Company records prepaid ground rent in Prepaid and other current assets and Notes receivable and
other non-current assets in the accompanying consolidated balance sheets according to the anticipated period of benefit.
Selling, General, Administrative and Development Expense—Selling, general and administrative expense consists of overhead
expenses related to the Company’s property and services operations and corporate overhead costs not specifically allocable to
any of the Company’s individual business operations. Development expense consists of costs related to the Company’s
acquisition efforts, costs associated with new business initiatives and project cancellation costs.
Stock-Based Compensation—Stock-based compensation expense is measured at the accounting measurement date based on the
fair value of the award and is generally recognized as an expense over the service period, which typically represents the vesting
period. The Company provides for accelerated vesting and extended exercise periods of stock options and restricted stock units
upon an employee’s death or permanent disability, or upon an employee’s qualified retirement, provided certain eligibility
criteria are met. Accordingly, the Company recognizes compensation expense for stock options and time-based restricted stock
units (“RSUs”) over the shorter of (i) the four-year vesting period or (ii) the period from the date of grant to the date the
employee becomes eligible for such retirement benefits, which may occur upon grant. The expense recognized includes the
impact of forfeitures as they occur.
In March 2015 and 2016, the Company granted performance-based restricted stock units (“PSUs”) to its executive officers.
Threshold, target and maximum parameters were established for the metrics for each year in the three-year performance period
for the March 2015 grants, and for a three-year performance period for the March 2016 grants. The metrics will be used to
calculate the number of shares that will be issuable when the awards vest, which may range from zero to 200% of the target
amounts. The Company recognizes compensation expense for PSUs over the three-year vesting period, subject to adjustment
based on the date the employee becomes eligible for retirement benefits as well as performance relative to grant parameters.
The fair value of stock options is determined using the Black-Scholes option-pricing model and the fair value of restricted stock
units is based on the fair value of the Company’s common stock on the date of grant. The Company recognizes all stock-based
compensation expense in either Selling, general, administrative and development expense, costs of operations or as part of the
costs associated with the construction of the tower assets.
In connection with the vesting of RSUs, the Company withholds from issuance a number of shares of common stock to satisfy
certain employee tax withholding obligations arising from such vesting. The shares withheld are considered constructively
retired. The Company recognizes the fair value of the shares withheld in Additional paid-in capital on the consolidated balance
sheets. As of December 31, 2016, the Company has withheld from issuance an aggregate of 1,219,755 shares, including
218,063 shares related to the vesting of RSUs during the year ended December 31, 2016.
Litigation Costs—The Company periodically becomes involved in various claims and lawsuits that are incidental to its
business. The Company regularly monitors the status of pending legal actions to evaluate both the magnitude and likelihood of
any potential loss. The Company accrues for these potential losses when it is probable that a liability has been incurred and the
amount of loss, or possible range of loss, can be reasonably estimated. Should the ultimate losses on contingencies or litigation
vary from estimates, adjustments to those liabilities may be required. The Company also incurs legal costs in connection with
these matters and records estimates of these expenses, which are reflected in Selling, general, administrative and development
expense in the accompanying consolidated statements of operations.
Earnings Per Common Share—Basic and Diluted—Basic net income per common share represents net income attributable to
American Tower Corporation common stockholders divided by the weighted average number of common shares outstanding
during the period. Diluted net income per common share represents net income attributable to American Tower Corporation
common stockholders divided by the weighted average number of common shares outstanding during the period and any
dilutive common share equivalents, including (A) shares issuable upon (i) the vesting of RSUs, (ii) exercise of stock options,
and (iii) conversion of the Company’s mandatory convertible preferred stock and (B) shares earned upon the achievement of the
parameters established for the PSUs, each to the extent not anti-dilutive. Dilutive common share equivalents also include the
dilutive impact of the shares issuable in the Alltel transaction, which is described in notes 15 and 18. The Company uses the
treasury stock method to calculate the effect of its outstanding RSUs, PSUs and stock options and uses the if-converted method
to calculate the effect of its outstanding mandatory convertible preferred stock.
Retirement Plan—The Company has a 401(k) plan covering substantially all employees who meet certain age and employment
requirements. For the years ended December 31, 2016, 2015 and 2014, the Company matched 75% of the first 6% of a
participant’s contributions. For the years ended December 31, 2016, 2015 and 2014, the Company contributed $9.1 million,
$7.4 million and $6.5 million to the plan, respectively.
F-13
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounting Standards Updates—In May 2014, the Financial Accounting Standards Board (the “FASB”) issued new revenue
recognition guidance, which requires an entity to recognize revenue in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for the transfer of promised goods or services to customers. The standard will replace
most existing revenue recognition guidance and will become effective for the Company on January 1, 2018. Early adoption is
permitted for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. The standard
permits the use of either the retrospective or cumulative effect transition method. Leases are not included in the scope of this
standard. The revenue to which the Company must apply this standard is generally limited to services revenue, certain power
and fuel charges not covered by lease agreements and other fees charged to customers. As of December 31, 2016, this revenue
was approximately 12% of total revenue. Although the Company is still assessing the impact of this standard on its financial
statements, it does not expect changes in the timing of revenue recognition to be material to its financial statements.
In January 2016, the FASB issued new guidance on the recognition and measurement of financial assets and financial liabilities.
The guidance amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This
standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The
Company does not expect the adoption of this guidance to have a material effect on its financial statements.
In February 2016, the FASB issued new guidance on the accounting for leases. The guidance amends the existing accounting
standards for lease accounting, including the requirement that lessees recognize assets and liabilities for leases with terms
greater than twelve months in the statement of financial position. Under the new guidance, lessor accounting is largely
unchanged. This guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after
December 15, 2018. The standard is required to be applied using a modified retrospective approach for all leases existing at, or
entered into after, the beginning of the earliest comparative period presented. The Company is evaluating the impact this
standard will have on its financial statements.
In March 2016, the FASB issued new guidance on the accounting for share-based payment transactions. The guidance amends
the accounting for taxes related to stock-based compensation, including how excess tax benefits and a company’s payments for
tax withholdings should be classified. This guidance is effective for fiscal years, and for interim periods within those fiscal
years, beginning after December 15, 2016. The Company early adopted this standard in the second quarter of 2016 and elected
to account for forfeitures as they occur, effective January 1, 2016. The adoption of this guidance was not material to the
Company’s consolidated financial statements. Additionally, the Company elected to apply the prospective transition method to
the amendments related to the presentation of excess tax benefits in the statements of cash flows.
In August 2016, the FASB issued new guidance on certain classifications within the statement of cash flows. The guidance
addresses, among other things, how cash receipts and cash payments are presented and classified in the statement of cash flows,
including payments for costs related to debt prepayments or extinguishment, as well as payments of contingent consideration
after an acquisition. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within
those fiscal years. The Company has early adopted this guidance for the year ended December 31, 2016, and it did not have a
material effect on the Company’s financial statements. Prior periods were not retrospectively adjusted.
In November 2016, the FASB issued new guidance on amounts described as restricted cash or restricted cash equivalents within
the statement of cash flows. The guidance requires amounts generally described as restricted cash and restricted cash
equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period balances
on the statement of cash flows. The guidance is effective for fiscal years, and for interim periods within those fiscal years,
beginning after December 15, 2017. The standard is required to be applied using a retrospective transition method to each
period presented. The Company does not expect the adoption of this guidance to have a material effect on its financial
statements.
In January 2017, the FASB issued new guidance that clarifies the definition of a business that an entity uses to determine
whether a transaction should be accounted for as an asset acquisition (or disposal) or a business combination. The guidance is
expected to cause fewer acquired sets of assets (and liabilities) to be identified as businesses. The guidance is effective for fiscal
years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted for
transactions that meet certain requirements. The Company is evaluating the impact this standard will have on its financial
statements.
In January 2017, the FASB issued new guidance that simplifies the accounting for goodwill impairments by eliminating Step 2
from the goodwill impairment test. The guidance requires, among other things, recognition of an impairment loss when the fair
value of a reporting unit exceeds its carrying amount. The loss recognized is limited to the total amount of goodwill allocated to
F-14
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
that reporting unit. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after
December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates
after January 1, 2017. The Company does not expect the adoption of this guidance to have a material effect on its financial
statements.
2. PREPAID AND OTHER CURRENT ASSETS
Prepaid and other current assets consisted of the following as of December 31, (in thousands):
Prepaid operating ground leases
Prepaid income tax
Unbilled receivables
Prepaid assets
Value added tax and other consumption tax receivables
Other miscellaneous current assets
Prepaids and other current assets
2016
134,167
127,142
57,661
36,300
31,570
54,193
441,033
$
$
$
2015
128,542
45,056
34,173
32,892
30,239
35,333
306,235
3. PROPERTY AND EQUIPMENT
Property and equipment (including assets held under capital leases) consisted of the following as of December 31, (in
thousands):
Towers
Equipment
Buildings and improvements
Land and improvements (2)
Construction-in-progress
Total
Less accumulated depreciation
Property and equipment, net
Estimated
Useful Lives
(years) (1)
Up to 20
2 - 15
3 - 32
Up to 20
2016
$ 11,740,479
1,176,260
621,874
1,909,732
203,411
15,651,756
(5,134,498)
$ 10,517,258
2015
$ 10,726,656
1,095,906
607,661
1,728,115
238,960
14,397,298
(4,530,874)
$ 9,866,424
_______________
(1) Assets on leased land are depreciated over the shorter of the estimated useful life of the asset or the term of the corresponding ground lease taking into
consideration lease renewal options and residual value.
(2) Estimated useful lives apply to improvements only.
Depreciation expense for the years ended December 31, 2016, 2015 and 2014 was $758.9 million, $661.4 million and $551.8
million, respectively.
As of December 31, 2016, property and equipment included $4,735.3 million and $1,198.0 million of capital lease assets and
accumulated depreciation, respectively. As of December 31, 2015, property and equipment included $5,112.4 million and
$1,414.6 million of capital lease assets and accumulated depreciation, respectively. The decreases in capital lease assets and
accumulated depreciation were primarily due to the Company exercising its option to purchase 1,523 communications towers
that were previously subject to capital leases. See note 18 for further discussion of this transaction. As of December 31, 2016
and 2015, capital lease assets were primarily classified as towers and land and improvements.
F-15
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying value of goodwill for the Company’s business segments were as follows (in thousands):
Property
Balance as of January 1, 2015
Additions
Effect of foreign currency translation
U.S.
$ 3,356,096
$
23,067
—
Balance as of December 31, 2015
$ 3,379,163
$
Asia
178,521
610
(8,412)
170,719
Additions (1)
Effect of foreign currency translation
—
—
Balance as of December 31, 2016
$ 3,379,163
881,783 (2)
(23,189)
$ 1,029,313
EMEA
Latin
America
$
78,647
$
416,922
68,663
(14,740)
132,570
40,386
(22,445)
150,511
$
$
122,345
(131,902)
407,365
$
53,575
48,765
Services
1,988
$
Total
$ 4,032,174
—
—
$
1,988
214,685
(155,054)
$ 4,091,805
—
—
975,744
3,131
$
509,705
$
1,988
$ 5,070,680
_______________
(1) Additions consist of $975.6 million resulting from 2016 acquisitions and $0.1 million from revisions to prior year acquisitions resulting from
measurement period adjustments.
(2) Assumed in the acquisition of Viom (see note 6).
The Company’s other intangible assets subject to amortization consisted of the following (in thousands):
Estimated Useful
Lives
(years)
As of December 31, 2016
As of December 31, 2015
Gross
Carrying
Value
Accumulated
Amortization
Net Book
Value
Gross
Carrying
Value
Accumulated
Amortization
Net Book
Value
(in thousands)
Acquired network
location intangibles
(1)
Acquired tenant-
related intangibles
Acquired licenses
and other
intangibles
Economic Rights,
TV Azteca
Total other
intangible assets
Up to 20
$ 4,622,316
$ (1,280,284) $ 3,342,032
$ 3,980,281
$ (1,052,393) $ 2,927,888
15-20
10,130,466
(2,224,119)
7,906,347
8,640,554
(1,763,853)
6,876,701
3-20
28,140
(4,827)
23,313
28,293
(5,486)
22,807
70
13,893
(10,974)
2,919
21,688
(11,208)
10,480
$14,794,815
$ (3,520,204) $11,274,611
$12,670,816
$ (2,832,940) $ 9,837,876
_______________
(1) Acquired network location intangibles are amortized over the shorter of the term of the corresponding ground lease taking into consideration lease
renewal options and residual value or up to 20 years, as the Company considers these intangibles to be directly related to the tower assets.
The acquired network location intangibles represent the value to the Company of the incremental revenue growth that could
potentially be obtained from leasing the excess capacity on acquired communications sites. The acquired tenant-related
intangibles typically represent the value to the Company of tenant contracts and relationships in place at the time of an
acquisition or similar transaction, including assumptions regarding estimated renewals. This item was previously referred to as
customer-related intangibles.
The Company amortizes its acquired network location intangibles and tenant-related intangibles on a straight-line basis over the
estimated useful lives. As of December 31, 2016, the remaining weighted average amortization period of the Company’s
intangible assets, excluding the TV Azteca Economic Rights detailed in note 5, was 16 years. Amortization of intangible assets
for the years ended December 31, 2016, 2015 and 2014 was $699.8 million, $568.3 million and $411.7 million, respectively.
Based on current exchange rates, the Company expects to record amortization expense as follows over the next five years (in
millions):
F-16
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ending December 31,
2017
2018
2019
2020
2021
$
710.5
707.8
705.1
686.3
676.8
5. NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS
Notes receivable and other non-current assets consisted of the following as of December 31, (in thousands):
Long-term prepaid ground rent
Notes receivable
Other miscellaneous assets
Notes receivable and other non-current assets
$
$
2016
467,781
83,736
290,006
2015
388,790
83,658
260,455
$
841,523
$
732,903
TV Azteca Note Receivable—In 2000, the Company loaned TV Azteca, S.A. de C.V. (“TV Azteca”), the owner of a major
national television network in Mexico, $119.8 million. The loan has an interest rate of 13.11%, payable quarterly, which at the
time of issuance was determined to be below market and therefore a corresponding discount was recorded. The term of the loan
is 70 years; however, the loan may be prepaid by TV Azteca without penalty during the last 50 years of the agreement. The
discount on the loan is being amortized to Interest income, TV Azteca, net of interest expense on the Company’s consolidated
statements of operations, using the effective interest method over the 70-year term of the loan.
Since inception, TV Azteca has repaid $28.0 million of principal on the loan. As of December 31, 2016 and 2015, the
outstanding balance on the loan was $91.8 million, or $82.9 million, net of discount.
TV Azteca Economic Rights—Simultaneous with the signing of the loan agreement, the Company also entered into a 70-year
Economic Rights Agreement with TV Azteca regarding space not used by TV Azteca on approximately 190 of its broadcast
towers. In exchange for the issuance of the below market interest rate loan and the annual payment of $1.5 million to TV Azteca
(under the Economic Rights Agreement), the Company has the right to market and lease the unused tower space on the
broadcast towers (the “Economic Rights”). TV Azteca retains title to these towers and is responsible for their operation and
maintenance. The Company is entitled to 100% of the revenues generated from leases with tenants on the unused space and is
responsible for any incremental operating expenses associated with those tenants.
The term of the Economic Rights Agreement is 70 years; however, TV Azteca has the right to purchase, at fair market value, the
Economic Rights from the Company at any time during the last 50 years of the agreement. Should TV Azteca elect to purchase
the Economic Rights, in whole or in part, it would also be obligated to repay a proportional amount of the loan discussed above
at the time of such election. The Company’s obligation to pay TV Azteca $1.5 million annually would also be reduced
proportionally.
The Company accounted for the annual payment of $1.5 million as a capital lease by initially recording an asset and a
corresponding liability of $18.6 million. The capital lease asset also included the original discount on the note. The capital
lease asset and original discount on the note aggregated $30.2 million at the time of the transaction and represents the cost to
acquire the Economic Rights. The Economic Rights asset was recorded as an intangible asset and is being amortized over the
70-year life of the Economic Rights Agreement.
6. ACQUISITIONS
The estimates of the fair value of the assets or rights acquired and liabilities assumed at the date of the applicable acquisition
are subject to adjustment during the measurement period (up to one year from the particular acquisition date). The primary
areas of the accounting for the acquisitions that are not yet finalized relate to the fair value of certain tangible and intangible
assets acquired and liabilities assumed, which may include contingent consideration, residual goodwill and any related tax
impact. The fair value of these net assets acquired are based on management’s estimates and assumptions, as well as other
F-17
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
information compiled by management, including valuations that utilize customary valuation procedures and techniques. While
the Company believes that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired
and liabilities assumed, it evaluates any necessary information prior to finalization of the fair value. During the measurement
period, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as
of the acquisition date that, if known, would have resulted in the revised estimated values of those assets or liabilities as of that
date.
Impact of current year acquisitions—The Company typically acquires communications sites from wireless carriers or other
tower operators and subsequently integrates those sites into its existing portfolio of communications sites. The financial results
of the Company’s acquisitions have been included in the Company’s consolidated statement of operations for the year ended
December 31, 2016 from the date of the respective acquisition. The date of acquisition, and by extension the point at which the
Company begins to recognize the results of an acquisition, may depend upon, among other things, the receipt of contractual
consents, the commencement and extent of leasing arrangements and the timing of the transfer of title or rights to the assets,
which may be accomplished in phases. Sites acquired from communications service providers may never have been operated as
a business and may have been utilized solely by the seller as a component of its network infrastructure. An acquisition may or
may not involve the transfer of business operations or employees.
The estimated aggregate impact of the 2016 acquisitions on the Company’s revenues and gross margin for the year ended
December 31, 2016 was approximately $567.9 million and $241.1 million, respectively. The revenues and gross margin
amounts also reflect incremental revenues from the addition of new tenants to such sites subsequent to the transaction date.
Incremental amounts of segment selling, general, administrative and development expense subsequent to the transaction date
have not been reflected.
For those acquisitions accounted for as business combinations, the Company recognizes acquisition and merger related
expenses in the period in which they are incurred and services are received. Acquisition and merger related expenses may
include finder’s fees, advisory, legal, accounting, valuation and other professional or consulting fees, fair value adjustments to
contingent consideration and general administrative costs directly related to the transaction. Integration costs include
incremental and nonrecurring costs necessary to convert data, retain employees and otherwise enable the Company to operate
new businesses efficiently. The Company records acquisition and merger related expenses, as well as integration costs in Other
operating expenses in the consolidated statements of operations.
During the years ended December 31, 2016, 2015 and 2014, the Company recorded the following acquisition and merger
related expenses and integration costs (in thousands):
Acquisition and merger related expenses
Integration costs
2016 Transactions
Year Ended December 31,
2016
2015
2014
$
$
15,875
9,901
$
$
18,799
18,097
$
$
26,969
13,057
Viom Acquisition—On April 21, 2016, the Company, through its wholly owned subsidiary, ATC Asia Pacific Pte. Ltd. (“ATC Asia”),
acquired a 51% controlling ownership interest in Viom, a telecommunications infrastructure company that owns and operates
approximately 42,000 wireless communications towers and 200 indoor DAS networks in India, from certain Viom shareholders,
including the managing shareholder, SREI Infrastructure Finance Limited, several other minority shareholders and Tata Teleservices
Limited, pursuant to its previously announced share purchase agreement (the “Viom Acquisition”). Consideration for the acquisition
included 76.4 billion INR in cash ($1.1 billion at the date of the Viom Acquisition), as well as the assumption of approximately
52.3 billion INR ($0.8 billion at the date of the Viom Acquisition) of existing debt, which included 1.7 billion INR ($25.1 million
at the date of the Viom Acquisition) of mandatorily redeemable preference shares issued by Viom.
On April 21, 2016, the closing date of the Viom Acquisition, ATC Asia’s shareholders agreement (the “Shareholders
Agreement”) with Viom and the following remaining Viom shareholders - Tata Sons Limited, Tata Teleservices Limited, IDFC
Private Equity Fund III, Macquarie SBI Investments Pte Limited and SBI Macquarie Infrastructure Trust (collectively, the
“Remaining Shareholders”) - became effective. The Shareholders Agreement provides that, among other things, the Remaining
Shareholders will have certain governance, anti-dilution and contractual rights. The Remaining Shareholders have put options,
and ATC Asia has a call option, subject to the time periods and conditions outlined in the Shareholders Agreement.
F-18
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Other Acquisitions—During the year ended December 31, 2016, the Company acquired a total of 891 communications sites in
the United States, Brazil, Chile, Germany, Mexico, Nigeria and South Africa, and a company holding urban
telecommunications assets and fiber in Argentina, for an aggregate purchase price of $304.4 million (including contingent
consideration of $8.8 million). Of the total purchase price, $12.1 million is reflected in Accounts payable in the consolidated
balance sheet as of December 31, 2016. The purchase prices of certain transactions are subject to post-closing adjustments.
The following table summarizes the preliminary allocation of the purchase prices for fiscal year 2016 acquisitions based upon
their estimated fair value at the date of acquisition (in thousands).
Current assets
Non-current assets
Property and equipment
Intangible assets (1):
Tenant-related intangible assets
Network location intangible assets
Current liabilities
Deferred tax liability
Other non-current liabilities
Net assets acquired
Goodwill (2)
Fair value of net assets acquired
Debt assumed
Redeemable noncontrolling interests
Purchase Price
$
Asia
Viom
276,560
57,645
701,988
1,369,580
666,364
(195,900)
(619,070)
(102,751)
2,154,416
881,783
3,036,199
(786,889)
(1,100,804)
$ 1,148,506
$
Other
25,477
2,336
81,521
105,557
83,645
(14,782)
(43,756)
(29,472)
210,526
93,856
304,382
—
—
$
304,382
_______________
(1) Tenant-related intangible assets and network location intangible assets are amortized on a straight-line basis over periods of up to 20 years.
(2) Primarily results from purchase accounting adjustments, which are at least partially deductible for tax purposes in certain foreign jurisdictions.
2015 Transactions
Verizon Transaction—On March 27, 2015, the Company completed its acquisition of the exclusive right to lease, acquire or
otherwise operate and manage 11,449 wireless communications sites from Verizon Communications Inc. (“Verizon”) in the
United States (the “Verizon Transaction”) pursuant to the Master Agreement entered into on February 5, 2015 and the related
Master Prepaid Lease, Management Agreement, Sale Site Master Lease Agreement and MPL Site Master Lease Agreement.
The Company, through its wholly-owned subsidiary, leased or subleased from certain Verizon subsidiaries 11,286
communications sites, including the interest in the land, the tower and certain related improvements and tower related assets
pursuant to the Master Prepaid Lease. Under the Master Prepaid Lease, the Company has the exclusive right to lease and
operate the Verizon communications sites for a weighted average term of approximately 28 years and the Company will have
the option to purchase the communications sites in various tranches at the end of the respective lease or sublease terms at a
fixed amount stated in the sublease for such tranche plus the fair market value of certain alterations made to the related towers.
The Company accounted for the payment with respect to the leased sites as a capital lease and the respective lease and non-
lease elements related to tower assets and intangible assets, as described below. In addition, the Company, through its wholly-
owned subsidiary, acquired 163 communications sites. The Company accounted for these sites as a business combination and
the purchase price is reflected below in “Other Acquisitions.”
Upon closing, the Company agreed to lease, sublease or otherwise make available collocation space at each of the
communications sites to Verizon for an initial non-cancellable term of ten years, subject to automatic extension for eight
additional five-year renewal terms. The initial collocation rent is $1,900 per month for each communications site, with annual
increases of 2%.
F-19
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The total consideration for the Verizon Transaction was $5.066 billion, which includes consideration for the sites under the
Master Prepaid Lease as well as cash consideration for the 163 acquired sites. The allocation of the consideration transfered for
the 11,286 communication sites under the Master Prepaid Lease was finalized during the year ended December 31, 2015.
Airtel Acquisition—During the year ended December 31, 2015, the Company acquired 4,716 communications sites in Nigeria
from certain subsidiaries of Bharti Airtel Limited (“Airtel”) for an aggregate total purchase price of $1.112 billion, including
value added tax. During the year ended December 31, 2016 there were no changes to the preliminary allocation of the purchase
price and the measurement period expired.
The estimates of the fair value of the assets or rights acquired and liabilities assumed at the date of the applicable acquisition
are subject to adjustment during the measurement period (up to one year from the applicable acquisition date). During the year
ended December 31, 2016, the Company adopted new guidance on the accounting for measurement-period adjustments related
to business combinations. This guidance requires that an acquirer make adjustments to the provisional amounts recognized at
the acquisition date with a corresponding adjustment to goodwill in the current period. Additionally, the effects on earnings of
all measurement-period adjustments are included in current period earnings.
During the year ended December 31, 2016, post-closing adjustments impacted the following 2015 acquisitions:
TIM Acquisition—On April 29, 2015, the Company acquired 4,176 communications sites from TIM Celular S.A. (“TIM”) for
an initial aggregate purchase price of $644.3 million, which was subsequently reduced by $0.8 million during the year ended
December 31, 2016. On September 30, 2015, the Company acquired an additional 1,125 communications sites from TIM for an
initial aggregate purchase price of $130.9 million. On December 16, 2015, the Company acquired an additional 182
communications sites from TIM for an initial aggregate purchase price of $21.7 million.
Other Acquisitions—During the year ended December 31, 2015, the Company acquired a total of 439 communications sites and
related assets in Brazil, India, Mexico and Uganda for an aggregate purchase price of $22.5 million (including $0.3 million for
the estimated fair value of contingent consideration), which was satisfied with cash consideration and by the issuance of credits
to be applied against trade accounts receivable. The Company also acquired a total of 210 communications sites and equipment,
as well as four property interests, in the United States for an aggregate purchase price of $142.4 million (including $1.3 million
for the estimated fair value of contingent consideration), which included the 163 communications sites acquired as part of the
Verizon Transaction, described above. The initial aggregate purchase price of other acquisitions was subsequently reduced by
$0.2 million during the year ended December 31, 2016.
The following table summarizes the preliminary and final allocations of the purchase prices paid and the amounts of assets
acquired and liabilities assumed for the fiscal year 2015 acquisitions based upon their estimated fair value at the date of
acquisition (in thousands).
Current assets
Non-current assets
Property and equipment
Intangible assets (2):
Tenant-related intangible assets
Network location intangible assets
Current liabilities
Other non-current liabilities
Net assets acquired
Goodwill (3)
Fair value of net assets acquired
Debt assumed
Purchase Price
Preliminary Allocation
Final Allocation (1)
Latin America
Latin America
TIM
Other
TIM
Other
$
— $
—
275,630
1,113
995
42,716
$
— $
—
274,530
1,113
995
42,716
361,822
115,562
(3,192)
(74,966)
674,856
122,011
796,867
—
796,867
63,001
37,691
(624)
(4,028)
140,864
24,011
164,875
—
$ 164,875
$
361,765
115,795
(3,192)
(74,966)
673,932
122,116
796,048
—
796,048
62,832
37,691
(624)
(4,028)
140,695
24,011
164,706
—
$ 164,706
$
F-20
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
_______________
(1) The allocation of the purchase prices was finalized during the year ended December 31, 2016.
(2) Tenant-related intangible assets and network location intangible assets are amortized on a straight-line basis over periods of up to 20 years.
(3) Goodwill was allocated to the Company’s property segments. The Company expects goodwill recorded in its U.S. and Asia property segments will be
deductible for local tax purposes. The Company expects goodwill recorded in its Latin America property segment will be deductible in certain jurisdictions
for local tax purposes.
Pro Forma Consolidated Results (Unaudited)
The following table presents the unaudited pro forma financial results as if the 2016 acquisitions had occurred on January 1,
2015 and the 2015 acquisitions had occurred on January 1, 2014. The pro forma results do not include any anticipated cost
synergies, costs or other integration impacts. Accordingly, such pro forma amounts are not necessarily indicative of the results
that actually would have occurred had the transactions been completed on the dates indicated, nor are they indicative of the
future operating results of the Company.
Pro forma revenues
Pro forma net income attributable to American Tower Corporation common stockholders
Pro forma net income per common share amounts:
Basic net income attributable to American Tower Corporation common stockholders
Diluted net income attributable to American Tower Corporation common stockholders
Other Signed Acquisitions
Year Ended December 31,
2016
$ 6,055,187
2015
$ 5,886,691
$
$
$
847,738
1.99
1.97
$
$
$
544,641
1.29
1.27
Airtel Tanzania—On March 17, 2016, the Company entered into a definitive agreement with Airtel, through its subsidiary
company Airtel Tanzania Limited (“Airtel Tanzania”), pursuant to which the Company may acquire approximately 1,350 of
Airtel Tanzania’s communications sites in Tanzania, for total consideration of approximately $179.0 million, subject to
customary adjustments. Under the definitive agreement, the Company may pay additional consideration to acquire up to
approximately 100 additional communications sites currently in development. The closing of this transaction is subject to
customary closing conditions. In light of recent legislation in Tanzania, the Company is considering its options, including
negotiating potential adjustments to the definitive agreement in the event a waiver of such legislation is not obtained.
FPS Towers France—On December 19, 2016, ATC Europe entered into a definitive agreement with Antin Infrastructure
Partners and the individuals party thereto to acquire 100% of the outstanding shares of FPS Towers (“FPS”). FPS owns and
operates approximately 2,400 wireless tower sites in France. This transaction closed on February 15, 2017 for total
consideration of 713.9 million Euros ($757.1 million at the date of acquisition), a portion of which was funded by PGGM (see
note 23).
Acquisition-Related Contingent Consideration
The Company may be required to pay additional consideration under certain agreements for the acquisition of communications
sites if specific conditions are met or events occur. In Colombia and Ghana, the Company may be required to pay additional
consideration upon the conversion of certain barter agreements with other wireless carriers to cash-paying lease agreements. In
the United States, India and South Africa, the Company may be required to pay additional consideration if certain pre-
designated tenant leases commence during a specified period of time.
F-21
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the value of the Company’s contingent consideration is as follows (in thousands):
Colombia
Ghana
India
South Africa
United States
Total
Year Ended December 31, 2016
Maximum
potential value (1)
23,557
$
Estimated value at
December 31, 2016 (2)
5,342
$
Additions (3)
$
— $
555
—
22,291
393
555
—
9,154
393
—
—
8,692
119
$
46,796
$
15,444
$
8,811
$
Settlements
Change in Fair
Value
— $
—
—
—
(306)
(306) $
(4,964)
47
(161)
—
(1,294)
(6,372)
_______________
(1) The maximum potential value is based on exchange rates at December 31, 2016. The minimum value could be zero.
(2) Estimate is determined using a probability weighted average of expected outcomes as of December 31, 2016.
(3) Based on preliminary acquisition accounting upon closing of certain acquisitions during the year ended December 31, 2016.
For more information regarding contingent consideration, see note 11.
7. ACCRUED EXPENSES
Accrued expenses consisted of the following as of December 31, (in thousands):
Accrued property and real estate taxes
Payroll and related withholdings
Accrued rent
Amounts payable to tenants
Accrued construction costs
Accrued income tax payable
Other accrued expenses
Accrued expenses
2016
138,361
76,141
50,951
32,326
28,587
11,551
282,646
620,563
$
$
2015
75,827
62,334
54,732
58,683
19,857
11,704
233,276
516,413
$
$
F-22
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. LONG-TERM OBLIGATIONS
Outstanding amounts under the Company’s long-term obligations, reflecting discounts, premiums, debt issuance costs and fair
value adjustments due to interest rate swaps consisted of the following as of December 31, (in thousands):
2016
498,642
$
2015
497,478
$
1,290,267
1,288,689
347,108
519,437
179,459
132,960
549,528
24,537
151,045
286,009
3,978,992
539,975
993,936
1,385,000
998,676
999,716
297,032
744,917
697,352
744,762
643,848
497,343
572,764
696,013
989,269
346,262
518,776
—
145,540
219,902
3,509,231
1,225,000
1,993,601
1,980,000
997,693
999,769
296,242
743,557
697,216
—
642,786
497,188
—
695,374
987,966
Contractual Interest
Rate (1)
Maturity Date (1)
1.551%
3.070%
2.350%
3.482%
March 15, 2018
March 15, 2023
June 15, 2020
June 16, 2025
281,902
4.336% - 7.358%
March 15, 2019
201,930
6.392% - 9.522%
April 15, 2020
8,752
8.15% - 11.70%
13.500%
Various
Various
Various
Various
Various
Various
1.963%
2.020%
2.432%
4.500%
June 28, 2020
January 31, 2022
January 31, 2022
January 15, 2018
3.400% February 15, 2019
7.250%
2.800%
May 15, 2019
June 1, 2020
5.050% September 1, 2020
3.300% February 15, 2021
3.450% September 15, 2021
5.900% November 1, 2021
2.250%
4.700%
3.500%
January 15, 2022
March 15, 2022
January 31, 2023
Series 2013-1A Securities (2)
Series 2013-2A Securities (3)
Series 2015-1 Notes (4)
Series 2015-2 Notes (5)
2012 GTP Notes (6) (7)
Unison Notes (7) (8)
India indebtedness (9)
Viom preference shares (10)
Shareholder loans (11)
Other subsidiary debt (12)
Total American Tower subsidiary debt
2013 Credit Facility (13)
Term Loan (13)
2014 Credit Facility (13)
4.500% senior notes
3.40% senior notes
7.25% senior notes (7)
2.800% senior notes
5.050% senior notes
3.300% senior notes
3.450% senior notes
5.900% senior notes
2.250% senior notes
4.70% senior notes
3.50% senior notes
5.00% senior notes
4.000% senior notes
4.400% senior notes
3.375% senior notes
3.125% senior notes
1,002,742
1,003,453
5.000% February 15, 2024
739,985
495,212
983,369
396,713
739,057
4.000%
June 1, 2025
—
—
—
4.400% February 15, 2026
3.375%
3.125%
October 15, 2026
January 15, 2027
Total American Tower Corporation debt
Other debt, including capital lease obligations
Total
Less current portion long-term obligations
Long-term obligations
14,418,624
13,498,902
135,849
110,876
18,533,465
(238,806)
$ 18,294,659
17,119,009
(50,202)
$ 17,068,807
_______________
(1) Represents the interest rate or maturity date as of December 31, 2016; interest rate does not reflect the impact of interest rate swap agreements.
(2) Maturity date reflects the anticipated repayment date; final legal maturity is March 15, 2043.
(3) Maturity date reflects the anticipated repayment date; final legal maturity is March 15, 2048.
(4) Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2045.
(5) Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2050.
(6) Secured debt assumed by the Company in connection with its acquisition of MIP Tower Holdings LLC (“MIPT”). Maturity date represents anticipated
repayment date; final legal maturity is March 15, 2042.
F-23
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(7) Debt was repaid in full subsequent to December 31, 2016. For more information see note 23.
(8) Secured debt assumed in connection with the acquisition of certain legal entities holding a portfolio of property interests from Unison Holdings, LLC and
Unison Site Management II, L.L.C. (together, “Unison”). Maturity date reflects the anticipated repayment date; final legal maturity is April 15, 2040.
(9) Denominated in Indian Rupees (“INR”). Debt includes India working capital facility, remaining debt assumed by the Company in connection with the Viom
Acquisition and debt that has been entered into by ATC TIPL.
(10) Mandatorily redeemable preference shares (the “Preference Shares”) classified as debt, assumed by the Company in connection with the Viom Acquisition.
The shares are to be redeemed in equal parts on March 26, 2017 and March 26, 2018.
(11) Reflects balances owed to the Company’s joint venture partners in Ghana and Uganda. The Ghana loan is denominated in Ghanaian Cedi (“GHS”) and the
Uganda loan was denominated in U.S. Dollars (“USD”). The Uganda loan accrued interest at a variable rate. Effective January 1, 2017, this loan, which had
an outstanding balance of $80.0 million, was converted by the holder to a new shareholder note for $31.8 million, bearing interest at 16.6% per annum. The
remaining balance of the Uganda loan was converted into equity.
(12) Includes the BR Towers Debentures (as defined below), which are denominated in Brazilian Reais (“BRL”) and amortize through October 15, 2023, the
South African Credit Facility (as defined below), which is denominated in South African Rand (“ZAR”) and amortizes through December 17, 2020, the
Colombian Credit Facility (as defined below), which is denominated in Colombian Pesos (“COP”) and amortizes through April 24, 2021 and the Brazil
Credit Facility (as defined below), which is denominated in BRL and matures on January 15, 2022.
(13) Debt accrues interest at a variable rate.
American Tower Subsidiary Debt
Subsidiary Debt
The Company has several securitizations in place. Cash flows generated by the sites that secure the securitized debt are only
available for payment of such debt and are not available to pay the Company’s other obligations or the claims of its creditors.
However, subject to certain restrictions, the Company holds the right to the excess cash flows not needed to pay the securitized
debt and other obligations arising out of the securitizations. The securitized debt is the obligation of the issuers thereof or
borrowers thereunder, as applicable, and their subsidiaries, and not of the Company or its other subsidiaries.
Secured Tower Revenue Securities, Series 2013-1A and Series 2013-2A—In March 2013, the Company completed a private
issuance (the “2013 Securitization”) of $1.8 billion of Secured Tower Revenue Securities, Series 2013-1A and Series 2013-2A
(the “2013 Securities”) issued by American Tower Trust I (the “Trust”), a trust established by American Tower Depositor Sub,
LLC, a wholly owned special purpose subsidiary of the Company. The net proceeds of the transaction were $1.78 billion. The
assets of the Trust consist of a nonrecourse loan (the “Loan”) to American Tower Asset Sub, LLC and American Tower Asset Sub
II, LLC (the “AMT Asset Subs”), pursuant to a First Amended and Restated Loan and Security Agreement dated as of March 15,
2013 (the “Loan Agreement”).
The Loan is secured by (i) mortgages, deeds of trust and deeds to secure debt on substantially all of the 5,181 wireless and
broadcast communications towers owned by the AMT Asset Subs (the “2013 Secured Towers”), (ii) a pledge of the AMT Asset
Subs’ operating cash flows from the 2013 Secured Towers, (iii) a security interest in substantially all of the AMT Asset Subs’
personal property and fixtures and (iv) the AMT Asset Subs’ rights under the tenant leases and the management agreement entered
into in connection with the 2013 Securitization. American Tower Holding Sub, LLC, whose only material assets are its equity
interests in each of the AMT Asset Subs, and American Tower Guarantor Sub, LLC, whose only material asset are its equity
interests in American Tower Holding Sub, LLC, each have guaranteed repayment of the Loan and pledged their equity interests in
their respective subsidiary or subsidiaries as security for such payment obligations.
The 2013 Securities were issued in two separate series of the same class pursuant to a First Amended and Restated Trust and
Servicing Agreement, with terms identical to the Loan. The effective weighted average life and interest rate of the 2013 Securities
was 8.6 years and 2.648%, respectively, as of the date of issuance.
American Tower Secured Revenue Notes, Series 2015-1, Class A and Series 2015-2, Class A—In May 2015, GTP Acquisition
Partners I, LLC (“GTP Acquisition Partners”), one of the Company’s wholly owned subsidiaries, refinanced existing debt with
cash on hand and proceeds from a private issuance (the “2015 Securitization”) of $350.0 million of American Tower Secured
Revenue Notes, Series 2015-1, Class A (the “Series 2015-1 Notes”) and $525.0 million of American Tower Secured Revenue
Notes, Series 2015-2, Class A (the “Series 2015-2 Notes,” and together with the Series 2015-1 Notes, the “2015 Notes”).
The 2015 Notes are secured by (i) mortgages, deeds of trust and deeds to secure debt on substantially all of the 3,596
communications sites (the “2015 Secured Sites”) owned by GTP Acquisition Partners and its subsidiaries (the “GTP Entities”)
and their operating cash flows, (ii) a security interest in substantially all of the personal property and fixtures of the GTP Entities,
including GTP Acquisition Partners’ equity interests in its subsidiaries and (iii) the rights of the GTP Entities under a management
agreement. American Tower Holding Sub II, LLC, whose only material assets are its equity interests in GTP Acquisition Partners,
has guaranteed repayment of the 2015 Notes and pledged its equity interests in GTP Acquisition Partners as security for such
payment obligations.
F-24
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The 2015 Notes were issued by GTP Acquisition Partners pursuant to a Third Amended and Restated Indenture and related series
supplements, each dated as of May 29, 2015 (collectively, the “2015 Indenture”), between the GTP Entities and The Bank of New
York Mellon, as trustee. The effective weighted average life and interest rate of the 2015 Notes was 8.1 years and 3.029%,
respectively, as of the date of issuance.
Under the terms of the Loan Agreement and 2015 Indenture, amounts due will be paid from the cash flows generated by the 2013
Secured Towers or the 2015 Secured Sites, respectively, which must be deposited into certain reserve accounts, and thereafter
distributed solely pursuant to the terms of the Loan Agreement or 2015 Indenture, as applicable. On a monthly basis, after
payment of all required amounts under the Loan Agreement or 2015 Indenture, as applicable, including interest payments, subject
to the conditions described below, the excess cash flows generated from the operation of such assets are released to the AMT
Asset Subs or GTP Acquisition Partners, as applicable, and can then be distributed to, and used by, the Company.
In order to distribute any excess cash flow to the Company, the AMT Asset Subs and GTP Acquisition Partners must each
maintain a specified debt service coverage ratio (the “DSCR”), generally defined as the net cash flow divided by the amount of
interest, servicing fees and trustee fees required to be paid over the succeeding 12 months on the principal amount of the Loan or
the 2015 Notes, as applicable, that will be outstanding on the payment date following such date of determination. If the DSCR
were equal to or below 1.30x (the “Cash Trap DSCR”) for any quarter, then all cash flow in excess of amounts required to make
debt service payments, to fund required reserves, to pay management fees and budgeted operating expenses and to make other
payments required under the applicable transaction documents, referred to as excess cash flow, will be deposited into a reserve
account (the “Cash Trap Reserve Account”) instead of being released to the AMT Asset Subs or GTP Acquisition Partners, as
applicable. The funds in the Cash Trap Reserve Account will not be released to the AMT Asset Subs or GTP Acquisition Partners
unless the DSCR, as applicable, exceeds the Cash Trap DSCR for two consecutive calendar quarters.
Additionally, an “amortization period” commences if, as of the end of any calendar quarter, the DSCR falls below 1.15x (the
“Minimum DSCR”) and will continue to exist until the DSCR exceeds the Minimum DSCR for two consecutive calendar
quarters. With respect to the 2013 Securities, an “amortization period” also commences if, on the anticipated repayment date the
component of the Loan corresponding to the applicable subclass of the 2013 Securities has not been repaid in full, provided that
such amortization period shall apply with respect to such component that has not been repaid in full. If either series of the 2015
Notes have not been repaid in full on the applicable anticipated repayment date, additional interest will accrue on the unpaid
principal balance of the applicable series of the 2015 Notes, and such series will begin to amortize on a monthly basis from excess
cash flow. During an amortization period, all excess cash flow and any amounts then in the applicable Cash Trap Reserve Account
would be applied to payment of the principal on the Loan or the 2015 Notes, as applicable.
The Loan and the 2015 Notes may be prepaid in whole or in part at any time, provided such payment is accompanied by the
applicable prepayment consideration. If the prepayment occurs within 12 months of the anticipated repayment date with respect to
the Series 2013-1A Securities or the Series 2015-1 Notes, or 18 months of the anticipated repayment date with respect to the
Series 2013-2A Securities or the Series 2015-2 Notes, no prepayment consideration is due. The Loan may be defeased in whole at
any time prior to the anticipated repayment date for any component of the Loan then outstanding.
The Loan Agreement and the 2015 Indenture include operating covenants and other restrictions customary for transactions subject
to rated securitizations. Among other things, the AMT Asset Subs and the GTP Entities, as applicable, are prohibited from
incurring other indebtedness for borrowed money or further encumbering their assets subject to customary carve-outs for ordinary
course trade payables and permitted encumbrances (as defined in the Loan Agreement or the 2015 Indenture, as applicable). The
organizational documents of the AMT Asset Subs and the GTP Entities contain provisions consistent with rating agency
securitization criteria for special purpose entities, including the requirement that they maintain independent directors. The Loan
Agreement and the 2015 Indenture also contain certain covenants that require the AMT Asset Subs or GTP Acquisition Partners,
as applicable, to provide the respective trustee with regular financial reports and operating budgets, promptly notify such trustee
of events of default and material breaches under the Loan Agreement and other agreements related to the 2013 Secured Towers or
the 2015 Indenture and other agreements related to the 2015 Secured Sites, as applicable, and allow the applicable trustee
reasonable access to the sites, including the right to conduct site investigations.
A failure to comply with the covenants in the Loan Agreement or the 2015 Indenture could prevent the AMT Asset Subs or GTP
Acquisition Partners from distributing excess cash flow to the Company. Furthermore, if the AMT Asset Subs or GTP Acquisition
Partners were to default on the Loan or a series of the 2015 Notes, the applicable trustee may seek to foreclose upon or otherwise
convert the ownership of all or any portion of the 2013 Secured Towers or the 2015 Secured Sites, respectively, in which case the
Company could lose the revenue associated with those assets. With respect to the 2015 Notes, upon occurrence and during an
event of default, the trustee may, in its discretion or at direction of holders of more than 50% of the aggregate outstanding
F-25
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
principal of any series of the 2015 Notes, declare such series of 2015 Notes immediately due and payable, in which case any
excess cash flow would need to be used to pay holders of such notes.
Further, under the Loan Agreement and the 2015 Indenture, the AMT Asset Subs or GTP Acquisition Partners, respectively, are
required to maintain reserve accounts, including for amounts received or due from tenants related to future periods, property
taxes, insurance, ground rents, certain expenses and debt service. Based on the terms of the Loan Agreement and the 2015
Indenture, all rental cash receipts received for each month are reserved for the succeeding month and held in an account
controlled by the applicable trustee and then released. The $82.7 million held in the reserve accounts with respect to the 2013
Securitization and the $16.8 million held in the reserve accounts with respect to the 2015 Securitization as of December 31, 2016
are classified as Restricted cash on the Company’s accompanying consolidated balance sheets.
2012 GTP Notes—In connection with the acquisition of MIPT, the Company assumed existing indebtedness issued by certain
subsidiaries of Global Tower Partners in several securitization transactions. During the year ended December 31, 2016, the
Company repaid $94.1 million of these notes and released 472 sites in connection with this repayment. As of December 31, 2016,
the aggregate amount outstanding was $173.7 million plus $5.7 million of unamortized premium. As discussed in note 23, all
amounts outstanding under these notes were repaid subsequent to December 31, 2016.
Unison Notes—In connection with the acquisition of Unison, the Company assumed $196.0 million of existing securitized
indebtedness. In October 2016, the Company repaid $67.0 million of these notes. As of December 31, 2016, the aggregate amount
outstanding was $129.0 million plus $4.0 million of unamortized premium. As discussed in note 23, all amounts outstanding
under these notes were repaid subsequent to December 31, 2016.
India indebtedness—Amounts outstanding and key terms of the India indebtedness consisted of the following as of December 31,
2016 (in millions, except percentages):
Amount
Outstanding
(INR)
Amount
Outstanding
(USD)
Interest Rate (Range)
Maturity Date (Range)
Term loans
Debenture
Working capital facilities
31,326
6,000
0
$
$
$
461.2
88.3
8.15% - 11.15% March 31, 2017 - November 30, 2024
9.90%
April 28, 2020
0
8.70% - 11.70%
January 31, 2017 - October 23, 2017
The India indebtedness includes several term loans, ranging from one to ten years, which are generally secured by the borrower’s
short-term and long-term assets. Each of the term loans bear interest at the applicable bank’s Marginal Cost of Funds based
Lending Rate (as defined in the applicable agreement) or base rate, plus a spread. Interest rates on the term loans are fixed until
certain reset dates. Generally, the term loans can be repaid without penalty on the reset dates; repayments at dates other than the
reset dates are subject to prepayment penalties, typically of 1% to 2%. Scheduled repayment terms include either ratable or
staggered amortization with repayments typically commencing between six and 36 months after the initial disbursement of funds.
The debenture is secured by the borrower’s long-term assets, including property and equipment and intangible assets. The
debenture bears interest at a base rate plus a spread of 0.6%. The base rate is set in advance for each quarterly coupon period.
Should the actual base rate be between 9.75% and 10.25%, the revised base rate is assumed to be 10.00% for purposes of the
reset. Additionally, the spread is subject to reset 36 and 48 months from the issuance date of April 27, 2015. The holders of the
debenture must reach a consensus on the revised spread and the borrower must redeem all of the debentures held by holders from
whom consensus is not achieved. Additionally, the debenture is required to be redeemed by the borrower if it does not maintain a
minimum credit rating.
The India indebtedness includes several working capital facilities, most of which are subject to annual renewal, and which are
generally secured by the borrower’s short-term and long-term assets. The working capital facilities bear interest at rates that are
comprised of the applicable bank’s Marginal Cost of Funds based Lending Rate (as defined in the applicable agreement) or base
rate, plus a spread. Generally, the working capital facilities are payable on demand prior to maturity.
Viom preference shares—As of December 31, 2016, ATC TIPL had 166,666,666 Preference Shares outstanding, which are
required to be redeemed in cash. Accordingly, the Company recognized debt of 1.67 billion INR ($24.5 million) related to the
Preference Shares outstanding on the consolidated balance sheet.
Unless redeemed earlier, the Preference Shares will be redeemed in two equal installments on March 26, 2017 and March 26,
2018 in an amount equal to ten INR per share along with a redemption premium, as defined in the investment agreement, which
F-26
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
equates to a compounded return of 13.5% per annum. ATC TIPL, at its option, may redeem the Preference Shares prior to the
aforementioned dates, subject to an additional 2% redemption premium.
Other Subsidiary Debt—The Company’s other subsidiary debt includes (i) publicly issued simple debentures in Brazil (the “BR
Towers Debentures”) issued by a subsidiary of BR Towers and assumed by the Company in its acquisition of BR Towers, (ii) a
credit facility entered into by one of the Company’s South African subsidiaries in December 2015, as amended (the “South
African Credit Facility”), (iii) a long-term credit facility entered into by one of the Company’s Colombian subsidiaries in October
2014 (the “Colombian Credit Facility”) and (iv) a credit facility entered into by one of the Company’s Brazilian subsidiaries in
December 2014 (the “Brazil Credit Facility”) with Banco Nacional de Desenvolvimento Econômico e Social.
Amounts outstanding and key terms of other subsidiary debt consisted of the following as of December 31, 2016 (in millions,
except percentages):
Amount Outstanding
(Functional Currency)
Amount Outstanding
(USD) (1)
Interest Rate
Maturity Date
2016
2015
BR Towers Debentures (2)
329.3
332.8
South African Credit Facility (3)
Colombian Credit Facility (4)
1,164.0
170,000.0
830.0
190,000.0
Brazil Credit Facility (5)
147.7
85.4
2016
$ 101.0
$
$
$
84.3
56.1
44.6
2015
85.2
53.2
59.6
21.9
$
$
$
$
7.400%
October 15, 2023
9.308% December 17, 2020
April 24, 2021
10.920%
Various
January 15, 2022
_______________
(1)
(2) Denominated in BRL, with an original principal amount of 300.0 million BRL. Debt accrues interest at a variable rate. The aggregate principal amount of the
Includes applicable deferred financing costs.
BR Towers Debentures may be adjusted periodically relative to changes in the National Extended Consumer Price Index.
(3) Denominated in ZAR, with an original principal amount of 830.0 million ZAR. On December 23, 2016, the borrower borrowed an additional 500.0 million
ZAR, with the ability to request an additional 330.0 million ZAR. Debt accrues interest at a variable rate.
(4) Denominated in COP, with an original principal amount of 200.0 billion COP. Debt accrues interest at a variable rate. The loan agreement for the Colombian
Credit Facility requires that the borrower manage exposure to variability in interest rates on certain of the amounts outstanding under the Colombian Credit
Facility.
(5) Denominated in BRL, with an original principal amount of 271.0 million BRL. Debt accrues interest at a variable rate. As of December 30, 2016, the
borrower no longer maintains the ability to draw on the Brazil Credit Facility.
Pursuant to the agreements governing the BR Towers Debentures, the South African Credit Facility and the Colombian Credit
Facility, payments of principal and interest are payable quarterly in arrears. Outstanding principal and accrued but unpaid interest
will be due and payable in full at maturity. The BR Towers Debentures may be redeemed beginning on October 15, 2018 at the
then outstanding principal amount plus a surcharge and all accrued and unpaid interest thereon. The South African Credit Facility
may be prepaid in whole or in part without prepayment consideration. The Colombian Credit Facility may be prepaid in whole or
in part at any time, subject to certain limitations and prepayment consideration.
The South African Credit Facility, the Colombian Credit Facility and the Brazil Credit Facility are secured by, among other things,
liens on towers owned by the applicable borrower. The BR Towers Debentures are secured by (i) 100% of the shares of the issuer
thereof and (ii) all proceeds and rights from the issuance of the BR Towers Debentures, including amounts in a Resource Account,
as defined in the applicable agreement.
Each of the agreements governing the other subsidiary debt contains contractual covenants and other restrictions. Failure to
comply with certain of the financial and operating covenants could constitute a default under the applicable debt agreement,
which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming
immediately due and payable.
Shareholder Loans—In connection with the establishment of certain of the Company’s joint ventures and related acquisitions of
communications sites in Ghana and Uganda, the Company’s majority owned subsidiaries entered into shareholder loan
agreements, as borrowers, with wholly owned subsidiaries of the Company and of the Company’s joint venture partners, as
lenders. The portions of the loans made by the Company’s wholly owned subsidiaries are eliminated in consolidation and the
portions of the loans made by each of the Company’s joint venture partner’s wholly owned subsidiaries are reported as
outstanding debt of the Company. Outstanding amounts under each of the Company’s shareholder loans consisted of the
following as of December 31, (in thousands):
F-27
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Ghana loan (1)
Uganda loan (2)(3)
2016
2015
$
71,047
$
79,998
70,314
75,226
Contractual Interest
Rate
Maturity Date
21.87% December 31, 2019
6.52%
June 29, 2019
_______________
(1) Denominated in GHS. As of December 31, 2016, the aggregate principal amount outstanding under the Ghana loan was 300.9 million GHS.
(2)
(3)
Interest accrues at a variable rate.
Includes $4.8 million of interest which was capitalized during the year ended December 31, 2016.
American Tower Corporation Debt
Bank Facilities—In November 2016, the Company entered into amendment agreements (the “Credit Facility Amendments”) with
respect to (i) its multicurrency senior unsecured revolving credit facility entered into in June 2013, as amended (the “2013 Credit
Facility”), (ii) its senior unsecured revolving credit facility entered into in January 2012, as amended and restated in September
2014, as further amended (the “2014 Credit Facility”) and (iii) its unsecured term loan entered into in October 2013, as amended
(the “Term Loan”), which, among other things, (i) extend the maturity dates by one year to June 28, 2020, January 31, 2022 and
January 31, 2022, respectively, (ii) increase the maximum Revolving Loan Commitments, after giving effect to any Incremental
Commitments (each as defined in the loan agreements for each of the 2013 Credit Facility and the 2014 Credit Facility) to $4.25
billion and $3.00 billion under the 2013 Credit Facility and the 2014 Credit Facility, respectively, (iii) amend the limitation on
indebtedness of, and guaranteed by, the Company’s subsidiaries to the greater of (x) $2.25 billion and (y) 50% of Adjusted
EBITDA (as defined in the agreements for each of the 2013 Credit Facility, the 2014 Credit Facility and the Term Loan) of the
Company and its subsidiaries on a consolidated basis and (iv) amend the limitation of the Company's permitted ratio of Total Debt
to Adjusted EBITDA (each as defined in the agreements for each of the 2013 Credit Facility, the 2014 Credit Facility and the
Term Loan) to be no greater than (x) 6.00 to 1.00 as of the end of each fiscal quarter or (y) 7.00 to 1.00 as of the specified time
periods after the occurrence of a Qualified Acquisition (as defined in each of the Credit Facility Amendments).
2013 Credit Facility—The Company has the ability to borrow up to $2.75 billion under the 2013 Credit Facility, which includes
a $1.0 billion sublimit for multicurrency borrowings, a $200.0 million sublimit for letters of credit and a $50.0 million sublimit
for swingline loans. During the year ended December 31, 2016, the Company borrowed an aggregate of $1.9 billion and repaid an
aggregate of $2.6 billion of revolving indebtedness under the 2013 Credit Facility. The Company primarily used the borrowings to
fund the Viom Acquisition and general corporate purposes.
2014 Credit Facility—The Company has the ability to borrow up to $2.0 billion under the 2014 Credit Facility, which includes a
$200.0 million sublimit for letters of credit and a $50.0 million sublimit for swingline loans. During the year ended December 31,
2016, the Company borrowed an aggregate of $245.0 million and repaid an aggregate of $840.0 million of revolving indebtedness
under the 2014 Credit Facility.
Term Loan—During the year ended December 31, 2016, the Company repaid $1.0 billion of indebtedness under the Term Loan.
The Term Loan, the 2013 Credit Facility and the 2014 Credit Facility do not require amortization of principal and may be paid
prior to maturity in whole or in part at the Company’s option without penalty or premium. The Company has the option of
choosing either a defined base rate or the London Interbank Offered Rate (“LIBOR”) as the applicable base rate for borrowings
under the Term Loan, the 2013 Credit Facility and the 2014 Credit Facility. The interest rates range between 1.000% to 2.000%
above LIBOR for LIBOR based borrowings or up to 1.000% above the defined base rate for base rate borrowings, in each case
based upon our debt ratings.
F-28
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016, the key terms under the 2013 Credit Facility, the 2014 Credit Facility and the Term Loan were as
follows:
Outstanding
Principal
Balance
(in millions)
Undrawn
letters of
credit
(in millions)
3.2
7.3
— January 31, 2022
June 28, 2020 (3)
January 31, 2022 (3)
Maturity Date
Current margin over
LIBOR and base rate
1.250% and 0.250%
1.250% and 0.250%
1.250% and 0.250%
Current
commitment fee (1)
0.150%
0.150%
N/A
2013 Credit Facility
2014 Credit Facility
Term Loan
$
$
$
540.0 (2) $
1,385.0 (4) $
1,000.0 (2) $
_______________
(1) Fee on undrawn portion of each credit facility.
(2) Borrowed at LIBOR.
(3) Subject to two optional renewal periods.
(4) Includes $1,095.0 million borrowed at LIBOR and $290.0 million borrowed at the base rate.
Senior Notes
3.300% Notes and 4.400% Notes Offerings—On January 12, 2016, the Company completed registered public offerings of $750.0
million aggregate principal amount of 3.300% senior unsecured notes due 2021 (the “3.300% Notes”) and $500.0 million
aggregate principal amount of 4.400% senior unsecured notes due 2026 (the “4.400% Notes”). The net proceeds from these
offerings were approximately $1,237.2 million, after deducting commissions and estimated expenses. The Company used the
proceeds to repay existing indebtedness under the 2013 Credit Facility and for general corporate purposes.
3.375% Notes Offering—On May 13, 2016, the Company completed a registered public offering of $1.0 billion aggregate
principal amount of 3.375% senior unsecured notes due 2026 (the “3.375% Notes”). The net proceeds from this offering were
approximately $981.5 million, after deducting commissions and estimated expenses. The Company used the proceeds to repay
existing indebtedness under the 2013 Credit Facility.
2.250% Notes and 3.125% Notes Offerings—On September 30, 2016, the Company completed registered public offerings of
$600.0 million aggregate principal amount of 2.250% senior unsecured notes due 2022 (the “2.250% Notes”) and $400.0 million
aggregate principal amount of 3.125% senior unsecured notes due 2027 (the “3.125% Notes”). The net proceeds from these
offerings were approximately $990.6 million, after deducting commissions and estimated expenses. The Company used the
proceeds to repay existing indebtedness under the Term Loan.
The Company entered into interest rate swap agreements, which were designated as fair value hedges at inception, to hedge
against changes in fair value of the 2.250% Notes resulting from changes in interest rates. As of December 31, 2016, the interest
rate on the 2.250% Notes, after giving effect to the interest rate swap agreements, was 1.97%.
F-29
January 12, 2016
January 15, 2021
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table outlines key terms related to the Company’s outstanding senior notes as of December 31, 2016:
Adjustments to
Principal Amount (1)
Aggregate
Principal
Amount
2016
2015
(in thousands)
Semi-annual interest
payments due
Issue Date
Par Call Date (2)
4.500% Notes
$1,000,000
$ (1,324) $ (2,307)
January 15 and July 15
December 7, 2010
3.40% Notes (3)
1,000,000
(231)
February 15 and August 15
August 19, 2013
300,000
750,000
700,000
750,000
650,000
500,000
600,000
700,000
(284)
(2,968)
(5,083)
(2,648)
(5,238)
(6,152)
(2,657)
(27,236)
(3,987)
(3,758) May 15 and November 15
(6,443)
June 1 and December 1
(2,784) March 1 and September 1
— February 15 and August 15
(7,214) March 15 and September 15
June 10, 2009
May 7, 2015
August 16, 2010
August 7, 2014
(2,812)
—
May 1 and November 1
October 6, 2011
January 15 and July 15
(4,626) March 15 and September 15
September 30, 2016
March 12, 2012
1,000,000
(10,731)
(12,034)
January 31 and July 31
January 8, 2013
1,000,000
2,742
3,453
February 15 and August 15
August 19, 2013
7.25% Notes
2.800% Notes
5.050% Notes
3.300% Notes
3.450% Notes
5.900% Notes
2.250% Notes (4)
4.70% Notes
3.50% Notes
5.00% Notes (3)
4.000% Notes
N/A
N/A
N/A
May 1, 2020
N/A
N/A
N/A
N/A
N/A
N/A
N/A
750,000
(10,015)
4.400% Notes
500,000
(4,788)
3.375% Notes
1,000,000
(16,631)
(10,943)
June 1 and December 1
— February 15 and August 15
—
April 15 and October 15
May 7, 2015
March 1, 2025
January 12, 2016 November 15, 2025
May 13, 2016
July 15, 2026
3.125% Notes
400,000
(3,287)
—
January 15 and July 15
September 30, 2016
October 15, 2026
Includes unamortized discounts, premiums and debt issuance costs and fair value adjustments due to interest rate swaps.
_______________
(1)
(2) The Company will not be required to pay a make-whole premium if redeemed on or after the par call date.
(3) The original issue date for the 3.40% Notes and the 5.00% Notes was August 19, 2013. The issue date for the reopened 3.40% Notes and the reopened
5.00% Notes was January 10, 2014.
Includes $22.3 million fair value adjustment due to interest rate swaps.
(4)
The Company may redeem each series of notes at any time, subject to the terms of the applicable supplemental indenture, in
whole or in part, at a redemption price equal to 100% of the principal amount of the notes plus a make-whole premium, together
with accrued interest to the redemption date. In addition, if the Company undergoes a change of control and corresponding ratings
decline, each as defined in the applicable supplemental indenture, it may be required to repurchase all of the applicable notes at a
purchase price equal to 101% of the principal amount of such notes, plus accrued and unpaid interest (including additional
interest, if any), up to but not including the repurchase date. The notes rank equally with all of the Company’s other senior
unsecured debt and are structurally subordinated to all existing and future indebtedness and other obligations of its subsidiaries.
Each applicable supplemental indenture for the notes contains certain covenants that restrict the Company’s ability to merge,
consolidate or sell assets and its (together with its subsidiaries’) ability to incur liens. These covenants are subject to a number of
exceptions, including that the Company, and its subsidiaries, may incur certain liens on assets, mortgages or other liens securing
indebtedness if the aggregate amount of such liens does not exceed 3.5x Adjusted EBITDA, as defined in the applicable
supplemental indenture.
Capital Lease and Other Obligations—The Company’s capital lease and other obligations approximated $135.8 million and
$110.9 million as of December 31, 2016 and 2015, respectively. These obligations are secured by the related assets, bear interest
at rates of 2.40% to 9.50%, and mature in periods ranging from less than one year to approximately seventy years.
F-30
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maturities—Aggregate principal maturities of long-term debt, including capital leases, for the next five years and thereafter are
expected to be (in thousands):
Year Ending December 31,
2017
2018
2019
2020
2021
Thereafter
Total cash obligations
Unamortized discounts, premiums and debt issuance costs and fair value adjustments, net
Balance as of December 31, 2016
9. OTHER NON-CURRENT LIABILITIES
Other non-current liabilities consisted of the following as of December 31, (in thousands):
Unearned revenue
Deferred rent liability
Other miscellaneous liabilities
Other non-current liabilities
$
238,806
1,649,137
1,759,808
2,677,594
1,976,976
10,350,583
18,652,904
(119,439)
$ 18,533,465
$
2016
457,272
407,157
278,294
$ 1,142,723
$
$
2015
451,844
348,532
158,973
959,349
10. ASSET RETIREMENT OBLIGATIONS
The changes in the carrying amount of the Company’s asset retirement obligations were as follows (in thousands):
Beginning balance as of January 1,
Additions
Accretion expense
Revisions in estimates (1)
Settlements
Balance as of December 31,
2016
856,936
64,092
67,010
(21,130)
(1,401)
965,507
$
$
$
$
2015
609,035
277,982
55,592
(83,636)
(2,037)
856,936
_______________
(1) Revisions in estimates include an increase in the liability of $9.6 million for the year ended December 31, 2016 and a decrease in the liability of $81.7
million for the year ended December 31, 2015 related to foreign currency translation.
As of December 31, 2016, the estimated undiscounted future cash outlay for asset retirement obligations was $2.5 billion.
F-31
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. FAIR VALUE MEASUREMENTS
The Company determines the fair value of its financial instruments based on the fair value hierarchy, which requires an entity to
maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Below are the
three levels of inputs that may be used to measure fair value:
Level 1
Level 2
Level 3
Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at
the measurement date.
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities.
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities.
Items Measured at Fair Value on a Recurring Basis—The fair value of the Company’s financial assets and liabilities that are
required to be measured on a recurring basis at fair value was as follows (in thousands):
December 31, 2016
December 31, 2015
Fair Value Measurements Using
Fair Value Measurements Using
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Assets:
Short-term investments (1)
Interest rate swap agreements
Embedded derivative in lease agreement
$
4,026
— $
—
Liabilities:
Interest rate swap agreements
Acquisition-related contingent consideration
— $ 24,682
—
—
— $
15,444
_______________
(1) Consists of highly liquid investments with original maturities in excess of three months.
Interest Rate Swap Agreements
—
3
—
—
—
— $
—
692
—
—
— $
13,290
—
—
—
— $
14,176
—
—
— $
12,436
The fair value of the Company’s interest rate swap agreements is determined using pricing models with inputs that are
observable in the market or can be derived principally from, or corroborated by, observable market data. For derivative
instruments that are designated and qualify as fair value hedges, changes in value of the derivatives are recognized in the
consolidated statement of operations in the current period, along with the offsetting gain or loss on the hedged item attributable
to the hedged risk. For derivative instruments that are designated and qualify as a cash flow hedges, the Company records the
change in fair value for the effective portion of the cash flow hedges in AOCI in the consolidated balance sheets and reclassifies
a portion of the value from AOCI into Interest expense on a quarterly basis as the cash flows from the hedged item affects
earnings. The Company records the settlement of interest rate swap agreements in Gain (loss) on retirement of long-term
obligations in the consolidated statements of operations in the period in which the settlement occurs.
The Company entered into three interest rate swap agreements with an aggregate notional value of $600.0 million related to the
2.250% Notes. These interest rate swaps, which were designated as fair value hedges at inception, were entered into to hedge
against changes in fair value of the 2.250% Notes resulting from changes in interest rates. The interest rate swap agreements
require the Company to pay interest at a variable interest rate of one-month LIBOR plus applicable spreads and to receive fixed
interest at a rate of 2.250% through January 15, 2022. During the year ended December 31, 2016, the Company recorded a $2.4
million fair value adjustment which was recorded in Other expense in the consolidated statement of operations. As of December
31, 2016, the interest rate swap agreements in the U.S. were included in Other non-current liabilities on the consolidated
balance sheet.
One of the Company’s Colombian subsidiaries entered into an interest rate swap agreement with an aggregate notional value of
100.0 billion COP ($33.3 million) with certain of the lenders under the Colombian Credit Facility. The interest rate swap
F-32
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
agreement, which was designated as a cash flow hedge at inception, was entered into to manage exposure to variability in
interest rates on debt. The interest rate swap agreement requires the payment of a fixed interest rate of 5.74% and pays variable
interest at the three-month Inter-bank Rate (IBR) through the earlier of termination of the underlying debt or April 24, 2021.
The notional value is reduced in accordance with the repayment schedule under the Colombian Credit Facility.
The notional amount and fair value of the Colombian interest rate swap agreements were as follows as of December 31, (in
thousands):
Colombia (COP) (1)
Notional
Fair Value
2016
2015
Local
USD
Local
USD
85,000,000 $
8,763
28,327
3
95,000,000 $
2,179,374
30,164
692
_______________
(1) As of December 31, 2016 and 2015, the interest rate swap agreement in Colombia was included in Notes receivable and other non-current assets on the
consolidated balance sheet.
Embedded Derivative in Lease Agreement
In connection with the acquisition of communications sites in Nigeria, the Company entered into a site lease agreement where a
portion of the monthly rent to be received is escalated based on an index outside the lessor’s economic environment. The fair
value of the portion of the lease tied to the U.S. CPI was $14.6 million at the date of acquisition and was recorded in Notes
receivable and other non-current assets on the consolidated balance sheet. The fair value of the Company’s embedded derivative
is determined using a discounted cash flow approach, which takes into consideration Level 3 unobservable inputs, including
expected future cash flows over the period in which the associated payment is expected to be received and applies a discount
factor that captures uncertainties in the future periods associated with the expected payment. During the year ended December
31, 2016, the Company recorded $0.9 million of a fair value adjustment, which was recorded in Other expense in the
consolidated statement of operations.
Acquisition-Related Contingent Consideration
Acquisition-related contingent consideration is initially measured and recorded at fair value as an element of consideration paid
in connection with an acquisition with subsequent adjustments recognized in Other operating expenses in the consolidated
statements of operations. The fair value of acquisition-related contingent consideration, and any subsequent changes in fair
value, is determined by using a discounted probability-weighted approach, which takes into consideration Level 3 unobservable
inputs, including assessments of expected future cash flows over the period in which the obligation is expected to be settled,
and applies a discount factor that captures the uncertainties associated with the obligation. Changes in the unobservable inputs
of Level 3 assets or liabilities could significantly impact the fair value of these assets or liabilities recorded in the
accompanying consolidated balance sheets, with the adjustments being recorded in the consolidated statements of operations.
As of December 31, 2016, the Company estimates that the value of all potential acquisition-related contingent consideration
required payments to be between zero and $46.8 million. The changes in fair value of the contingent consideration were as
follows during the years ended December 31, (in thousands):
Balance as of January 1
Additions
Settlements
Change in fair value
Foreign currency translation adjustment
Balance as of December 31
2016
2015
12,436
8,811
(306)
(6,372)
875
15,444
$
$
28,524
1,626
(7,943)
(4,781)
(4,990)
12,436
$
$
F-33
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Items Measured at Fair Value on a Nonrecurring Basis
Assets Held and Used—The Company’s long-lived assets are recorded at amortized cost and, if impaired, are adjusted to fair
value using Level 3 inputs. During the year ended December 31, 2016, certain long-lived assets held and used with a carrying
value of $12.7 billion were written down to their net realizable value as a result of an asset impairment charge of $28.5 million.
During the year ended December 31, 2015, certain long-lived assets held and used with a carrying value of $12.6 billion were
written down to their net realizable value as a result of an asset impairment charge of $15.1 million. The asset impairment
charges are recorded in Other operating expenses in the accompanying consolidated statements of operations. These
adjustments were determined by comparing the estimated fair value utilizing projected future discounted cash flows to be
provided from the long-lived assets to the asset’s carrying value.
There were no other items measured at fair value on a nonrecurring basis during the year ended December 31, 2016.
Fair Value of Financial Instruments—The Company’s financial instruments for which the carrying value reasonably
approximates fair value at December 31, 2016 and 2015 include cash and cash equivalents, restricted cash, accounts receivable
and accounts payable. The Company’s estimates of fair value of its long-term obligations, including the current portion, are
based primarily upon reported market values. For long-term debt not actively traded, fair value is estimated using either
indicative price quotes or a discounted cash flow analysis using rates for debt with similar terms and maturities. As of
December 31, 2016, the carrying value and fair value of long-term obligations, including the current portion, were $18.5 billion
and $18.8 billion, respectively, of which $11.8 billion was measured using Level 1 inputs and $7.0 billion was measured using
Level 2 inputs. As of December 31, 2015, the carrying value and fair value of long-term obligations, including the current
portion, were $17.1 billion and $17.4 billion, respectively, of which $8.7 billion was measured using Level 1 inputs and $8.7
billion was measured using Level 2 inputs.
12. INCOME TAXES
The Company has filed, for prior taxable years through its taxable year ended December 31, 2011, consolidated U.S. federal tax
returns, which included all of its then wholly owned domestic subsidiaries. For its taxable year commencing January 1, 2012,
the Company filed, and intends to continue to file, as a REIT, and its domestic TRSs filed, and intend to continue to file,
separate tax returns as required. The Company also files tax returns in various states and countries. The Company’s state tax
returns reflect different combinations of the Company’s subsidiaries and are dependent on the connection each subsidiary has
with a particular state and form of organization. The following information pertains to the Company’s income taxes on a
consolidated basis.
The income tax provision from continuing operations consisted of the following for the years ended December 31, (in
thousands):
Current:
Federal
State
Foreign
Deferred:
Federal
State
Foreign
Income tax provision
2016
2015
2014
$
$
(26,494) $
(1,976)
(100,074)
(73,930) $
(21,216)
(55,045)
(2,390)
(797)
(57,934)
(616)
(259)
(26,082)
(155,501) $
9,131
8
(16,903)
(157,955) $
(4,180)
(973)
3,769
(62,505)
The effective tax rate (“ETR”) on income from continuing operations for the years ended December 31, 2016, 2015 and 2014
differs from the federal statutory rate primarily due to the Company’s qualification for taxation as a REIT, as well as
adjustments for foreign items. As a REIT, the Company may deduct earnings distributed to stockholders against the income
generated by its REIT operations. In addition, the Company is able to offset certain income by utilizing its NOLs, subject to
specified limitations.
F-34
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation between the U.S. statutory rate and the effective rate from continuing operations is as follows for the years
ended December 31:
Statutory tax rate
Adjustment to reflect REIT status (1)
Foreign taxes
Foreign withholding taxes
Uncertain tax positions
Change in tax law
MIPT tax election (2)
Other
Effective tax rate
2016
2015
2014
35%
(35)
5
4
5
—
—
—
35%
(35)
3
3
—
2
11
—
35%
(35)
2
3
—
—
—
2
14%
19%
7%
_______________
(1) Includes 29%, 36% and 24% from dividend paid deductions in 2016, 2015 and 2014, respectively.
(2) Includes federal and state taxes, net of federal benefit.
The domestic and foreign components of income from continuing operations before income taxes are as follows for the years
ended December 31, (in thousands):
United States
Foreign
Total
$
2016
882,552
243,308
$ 1,125,860
$
$
2015
785,201
44,761
829,962
$
$
2014
857,457
8,247
865,704
The components of the net deferred tax asset and liability and related valuation allowance were as follows as of December 31,
(in thousands):
Assets:
Net operating loss carryforwards
Accrued asset retirement obligations
Stock-based compensation
Unearned revenue
Unrealized loss on foreign currency
Other accruals and allowances
Items not currently deductible and other
Liabilities:
Depreciation and amortization
Deferred rent
Other
Subtotal
Valuation allowance
Net deferred tax (liabilities) assets
2016
2015
$
278,674
$
277,977
130,014
4,267
29,003
26,883
45,578
26,886
92,295
3,889
25,654
37,440
13,824
17,608
(942,409)
(27,099)
(9,294)
(437,497)
(144,397)
(581,894) $
(194,230)
(20,720)
(11,077)
242,660
(136,952)
105,708
$
As described in note 1, effective January 1, 2016, the Company adopted new guidance on the accounting for share-based
payment transactions. As part of this new guidance, excess windfall tax benefits and tax deficiencies related to the Company’s
stock option exercises and restricted stock unit vestings are recognized as an income tax benefit or expense in the consolidated
F-35
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
statement of operations in the period in which the deduction occurs. Excess windfall tax benefits and tax deficiencies are
therefore not anticipated when determining the annual ETR and are instead recognized in the interim period in which those
items occur.
At December 31, 2016 and 2015, the Company has provided a valuation allowance of $144.4 million and $137.0 million,
respectively, which primarily relates to foreign items. During 2016, the Company increased the amounts recorded as valuation
allowances due to the uncertainty as to the timing of, and the Company’s ability to recover, net deferred tax assets in certain
foreign operations in the foreseeable future. The increase in the valuation allowance for the year ending December 31, 2016, is
offset by fluctuations in foreign currency exchange rates and by a removal of previously reserved deferred tax assets resulting
from a restructuring in Germany. The amount of deferred tax assets considered realizable, however, could be adjusted if
objective evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective
evidence such as the Company’s projections for growth.
A summary of the activity in the valuation allowance is as follows (in thousands):
Balance as of January 1,
Additions (1)
Reversals
Foreign currency translation
Balance as of December 31,
2016
136,952
14,118
—
(6,673)
144,397
$
$
2015
141,241
19,512
—
(23,801)
136,952
$
$
2014
136,006
40,124
(10,769)
(24,120)
141,241
$
$
_______________
(1) Includes net charges to expense and allowances established through goodwill at acquisition.
The recoverability of the Company’s deferred tax assets has been assessed utilizing projections based on its current operations.
Accordingly, the recoverability of the deferred tax assets is not dependent on material asset sales or other non-routine
transactions. Based on its current outlook of future taxable income during the carryforward period, the Company believes that
deferred tax assets, other than those for which a valuation allowance has been recorded, will be realized.
The Company considers the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside of the United States on
the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. The Company
has not recorded a deferred tax liability related to the U.S. federal and state income taxes and foreign withholding taxes on
$648.7 million of undistributed earnings of foreign subsidiaries indefinitely invested outside of the United States. Should the
Company decide to repatriate the foreign earnings, it may have to adjust the income tax provision in the period it determined
that the earnings will no longer be indefinitely invested outside of the United States.
At December 31, 2016, the Company had net federal, state and foreign operating loss carryforwards available to reduce future
taxable income. If not utilized, the Company’s NOLs expire as follows (in thousands):
Years ended December 31,
2017 to 2021
2022 to 2026
2027 to 2031
2032 to 2036
Indefinite carryforward
Total
Federal
State
Foreign
$
— $
59,213
$
8,950
—
146,763
16,604
—
388,695
98,538
32,345
184,611
—
—
—
831,185
$
163,367
$
578,791
$ 1,024,746
In addition, the Company has Mexican tax credits of $0.9 million, which if not utilized will expire in 2017.
As of December 31, 2016 and 2015, the total amount of unrecognized tax benefits that would impact the ETR, if recognized, is
$102.9 million and $28.1 million, respectively. The amount of unrecognized tax benefits for the year ended December 31, 2016,
includes additions to the Company’s existing tax positions of $82.9 million, which includes $23.8 million assumed through
acquisition.
F-36
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company expects the unrecognized tax benefits to change over the next 12 months if certain tax matters ultimately settle
with the applicable taxing jurisdiction during this timeframe, or if the applicable statute of limitations lapses. The impact of the
amount of such changes to previously recorded uncertain tax positions could range from zero to $10.8 million.
A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows for the years ended
December 31, (in thousands):
Balance at January 1
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Foreign currency
Reduction as a result of the lapse of statute of limitations and effective
settlements
Balance at December 31
2016
2015
2014
$
28,114
$
31,947
$
82,912
—
(307)
5,042
—
(5,371)
(3,168)
107,551
$
$
(3,504)
28,114
$
32,545
4,187
3,780
(3,216)
(5,349)
31,947
During the years ended December 31, 2016, 2015 and 2014, the statute of limitations on certain unrecognized tax benefits
lapsed and certain positions were effectively settled, which resulted in a decrease of $3.2 million, $3.5 million and $5.3 million,
respectively, in the liability for uncertain tax benefits, all of which reduced the income tax provision.
The Company recorded penalties and tax-related interest expense to the tax provision of $9.2 million, $3.2 million and $6.5
million for the years ended December 31, 2016, 2015 and 2014, respectively. In addition, due to the expiration of the statute of
limitations in certain jurisdictions, the Company reduced its liability for penalties and income tax-related interest expense
related to uncertain tax positions during the years ended December 31, 2016, 2015 and 2014 by $3.4 million, $3.1 million and
$9.9 million, respectively.
As of December 31, 2016 and 2015, the total amount of accrued income tax-related interest and penalties included in the
consolidated balance sheets were $24.3 million and $20.2 million, respectively.
The Company has filed for prior taxable years, and for its taxable year ended December 31, 2016 will file, numerous
consolidated and separate income tax returns, including U.S. federal and state tax returns and foreign tax returns. The Company
is subject to examination in the U.S. and various state and foreign jurisdictions for certain tax years. As a result of the
Company’s ability to carryforward federal, state and foreign NOLs, the applicable tax years generally remain open to
examination several years after the applicable loss carryforwards have been used or have expired. The Company regularly
assesses the likelihood of additional assessments in each of the tax jurisdictions resulting from these examinations. The
Company believes that adequate provisions have been made for income taxes for all periods through December 31, 2016.
13. STOCK-BASED COMPENSATION
Summary of Stock-Based Compensation Plans—The Company maintains equity incentive plans that provide for the grant of
stock-based awards to its directors, officers and employees. The 2007 Equity Incentive Plan (the “2007 Plan”) provides for the
grant of non-qualified and incentive stock options, as well as restricted stock units, restricted stock and other stock-based
awards. Exercise prices in the case of non-qualified and incentive stock options are not less than the fair value of the underlying
common stock on the date of grant. Equity awards typically vest ratably, generally over four years for RSUs and stock options
and three years for PSUs. Stock options generally expire 10 years from the date of grant. As of December 31, 2016, the
Company had the ability to grant stock-based awards with respect to an aggregate of 9.5 million shares of common stock under
the 2007 Plan. In addition, the Company maintains an employee stock purchase plan (the “ESPP”) pursuant to which eligible
employees may purchase shares of the Company’s common stock on the last day of each bi-annual offering period at a
discount of the lower of the closing market value on the first or last day of such offering period. The offering periods run from
June 1 through November 30 and from December 1 through May 31 of each year.
During the years ended December 31, 2016, 2015 and 2014, the Company recorded and capitalized the following stock-based
compensation expenses (in thousands):
F-37
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Stock-based compensation expense
Stock-based compensation expense capitalized as property and
equipment
2016
2015
2014
$
89,898
$
90,537
$
80,153
1,443
2,052
1,589
Stock Options—The fair value of each option granted during the period was estimated on the date of grant using the Black-
Scholes option pricing model based on the assumptions noted in the table below. The expected life of stock options (estimated
period of time outstanding) was estimated using the vesting term and historical exercise behavior of the Company’s employees.
The risk-free interest rate was based on the U.S. Treasury yield with a term that approximated the estimated life in effect at the
accounting measurement date. The expected volatility of the underlying stock price was based on historical volatility for a
period equal to the expected life of the stock options. The expected annual dividend yield was the Company’s best estimate of
expected future dividend yield.
Key assumptions used to apply this pricing model were as follows:
Range of risk-free interest rate
Weighted average risk-free interest rate
Range of expected life of stock options
Range of expected volatility of the underlying stock
price
Weighted average expected volatility of underlying stock
price
Range of expected annual dividend yield
2016
1.00% - 1.73%
1.44%
4.5 - 5.2 years
2015
1.32% - 1.62%
1.61%
4.5 years
2014
1.46% - 1.74%
1.64%
4.5 years
20.59% - 21.45%
21.09% - 21.24%
21.94% - 23.35%
21.43%
21.09%
1.85% - 2.40%
1.50% - 1.85%
23.08%
1.50%
The weighted average grant date fair value per share during the years ended December 31, 2016, 2015 and 2014 was $14.60,
$15.06 and $14.86, respectively. The intrinsic value of stock options exercised during the years ended December 31, 2016, 2015
and 2014 was $77.6 million, $32.1 million and $58.0 million, respectively. As of December 31, 2016, total unrecognized
compensation expense related to unvested stock options was $25.6 million and is expected to be recognized over a weighted
average period of approximately two years. The amount of cash received from the exercise of stock options was $84.9 million
during the year ended December 31, 2016.
The Company’s option activity for the year ended December 31, 2016 was as follows:
Outstanding as of January 1, 2016
Granted
Exercised
Forfeited
Expired
Outstanding as of December 31, 2016
Exercisable as of December 31, 2016
Vested or expected to vest as of December 31, 2016
Options
7,680,819
1,161,370
(1,520,541)
(51,472)
(800)
7,269,376
3,519,976
7,269,376
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Life (Years)
Aggregate
Intrinsic Value
(in millions)
$71.10
95.16
55.86
90.10
33.96
$78.00
$64.93
$78.00
6.73
5.24
6.73
$201.4
$143.4
$201.4
F-38
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth information regarding options outstanding at December 31, 2016:
Options Outstanding
Options Exercisable
Outstanding
Number of
Options
733,732
1,130,308
916,991
1,428,834
1,900,077
1,159,434
7,269,376
Range of Exercise
Price Per Share
$28.39 - $43.11
44.92 - 62.00
64.01 - 76.90
77.42- 81.18
81.46 - 94.57
94.71 - 113.60
$28.39 - $113.60
$
Weighted
Average Exercise
Price Per Share
37.01
$
Weighted Average
Remaining Life
(Years)
2.35
56.55
76.74
81.12
94.35
95.21
78.00
4.55
6.18
7.14
8.15
9.19
6.73
Options
Exercisable
733,732
$
1,130,308
621,338
589,547
441,405
3,646
3,519,976
$
Weighted
Average Exercise
Price Per Share
37.01
56.55
76.69
81.13
94.34
99.14
64.93
Restricted Stock Units and Performance-Based Restricted Stock Units—The Company’s RSU and PSU activity for the year
ended December 31, 2016 was as follows:
Outstanding as of January 1, 2016 (1)
Granted (2)
Vested
Forfeited
Outstanding as of December 31, 2016
Expected to vest as of December 31, 2016
RSUs
1,656,993
784,178
(656,645)
(120,783)
1,663,743
1,663,743
Weighted Average
Grant Date Fair
Value
PSUs
Weighted Average
Grant Date Fair
Value
$
$
$
84.12
95.15
79.36
90.18
90.76
90.76
33,377
$
209,380
—
—
242,757
242,757
$
$
94.57
93.81
—
—
93.92
93.92
_______________
(1) PSUs represent the shares issuable for the 2015 PSUs (as defined below) at the end of the three-year performance cycle based on exceeding the
performance metric for the first year’s performance period.
(2) PSUs represent the shares issuable for the 2015 PSUs at the end of the three-year performance cycle based on exceeding the performance metric for the
second year’s performance period and the target number of shares issuable at the end of the three-year performance cycle for the 2016 PSUs (as defined
below).
Restricted Stock Units—The total fair value of RSUs that vested during the year ended December 31, 2016 was $63.8 million.
As of December 31, 2016, total unrecognized compensation expense related to unvested RSUs granted under the 2007 Plan was
$86.1 million and is expected to be recognized over a weighted average period of approximately two years.
Performance-Based Restricted Stock Units—During the year ended December 31, 2016, the Company’s Compensation
Committee granted an aggregate of 169,340 PSUs to its executive officers (the “2016 PSUs”) and established the performance
metrics for this award. During the year ended December 31, 2015, the Company’s Compensation Committee granted an
aggregate of 70,135 PSUs to its executive officers (the “2015 PSUs”) and established the performance metric for this award.
Threshold, target and maximum parameters were established for the metrics for a three-year performance period with respect to
the 2016 PSUs and for each year in the three-year performance period with respect to the 2015 PSUs and will be used to
calculate the number of shares that will be issuable when the award vests, which may range from 0% to 200% of the target
amounts. At the end of the three-year performance period, the number of shares that vest will depend on the degree of
achievement against the pre-established performance goals. PSUs will be paid out in common stock at the end of the
performance period, subject to the executive’s continued employment. In the event of the executive’s death, disability or
qualifying retirement, PSUs will be paid out pro rata in accordance with the terms of the applicable award agreement. PSUs
will accrue dividend equivalents prior to vesting, which will be paid out only in respect of shares actually vested.
The performance metric related to the 2015 PSUs is tied to year-over-year growth, and actual results for the metric cannot be
determined until the end of each respective fiscal year. As a result, as of December 31, 2016, the Company was unable to
determine the annual target for the third year of the performance period for this award. Accordingly, an aggregate of
23,377 PSUs was not included in the table above.
F-39
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2016, the Company recorded $8.4 million in stock-based compensation expense for equity
awards in which the performance goals have been established and were probable of being achieved. The remaining
unrecognized compensation expense related to these awards at December 31, 2016, was $12.0 million based on the Company’s
current assessment of the probability of achieving the performance goals. The weighted-average period over which the cost will
be recognized is approximately two years.
14. REDEEMABLE NONCONTROLLING INTERESTS
Redeemable Noncontrolling Interests—In connection with the Viom Acquisition, ATC Asia entered into the Shareholders
Agreement with Viom and the Remaining Shareholders. The Shareholders Agreement provides for, among other things, put
options held by certain of the Remaining Shareholders, which allow the Remaining Shareholders to sell outstanding shares of
ATC TIPL, and a call option held by the Company, which allows the Company to buy the noncontrolling shares of ATC TIPL.
The put options, which are not under the Company’s control, cannot be separated from the noncontrolling interests. As a result,
the combination of the noncontrolling interests and the redemption feature require classification as redeemable noncontrolling
interests in the consolidated balance sheet, separate from equity.
Given the provisions governing the put rights, the redeemable noncontrolling interests are recorded outside of permanent equity
at their redemption value. The noncontrolling interests become redeemable after the passage of time, and therefore, the
Company records the carrying amount of the noncontrolling interests at the greater of (i) the initial carrying amount, increased
or decreased for the noncontrolling interests’ share of net income or loss and foreign currency translation adjustments, or (ii)
the redemption value. If required, the Company will adjust the redeemable noncontrolling interests to redemption value on each
balance sheet date with changes in redemption value recognized as an adjustment to Distributions in excess of earnings.
The put options may be exercised, requiring the Company to purchase the Remaining Shareholders’ equity interests, on
specified dates beginning April 1, 2018 through March 31, 2021. The price of the put options will be based on the fair market
value of the exercising Remaining Shareholder’s interest in the Company’s India operations at the time the option is exercised.
Put options held by certain of the Remaining Shareholders are subject to a floor price of 216 INR per share.
The following is a reconciliation of the changes in the Redeemable noncontrolling interests (in thousands):
Balance as of January 1, 2016
Fair value at acquisition
Net income attributable to noncontrolling interests
Foreign currency translation adjustment attributable to noncontrolling interests
Balance as of December 31, 2016
$
$
—
1,100,804
13,851
(23,435)
1,091,220
15. EQUITY
Common Stock Issuance—On December 8, 2016, the Company issued 1,171,187 shares of its common stock directly to
ALLTEL Communications, LLC (“Alltel”), a subsidiary of Verizon Wireless, in consideration of the Company's exercise of its
purchase option related to 1,523 communications towers pursuant to its agreement with Alltel (see note 18).
Series A Preferred Stock—The Company has 6,000,000 shares outstanding of its 5.25% Mandatory Convertible Preferred
Stock, Series A, par value $0.01 per share (the “Series A Preferred Stock”), which was originally issued on May 12, 2014.
Unless converted earlier, each share of the Series A Preferred Stock will automatically convert on May 15, 2017, into between
0.9272 and 1.1591 shares of the Company’s common stock, depending on the applicable market value of the Company’s
common stock and subject to anti-dilution adjustments. Subject to certain restrictions, at any time prior to May 15, 2017,
holders of the Series A Preferred Stock may elect to convert all or a portion of their shares into common stock at the minimum
conversion rate then in effect.
Dividends on shares of the Series A Preferred Stock are payable on a cumulative basis when, as, and if declared by the
Company’s Board of Directors at an annual rate of 5.25% on the liquidation preference of $100.00 per share, on February 15,
May 15, August 15 and November 15 of each year, commencing on August 15, 2014 to, and including, May 15, 2017.
F-40
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Series B Preferred Stock—The Company has 13,750,000 depositary shares, each representing a 1/10th interest in a share of its
5.50% Mandatory Convertible Preferred Stock, Series B, par value $0.01 per share (the “Series B Preferred Stock” and,
together with the Series A Preferred Stock, the “Mandatory Convertible Preferred Stock”), which was originally issued on
March 3, 2015.
Unless converted or redeemed earlier, each share of the Series B Preferred Stock will convert automatically on February 15,
2018, into between 8.5911 and 10.3093 shares of common stock, depending on the applicable market value of the Company’s
common stock and subject to anti-dilution adjustments. Subject to certain restrictions, at any time prior to February 15, 2018,
holders of the Series B Preferred Stock may elect to convert all or a portion of their shares into common stock at the minimum
conversion rate then in effect.
Dividends on shares of the Series B Preferred Stock are payable on a cumulative basis when, as, and if declared by the
Company’s Board of Directors at an annual rate of 5.50% on the liquidation preference of $1,000.00 per share (and,
correspondingly, $100.00 per share with respect to the depositary shares) on February 15, May 15, August 15 and November 15
of each year, commencing on May 15, 2015 to, and including, February 15, 2018.
The Company may pay dividends on its Mandatory Convertible Preferred Stock in cash or, subject to certain limitations, in
shares of common stock or any combination of cash and shares of common stock. The terms of the Mandatory Convertible
Preferred Stock provide that, unless full cumulative dividends have been paid or set aside for payment on all outstanding
Mandatory Convertible Preferred Stock for all prior dividend periods, no dividends may be declared or paid on common stock.
Stock Repurchase Program—In March 2011, the Board of Directors approved a $1.5 billion stock repurchase program,
pursuant to which the Company is authorized to purchase up to an additional $1.1 billion of the Company’s common stock.
The Company temporarily suspended repurchases under the program in September 2013. However, the Company may, at any
time, elect to resume repurchases under the program.
Sales of Equity Securities—The Company receives proceeds from sales of its equity securities pursuant to the ESPP and upon
exercise of stock options granted under its equity incentive plans.
Distributions—During the years ended December 31, 2016, 2015 and 2014, the Company declared the following cash
distributions:
For the year ended December 31,
2016
2015
2014
Distribution
per share
2.17
5.25
$
$
Aggregate
Payment
Amount
(in millions)
923.7
$
31.5
$
Distribution
per share
1.81
3.94
$
$
Aggregate
Payment
Amount
(in millions)
766.4
$
23.7
$
Distribution
per share
1.40
3.98
$
$
Aggregate
Payment
Amount
(in millions)
554.6
$
23.9
$
$
55.00
$
75.6
$
38.65
$
53.1
$
— $
—
Common Stock
Series A Preferred Stock
Series B Preferred Stock
F-41
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table characterizes the tax treatment of distributions declared per share of common stock and Mandatory
Convertible Preferred Stock.
For the year ended December 31,
2016
2015
2014 (1)
Per Share
%
Per Share
%
Per Share
%
$ 2.1700 (2)
100.00% $
1.2694
70.13% $
1.4000
100.00%
—
—
0.5406
29.87
—
—
$ 2.1700
100.00% $
1.8100
100.00% $
1.4000
100.00%
$ 6.4578 (3)
100.00% $
3.6818 (4)
70.13% $
2.6688
100.00%
—
—
1.5682
29.87
—
—
$ 6.4578
100.00% $
5.2500
100.00% $
2.6688
100.00%
Common Stock
Ordinary dividend
Capital gains distribution
Total
Series A Preferred Stock
Ordinary dividend
Capital gains distribution
Total
Series B Preferred Stock (5)
Ordinary dividend
Capital gains distribution
$ 5.5000
100.00% $
2.7107
70.13% $
—
—
1.1546
29.87
—
—
—
—%
—
—%
Total
$ 5.5000
100.00% $
3.8653
100.00% $
_______________
(1) The Company had no Series B Preferred Stock outstanding during the year ended December 31, 2014.
(2)
Includes dividend declared on December 14, 2016 of $0.58 per share, which was paid on January 13, 2017 to common stockholders of record at the close
of business on December 28, 2016.
Includes a deemed distribution as a result of a conversion rate adjustment triggered on June 17, 2016.
Includes dividend declared on December 2, 2014 of $1.3125 per share, which was paid on February 16, 2015 to preferred stockholders of record at the
close of business on February 1, 2015.
(3)
(4)
(5) Represents the tax treatment on dividends per depositary share, each of which represents a 1/10th interest in a share of Series B Preferred Stock.
The Company accrues distributions on unvested restricted stock units, which are payable upon vesting. As of December 31,
2016, the amount accrued for distributions payable related to unvested restricted stock units was $6.7 million. During the year
ended December 31, 2016, the Company paid $2.4 million of distributions payable upon the vesting of restricted stock units.
To maintain its qualification for taxation as a REIT, the Company expects to continue paying distributions, the amount, timing
and frequency of which will be determined and subject to adjustment by the Company’s Board of Directors.
16. IMPAIRMENTS, NET LOSS ON SALES OF LONG-LIVED ASSETS
During the years ended December 31, 2016, 2015 and 2014, the Company recorded impairment charges and net losses on sales
or disposals of long-lived assets of $53.6 million, $29.8 million and $28.5 million, respectively. These charges were primarily
related to assets included in the Company’s U.S. property segment and are included in Other operating expenses in the
consolidated statements of operations.
Included in these amounts were impairment charges of $28.5 million, $15.1 million and $15.3 million for the years ended
December 31, 2016, 2015 and 2014, respectively, to write down certain assets to net realizable value after an indicator of
impairment was identified. These assets consisted primarily of towers, which are assessed on an individual basis, and network
location intangibles, which relate directly to towers. For the year ended December 31, 2016, impairment charges also included
amounts related to land easements. Also included in these amounts were net losses associated with the sale or disposal of
certain non-core towers, other assets and other miscellaneous items of $25.1 million, $14.7 million and $13.2 million for the
years ended December 31, 2016, 2015 and 2014, respectively.
F-42
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. EARNINGS PER COMMON SHARE
The following table sets forth basic and diluted net income per common share computational data for the years ended
December 31, (in thousands, except per share data):
Net income attributable to American Tower Corporation stockholders
Dividends on preferred stock
Net income attributable to American Tower Corporation common stockholders
Basic weighted average common shares outstanding
Dilutive securities
Diluted weighted average common shares outstanding
Basic net income attributable to American Tower Corporation common
stockholders per common share
Diluted net income attributable to American Tower Corporation common
stockholders per common share
$
2016
956,425
(107,125)
849,300
425,143
4,140
429,283
$
2015
685,074
(90,163)
594,911
418,907
4,108
423,015
2014
824,910
(23,888)
801,022
395,958
4,128
400,086
2.00
1.98
$
$
1.42
1.41
$
$
2.02
2.00
$
$
$
Shares Excluded From Dilutive Effect
The following shares were not included in the computation of diluted earnings per share because the effect would be anti-
dilutive for the years ended December 31, (in thousands, on a weighted average basis):
Restricted stock awards
Stock options
Preferred stock
2016
2015
2014
6
817
17,509
—
1,606
15,408
5
1,290
4,303
18. COMMITMENTS AND CONTINGENCIES
Litigation—The Company periodically becomes involved in various claims, lawsuits and proceedings that are incidental to its
business. In the opinion of Company management, after consultation with counsel, there are no matters currently pending that
would, in the event of an adverse outcome, materially impact the Company’s consolidated financial position, results of
operations or liquidity.
Verizon Transaction—On March 27, 2015, the Company entered into an agreement with various operating entities of Verizon
that provides for the lease, sublease or management of 11,286 wireless communications sites from Verizon commencing March
27, 2015. The average term of the lease or sublease for all sites at the inception of the agreement was approximately 28 years,
assuming renewals or extensions of the underlying ground leases for the sites. The Company has the option to purchase the
leased sites in tranches, subject to the applicable lease, sublease or management right upon its scheduled expiration. Each tower
is assigned to an annual tranche, ranging from 2034 to 2047, which represents the outside expiration date for the sublease rights
to the towers in each tranche. The purchase price for each tranche is a fixed amount stated in the lease for such tranche plus the
fair market value of certain alterations made to the related towers. The aggregate purchase option price for the towers leased
and subleased is approximately $5.0 billion. Verizon will occupy the sites as a tenant for an initial term of ten years with eight
optional successive five-year terms; each such term shall be governed by standard master lease agreement terms established as
a part of the transaction.
AT&T Transaction—The Company has an agreement with SBC Communications Inc., a predecessor entity to AT&T Inc.
(“AT&T”), that currently provides for the lease or sublease of approximately 2,350 towers from AT&T with the lease
commencing between December 2000 and August 2004. Substantially all of the towers are part of the 2013 Securitization. The
average term of the lease or sublease for all sites at the inception of the agreement was approximately 27 years, assuming
renewals or extensions of the underlying ground leases for the sites. The Company has the option to purchase the sites subject
to the applicable lease or sublease upon its expiration. Each tower is assigned to an annual tranche, ranging from 2013 to 2032,
which represents the outside expiration date for the sublease rights to that tower. The purchase price for each site is a fixed
amount stated in the lease for that site plus the fair market value of certain alterations made to the related tower by AT&T. As of
December 31, 2016, the Company has purchased an aggregate of 77 of the subleased towers upon expiration of the applicable
F-43
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
agreement. The aggregate purchase option price for the remaining towers leased and subleased is $760.1 million and will
accrete at a rate of 10% per annum through the applicable expiration of the lease or sublease of a site. For all such sites
purchased by the Company prior to June 30, 2020, AT&T will continue to lease the reserved space at the then-current monthly
fee which shall escalate in accordance with the standard master lease agreement for the remainder of AT&T’s tenancy.
Thereafter, AT&T shall have the right to renew such lease for up to four successive five-year terms. For all such sites purchased
by the Company subsequent to June 30, 2020, AT&T has the right to continue to lease the reserved space for successive one-
year terms at a rent equal to the lesser of the agreed upon market rate and the then-current monthly fee, which is subject to an
annual increase based on changes in the U.S. Consumer Price Index.
Alltel Transaction—In December 2000, the Company entered into an agreement with Alltel, to acquire towers through a 15-
year sublease agreement. Pursuant to the agreement, as amended, with Verizon Wireless, the Company acquired rights to
approximately 1,800 towers in tranches between April 2001 and March 2002. The Company has the option to purchase each
tower at the expiration of the applicable sublease. The Company exercised the purchase options for 1,523 towers in a single
closing which occurred on December 8, 2016. The Company has provided notice to the tower owner of its intent to exercise the
purchase options related to the 243 remaining towers. As of December 31, 2016, the purchase price per tower was $42,844
payable in cash or, at the tower owner’s option, with 769 shares of the Company’s common stock per tower. The aggregate cash
purchase option price for the remaining subleased towers was $10.4 million as of December 31, 2016.
Other Contingencies—The Company is subject to income tax and other taxes in the geographic areas where it operates, and
periodically receives notifications of audits, assessments or other actions by taxing authorities. The Company evaluates the
circumstances of each notification based on the information available and records a liability for any potential outcome that is
probable or more likely than not unfavorable if the liability is also reasonably estimable. On December 5, 2016, the Company
received an income tax assessment of Essar Telecom Infrastructure Private Limited (“ETIPL”) for the fiscal year ending 2008
in the amount of 4.75 billion INR ($69.8 million on the date of assessment) related to capital contributions. The Company is
challenging the assessment before India’s tax authority Commissioner of Income Tax (Appeals) and estimates that there is a
more likely than not probability that the Company’s position will be sustained. Accordingly, no such liability has been recorded.
Additionally, the assessment was made with respect to transactions that took place in the tax year commencing in 2007, prior to
the Company’s acquisition of ETIPL. Under the Company’s definitive acquisition agreement of ETIPL, the seller is obligated to
indemnify and defend the Company with respect to any tax-related liability that may arise from activities prior to March 31,
2010.
Lease Obligations—The Company leases certain land, office and tower space under operating leases that expire over various
terms. Many of the leases contain renewal options with specified increases in lease payments upon exercise of the renewal
option. Escalation clauses present in operating leases, excluding those tied to CPI or other inflation-based indices, are
recognized on a straight-line basis over the non-cancellable term of the leases.
Future minimum rental payments under non-cancellable operating leases include payments for certain renewal periods at the
Company’s option because failure to renew could result in a loss of the applicable communications sites and related revenues
from tenant leases, thereby making it reasonably assured that the Company will renew the leases. Such payments at
December 31, 2016 are as follows (in millions):
Year Ending December 31,
2017
2018
2019
2020
2021
Thereafter
Total
$
$
869
846
816
776
737
6,638
10,682
Aggregate rent expense (including the effect of straight-line rent expense) under operating leases for the years ended
December 31, 2016, 2015 and 2014 approximated $986.2 million, $804.8 million and $655.0 million, respectively.
F-44
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Future minimum payments under capital leases in effect at December 31, 2016 were as follows (in millions):
Year Ending December 31,
2017
2018
2019
2020
2021
Thereafter
Total minimum lease payments
Less amounts representing interest
Present value of capital lease obligations
$
$
28
24
22
18
14
163
269
(132)
137
Tenant Leases—The Company’s lease agreements with its tenants vary depending upon the region and the industry of the
tenant, and generally have initial terms of ten years with multiple renewal terms at the option of the tenant.
Future minimum rental receipts expected from tenants under non-cancellable operating lease agreements in effect at
December 31, 2016 were as follows (in millions):
Year Ending December 31,
2017
2018
2019
2020
2021
Thereafter
Total
$
$
4,646
4,502
4,240
3,905
3,372
10,477
31,142
Guaranties and Indemnifications—The Company enters into agreements from time to time in the ordinary course of business
pursuant to which it agrees to guarantee or indemnify third parties for certain claims. The Company has also entered into
purchase and sale agreements relating to the sale or acquisition of assets containing customary indemnification provisions. The
Company’s indemnification obligations under these agreements generally are limited solely to damages resulting from breaches
of representations and warranties or covenants under the applicable agreements, but do not guarantee future performance. In
addition, payments under such indemnification clauses are generally conditioned on the other party making a claim that is
subject to whatever defenses the Company may have and are governed by dispute resolution procedures specified in the
particular agreement. Further, the Company’s obligations under these agreements may be limited in duration and amount, and in
some instances, the Company may have recourse against third parties for payments made by the Company. The Company has
not historically made any material payments under these agreements and, as of December 31, 2016, is not aware of any
agreements that could result in a material payment.
F-45
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental cash flow information and non-cash investing and financing activities are as follows for the years ended
December 31, (in thousands):
2016
2015
2014
Supplemental cash flow information:
Cash paid for interest
Cash paid for income taxes (net of refunds of $19,554, $7,053 and $8,476,
respectively)
$
645,092
$
577,952
$
548,089
96,241
157,058
69,212
Non-cash investing and financing activities:
(Decrease) increase in accounts payable and accrued expenses for purchases
of property and equipment and construction activities
Purchases of property and equipment under capital leases
Fair value of debt assumed through acquisitions
Exercise of purchase option for property and equipment for common shares
issued
Settlement of accounts receivable related to acquisitions
Conversion of third-party debt to equity
(18,973)
55,635
786,889
120,785
—
—
2,780
36,851
—
—
899
—
1,121
36,486
463,135
—
31,849
111,181
20. BUSINESS SEGMENTS
The Company’s primary business is leasing space on multitenant communications sites to wireless service providers, radio and
television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of
other industries. This business is referred to as the Company’s property operations, which as of December 31, 2016, consisted
of the following:
• U.S.: property operations in the United States;
• Asia: property operations in India;
• EMEA: property operations in Germany, Ghana, Nigeria, South Africa and Uganda; and
• Latin America: property operations in Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Peru.
The Company has applied the aggregation criteria to operations within the EMEA and Latin America property operating
segments on a basis that is consistent with management’s review of information and performance evaluations of these regions.
The Company’s services segment offers tower-related services in the United States, including site acquisition, zoning and
permitting services and structural analysis services, which primarily support its site leasing business, including the addition of
new tenants and equipment on its sites. The services segment is a strategic business unit that offers different services from, and
requires different resources, skill sets and marketing strategies than, the property operating segments.
The accounting policies applied in compiling segment information below are similar to those described in note 1. Among other
factors, in evaluating financial performance in each business segment, management uses segment gross margin and segment
operating profit. The Company defines segment gross margin as segment revenue less segment operating expenses excluding
stock-based compensation expense recorded in costs of operations; Depreciation, amortization and accretion; Selling, general,
administrative and development expense; and Other operating expenses. The Company defines segment operating profit as
segment gross margin less Selling, general, administrative and development expense attributable to the segment, excluding
stock-based compensation expense and corporate expenses. For reporting purposes, the Latin America property segment gross
margin and segment operating profit also include Interest income, TV Azteca, net. These measures of segment gross margin and
segment operating profit are also before Interest income, Interest expense, Gain (loss) on retirement of long-term obligations,
Other expense, Net income (loss) attributable to noncontrolling interests and Income tax benefit (provision). The categories of
expenses indicated above, such as depreciation, have been excluded from segment operating performance as they are not
considered in the review of information or the evaluation of results by management. There are no significant revenues resulting
from transactions between the Company’s operating segments. All intercompany transactions are eliminated to reconcile
segment results and assets to the consolidated statements of operations and consolidated balance sheets.
F-46
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Summarized financial information concerning the Company’s reportable segments for the years ended December 31, 2016,
2015 and 2014 is shown in the following tables. The “Other” column (i) represents amounts excluded from specific segments,
such as business development operations, stock-based compensation expense and corporate expenses included in Selling,
general, administrative and development expense; Other operating expenses; Interest income; Interest expense; Gain (loss) on
retirement of long-term obligations; and Other expense, as the amounts are not utilized in assessing each segment’s
performance, and (ii) reconciles segment operating profit to Income from continuing operations before income taxes.
Year ended December 31,
2016
U.S.
Asia
EMEA
Property
Latin
America
Total
Property
(in thousands)
Services
Other
Total
Segment revenues
Segment operating
expenses (1)
Interest income, TV Azteca,
net
Segment gross margin
Segment selling, general,
administrative and
development expense (1)
Segment operating profit
Stock-based compensation
expense
Other selling, general,
administrative and
development expense
Depreciation, amortization
and accretion
Other expense (2)
Income from continuing
operations before income
taxes
Capital expenditures (3)
$3,370,033
$ 827,627
$ 529,531
$ 985,935
$ 5,713,126
$
72,542
$5,785,668
733,403
465,938
223,716
337,887
1,760,944
27,007
—
—
—
10,960
10,960
2,636,630
361,689
305,815
659,008
3,963,142
147,559
48,238
60,903
60,690
317,390
$2,489,071
$ 313,451
$ 244,912
$ 598,318
$ 3,645,752
$
—
45,535
12,510
33,025
1,787,951
10,960
4,008,677
329,900
$3,678,777
$
89,898
89,898
126,035
126,035
1,525,635
1,525,635
811,349
811,349
$1,125,860
$ 310,744
$ 115,508
$
86,128
$ 172,568
$
684,948
$
— $
16,439
$ 701,387
_______________
(1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $2.4
million and $87.5 million, respectively.
(2) Primarily includes interest expense.
(3) Includes $18.9 million of capital lease payments included in Repayments of notes payable, credit facilities, term loan, senior notes and capital leases in the
cash flow from financing activities in our consolidated statement of cash flows.
F-47
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31,
2015
U.S.
Asia
EMEA
Property
Latin
America
Total
Property
(in thousands)
Services
Other
Total
Segment revenues
Segment operating
expenses (1)
Interest income, TV Azteca,
net
Segment gross margin
Segment selling, general,
administrative and
development expense (1)
Segment operating profit
Stock-based compensation
expense
Other selling, general,
administrative and
development expense
Depreciation, amortization
and accretion
Other expense (2)
Income from continuing
operations before income
taxes
Capital expenditures
$3,157,501
$ 242,223
$ 395,092
$ 885,572
$ 4,680,388
$
91,128
$4,771,516
678,499
126,874
163,820
304,629
1,273,822
32,993
—
—
—
11,209
11,209
2,479,002
115,349
231,272
592,152
3,417,775
138,617
22,771
48,672
62,111
272,171
$2,340,385
$
92,578
$ 182,600
$ 530,041
$ 3,145,604
$
—
58,135
15,724
42,411
1,306,815
11,209
3,475,910
287,895
$3,188,015
$
90,537
90,537
121,456
121,456
1,285,328
1,285,328
860,732
860,732
$ 829,962
$ 367,663
$
75,407
$
66,625
$ 201,806
$
711,501
$
— $
17,252
$ 728,753
_______________
(1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $2.1
million and $88.5 million, respectively.
(2) Primarily includes interest expense.
Year ended December 31,
2014
U.S.
Asia
EMEA
Property
Latin
America
Total
Property
(in thousands)
Services
Other
Total
Segment revenues
Segment operating
expenses (1)
Interest income, TV Azteca,
net
Segment gross margin
Segment selling, general,
administrative and
development expense (1)
Segment operating profit
Stock-based compensation
expense
Other selling, general,
administrative and
development expense (2)
Depreciation, amortization
and accretion
Other expense (3)
Income from continuing
operations before income
taxes
Capital expenditures
$2,639,790
$ 219,566
$ 315,053
$ 832,445
$ 4,006,854
$
93,194
$4,100,048
515,742
121,797
126,714
290,527
1,054,780
37,648
—
—
—
10,547
10,547
2,124,048
97,769
188,339
552,465
2,962,621
124,944
19,632
39,553
66,890
251,019
$1,999,104
$
78,137
$ 148,786
$ 485,575
$ 2,711,602
$
—
55,546
12,469
43,077
1,092,428
10,547
3,018,167
263,488
$2,754,679
$
80,153
80,153
104,738
104,738
1,003,802
1,003,802
700,282
700,282
$ 865,704
$ 576,153
$
74,334
$
70,126
$ 229,645
$
950,258
$
— $
24,146
$ 974,404
_______________
(1) Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $1.8
million and $78.3 million, respectively.
Includes $7.9 million of expense previously recorded as segment selling, general, administrative and development expense.
(2)
(3) Primarily includes interest expense.
F-48
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Additional information relating to the total assets of the Company’s operating segments is as follows for the years ended
December 31, (in thousands):
U.S. property
Asia property (1)
EMEA property (1)
Latin America property (1)
Services
Other (2)
Total assets
2016
$ 18,846,941
4,535,293
2,062,399
4,938,064
48,327
448,126
$ 30,879,150
2015
$ 19,286,465
736,149
2,249,634
4,401,258
68,388
162,378
$ 26,904,272
2014
$ 14,335,731
738,290
1,275,253
4,700,357
57,367
156,567
$ 21,263,565
_______________
(1) Balances are translated at the applicable period end exchange rate, which may impact comparability between periods.
(2) Balances include corporate assets such as cash and cash equivalents, certain tangible and intangible assets and income tax accounts that have not been
allocated to specific segments.
Summarized geographic information related to the Company’s operating revenues for the years ended December 31, 2016,
2015 and 2014 and long-lived assets as of December 31, 2016 and 2015 is as follows (in thousands):
Operating Revenues:
United States
Asia (1):
India
EMEA (1):
Germany
Ghana
Nigeria
South Africa
Uganda
Latin America (1):
Argentina
Brazil
Chile
Colombia
Costa Rica
Mexico
Panama (2)
Peru
Total International
Total operating revenues
2016
2015
2014
$ 3,442,575
$ 3,248,629
$ 2,732,984
827,627
242,223
219,566
60,163
116,219
215,402
80,006
57,741
55,965
94,549
109,701
80,510
54,367
64,946
95,486
—
98,334
56,287
1,065
506,182
33,831
79,755
18,968
331,173
—
14,961
2,343,093
$ 5,785,668
—
408,644
29,650
78,351
17,244
340,461
—
11,222
1,522,887
$ 4,771,516
—
331,089
31,756
89,421
16,742
354,116
1,243
8,078
1,367,064
$ 4,100,048
_______________
(1) Balances are translated at the applicable exchange rate, which may impact comparability between periods.
(2)
In September 2014, the Company completed the sale of its operations in Panama.
F-49
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Long-Lived Assets (1):
United States
Asia (2):
India
EMEA (2):
Germany
Ghana
Nigeria
South Africa
Uganda
Latin America (2):
Argentina
Brazil
Chile
Colombia
Costa Rica
Mexico
Peru
Total International
Total long-lived assets
_______________
(1)
(2) Balances are translated at the applicable period end exchange rate, which may impact comparability between periods.
Includes Property and equipment, net, Goodwill and Other intangible assets, net.
2016
2015
$ 16,969,558
$ 17,516,535
4,094,190
619,370
397,317
192,158
640,634
271,760
141,533
388,727
217,530
1,018,980
133,088
162,346
137,588
2,626,431
137,170
272,338
117,481
797,798
66,593
9,892,991
$ 26,862,549
—
2,204,494
121,938
256,892
120,292
976,707
59,206
6,279,570
$ 23,796,105
The following tenants within the property segments and services segment individually accounted for 10% or more of the
Company’s consolidated operating revenues for the years ended December 31, is as follows:
AT&T
Verizon Wireless
Sprint
T-Mobile
2016
2015
2014
21%
15%
11%
9%
24%
16%
13%
10%
20%
11%
15%
10%
21. RELATED PARTY TRANSACTIONS
During the years ended December 31, 2016, 2015 and 2014, the Company had no significant related party transactions.
F-50
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
22. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Selected quarterly financial data for the years ended December 31, 2016 and 2015 is as follows (in thousands, except per share
data):
2016:
Operating revenues
Costs of operations (1)
Operating income
Net income
Net income attributable to American Tower
Corporation stockholders
Dividends on preferred stock
Net income attributable to American Tower
Corporation common stockholders
Basic net income per share attributable to
American Tower Corporation common
stockholders
Diluted net income per share attributable to
American Tower Corporation common
stockholders
2015:
Operating revenues
Costs of operations (1)
Operating income
Net income
Net income attributable to American Tower
Corporation stockholders
Dividends on preferred stock
Net income attributable to American Tower
Corporation common stockholders
Basic net income per share attributable to
American Tower Corporation common
stockholders
Diluted net income per share attributable to
American Tower Corporation common
stockholders
_______________
Three Months Ended
March 31,
June 30,
September 30,
December 31,
Year Ended
December 31,
$ 1,289,047
$ 1,442,227
$ 1,514,845
$ 1,539,549
$ 5,785,668
351,445
451,853
281,307
459,711
432,806
192,464
491,237
479,074
263,735
487,996
489,296
232,853
1,790,389
1,853,029
970,359
275,159
(26,781)
187,550
(26,782)
264,509
(26,781)
229,207
(26,781)
956,425
(107,125)
248,378
160,768
237,728
202,426
849,300
0.59
0.58
0.38
0.37
0.56
0.55
0.48
0.47
2.00
1.98
Three Months Ended
March 31,
June 30,
September 30,
December 31,
Year Ended
December 31,
$ 1,079,190
$ 1,174,375
$ 1,237,910
$ 1,280,041
$ 4,771,516
264,640
419,966
195,492
322,458
389,774
157,180
365,389
400,925
97,740
356,381
402,124
221,595
1,308,868
1,612,789
672,007
193,317
(9,819)
156,056
(26,782)
102,999
(26,781)
232,702
(26,781)
685,074
(90,163)
183,498
129,274
76,218
205,921
594,911
0.45
0.45
0.31
0.30
0.18
0.18
0.49
0.48
1.42
1.41
(1) Represents Operating expenses, exclusive of Depreciation, amortization and accretion, Selling, general, administrative and development expense, and
Other operating expenses.
23. SUBSEQUENT EVENTS
Redemption of 7.25% Senior Notes—On February 10, 2017, the Company redeemed all of the outstanding 7.25% senior
unsecured notes due 2019 (the “7.25% Notes”) at a price equal to 112.0854% of the principal amount, plus accrued and unpaid
interest up to, but excluding, February 10, 2017, for an aggregate redemption price of $341.4 million, including $5.1 million in
accrued and unpaid interest. The Company expects to record a loss on retirement of long-term obligations of approximately
$39.1 million, which includes prepayment consideration of $36.3 million, and the remaining portion of the unamortized
F-51
discount and deferred financing costs. The redemption was funded with borrowings under the 2013 Credit Facility and cash on
hand. Upon completion of the redemption, none of the 7.25% Notes remained outstanding.
Repayment of 2012 GTP Notes—On February 15, 2017, the Company repaid the $173.5 million remaining principal amount
outstanding under the Secured Cellular Site Revenue Notes, Series 2012-2 Class A, Series 2012-2 Class B and Series 2012-2
Class C issued by GTP Cellular Sites, LLC, plus prepayment consideration and accrued and unpaid interest. The Company
expects to record a loss on retirement of long-term obligations of approximately $1.8 million, which includes prepayment
consideration of $7.2 million offset by the remaining portion of the unamortized premium. The repayment was funded with
borrowings under the 2013 Credit Facility and cash on hand.
Repayment of Unison Notes—On February 15, 2017, the Company repaid the $129.0 million principal amount outstanding
under the Secured Cellular Site Revenue Notes, Series 2010-2, Class C and Series 2010-2, Class F issued by Unison Ground
Lease Funding, LLC, plus prepayment consideration and accrued and unpaid interest. The Company expects to record a loss on
retirement of long-term obligations of approximately $14.5 million, which includes prepayment consideration of $18.3 million
offset by the remaining portion of the unamortized premium. The repayment was funded with borrowings under the 2013 Credit
Facility and cash on hand.
FPS Towers Acquisition—On February 15, 2017, ATC Europe acquired 100% of the outstanding shares of FPS for total
consideration of 713.9 million Euros ($757.1 million at the date of acquisition). The acquisition was funded by the Company
and its equity partner, PGGM. The Company made a loan to ATC Europe to fund 225.0 million Euros ($238.6 million at the
date of acquisition) of the total consideration. The remainder of the purchase price was funded by the Company and PGGM in
proportion to their respective interests in ATC Europe. The Company funded its portion of the purchase price with
borrowings under the 2013 Credit Facility and cash on hand. The acquisition is consistent with the Company’s strategy to
expand in selected geographic areas. A preliminary purchase price allocation is not available due to the timing of the closing.
F-52
AMERICAN TOWER CORPORATION AND SUBSIDIARIES
SCHEDULE III—SCHEDULE OF REAL ESTATE
AND ACCUMULATED DEPRECIATION
(dollars in thousands)
Description
Encumbrances
Cost
capitalized
subsequent to
acquisition
Gross amount
carried at
close of
current
period
Accumulated
depreciation
at close of
current
period
Initial cost
to company
Date of
construction
Date
acquired
Life on which
depreciation in
latest income
statements is
computed
144,119 sites (1)
$
3,815,002 (2)
(3)
(3)
$
14,276,973 (4)
$ (4,548,096)
Various
Various
Up to 20 years
_______________
(1) No single site exceeds 5% of the total amounts indicated in the table above.
(2) Certain assets secure debt of $3.8 billion.
(3) The Company has omitted this information, as it would be impracticable to compile such information on a site-by-site basis.
(4) Does not include those sites under construction.
Gross amount at beginning
Additions during period:
Acquisitions
Discretionary capital projects (2)
Discretionary ground lease purchases (3)
Redevelopment capital expenditures (4)
Capital improvements (5)
Start-up capital expenditures (6)
Other (7)
Total additions
Deductions during period:
Cost of real estate sold or disposed
Other (8)
Total deductions:
Balance at end
Gross amount of accumulated depreciation at beginning
Additions during period:
Depreciation
Other
Total additions
Deductions during period:
Amount of accumulated depreciation for assets sold or disposed
Other (8)
Total deductions
Balance at end
2016
$ 13,046,291
2015
2014
$ 10,434,326 (1) $ 9,921,276 (1)
787,206
105,279
168,133
136,821
81,790
128,707
139,356
1,547,292
2,620,778
210,421
144,695
114,089
42,417
35,561
201,118
3,369,079
397,837
437,720
159,637
96,782
41,967
21,173
22,069
1,177,185
(85,789)
(230,821)
(316,610)
$ 14,276,973
(60,975)
(696,139)
(757,114)
$ 13,046,291
(60,147)
(569,107)
(629,254)
$ 10,469,207
2016
$ (3,994,874)
2015
$ (3,613,078)
2014
$ (3,297,033)
(647,910)
—
(647,910)
(557,052)
—
(557,052)
(457,135)
(761)
(457,896)
24,911
69,777
94,688
$ (4,548,096)
30,083
145,173
175,256
$ (3,994,874)
20,953
120,898
141,851
$ (3,613,078)
_______________
(1) Beginning balance has been revised to reflect purchase accounting measurement period adjustments.
(2)
(3)
(4)
(5)
(6)
Includes amounts incurred primarily for the construction of new sites.
Includes amounts incurred to purchase or otherwise secure the land under communications sites.
Includes amounts incurred to increase the capacity of existing sites, which results in new incremental tenant revenue.
Includes amounts incurred to enhance existing sites by adding additional functionality, capacity or general asset improvements.
Includes amounts incurred in connection with acquisitions or new market launches. Start-up capital expenditures includes non-recurring expenditures
contemplated in acquisitions or new market launch business cases.
(7) Primarily includes regional improvements and other additions.
(8) Primarily includes foreign currency exchange rate fluctuations and other deductions.
F-53
INDEX TO EXHIBITS
Pursuant to the rules and regulations of the SEC, the Company has filed certain agreements as exhibits to this Annual Report on
Form 10-K. These agreements may contain representations and warranties by the parties. These representations and warranties have
been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made
to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such
agreements and are subject to more recent developments, which may not be fully reflected in the Company’s public disclosure,
(iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from
what may be viewed as material to investors. Accordingly, these representations and warranties may not describe the Company’s
actual state of affairs at the date hereof and should not be relied upon.
The exhibits below are included, either by being filed herewith or by incorporation by reference, as part of this Annual Report
on Form 10-K. Exhibits are identified according to the number assigned to them in Item 601 of SEC Regulation S-K. Documents that
are incorporated by reference are identified by their Exhibit number as set forth in the filing from which they are incorporated by
reference. The filings of the Registrant from which various exhibits are incorporated by reference into this Annual Report are
indicated by parenthetical numbering which corresponds to the following key:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
Annual Report on Form 10-K (File No. 001-14195) filed on April 2, 2001;
Annual Report on Form 10-K (File No. 001-14195) filed on March 15, 2006;
Tender Offer Statement on Schedule TO (File No. 005-55211) filed on November 29, 2006;
Definitive Proxy Statement on Schedule 14A (File No. 001-14195) filed on March 22, 2007;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on August 6, 2008;
Current Report on Form 8-K (File No. 001-14195) filed on March 5, 2009;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on May 8, 2009;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on August 6, 2009;
Annual Report on Form 10-K (File No. 001-14195) filed on March 1, 2010;
Registration Statement on Form S-3ASR (File No. 333-166805) filed on May 13, 2010;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on November 5, 2010;
Current Report on Form 8-K (File No. 001-14195) filed on December 9, 2010;
Current Report on Form 8-K (File No. 001-14195) filed on August 25, 2011;
Current Report on Form 8-K (File No. 001-14195) filed on October 6, 2011;
Current Report on Form 8-K (File No. 001-14195) filed on January 3, 2012;
Current Report on Form 8-K (File No. 001-14195) filed on March 12, 2012;
Current Report on Form 8-K (File No. 001-14195) filed on January 8, 2013;
Annual Report on Form 10-K (File No. 001-14195) filed on February 27, 2013;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on May 1, 2013;
Registration Statement on Form S-3ASR (File No. 333-188812) filed on May 23, 2013;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on July 31, 2013;
Current Report on Form 8-K (File No. 001-14195) filed on August 19, 2013;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on October 30, 2013;
Current Report on Form 8-K (File No. 001-14195) filed on May 12, 2014;
Current Report on Form 8-K (File No. 001-14195) filed on August 7, 2014;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on October 30, 2014;
Current Report on Form 8-K (File No. 001-14195) filed on February 23, 2015;
EX-1
(28)
(29)
(30)
(31)
(32)
(33)
(34)
(35)
(36)
(37)
(38)
(39)
Annual Report on Form 10-K (File No. 001-14195) filed on February 24, 2015;
Current Report on Form 8-K (File No. 001-14195) filed on March 3, 2015;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on April 30, 2015;
Current Report on Form 8-K (File No. 001-14195) filed on May 7, 2015;
Quarterly Report on Form 10-Q (File No. 001-14195) filed on July 29, 2015;
Current Report on Form 8-K (File No. 001-14195) filed on January 12, 2016;
Current Report on Form 8-K (File No. 001-14195) filed on February 16, 2016;
Annual Report on Form 10-K (File No. 001-14195) filed on February 26, 2016;
Current Report on Form 8-K (File No. 001-14195) filed on March 9, 2016;
Current Report on Form 8-K (File No. 001-14195) filed on May 13, 2016;
Current Report on Form 8-K (File No. 001-14195) filed on September 30, 2016; and
Quarterly Report on Form 10-Q (File No. 001-14195) filed on October 27, 2016.
EX-2
Exhibit No.
Description of Document
Exhibit File No.
2.1
3.1
3.2
3.3
3.4
3.5
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
Agreement and Plan of Merger by and between American Tower Corporation and
American Tower REIT, Inc., dated as of August 24, 2011
Restated Certificate of Incorporation of the Company as filed with the Secretary of
State of the State of Delaware, effective as of December 31, 2011
Certificate of Merger, effective as of December 31, 2011
Amended and Restated By-Laws of the Company, effective as of February 12,
2016
Certificate of Designations of the 5.25% Mandatory Convertible Preferred Stock,
Series A, of the Company as filed with the Secretary of State of the State of
Delaware, effective as of May 12, 2014
Certificate of Designations of 5.50% Mandatory Convertible Preferred Stock,
Series B, of the Company as filed with the Secretary of State of the State of
Delaware, effective as of March 3, 2015
Indenture dated as of June 10, 2009, by and between the Company and The Bank
of New York Mellon Trust Company N.A., as Trustee, for the 7.25% Senior Notes
due 2019
Indenture dated May 13, 2010, by and between the Company and The Bank of
New York Mellon Trust Company N.A., as Trustee
Indenture dated May 23, 2013, by and between the Company and U.S. Bank
National Association, as Trustee
Supplemental Indenture No. 1, dated August 16, 2010, to Indenture dated May 13,
2010, by and between the Company and The Bank of New York Mellon Trust
Company N.A., as Trustee, for the 5.050% Senior Notes due 2020
Supplemental Indenture No. 2, dated December 7, 2010, to Indenture dated May
13, 2010, by and between the Company and The Bank of New York Mellon Trust
Company N.A., as Trustee, for the 4.500% Senior Notes due 2018
Supplemental Indenture No. 3, dated as of October 6, 2011, to Indenture dated
May 13, 2010, by and between the Company and The Bank of New York Mellon
Trust Company N.A., as Trustee, for the 5.900% Senior Notes due 2021
Supplemental Indenture No. 1, dated as of December 30, 2011, to Indenture dated
as of June 10, 2009, with respect to the Predecessor Registrant’s 7.25% Senior
Notes due 2019, by and among, the Predecessor Registrant, the Company and The
Bank of New York Mellon Trust Company N.A., as Trustee
Supplemental Indenture No. 4, dated as of December 30, 2011, to Indenture dated
May 13, 2010, by and among, the Predecessor Registrant, the Company and The
Bank of New York Mellon Trust Company N.A., as Trustee
Supplemental Indenture No. 5, dated as of March 12, 2012, to Indenture dated May
13, 2010, by and between the Company and the Bank of New York Mellon Trust
Company N.A., as Trustee, for the 4.70% Senior Notes due 2022
Supplemental Indenture No. 6, dated as of January 8, 2013, to Indenture dated May
13, 2010, by and between the Company and the Bank of New York Mellon Trust
Company N.A., as Trustee, for the 3.50% Senior Notes due 2023
Supplemental Indenture No. 1, dated as of August 19, 2013, to Indenture dated
May 23, 2013, by and between the Company and U.S. Bank National Association,
as Trustee, for the 3.40% Senior Notes due 2019 and the 5.00% Senior Notes due
2024
Supplemental Indenture No. 2, dated as of August 7, 2014, to Indenture dated May
23, 2013, by and between the Company and U.S. Bank National Association, as
Trustee, for the 3.450% Senior Notes due 2021
EX-3
2.1 (13)
3.1 (15)
3.2 (15)
3.1 (34)
3.1 (24)
3.1 (29)
10.1 (8)
4.3 (10)
4.12 (20)
4 (11)
4.1 (12)
4.1 (14)
4.4 (15)
4.6 (15)
4.1 (16)
4.1 (17)
4.1 (22)
4.1 (25)
Exhibit No.
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Description of Document
Exhibit File No.
Supplemental Indenture No. 3, dated as of May 7, 2015, to Indenture dated May
23, 2013, by and between the Company and U.S. Bank National Association, as
trustee, for the 2.800% Senior Notes due 2020 and the 4.000% Senior Notes due
2025
Supplemental Indenture No. 4, dated as of January 12, 2016, to Indenture dated
May 23, 2013, by and between the Company and U.S. Bank National Association,
as trustee, for the 3.300% Senior Notes due 2021 and the 4.400% Senior Notes due
2026
Supplemental Indenture No. 5, dated as of May 13, 2016, to Indenture dated May
23, 2013, by and between the Company and U.S. Bank National Association, as
trustee, for the 3.375% Senior Notes due 2026
Supplemental Indenture No. 6, dated as of September 30, 2016, to Indenture dated
as of May 23, 2013, by and between the Company and U.S. Bank National
Association, as trustee, for the 2.250% Senior Notes due 2022 and the 3.125%
Senior Notes due 2027
Deposit Agreement, dated March 3, 2015, among the Company, Computershare
Trust Company, N.A., Computershare Inc. and the holders from time to time of the
depositary receipts evidencing the depositary shares, for the 5.50% Mandatory
Convertible Preferred Stock, Series B
Third Amended and Restated Indenture, dated May 29, 2015, by and between GTP
Acquisition Partners I, LLC, ACC Tower Sub, LLC, DCS Tower Sub, LLC, GTP
South Acquisitions II, LLC, GTP Acquisition Partners II, LLC, GTP Acquisition
Partners, III, LLC, GTP Infrastructure I, LLC, GTP Infrastructure II, LLC, GTP
Infrastructure III, LLC, GTP Towers VIII, LLC, GTP Towers I, LLC, GTP Towers
II, LLC, GTP Towers IV, LLC, GTP Towers V, LLC, GTP Towers VII, LLC, GTP
Towers IX, LLC, PCS Structures Towers, LLC and GTP TRS I LLC, as obligors,
and The Bank of New York Mellon, as trustee
Series 2015-1 Supplement, dated May 29, 2015, to the Third Amended and
Restated Indenture dated May 29, 2015
Series 2015-2 Supplement, dated May 29, 2015, to the Third Amended and
Restated Indenture dated May 29, 2015
American Tower Systems Corporation 1997 Stock Option Plan, as amended
American Tower Corporation 2000 Employee Stock Purchase Plan, as amended
and restated
American Tower Corporation 2007 Equity Incentive Plan
Form of Notice of Grant of Nonqualified Stock Option and Option Agreement
(U.S. Employee) Pursuant to the American Tower Corporation 2007 Equity
Incentive Plan
Form of Notice of Grant of Nonqualified Stock Option and Option Agreement
(Non-U.S. Employee) Pursuant to the American Tower Corporation 2007 Equity
Incentive Plan
Form of Restricted Stock Unit Agreement (U.S. Employee/ Non-U.S. Employee
Director) Pursuant to the American Tower Corporation 2007 Equity Incentive Plan
Form of Restricted Stock Unit Agreement (Non-U.S. Employee) Pursuant to the
American Tower Corporation 2007 Equity Incentive Plan
Form of Notice of Grant of Performance-Based Restricted Stock Units Agreement
(U.S. Employee) Pursuant to the American Tower Corporation 2007 Equity
Incentive Plan
Form of Notice of Grant of Restricted Stock Units and RSU Agreement (U.S.
Employee / Time) (Non-Employee Director) Pursuant to the American Tower
Corporation 2007 Equity Incentive Plan
EX-4
4.1 (31)
4.1 (33)
4.1 (37)
4.1 (38)
4.1 (29)
4.2 (32)
4.3 (32)
4.4 (32)
(d)(1) (3)*
10.5 (9)
Annex A (4)*
10.6 (18)*
10.31 (18)*
10.8 (18)*
10.9 (18)*
10.1 (27)*
10.1 (36)*
Description of Document
Exhibit File No.
Exhibit No.
10.10
Notice of Grant of Performance-Based Restricted Stock Units and PSU Agreement
(U.S. Employee) Pursuant to the American Tower Corporation 2007 Equity
Incentive Plan
10.11
Noncompetition and Confidentiality Agreement dated as of January 1, 2004
between American Tower Corporation and William H. Hess
10.12
Amendment, dated August 6, 2008, to Noncompetition and Confidentiality
Agreement dated as of January 1, 2004 between American Tower Corporation and
William H. Hess
10.13
10.14
10.15
10.16
First Amended and Restated Loan and Security Agreement, dated as of March 15,
2013, by and between American Tower Asset Sub, LLC and American Tower Asset
Sub II, LLC, as Borrowers, and U.S. Bank National Association, as Trustee for
American Tower Trust I Secured Tower Revenue Securities, as Lender
First Amended and Restated Management Agreement, dated as of March 15, 2013,
by and between American Tower Asset Sub, LLC and American Tower Asset Sub
II, LLC, as Owners, and SpectraSite Communications, LLC, as Manager
First Amended and Restated Cash Management Agreement, dated as of March 15,
2013, by and among American Tower Asset Sub, LLC and American Tower Asset
Sub II, LLC, as Borrowers, and U.S. Bank National Association, as Trustee for
American Tower Trust I Secured Tower Revenue Securities, as Lender, Midland
Loan Services, a Division of PNC Bank, National Association, as Servicer, U.S.
Bank National Association, as Agent, and SpectraSite Communications, LLC, as
Manager
First Amended and Restated Trust and Servicing Agreement, dated as of March 15,
2013, by and among American Tower Depositor Sub, LLC, as Depositor, Midland
Loan Services, a Division of PNC Bank, National Association, as Servicer, and
U.S. Bank National Association, as Trustee
10.17
Lease and Sublease by and among ALLTEL Communications, Inc. and the other
entities named therein and American Towers, Inc. and American Tower
Corporation, dated , 2001
10.18
Agreement to Sublease by and among ALLTEL Communications, Inc. the
ALLTEL entities and American Towers, Inc. and American Tower Corporation,
dated December 19, 2000
10.19
10.20
10.21
10.22
10.23
10.24
10.25
Lease and Sublease, dated as of December 14, 2000, by and among SBC Tower
Holdings LLC, Southern Towers, Inc., SBC Wireless, LLC and SpectraSite
Holdings, Inc. (incorporated by reference from Exhibit 10.2 to the SpectraSite
Holdings, Inc. Quarterly Report on Form 10-Q (File No. 000-27217) filed on
May 11, 2001)
Amendment to Lease and Sublease, dated September 30, 2008, by and between
SpectraSite, LLC, American Tower Asset Sub II, LLC, SBC Wireless, LLC and
SBC Tower Holdings LLC
Summary Compensation Information for Current Named Executive Officers
(incorporated by reference from Item 5.02(e) of Current Report on Form 8-K (File
No. 001-14195) filed on March 3, 2016)
Form of Waiver and Termination Agreement
American Tower Corporation Severance Plan, as amended
American Tower Corporation Severance Plan, Program for Executive Vice
Presidents and Chief Executive Officer, as amended
Letter Agreement, dated as of May 4, 2016, as amended, by and between the
Company and William H. Hess
EX-5
10.2 (36)*
10.10 (2)*
10.1 (5)*
10.1 (19)
10.2 (19)
10.3 (19)
10.4 (19)
2.1 (1)
2.2 (1)
10.2
10.7 (7)**
*
10.4 (6)
10.35 (9)*
10.36 (9)*
10.1 (39)*
Exhibit No.
Description of Document
10.26
Letter Agreement, dated as of February 9, 2015 by and between the Company and
Steven C. Marshall
Exhibit File No.
10.24 (28)*
10.27
Amended and Restated Indenture, dated as of February 28, 2012, by and between
GTP Cellular Sites, LLC, Cell Tower Lease Acquisition LLC, GLP Cell Site I,
LLC, GLP Cell Site II, LLC, GLP Cell Site III, LLC, GLP Cell Site IV, LLC, GLP
Cell Site A, LLC, Cell Site NewCo II, LLC, as obligors, and Deutsche Bank Trust
Company Americas, as indenture trustee
10.28
Series 2012-1 and Series 2012-2 Indenture Supplement, dated as of February 28,
2012, to the Amended and Restated Indenture dated February 28, 2012
10.29
Loan Agreement, dated as of June 28, 2013, among the Company, as Borrower,
10.30
10.31
10.32
10.33
10.34
10.35
10.36
10.37
Toronto Dominion (Texas) LLC, as Administrative Agent and Swingline Lender,
Barclays Bank PLC, Citibank, N.A. and Bank of America, N.A., as Syndication
Agents, JPMorgan Chase Bank, N.A., as Documentation Agent, TD Securities
(USA) LLC, Barclays Bank PLC, Citigroup Global Markets Inc. and Merrill
Lynch, Pierce, Fenner & Smith, Incorporated, as Co-Lead Arrangers and Joint
Bookrunners, and the several other lenders that are parties thereto
First Amendment to Loan Agreement, dated as of September 20, 2013, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Loan Agreement entered into
on June 28, 2013
Term Loan Agreement, dated as of October 29, 2013, among the Company, as
borrower, The Royal Bank of Scotland plc, as administrative agent, Royal Bank of
Canada and TD Securities (USA) LLC, as co-syndication agents, JPMorgan Chase
Bank, N.A., Barclays Bank PLC, Citibank, N.A, Morgan Stanley MUFG Loan
Partners, LLC and CoBank, ACB as co-documentation agents, RBS Securities Inc.,
RBC Capital Markets, LLC, TD Securities (USA) LLC, J.P. Morgan Securities
LLC and Barclays Bank PLC, as joint lead arrangers and joint bookrunners, and
the several other lenders that are parties thereto
Amended and Restated Loan Agreement, dated as of September 19, 2014, among
the Company, as borrower, Toronto Dominion (Texas) LLC, as administrative
agent, and swingline lender, TD Securities (USA) LLC, Citigroup Global Markets
Inc., J.P. Morgan Securities LLC, Morgan Stanley MUFG Loan Partners, LLC and
RBS Securities Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A.,
JPMorgan Chase Bank, N.A., Morgan Stanley MUFG Loan Partners, LLC and The
Royal Bank of Scotland plc, as co-syndication agents, and the other lenders that
are parties thereto
Second Amendment to Loan Agreement, dated as of September 19, 2014, among
the Company, as borrower, Toronto Dominion (Texas) LLC, as administrative
agent, and all of the lenders under the Company’s Loan Agreement entered into on
June 28, 2013
First Amendment to Term Loan Agreement, dated as of September 19, 2014,
among the Company, as borrower, The Royal Bank of Scotland plc, as
administrative agent, and a majority of the lenders under the Company’s Term
Loan Agreement entered into on October 29, 2013
First Amendment to Loan Agreement, dated as of February 5, 2015, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Amended and Restated Loan
Agreement entered into on September 19, 2014
Second Amendment to Term Loan Agreement, dated as of February 5, 2015,
among the Company, as borrower, The Royal Bank of Scotland plc, as
administrative agent, and a majority of the lenders under the Company’s Term
Loan Agreement entered into on October 29, 2013
Third Amendment to Loan Agreement, dated as of February 5, 2015, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Loan Agreement entered into
on June 28, 2013
EX-6
10.15 (23)
10.16 (23)
10.1 (21)
10.7 (23)
10.8 (23)
10.1 (26)
10.2 (26)
10.3 (26)
10.51 (28)
10.52 (28)
10.53 (28)
Exhibit No.
10.38
10.39
10.40
10.41
10.42
10.43
10.44
10.45
10.46
10.47
10.48
10.49
10.50
10.51
10.52
10.53
Description of Document
Exhibit File No.
Second Amendment to Loan Agreement, dated as of February 20, 2015, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Amended and Restated Loan
Agreement entered into on September 19, 2014
Third Amendment to Term Loan Agreement, dated as of February 20, 2015, among
the Company, as borrower, The Royal Bank of Scotland plc, as administrative
agent, and a majority of the lenders under the Company’s Term Loan Agreement
entered into on October 29, 2013
Fourth Amendment to Loan Agreement, dated as of February 20, 2015, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Loan Agreement entered into
on June 28, 2013
Third Amendment to Loan Agreement, dated as of October 28, 2015, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Amended and Restated Loan
Agreement entered into on September 19, 2014
Fourth Amendment to Term Loan Agreement, dated as of October 28, 2015, among
the Company, as borrower, Mizuho Bank, Ltd. (successor to The Royal Bank of
Scotland plc), as administrative agent, and a majority of the lenders under the
Company’s Term Loan Agreement entered into on October 29, 2013
Fifth Amendment to Loan Agreement, dated as of October 28, 2015, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Loan Agreement entered into
on June 28, 2013
Fourth Amendment to Loan Agreement, dated as of November 30, 2016, among
the Company, as borrower, Toronto Dominion (Texas) LLC, as administrative
agent, and a majority of the lenders under the Company’s Amended and Restated
Loan Agreement entered into on September 19, 2014
Fifth Amendment to Term Loan Agreement, dated as of November 30, 2016,
among the Company, as borrower, Mizuho Bank, Ltd. (successor to The Royal
Bank of Scotland plc), as administrative agent, and a majority of the lenders under
the Company’s Term Loan Agreement entered into on October 29, 2013
Sixth Amendment to Loan Agreement, dated as of November 30, 2016, among the
Company, as borrower, Toronto Dominion (Texas) LLC, as administrative agent,
and a majority of the lenders under the Company’s Loan Agreement entered into
on June 28, 2013
Master Agreement, dated as of February 5, 2015, among the Company and Verizon
Communications, Inc.
Master Prepaid Lease, dated as of March 27, 2015, among certain subsidiaries of
the Company and Verizon Communications Inc.
Sale Site Master Lease Agreement, dated as of March 27, 2015, among certain
subsidiaries of the Company, Verizon Communications Inc. and certain of its
subsidiaries
MPL Site Master Lease Agreement, dated as of March 27, 2015, among Verizon
Communications Inc. and certain of its subsidiaries and ATC Sequoia LLC
Management Agreement, dated as of March 27, 2015, among Verizon
Communications Inc. and certain of its subsidiaries and ATC Sequoia LLC
Share Purchase Agreement, dated as of October 21, 2015, amongst ATC Asia
Pacific Pte. Ltd., American Tower International, Inc., Viom Networks Limited and
certain of its existing shareholders
Shareholders Agreement, dated as of October 21, 2015, by and amongst Viom
Networks Limited, Tata Sons Limited, Tata Teleservices Limited, IDFC Private
Equity Fund III, Macquarie SBI Investments Pte Limited, SBI Macquarie
Infrastructure Trust and ATC Asia Pacific Pte. Ltd.
EX-7
10.54 (28)
10.55 (28)
10.56 (28)
10.43 (35)
10.44 (35)
10.45 (35)
Filed herewith
as
Exhibit 10.44
Filed herewith
as
Exhibit 10.45
Filed herewith
as
Exhibit 10.46
10.45 (28)
10.8 (30)
10.9 (30)
10.10 (30)
10.11 (30)
10.52 (35)
10.53 (35)
Exhibit No.
Description of Document
12
21
23
Statement Regarding Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
Subsidiaries of the Company
Consent of Independent Registered Public Accounting Firm—Deloitte & Touche
LLP
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
32
Certifications filed pursuant to 18. U.S.C. Section 1350
101
The following materials from American Tower Corporation’s Annual Report on
Form 10-K for the year ended December 31, 2011, formatted in XBRL (Extensible
Business Reporting Language):
101.INS—XBRL Instance Document
101.SCH—XBRL Taxonomy Extension Schema Document
101.CAL—XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB—XBRL Taxonomy Extension Label Linkbase Document
101.PRE—XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF—XTRL Taxonomy Extension Definition
Exhibit File No.
Filed herewith
as
Exhibit 12
Filed herewith
as
Exhibit 21
Filed herewith
as
Exhibit 23
Filed herewith
as
Exhibit 31.1
Filed herewith
as
Exhibit 31.2
Filed herewith
as
Exhibit 32
Filed herewith
as Exhibit 101
*
**
Management contracts and compensatory plans and arrangements required to be filed as exhibits to this Form 10-K
pursuant to Item 15(a)(3).
The exhibit has been filed separately with the Commission pursuant to an application for confidential treatment. The
confidential portions of the exhibit have been omitted and are marked by an asterisk.
EX-8
American Tower Corporation • 2016 Annual Report
Appendix 1 • Letter to Shareholders
DEFINITIONS, RECONCILIATIONS TO MEASURES UNDER GAAP AND CALCULATION OF DEFINED MEASURES
Adjusted EBITDA
Net income before income (loss) from equity method investments, income tax benefit (provision), other income
(expense), gain (loss) on retirement of long-term obligations, interest expense, interest income, other operating
income (expense), depreciation, amortization and accretion and stock-based compensation expense. The
Company believes this measure provides valuable insight into the profitability of its operations while at the same
time taking into account the central overhead expenses required to manage its global operations. In addition, it is
a widely used performance measure across our telecommunications real estate sector.
NAREIT Funds From
Operations (FFO), as
defined by the National
Association of Real Estate
Investment Trusts
(NAREIT), attributable to
American Tower
Corporation common
stockholders
Consolidated Adjusted
Funds From Operations
(AFFO)
Net income before gains or losses from the sale or disposal of real estate, real estate related impairment charges, real
estate related depreciation, amortization and accretion and dividends on preferred stock, and including adjustments
for (i) unconsolidated affiliates and (ii) noncontrolling interests. The Company believes this measure provides valuable
insight into the operating performance of its property assets by excluding the charges described above, particularly
depreciation expenses, given the high initial, up-front capital intensity of the Company’s operating model. In addition,
it is a widely used performance measure across our telecommunications real estate sector.
NAREIT FFO attributable to American Tower Corporation common stockholders before (i) straight-line revenue and
expense, (ii) stock-based compensation expense, (iii) the deferred portion of income tax, (iv) non-real estate related
depreciation, amortization and accretion, (v) amortization of deferred financing costs, capitalized interest, debt
discounts and premiums and long-term deferred interest charges, (vi) other income (expense), (vii) gain (loss) on
retirement of long-term obligations, (viii) other operating income (expense), and adjustments for (ix) unconsolidated
affiliates and (x) noncontrolling interests, less cash payments related to capital improvements and cash payments
related to corporate capital expenditures. The Company believes this measure provides valuable insight into the
operating performance of its property assets by further adjusting the NAREIT FFO attributable to American Tower
Corporation common stockholders metric to exclude the factors outlined above, which if unadjusted, may cause
material fluctuations in NAREIT FFO attributable to American Tower Corporation common stockholders growth from
period to period that would not be representative of the underlying performance of our property assets in those
periods. In addition, it is a widely used performance measure across our telecommunications real estate sector.
Consolidated AFFO
per Share
Consolidated AFFO divided by the diluted weighted average common shares outstanding.
Net Debt
Total long-term debt less cash and cash equivalents.
Net Leverage Ratio
Net Debt divided by the quarter’s annualized Adjusted EBITDA (the quarter’s Adjusted EBITDA multiplied by four).
The Company believes that including this calculation is important for investors and analysts given it is a critical
component underlying its credit agency ratings.
Return on Invested
Capital (ROIC)
Adjusted EBITDA less maintenance capital expenditures and corporate capital expenditures and cash taxes,
divided by gross property, plant and equipment, intangible assets and goodwill (excluding the impact of recording
deferred tax adjustments related to valuation).
American Tower Corporation • 2016 Annual Report
Appendix 1 • Letter to Shareholders
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME ($ in millions. Totals may not add due to rounding.)
Net income
2007
$57
2008
$347
Loss (income) from discontinued operations, net
36
(111)
2009
$247
(8)
2010
$374
(0)
2011
$382
2012
$594
2013
$482
2014
$803
2015
$672
2016
$970
–
–
–
–
–
–
Income from continuing operations
$93
$236
$239
$374
$382
$594
$482
$803
$672
$970
Income from equity method investments
Income tax provision
Other (income) expense
Loss (gain) on retirement of long-term obligations
Interest expense
Interest income
Other operating expenses
Depreciation, amortization and accretion
Stock-based compensation expense
0
60
(21)
35
236
(11)
9
523
55
0
136
(6)
5
0
183
(1)
18
0
182
(0)
2
254
250
246
(3)
11
405
55
(2)
19
415
61
(5)
36
461
53
0
125
123
–
312
(7)
58
556
47
0
107
38
0
402
(8)
62
644
52
–
60
207
39
458
(10)
72
–
63
62
3
580
(14)
69
–
158
135
80
596
(16)
67
–
156
48
(1)
717
(26)
73
800
1,004
1,285
1,526
68
80
91
90
Adjusted EBITDA
$979
$1,092
$1,181
$1,348
$1,595
$1,892
$2,176
$2,650
$3,067
$3,553
Adjusted EBITDA
Straight-line revenue
Straight-line expense
Cash interest
Interest Income
Cash received (paid) for income taxes2
Dividends on preferred stock
Capital Improvement Capex
Corporate Capex
Consolidated AFFO
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
$979 $1,092 $1,181 $1,348 $1,595 $1,892 $2,176 $2,650 $3,067 $3,553
(70)
27
(50)
28
(36)
(105)
(144)
(166)
(148)
(124)
(155)
(132)
27
22
31
34
30
38
56
68
(227)
(244)
(240)
(238)
(301)
(381)
(435)
(572)
(573)
(694)
11
(35)
–
(29)
(13)
3
2
5
7
8
(35)
–
(33)
(6)
(40)
–
(33)
(8)
(36)
–
(31)
(12)
(54)
–
(61)
(19)
(69)
–
(75)
(20)
10
(52)
–
(81)
(30)
14
16
(69)
(24)
(75)
(24)
(64)
(90)
(90)
(16)
26
(96)
(107)
(110)
(16)
$642
$756
$852
$953 $1,055 $1,223 $1,470 $1,815 $2,150 $2,490
Divided by weighted average diluted shares outstanding
426
418
407
404
400
400
399
400
423
429
Consolidated AFFO per Share
$1.51
$1.81
$2.09
$2.36
$2.64
$3.06
$3.68
$4.54
$5.08
$5.80
1 Calculation of Consolidated AFFO excludes start-up related capital spending in 2012-2016.
2
2007 cash tax included in AFFO calculation has been adjusted to exclude a cash tax refund received in 2007 related to the carry back of certain federal net operating losses. Excludes
one-time GTP cash tax charge incurred during the third quarter of 2015.
American Tower Corporation • 2016 Annual Report
Appendix 1 • Letter to Shareholders
RETURN ON INVESTED CAPITAL (ROIC) RECONCILIATION1 ($ in millions. Totals may not add due to rounding.)
Adjusted EBITDA
Cash Taxes
Capital Improvement Capex
Corporate Capex
Numerator
Gross PPE
Gross Intangibles
Gross Goodwill5
Denominator
2007
2008
2009
2010
2011
2012
20132
2014
20153
20164
$979
$1,092
$1,181
$1,348
$1,595
$1,892
$2,401
$2,650
$3,206
$3,743
(35)
(29)
(13)
(35)
(33)
(6)
(40)
(33)
(8)
(36)
(31)
(12)
(54)
(61)
(19)
(69)
(75)
(20)
(114)
(81)
(23)
(69)
(75)
(24)
(107)
(124)
(26)
(98)
(159)
(27)
$903
$1,019
$1,100
$1,268
$1,462
$1,728
$2,183
$2,482
$2,948
$3,459
$4,992
$5,213
$5,621
$6,376
$7,889
$9,047
$10,844
$11,659
$14,397
$15,652
2,666
2,333
2,619
2,334
2,790
2,399
3,213
2,660
3,978
2,824
4,892
2,991
8,471
3,928
9,172
12,671
14,795
4,180
4,240
4,363
$9,991
$10,166
$10,810
$12,249
$14,691
$16,930
$23,243
$25,011
$31,308
$34,809
ROIC
9.0%
10.0%
10.2%
10.4%
10.0%
10.2%
9.4%
9.9%
9.4%
9.9%
1 Historical denominator balances reflect purchase accounting adjustments.
2 2013 has been adjusted to reflect a full year contribution from the GTP assets.
3 Reflects Q4 2015 annualized numbers to account for full year impact of Verizon Transaction.
4 Reflects Q4 2016 annualized numbers to account for full year impact of Viom Transaction.
5 Excludes the impact of deferred tax adjustments related to valuation.
RECONCILIATION OF NET LEVERAGE RATIO ($ in millions. Totals may not add due to rounding.)
Total debt
Less: Cash and cash equivalents
Net debt
Divided by: Q416 annualized Adjusted EBITDA
Net Leverage Ratio
4Q16
$18,533
(787)
$17,746
$3,743
4.7x
AMERICAN TOWER CORPORATION
Executive Management Team
James D. Taiclet, Jr.
Chairman, President and
Chief Executive Officer
Thomas A. Bartlett
Executive Vice President
and Chief Financial
Officer
Edmund DiSanto
Executive Vice President,
Chief Administrative
Officer, General Counsel
and Secretary
William H. Hess
Executive Vice President,
International Operations
and President, Latin
America and EMEA
Steven C. Marshall
Executive Vice President
and President, U.S.
Tower Division
Amit Sharma
Executive Vice President
and President, Asia
Directors
(From left to right) James D. Taiclet, Jr., Chairman, President and CEO – American Tower Corporation; Raymond P. Dolan, President and CEO – Sonus Networks, Inc;
Carolyn F. Katz, Executive Chairman – Author & Company; Robert D. Hormats, Vice Chairman – Kissinger Associates, Inc.; Gustavo Lara Cantu, Former CEO –
Monsanto Company, Latin America North Division; Craig Macnab, Chairman and CEO – National Retail Properties, Inc.; JoAnn A. Reed, Former CFO – Medco Health
Solutions, Inc.; Pamela D.A. Reeve, Former President and CEO – Lightbridge, Inc.; David E. Sharbutt, Former Chairman and CEO – Alamosa Holdings, Inc.;
Samme L. Thompson, President – Telit Associates, Inc.
Certifications. The certifications by the Company’s CEO and CFO required under Section 302 of the Sarbanes-Oxley Act of 2002 have been filed as exhibits
to the Company’s 2016 Annual Report on Form 10-K. The Annual CEO Certification pursuant to NYSE Corporate Governance Standards Section 303A.12(a)
was submitted to the NYSE on June 28, 2016.
Non-Incorporation. The Company’s Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission, is included
within this Annual Report. Other than the 2016 Form 10-K, all other portions of this Annual Report are not “filed” with the Securities and Exchange
Commission and should not be deemed so.
Annual Meeting
The annual meeting of shareholders will
be held on Wednesday, May 31, 2017 and
is scheduled to commence at 11:00 a.m.,
local time.
Location:
Form 10-K
Additional copies of the Company’s Annual
Report for the year ended December 31,
2016, including Form 10-K as filed with the
Securities and Exchange Commission, are
available upon request from:
Boston Marriott Copley Place
Tremont Conference Room
110 Huntington Avenue
Boston, MA 02116
Investor Relations
American Tower Corporation
116 Huntington Avenue
Boston, MA 02116
(617) 375-7500
ir@ americantower.com
Corporate Headquarters
116 Huntington Avenue
Boston, MA 02116
Registrar and Stock Transfer Agent
Computershare
Common Stock
The Company’s Common Stock is traded
on the New York Stock Exchange under the
symbol AMT.
Independent Registered Public
Accounting Firm
Deloitte & Touche LLP
116 Huntington Avenue, Boston, Massachusetts 02116
Phone 617-375-7500 · Fax 617-375-7575 · www.americantower.com