Item 16. FORM 10-K SUMMARY

None.

SIGNATURES

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 25th day of February, 2020**.**

			AMERICAN TOWER CORPORATION
			By:	/S/ JAMES D. TAICLET
				James D. Taiclet 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		Chairman, President and Chief Executive Officer (Principal Executive Officer)		February 25, 2020
James D. Taiclet
/S/ THOMAS A. BARTLETT		Executive Vice President and Chief Financial Officer (Principal Financial Officer)		February 25, 2020
Thomas A. Bartlett
/S/ ROBERT J. MEYER, JR		Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)		February 25, 2020
Robert J. Meyer, Jr.
/S/ RAYMOND P. DOLAN		Director		February 25, 2020
Raymond P. Dolan
/S/ ROBERT D. HORMATS		Director		February 25, 2020
Robert D. Hormats
/S/ GUSTAVO LARA CANTU		Director		February 25, 2020
Gustavo Lara Cantu
/S/ GRACE D. LIEBLEIN		Director		February 25, 2020
Grace D. Lieblein
/S/ CRAIG MACNAB		Director		February 25, 2020
Craig Macnab
/S/ JOANN A. REED		Director		February 25, 2020
JoAnn A. Reed
/S/ PAMELA D. A. REEVE		Director		February 25, 2020
Pamela D. A. Reeve
/S/ DAVID E. SHARBUTT		Director		February 25, 2020
David E. Sharbutt
/S/ BRUCE L. TANNER		Director		February 25, 2020
Bruce L. Tanner
/S/ SAMME L. THOMPSON		Director		February 25, 2020
Samme L. Thompson

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2019 and 2018		F-5
Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018 and 2017		F-6
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2019, 2018 and 2017		F-7
Consolidated Statements of Equity for the Years Ended December 31, 2019, 2018 and 2017		F-8
Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017		F-9
Notes to Consolidated Financial Statements		F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of American Tower Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of American Tower Corporation and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, effective January 1, 2019, the Company adopted the FASB’s new standard related to leases, Accounting Standard Update 2016-02, Leases (Topic 842), using the modified retrospective approach. The adoption of the new lease standard is also communicated as a critical audit matter below.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Leases - Refer to Notes 1 and 4 to the financial statements (also see change in accounting principle paragraph above)

Critical Audit Matter Description

The Company adopted the new lease standard on January 1, 2019 using the modified retrospective approach. The Company recognized and measured their operating leases within the scope of the standard through a cumulative-effect adjustment by recording an operating lease liability and a corresponding operating right-of-use asset on January 1, 2019. The initial operating lease liability recorded was determined based on the present value of the remaining lease payments for all the Company’s operating leases that are within the scope of the standard.

F-2

Management made significant estimates and assumptions in adopting the standard and was required to apply these estimates and assumptions to a high volume of leases globally. We identified the initial adoption of the standard as a critical audit matter given the complexity of applying the standard to numerous and differing lease provisions within the Company’s global lease portfolio. The related audit effort required a higher degree of auditor judgment and increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s judgments, including the selection of the incremental borrowing rate and the completeness and accuracy of the underlying data utilized within the new leasing module of the Company’s general ledger.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to the adoption of the standard included the following:

•	We tested the effectiveness of the Company’s controls over the adoption of the standard, including controls over a) the selection of the most critical assumptions, including the incremental borrowing rate, b) the process in place to validate the accuracy and completeness of the existing lease population, and c) the development and oversight of the Company’s new leasing module.

•	We evaluated the reasonableness of the Company’s incremental borrowing rates by testing the source information underlying the determination of the incremental borrowing rates and testing the mathematical accuracy of the calculations.

•	We judgmentally selected a sample of communication site locations from the Company’s fixed asset sub-ledger and tested for proper inclusion or exclusion from the corresponding operating lease liability and right-of-use asset account balance.

•	We judgmentally selected a sample of leases from the Company’s new global leasing module taking into consideration location, size and complexities of agreements and performed the following procedures for each selection:

◦	Tested management’s identification of the significant terms and provisions of the lease agreements for completeness and accuracy.

◦	Assessed the terms in the lease agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their use of judgments and estimates, in the determination of the operating lease liability and right-of-use asset recorded.

◦	Developed an independent estimate of the operating lease liability and right-of-use asset and compared it to the amounts recorded.

Revenue - Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

The Company’s contracts with major customers are often governed by a master lease agreement that contains terms and provisions governing the customer’s right to use the Company’s telecommunications sites and the land on which the sites are located (the “lease component”) and the customer’s responsibility for reimbursement of various costs incurred by the Company in operating the telecommunications towers and supporting the customer’s equipment as well as other services and contractual rights (the “non-lease components”). The master lease agreements contain both lease and non-lease components, may contain unusual or non-standard terms, and often pertain to a large number of the Company’s telecommunications sites. In the current year a revised master lease agreement was entered into with an existing major customer.

Management of the Company exercised significant judgment in determining the appropriate revenue recognition for the revised master lease agreement, including the following:

•	Determination of the lease and non-lease components and whether they should be accounted for as a combined lease component or separately.

•	Determination of the stand-alone selling prices for each performance obligation in the master lease agreement if not accounted for with the lease component.

•	Determination of the fixed and variable consideration in the master lease agreement, the impact of cancellation and renewal provisions, the estimated term of each of the individual contracts impacted by the master lease agreement, and the pattern of recognition for each lease component or performance obligation.

We identified the revised master lease agreement with a major customer as a critical audit matter because the audit effort required to evaluate management’s judgments in determining the appropriate revenue recognition for the impact of a multi-faceted, complex master lease agreement entered into with a major tenant was extensive.

How the Critical Audit Matter Was Addressed in the Audit

F-3

Our principal audit procedures related to the Company’s master lease agreement with a major customer included the following:

•	We tested the effectiveness of internal controls related to the Company’s process for evaluating the proper accounting for the master lease agreement.

•	We evaluated the Company’s significant accounting policies related to the master lease agreement for reasonableness and compliance with the applicable accounting standards.

•	We judgmentally selected a sample of individual communication site locations governed by the master lease agreement and performed the following procedures for each selection:

◦	Obtained and evaluated the relevant site location source documents and other documents that were part of the overall master lease agreement.

◦	Tested management’s identification of the significant terms for completeness and accuracy, including the identification of the lease and non-lease components, cancellation and renewal provisions, estimated term and fixed and variable consideration.

◦	Assessed the terms and provisions in the master lease agreement and the site location source documents and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.

•	We tested the mathematical accuracy of management’s determination of revenue and the associated timing of revenue recognized in the financial statements.

/s/ Deloitte & Touche LLP

Boston, Massachusetts

February 25, 2020

We have served as the Company's auditor since 1997.

F-4

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except share count and per share data)

		December 31, 2019				December 31, 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	1,501.2			$	1,208.7
Restricted cash		76.8				96.2
Accounts receivable, net		462.2				459.0
Prepaid and other current assets		513.6				621.2
Total current assets		2,553.8				2,385.1
PROPERTY AND EQUIPMENT, net		12,084.4				11,247.1
GOODWILL		6,178.3				5,501.9
OTHER INTANGIBLE ASSETS, net		12,318.4				11,174.3
DEFERRED TAX ASSET		131.8				157.7
DEFERRED RENT ASSET		1,771.1				1,581.7
RIGHT-OF-USE ASSET		7,357.4				—
NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS		406.4				962.6
TOTAL		$	42,801.6			$	33,010.4
LIABILITIES
CURRENT LIABILITIES:
Accounts payable		$	148.1			$	130.8
Accrued expenses		958.2				948.3
Distributions payable		455.0				377.4
Accrued interest		209.4				174.5
Current portion of operating lease liability		494.5				—
Current portion of long-term obligations		2,928.2				2,754.8
Unearned revenue		294.3				304.1
Total current liabilities		5,487.7				4,689.9
LONG-TERM OBLIGATIONS		21,127.2				18,405.1
OPERATING LEASE LIABILITY		6,510.4				—
ASSET RETIREMENT OBLIGATIONS		1,384.1				1,210.0
DEFERRED TAX LIABILITY		768.3				535.9
OTHER NON-CURRENT LIABILITIES		937.0				1,265.1
Total liabilities		36,214.7				26,106.0
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS		1,096.5				1,004.8
EQUITY (shares in thousands):
Common stock: $.01 par value; 1,000,000 shares authorized; 453,541 and 451,617 shares issued; and 442,890 and 441,060 shares outstanding, respectively		4.5				4.5
Additional paid-in capital		10,117.7				10,380.8
Distributions in excess of earnings		(1,016.8		)		(1,199.5		)
Accumulated other comprehensive loss		(2,823.6		)		(2,642.9		)
Treasury stock (10,651 and 10,557 shares at cost, respectively)		(1,226.4		)		(1,206.8		)
Total American Tower Corporation equity		5,055.4				5,336.1
Noncontrolling interests		435.0				563.5
Total equity		5,490.4				5,899.6
TOTAL		$	42,801.6			$	33,010.4

See accompanying notes to consolidated financial statements.

F-5

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except share and per share data)

	Year Ended December 31,
	2019				2018				2017
REVENUES:
Property	$	7,464.9			$	7,314.7			$	6,565.9
Services	115.4				125.4				98.0
Total operating revenues	7,580.3				7,440.1				6,663.9
OPERATING EXPENSES:
Costs of operations (exclusive of items shown separately below):
Property	2,173.7				2,128.7				2,022.0
Services	43.1				49.1				34.6
Depreciation, amortization and accretion	1,778.4				2,110.8				1,715.9
Selling, general, administrative and development expense	730.4				733.2				637.0
Other operating expenses	166.3				513.3				256.0
Total operating expenses	4,891.9				5,535.1				4,665.5
OPERATING INCOME	2,688.4				1,905.0				1,998.4
OTHER INCOME (EXPENSE):
Interest (expense) income, TV Azteca	—				(0.1		)		10.8
Interest income	46.8				54.7				35.4
Interest expense	(814.2		)		(825.5		)		(749.6		)
Loss on retirement of long-term obligations	(22.2		)		(3.3		)		(70.2		)
Other income (including foreign currency gains (losses) of $6.1, ($4.5), and $26.4, respectively)	17.6				23.8				31.3
Total other expense	(772.0		)		(750.4		)		(742.3		)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	1,916.4				1,154.6				1,256.1
Income tax benefit (provision)	0.2				110.1				(30.7		)
NET INCOME	1,916.6				1,264.7				1,225.4
Net (income) loss attributable to noncontrolling interests	(28.8		)		(28.3		)		13.5
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION STOCKHOLDERS	1,887.8				1,236.4				1,238.9
Dividends on preferred stock	—				(9.4		)		(87.4		)
NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION COMMON STOCKHOLDERS	$	1,887.8			$	1,227.0			$	1,151.5
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American Tower Corporation common stockholders	$	4.27			$	2.79			$	2.69
Diluted net income attributable to American Tower Corporation common stockholders	$	4.24			$	2.77			$	2.67
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in thousands):
BASIC	442,319				439,606				428,181
DILUTED	445,520				442,960				431,688

See accompanying notes to consolidated financial statements.

F-6

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

		Year Ended December 31,
		2019				2018				2017
Net income		$	1,916.6			$	1,264.7			$	1,225.4
Other comprehensive (loss) income:
Changes in fair value of cash flow hedges, each net of tax expense of $0		(0.1		)		(0.1		)		(0.4		)
Reclassification of unrealized losses (gains) on cash flow hedges to net income, each net of tax expense of $0		0.2				0.3				(0.1		)
Adjustment to redeemable noncontrolling interest		—				78.8				—
Purchase of noncontrolling interest		—				0.5				—
Foreign currency translation adjustments, net of tax expense (benefit) of $0.5, ($2.6), and $1.0, respectively		(157.9		)		(869.3		)		144.4
Other comprehensive (loss) income		(157.8		)		(789.8		)		143.9
Comprehensive income		1,758.8				474.9				1,369.3
Comprehensive loss (income) attributable to noncontrolling interests		3.8				96.9				(109.4		)
Allocation of accumulated other comprehensive income resulting from purchase of noncontrolling interest and redeemable noncontrolling interest		(55.5		)		—				—
Comprehensive income attributable to American Tower Corporation stockholders		$	1,707.1			$	571.8			$	1,259.9

See accompanying notes to consolidated financial statements.

F-7

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in millions, share counts in thousands)

	Preferred Stock - Series A							Preferred Stock - Series B							Common Stock							Treasury Stock							Additional Paid-in Capital				Accumulated Other Comprehensive Loss				Distributions in Excess of Earnings				Noncontrolling Interests				Total Equity
	Issued Shares			Amount				Issued Shares			Amount				Issued Shares			Amount				Shares			Amount
BALANCE, JANUARY 1, 2017	6,000			$	0.1			1,375			$	0.0			429,913			$	4.3			(2,810	)		$	(207.7	)		$	10,043.5			$	(1,999.3	)		$	(1,077.0	)		$	212.3			$	6,976.2
Stock-based compensation related activity	—			—				—			—				2,121			0.0				—			—				195.0				—				—				—				195.0
Issuance of common stock—stock purchase plan	—			—				—			—				93			0.0				—			—				9.0				—				—				—				9.0
Conversion of preferred stock	(6,000	)		(0.1		)		0			0.0				5,602			0.1				—			—				0.0				—				—				—				0.0
Treasury stock activity	—			—				—			—				—			—				(6,099	)		(766.3		)		—				—				—				—				(766.3		)
Changes in fair value of cash flow hedges, net of tax	—			—				—			—				—			—				—			—				—				(0.4		)		—				—				(0.4		)
Reclassification of unrealized gains on cash flow hedges to net income, net of tax	—			—				—			—				—			—				—			—				—				(0.1		)		—				—				(0.1		)
Foreign currency translation adjustment, net of tax	—			—				—			—				—			—				—			—				—				21.5				—				54.6				76.1
Contributions from noncontrolling interest	—			—				—			—				—			—				—			—				—				—				—				314.1				314.1
Distributions to noncontrolling interest	—			—				—			—				—			—				—			—				—				—				—				(14.3		)		(14.3		)
Common stock distributions declared	—			—				—			—				—			—				—			—				—				—				(1,128.6		)		—				(1,128.6		)
Preferred stock dividends declared	—			—				—			—				—			—				—			—				—				—				(91.4		)		—				(91.4		)
Net income	—			—				—			—				—			—				—			—				—				—				1,238.9				19.9				1,258.8
BALANCE, DECEMBER 31, 2017	—			$	—			1,375			$	0.0			437,729			$	4.4			(8,909	)		$	(974.0	)		$	10,247.5			$	(1,978.3	)		$	(1,058.1	)		$	586.6			$	6,828.1
Stock-based compensation related activity	—			—				—			—				1,782			0.0				—			—				190.4				—				—				—				190.4
Issuance of common stock—stock purchase plan	—			—				—			—				86			0.0				—			—				10.2				—				—				—				10.2
Conversion of preferred stock	—			—				(1,375	)		0.0				12,020			0.1				—			—				(0.1		)		—				—				—				0.0
Treasury stock activity	—			—				—			—				—			—				(1,648	)		(232.8		)		—				—				—				—				(232.8		)
Changes in fair value of cash flow hedges, net of tax	—			—				—			—				—			—				—			—				—				(0.1		)		—				—				(0.1		)
Reclassification of unrealized losses on cash flow hedges to net income, net of tax	—			—				—			—				—			—				—			—				—				0.3				—				—				0.3
Foreign currency translation adjustment, net of tax	—			—				—			—				—			—				—			—				—				(744.1		)		—				(33.1		)		(777.2		)
Adjustment to redeemable noncontrolling interest	—			—				—			—				—			—				—			—				(50.7		)		78.8				—				—				28.1
Distributions to noncontrolling interest	—			—				—			—				—			—				—			—				—				—				—				(15.0		)		(15.0		)
Purchase of noncontrolling interest				—				—			—				—			—				—			—				(16.5		)		0.5								(4.5		)		(20.5		)
Impact of revenue recognition standard adoption	—			—				—			—				—			—				—			—				—				—				38.4				—				38.4
Common stock distributions declared	—			—				—			—				—			—				—			—				—				—				(1,397.3		)		—				(1,397.3		)
Preferred stock dividends declared	—			—				—			—				—			—				—			—				—				—				(18.9		)		—				(18.9		)
Net income	—			—				—			—				—			—				—			—				—				—				1,236.4				29.5				1,265.9
BALANCE, DECEMBER 31, 2018	—			$	—			—			$	—			451,617			$	4.5			(10,557	)		$	(1,206.8	)		$	10,380.8			$	(2,642.9	)		$	(1,199.5	)		$	563.5			$	5,899.6
Stock-based compensation related activity	—			—				—			—				1,851			0.0				—			—				143.2				—				—				—				143.2
Issuance of common stock—stock purchase plan	—			—				—			—				73			0.0				—			—				11.3				—				—				—				11.3
Treasury stock activity	—			—				—			—				—			—				(94	)		(19.6		)		—				—				—				—				(19.6		)
Changes in fair value of cash flow hedges, net of tax	—			—				—			—				—			—				—			—				—				(0.1		)		—				—				(0.1		)
Reclassification of unrealized losses on cash flow hedges to net income, net of tax	—			—				—			—				—			—				—			—				—				0.2				—				—				0.2
Foreign currency translation adjustment, net of tax	—			—				—			—				—			—				—			—				—				(125.3		)		—				(24.3		)		(149.6		)
Distributions to noncontrolling interest	—			—				—			—				—			—				—			—				—				—				—				(14.6		)		(14.6		)
Purchase of noncontrolling interest	—			—				—			—				—			—				—			—				(49.5		)		(3.1		)		—				(15.9		)		(68.5		)
Reclassification to redeemable noncontrolling interest	—			—				—			—				—			—				—			—				(420.5		)		—				—				(102.5		)		(523.0		)
Purchase of redeemable noncontrolling interest	—			—				—			—				—			—				—			—				52.4				(52.4		)		—				—				0.0
Common stock distributions declared	—			—				—			—				—			—				—			—				—				—				(1,680.4		)		—				(1,680.4		)
Impact of lease accounting standard adoption	—			—				—			—				—			—				—			—				—				—				(24.7		)		—				(24.7		)
Net income	—			—				—			—				—			—				—			—				—				—				1,887.8				28.8				1,916.6
BALANCE, DECEMBER 31, 2019	—			$	—			—			$	—			453,541			$	4.5			(10,651	)		$	(1,226.4	)		$	10,117.7			$	(2,823.6	)		$	(1,016.8	)		$	435.0			$	5,490.4

See accompanying notes to consolidated financial statements.

F-8

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

		Year Ended December 31,
		2019				2018				2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	1,916.6			$	1,264.7			$	1,225.4
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion		1,778.4				2,110.8				1,715.9
Stock-based compensation expense		111.4				137.5				108.5
Loss (gain) on investments, unrealized foreign currency loss and other non-cash expense		46.2				47.3				(18.0		)
Impairments, net loss on sale of long-lived assets, non-cash restructuring and merger related expenses		140.0				479.6				242.4
Loss on early retirement of long-term obligations		22.2				3.3				70.2
Amortization of deferred financing costs, debt discounts and premiums and other non-cash interest		25.9				22.1				20.0
Deferred income taxes		(55.1		)		(303.0		)		(86.6		)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		12.5				(32.1		)		(191.1		)
Prepaid and other assets		(67.6		)		(101.7		)		(179.9		)
Deferred rent asset		(183.5		)		(87.6		)		(194.4		)
Right-of-use asset and Operating lease liability, net		17.4				—				—
Accounts payable and accrued expenses		(46.8		)		69.3				95.8
Accrued interest		32.4				8.4				9.2
Unearned revenue		2.5				85.8				59.3
Deferred rent liability		—				57.9				62.3
Other non-current liabilities		0.1				(14.0		)		(13.4		)
Cash provided by operating activities		3,752.6				3,748.3				2,925.6
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchase of property and equipment and construction activities		(991.3		)		(913.2		)		(803.6		)
Payments for acquisitions, net of cash acquired		(2,959.6		)		(1,881.4		)		(2,007.0		)
Proceeds from sales of short-term investments and other non-current assets		383.5				1,252.2				14.7
Payments for short-term investments		(355.9		)		(1,154.3		)		—
Deposits and other		(64.2		)		(52.8		)		(5.0		)
Cash used for investing activities		(3,987.5		)		(2,749.5		)		(2,800.9		)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under credit facilities		5,750.0				3,263.3				5,359.4
Proceeds from issuance of senior notes, net		4,876.7				584.9				2,674.0
Proceeds from term loan		1,300.0				1,500.0				—
Proceeds from issuance of securities in securitization transaction		—				500.0				—
Repayments of notes payable, credit facilities, term loan, senior notes, secured debt, finance leases and capital leases		(9,225.3		)		(4,884.8		)		(6,484.4		)
(Distributions to) contributions from noncontrolling interest holders, net		(11.8		)		(14.4		)		264.3
Purchases of common stock		(19.6		)		(232.8		)		(766.3		)
Proceeds from stock options and employee stock purchase plan		105.5				98.9				119.7
Distributions paid on common stock		(1,603.0		)		(1,323.5		)		(1,073.0		)
Distributions paid on preferred stock		—				(18.9		)		(91.4		)
Payment for early retirement of long-term obligations		(21.0		)		(3.3		)		(75.3		)
Deferred financing costs and other financing activities		(135.6		)		(56.6		)		(40.0		)
Purchase of redeemable noncontrolling interest		(425.7		)		—				—
Purchase of noncontrolling interest		(68.5		)		(20.5		)		—
Cash provided by (used for) financing activities		521.7				(607.7		)		(113.0		)
Net effect of changes in foreign currency exchange rates on cash and cash equivalents, and restricted cash		(13.7		)		(41.1		)		6.7
NET INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH		273.1				350.0				18.4
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR		1,304.9				954.9				936.5
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF YEAR		$	1,578.0			$	1,304.9			$	954.9

See accompanying notes to consolidated financial statements.

F-9

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

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. The Company refers to this business as its property operations. Additionally, the Company offers tower-related services in the United States, which the Company refers to as its services operations. These services include site acquisition, zoning and permitting (“AZP”) and structural analysis, which primarily support the Company’s site leasing business, including the addition of new tenants and equipment on its sites.

The Company’s portfolio primarily consists of towers that it owns and towers that 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 certain 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, fiber and property interests that it leases primarily to communications service providers and third-party tower operators.

American Tower Corporation is a holding company that conducts its operations through its directly and indirectly owned subsidiaries and 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 required to pay U.S. federal income taxes on income generated by its REIT operations, including the income derived from leasing space on its towers, as it receives a dividends paid deduction for distributions to stockholders that generally offsets its REIT 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 classification for U.S. tax purposes, continue to be subject to taxation in the 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, 2019, the Company’s REIT-qualified businesses included its U.S. tower leasing business and a majority of its U.S. indoor DAS networks business and services segment, as well as most of its operations in Mexico, Germany, Costa Rica, Nigeria and France.

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 method or as investments in equity securities, 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, 2019, the Company holds (i) a 51% controlling interest in each of two joint ventures, one in Ghana and one in Uganda (MTN Group Limited (“MTN”) holds a 49% noncontrolling interest), (ii) a 51% controlling interest in ATC Europe B.V. (“ATC Europe”), a joint venture that primarily consists of the Company’s operations in Germany and France, (PGGM holds a 49% noncontrolling interest) and (iii) a 79% controlling interest in ATC Telecom Infrastructure Private Limited (“ATC TIPL”), formerly Viom Networks Limited (“Viom”), in India (the remaining shareholders, as discussed in note 15, hold a 21% noncontrolling interest).

During the year ended December 31, 2019, the Company purchased the remaining 19% of noncontrolling interest in a subsidiary of the Company in South Africa from its local partner for $68.5 million, which resulted in an increase in the Company’s controlling interest from approximately 81% to 100%. The purchase is reflected in the consolidated statements of equity as a reduction of Additional Paid-in Capital of $49.5 million, an increase in Accumulated Other Comprehensive Loss of $3.1 million and a reduction in Noncontrolling Interests of $15.9 million.

During the year ended December 31, 2019, the Company entered into an agreement with MTN to acquire MTN’s noncontrolling interests in each of the Company’s joint ventures in Ghana and Uganda for total consideration of approximately

F-10

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

$523.0 million. The transaction is expected to close in the first quarter of 2020, subject to regulatory approval and other closing conditions.

Change in Reportable Segments— During the fourth quarter of 2019, the Company’s Europe, Middle East and Africa (“EMEA”) property segment was divided into the Africa property segment and the Europe property segment. As a result, the Company has six reportable segments: U.S. property, Asia property, Africa property, Europe property, Latin America property and services, which are discussed further in note 21. The change in reportable segments had no impact on the Company’s consolidated financial statements for any periods. Historical financial information included in this Annual Report on Form 10-K has been adjusted to reflect the change in reportable segments.

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 and lease accounting, income taxes and accounting for 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 and corresponding accounts receivable and the related deferred rent asset from a relatively small number of tenants in the telecommunications industry, and 54% 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, revenue 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:

	Year Ended December 31,
	2019				2018				2017
Balance as of January 1,	$	282.4			$	131.0			$	45.9
Current year increases	104.3				157.8				87.2
Write-offs, recoveries and other (1)	(223.4		)		(6.4		)		(2.1		)
Balance as of December 31,	$	163.3			$	282.4			$	131.0

---

(1)	In 2019, write-offs are primarily related to uncollectible amounts in India. In 2018 and 2017, recoveries include 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 normally the respective local currency, except for Costa Rica and Argentina, 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 Accumulated other comprehensive loss

F-11

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

(“AOCL”) in the consolidated balance sheets and included as a component of Comprehensive income in the consolidated statements of comprehensive income.

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 for which repayment is not anticipated in the foreseeable future is reflected in AOCL in the consolidated balance sheets and included as a component of Comprehensive income.

The Company recorded the following net foreign currency losses:

	Year Ended December 31,
	2019				2018				2017
Foreign currency losses recorded in AOCL	$	45.8			$	385.8			$	51.6
Foreign currency (gains) losses recorded in Other expense	(6.1		)		4.5				(26.4		)
Total foreign currency losses	$	39.7			$	390.3			$	25.2

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.

The reconciliation of cash and cash equivalents and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statements of cash flows is as follows:

	Year Ended December 31,
	2019				2018				2017
Cash and cash equivalents	$	1,501.2			$	1,208.7			$	802.1
Restricted cash	76.8				96.2				152.8
Total cash, cash equivalents and restricted cash	$	1,578.0			$	1,304.9			$	954.9

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 and related costs capitalized for the years ended December 31, 2019, 2018 and 2017 were $48.3 million, $55.0 million and $50.9 million, respectively. Capitalized interest costs were not material for the years ended December 31, 2019, 2018 and 2017.

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 finance 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 finance 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

F-12

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

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 and employs a discounted cash flow analysis when testing goodwill for impairment. 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 the 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, 2019, 2018 and 2017, 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 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 asset’s fair value, as compared to the asset’s carrying amount. The Company records impairment charges, which are discussed in note 17, 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 AOCL, as well as a component of comprehensive income, 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

F-13

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

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 associated with takedown costs. 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 REIT operations as it receives a dividends paid deduction for distributions to stockholders that generally offsets its REIT income and gains. 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 income tax liabilities in Other non-current liabilities in the consolidated balance sheet, 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 Interest income in the consolidated statements of operations.

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 AOCL balance included accumulated foreign currency translation losses of $2.8 billion, $2.6 billion and $2.0 billion as of December 31, 2019, 2018 and 2017, 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. All other acquisitions are accounted for as asset acquisitions and the purchase price is allocated to the net assets acquired with no recognition of goodwill. The purchase price is not subsequently adjusted.

F-14

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

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 and liabilities assumed, the Company must estimate the applicable discount rate and the timing and amount of future cash flows, including rate and terms of renewal and attrition.

Lease—The new lease standard requires leases to be accounted for using a right-of-use model, which recognizes that, at the date of commencement, a lessee has a financial obligation to make lease payments to the lessor for the right to use the underlying asset during the lease term. The lessee recognizes a corresponding right-of-use asset related to this right.

On January 1, 2019, the Company elected to adopt the new lease standard using the modified retrospective method applied to lease arrangements that were in place on the transition date. Results for reporting periods beginning January 1, 2019 are presented under the new standard, while prior-period amounts are not adjusted and continue to be reported in accordance with accounting under the previously applicable guidance.

The Company elected certain available practical expedients which permit the adopter to not reassess certain items upon adoption, including: (i) whether any existing contracts are or contain leases, (ii) the classification of existing leases and (iii) initial direct costs for existing leases. The Company also elected the practical expedient related to easements, which permits carryforward accounting treatment for land easements on existing agreements.

The Company recorded a net increase to opening Distributions in excess of earnings in its consolidated balance sheet of $24.7 million as of January 1, 2019 due to the cumulative impact of adopting the new lease standard. This adjustment related to right-of-use asset impairments. The Company also recorded a lease liability of $6.9 billion and a corresponding right-of-use asset of $7.1 billion upon adoption of the new lease standard. Those rights and obligations are primarily related to operating leases for ground space underneath the Company’s communications sites. The right-of-use assets recorded include, among other items, amounts previously classified as prepaid rent, deferred lease acquisition costs, fair value adjustments on acquired leases and long-term deferred rent obligations. Finance leases, which primarily relate to towers, equipment and vehicles, were largely unchanged. There was no significant change to the Company’s consolidated statements of operations resulting from the adoption of this standard.

The Company did not elect the practical expedient for short-term leases, which permits an adopter to not apply the lease standard to leases with a remaining maturity of one year or less, and applied the new lease accounting standard to all leases, including short-term leases.

In conjunction with the adoption of the new lease accounting guidance, the Company applied the lessor and lessee practical expedient and no longer separates lease and non-lease components within a lease agreement when the timing and pattern of revenue recognition for the components are the same and the combined single lease component is classified as an operating lease. Certain amounts, such as power and fuel and common area maintenance, which were previously reported as non-lease revenue, are now accounted for as lease revenue. Accordingly, the Company has reclassified certain prior-period amounts within its disclosures.

Revenue—The Company’s revenue is derived from leasing the right to use its communications sites and the land on which the sites are located (the “lease component”) and from the reimbursement of costs incurred by the Company in operating the communications sites and supporting the tenants’ equipment as well as other services and contractual rights (the “non-lease component”). Most of the Company’s revenue is derived from leasing arrangements and is accounted for as lease revenue unless the timing and pattern of revenue recognition of the non-lease component differs from the lease component. If the timing and pattern of the non-lease component revenue recognition differs from that of the lease component, the Company separately determines the stand-alone selling prices and pattern of revenue recognition for each performance obligation. Revenue related to DAS networks and fiber and other related assets results from agreements with tenants that are not leases.

The Company’s 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 probable. Escalation clauses tied to a 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, 2019, 2018 and 2017 were $183.5 million, $87.6 million and $194.4 million, respectively.

*Non-lease revenue—*Non-lease revenue consists primarily of revenue generated from DAS networks, fiber and other property related revenue. DAS networks and fiber arrangements require that the Company provide the tenant the right to use the

F-15

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

applicable communications infrastructure. Performance obligations are satisfied over time for the duration of the arrangements. Other property related revenue streams, which include site inspections, are not material on either an individual or consolidated basis.

*Services revenue—*The Company offers tower-related services in the United States. These services include AZP and structural analysis. There is a single performance obligation related to AZP and revenue is recognized over time based on milestones achieved, which are determined based on costs expected to be incurred. Structural analysis services may have more than one performance obligation, contingent upon the number of contracted services. Revenue is recognized at the point in time the services are completed.

Some of the Company’s contracts with tenants contain multiple performance obligations. For these arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price, which is typically based on the price charged to tenants.

Since most of the Company’s contracts are leases, costs to enter into lease arrangements are capitalized under the applicable lease accounting guidance. Costs incurred to obtain non-lease contracts that are capitalized primarily relate to DAS networks and are not material to the consolidated financial statements. The Company has excluded sales tax, value-added tax and similar taxes from non-lease revenue.

Revenue is disaggregated by geography in a manner consistent with the Company’s business segments, which are discussed further in note 21. A summary of revenue disaggregated by source and geography is as follows:

Year Ended December 31, 2019		U.S.				Asia				Africa				Europe				Latin America				Total
Non-lease property revenue		$	255.7			$	8.8			$	4.0			$	5.1			$	138.2			$	411.8
Services revenue		115.4				—				—				—				—				115.4
Total non-lease revenue		$	371.1			$	8.8			$	4.0			$	5.1			$	138.2			$	527.2
Property lease revenue		3,933.0				1,208.2				579.9				129.5				1,202.5				7,053.1
Total revenue		$	4,304.1			$	1,217.0			$	583.9			$	134.6			$	1,340.7			$	7,580.3

Year Ended December 31, 2018 (1)		U.S.				Asia				Africa				Europe				Latin America				Total
Non-lease property revenue		$	255.5			$	7.0			$	1.1			$	0.2			$	102.1			$	365.9
Services revenue		125.4				—				—				—				—				125.4
Total non-lease revenue		$	380.9			$	7.0			$	1.1			$	0.2			$	102.1			$	491.3
Property lease revenue		3,566.6				1,533.5				544.4				141.6				1,162.7				6,948.8
Total revenue		$	3,947.5			$	1,540.5			$	545.5			$	141.8			$	1,264.8			$	7,440.1

---

(1) Prior-period amounts adjusted with the adoption of the new lease accounting guidance, as applicable.

Information about receivables, contract assets and contract liabilities from contracts with tenants is as follows:

		December 31, 2019				December 31, 2018 (1)
Accounts receivable		$	80.5			$	92.6
Prepaids and other current assets		8.3				7.7
Notes receivable and other non-current assets		21.3				22.2
Unearned revenue (2)		35.0				35.0
Other non-current liabilities (3)		79.0				54.1

---

(1) Prior-period amounts adjusted with the adoption of the new lease accounting guidance, as applicable.

(2) Excludes $56.7 million and $55.0 million of capital contributions related to DAS networks as of December 31, 2019 and 2018, respectively.

(3) Excludes $300.2 million and $313.6 million of capital contributions related to DAS networks as of December 31, 2019 and 2018, respectively.

The Company records unearned revenue when payments are received from tenants in advance of the completion of the Company’s performance obligations. Long-term unearned revenue is included in Other non-current liabilities. During the year ended December 31, 2019, the Company recognized $62.2 million of revenue that was included in the Unearned revenue balance as of December 31, 2018. During the year ended December 31, 2018, the Company recognized $44.4 million of

F-16

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

revenue that was included in the Unearned revenue balance as of January 1, 2018. The Company also recognized revenues of $59.2 million and $55.4 million during the years ended December 31, 2019 and December 31, 2018, respectively, for capital contributions related to DAS networks. There was $0.4 million of revenue recognized from Other non-current liabilities during each of the years ended December 31, 2019 and 2018.

The Company records unbilled receivables, which are included in Prepaids and other current assets, when it has completed a performance obligation prior to its ability to bill under the customer arrangement. Other contract assets are included in Notes receivable and other non-current assets. The Company did not record any change in unbilled receivables attributable to non-lease property revenue recognized during each of the years ended December 31, 2019 and 2018. The change in contract assets attributable to revenue recognized during the years ended December 31, 2019 and 2018 was $3.1 million and $1.5 million, respectively.

The Company does not disclose the value of unsatisfied performance obligations for agreements (i) with an original expected length of one year or less or (ii) for which it recognizes revenue at the amount to which it has the right to invoice for services performed.

Rent Expense and Lease Accounting—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.

Effective January 1, 2019, the Company adopted the new lease standard using the modified retrospective method applied to lease arrangements that were in place on the transition date. The new lease accounting guidance required the Company to recognize a right-of-use lease asset and lease liability for operating and finance leases. The right-of-use asset is measured as the sum of the lease liability, prepaid or accrued lease payments, any initial direct costs incurred and any other applicable amounts.

The calculation of the lease liability requires the Company to make certain assumptions for each lease, including lease term and discount rate implicit in each lease, which could significantly impact the gross lease obligation, the duration and the present value of the lease liability. When calculating the lease term, the Company considers the renewal, cancellation and termination rights available to the Company and the lessor. The Company determines the discount rate by calculating the incremental borrowing rate on a collateralized basis at the commencement of a lease or upon a change in the lease term.

Total property straight-line ground rent expense for the years ended December 31, 2019, 2018 and 2017 was $44.4 million, $57.9 million and $62.3 million, respectively.

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 benefits due to death, disability or qualified retirement, which may occur upon grant. The expense recognized includes the impact of forfeitures as they occur.

The Company grants performance-based restricted stock units (“PSUs”) to its executive officers. Threshold, target and maximum parameters are established for a three-year performance period at the time of grant. The metrics are 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 RSUs and PSUs is based on the fair value of the Company’s common stock on the date of grant. The Company recognizes all stock-based

F-17

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

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 restricted stock units, 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, 2019, the Company has withheld from issuance an aggregate of 2.1 million shares, including 0.4 million shares related to the vesting of restricted stock units during the year ended December 31, 2019.

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 expected to be earned upon the achievement of the parameters established for 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 note 19, through August 30, 2019. The Company uses the treasury stock method to calculate the effect of its outstanding RSUs, PSUs and stock options and used 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, 2019, 2018 and 2017, the Company matched 100% of the first 5% of a participant's contributions. For the years ended December 31, 2019, 2018 and 2017, the Company contributed $11.8 million, $11.2 million and $11.0 million to the plan, respectively.

Accounting Standards Updates

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued guidance that modifies how entities measure credit losses on most financial instruments. The new guidance replaces the current "incurred loss" model with an "expected credit loss" model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. Operating lease receivables are not within the scope of this guidance. The Company is finalizing its analysis of the impact of this guidance on its financial statements and does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

In January 2017, the FASB issued guidance on accounting for goodwill impairments. The guidance eliminates Step 2 from the goodwill impairment test and requires, among other things, recognition of an impairment loss when the carrying value of a reporting unit exceeds its fair value. The loss recognized is limited to the total amount of goodwill allocated to 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 impact on the Company’s financial statements.

In August 2018, the FASB issued guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. This guidance aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The Company adopted this guidance prospectively on July 1, 2019. The adoption of this guidance did not have a material impact on the Company’s financial statements.

F-18

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

2. PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consisted of the following:

	As of
	December 31, 2019				December 31, 2018
Unbilled receivables	$	142.3			$	126.1
Prepaid income tax	185.8				125.1
Value added tax and other consumption tax receivables	71.3				86.3
Prepaid assets	56.8				40.5
Prepaid operating ground leases	—				165.0
Other miscellaneous current assets	57.4				78.2
Prepaid and other current assets	$	513.6			$	621.2

The reduction in Prepaid operating ground leases is a result of the reclassification of assets to the Right-of-use asset in connection with the Company’s adoption of the new lease accounting standard.

3. PROPERTY AND EQUIPMENT

Property and equipment (including assets held under finance leases) consisted of the following:

	Estimated Useful Lives (years) (1)		As of
	December 31, 2019				December 31, 2018
Towers	Up to 20		$	13,930.7			$	12,777.9
Equipment (2)	2 - 20		1,897.3				1,667.3
Buildings and improvements	3 - 32		638.9				628.5
Land and improvements (3)	Up to 20		2,486.1				2,285.4
Construction-in-progress			372.6				358.1
Total			19,325.6				17,717.2
Less accumulated depreciation			(7,241.2		)		(6,470.1		)
Property and equipment, net			$	12,084.4			$	11,247.1

---

(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)	Includes fiber and DAS assets.

(3)	Estimated useful lives apply to improvements only.

Total depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $905.5 million, $883.1 million and $835.5 million, respectively. Depreciation expense includes amounts related to finance lease assets for the year ended December 31, 2019 of $168.1 million.

As of December 31, 2018, property and equipment included $4,369.5 million and $1,016.2 million of capital lease assets with related equipment and improvements and accumulated depreciation, respectively. As of December 31, 2018, capital lease assets were primarily classified as towers and land and improvements.

As of December 31, 2019, property and equipment included $3,059.7 million and $1,140.4 million of finance lease assets and accumulated depreciation, respectively. Information about finance lease-related balances is as follows:

F-19

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

				As of
Finance leases:		Classification		December 31, 2019
Property and equipment		Towers		$	2,695.9
Accumulated depreciation				(1,062.0		)
Property and equipment, net				$	1,633.9
Property and equipment		Buildings and improvements		$	167.0
Accumulated depreciation				(65.3		)
Property and equipment, net				$	101.7
Property and equipment		Land		$	150.9
Property and equipment		Equipment		$	45.9
Accumulated depreciation				(13.1		)
Property and equipment, net				$	32.8

As of December 31, 2019, the Company had $1,575.2 million of perpetual land easements which are not depreciable.

4. LEASES

The Company determines if an arrangement is a lease at the inception of the agreement. The Company considers an arrangement to be a lease if it conveys the right to control the use of the communications site or ground space underneath a communications site for a period of time in exchange for consideration. The Company is both a lessor and a lessee.

Lessor—The Company is a lessor in most of its revenue arrangements, as property revenue is derived from tenant leases of specifically-identified, physically distinct space on the Company’s communications real estate assets. The Company’s lease arrangements with its tenants vary depending upon the region and the industry of the tenant and generally have initial non-cancellable terms of five to ten years with multiple renewal terms. The leases also contain provisions that periodically increase the rent due, typically annually, based on a fixed escalation percentage or an inflationary index, or a combination of both. The Company structures its leases to include financial penalties if a tenant terminates the lease, which serve to disincentivize tenants from terminating the lease prior to the expiration of the lease term.

The Company’s leasing arrangements outside of the U.S. may require that the Company provide power to the communications site through an electrical grid connection, diesel fuel generators or other sources and permit the Company to pass through the costs of, or otherwise charge for, these services. Many arrangements require that the communications site has power for a specified percentage of time. In most cases, if delivery of power falls below the specified service level, a corresponding reduction in revenue is recorded. The Company has determined that this performance obligation is satisfied over time for the duration of the lease.

The Company typically has more than one tenant on a site and, by performing ordinary course repair and maintenance work, can often lease a site, either through renewing existing agreements or leasing to new tenants, for periods beyond the existing tenant lease term. Accordingly, the Company has minimal risk with respect to the residual value of its leased assets. Communications sites are depreciated over their estimated useful lives, which generally do not exceed twenty years.

As of December 31, 2019, the Company does not have any material related party leases as a lessor. The Company generally does not enter into sales-type leases or direct financing leases. The Company’s leases generally do not include any incentives for the lessee and do not include any lessee purchase options.

F-20

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

Historically, the Company has been able to successfully renew its ground leases as needed to ensure continuation of its tower revenue. Accordingly, the Company assumes that it will have access to the land underneath its tower sites when calculating future minimum rental receipts. Future minimum rental receipts expected under non-cancellable operating lease agreements as of December 31, 2019, were as follows:

Year Ended December 31,		Amount (1)
2020		$	5,829.1
2021		5,711.1
2022		5,136.5
2023		4,985.0
2024		4,802.7
Thereafter		20,410.3
Total		$	46,874.7

---

(1)	Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.

During the year ended December 31, 2019, the Company entered into a new master lease agreement with one of its tenants in the U.S., AT&T Inc. (“AT&T”), which resulted in $13.7 billion in future minimum rental receipts expected under non-cancellable operating lease agreements.

Future minimum rental receipts expected under non-cancellable operating lease agreements in effect at December 31, 2018 were as follows:

Year Ended December 31,		Amount (1)
2019		$	5,251.2
2020		5,062.2
2021		4,676.1
2022		3,754.6
2023		3,457.3
Thereafter		12,641.1
Total		$	34,842.5

---

(1)	Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.

Lessee—The Company enters into arrangements as a lessee primarily for ground space underneath its communications sites. These arrangements are typically long-term lease agreements with initial non-cancellable terms of approximately five to ten years with one or more automatic or exercisable renewal periods and specified increases in lease payments upon exercise of the renewal options. The Company typically exercises its ground lease renewal options in order to provide ongoing tenant space on its communications sites through the end of the tenant lease term. 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 estimated lease term of the applicable lease. Additionally, the escalations tied to CPI or another inflation-based index are considered variable lease payments. In certain circumstances, the Company enters into revenue sharing arrangements with the ground space owner, which results in variability in lease payments. In most markets outside of the U.S., in the event there are no tenants on the communications site, the Company generally has unilateral termination rights and in certain situations, the lease is structured to allow for termination by the Company with minimal or no penalties. Ground lease arrangements usually include annual escalations and do not contain any residual value guarantees or restrictions on dividends, other financial obligations or other similar terms. The Company has entered into certain transactions whereby at the end of a lease, sublease or similar arrangement, the Company has the option to purchase the corresponding communications sites. These transactions are further described in note 19.

The Company’s lease liability is the present value of the remaining minimum rental payments to be made over the remaining lease term, including renewal options reasonably certain to be exercised. The Company also considers termination options and factors those into the determination of lease payments when appropriate. To determine the lease term, the Company considers all renewal periods that are reasonably certain to be exercised, taking into consideration all economic factors, including the

F-21

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

communications site’s estimated economic life (generally 20 years) and the respective lease terms of the Company’s tenants under the existing lease arrangements on such site.

As of the adoption date and new lease inception, the Company’s right-of-use asset is equal to its lease liability, plus payments made prior to the commencement date and initial direct costs, net of any impairment losses, lease incentives, fair value adjustments on acquired leases and deferred rent amount recorded under the prior lease accounting guidance. The Company assesses its right-of-use asset and other lease-related assets for impairment, as described in note 1. During the year ended December 31, 2019, the Company recorded $9.9 million of impairment expense related to these assets.

As of December 31, 2019, the Company does not have any material related party leases as a lessee. The Company does not have any sale-leaseback arrangements as lessee and typically does not enter into leveraged leases.

The Company leases certain land and office space under operating leases and land and improvements, towers and vehicles under finance leases. As of December 31, 2019, operating lease assets were included in Right-of-use asset and finance lease assets were included in Property and equipment, net in the consolidated balance sheet.

Information about other lease-related balances as of December 31, 2019 is as follows:

Operating leases:
Right-of-use asset		$	7,357.4
Current portion of lease liability		$	494.5
Lease liability		6,510.4
Total operating lease liability		$	7,004.9
Finance leases:
Current portion of lease liability		$	6.7
Lease liability		24.0
Total finance lease liability		$	30.7

As most of the Company’s leases do not specifically state an implicit rate, the Company uses a market-specific incremental borrowing rate consistent with the lease term as of the lease commencement date when calculating the present value of remaining lease payments. The incremental borrowing rate reflects the cost to borrow on a securitized basis in each market. The remaining lease term does not reflect all renewal options available to the Company, only those renewal options that the Company has assessed as reasonably certain of being exercised taking into consideration the economic and other factors noted above.

The weighted-average remaining lease terms and incremental borrowing rates as of December 31, 2019 are as follows:

Operating leases:
Weighted-average remaining lease term (years)		13.1
Weighted-average incremental borrowing rate		6.1	%
Finance leases:
Weighted-average remaining lease term (years)		15.0
Weighted-average incremental borrowing rate		6.2	%

The following table sets forth the components of lease cost for the year ended December 31, 2019:

		Year ended December 31, 2019
Operating lease cost		$	1,013.1
Variable lease costs not included in lease liability (1)		261.7

---

(1) Includes property tax paid on behalf of the landlord.

F-22

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

The interest expense on finance lease liabilities was $1.7 million for the year ended December 31, 2019. Assets held under finance leases are recorded in property and equipment and are depreciated over the lesser of the remaining lease term or the remaining useful life.

Supplemental cash flow information for the year ended December 31, 2019 is as follows:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	(1,012.2	)
Operating cash flows from finance leases		$	(1.7	)
Financing cash flows from finance leases		$	(18.0	)
Non-cash items:
New operating leases (1)		$	409.5
Operating lease modifications and reassessments (2)		$	334.1

---

(1)	Amount includes new operating leases and leases acquired in connection with acquisitions.

(2)	Includes a $60.6 million reduction of the operating lease liability.

As of December 31, 2019, the Company does not have material operating or financing leases that have not yet commenced.

Maturities of operating and finance lease liabilities as of December 31, 2019 were as follows:

Fiscal Year		Operating Lease (1)				Finance Lease (1)
2020		$	904.3			$	8.0
2021		878.3				5.3
2022		845.5				4.3
2023		810.3				3.0
2024		766.4				2.1
Thereafter		6,140.1				45.4
Total lease payments		10,344.9				68.1
Less amounts representing interest		(3,340.0		)		(37.4		)
Total lease liability		7,004.9				30.7
Less current portion of lease liability		494.5				6.7
Non-current lease liability		$	6,510.4			$	24.0

---

(1)	Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.

Future minimum rental payments under non-cancellable operating leases as of December 31, 2018 were as follows:

Year Ended December 31,		Amount (1)
2019		$	926.0
2020		904.2
2021		879.8
2022		834.2
2023		792.6
Thereafter		6,173.1
Total		$	10,509.9

---

(1)	Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.

F-23

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

Future minimum rental payments under capital leases in effect as of December 31, 2018 were as follows:

Year Ended December 31,		Amount (1)
2019		$	40.7
2020		32.7
2021		27.8
2022		23.7
2023		19.2
Thereafter		117.5
Total		261.6
Less amounts representing interest		(82.1		)
Present value of capital lease obligations		$	179.5

---

(1)	Balances are translated at the applicable period-end exchange rate, which may impact comparability between periods.

Included in the future minimum rental payments under capital leases and amounts representing interest as of December 31, 2018 were $220.3 million and $69.3 million, respectively, related to perpetual land easements, which are not accounted for as finance leases under the new lease accounting standard.

5. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying value of goodwill for each of the Company’s business segments were as follows:

		Property																				Services				Total
		U.S.				Asia				Africa				Europe				Latin America
Balance as of December 31, 2017		$	3,379.2			$	1,095.0			$	130.6			$	274.3			$	757.3			$	2.0			$	5,638.4
Additions and adjustments (1)		3.3				44.5				—				—				0.4				—				48.2
Effect of foreign currency translation		—				(94.0		)		(11.3		)		(12.3		)		(67.1		)		—				(184.7		)
Balance as of December 31, 2018		$	3,382.5			$	1,045.5			$	119.3			$	262.0			$	690.6			$	2.0			$	5,501.9
Additions and adjustments (2)		32.8				—				670.0				—				—				—				702.8
Effect of foreign currency translation		—				(23.7		)		0.9				(5.8		)		2.2				—				(26.4		)
Balance as of December 31, 2019		$	3,415.3			$	1,021.8			$	790.2			$	256.2			$	692.8			$	2.0			$	6,178.3

---

(1)	Additions consist of $47.8 million resulting from 2018 acquisitions and $0.4 million from revisions to prior-year acquisitions due to measurement period adjustments.

(2)	Additions consist of $704.3 million resulting from 2019 acquisitions offset by $1.5 million from revisions to prior-year acquisitions due to measurement period adjustments.

F-24

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

The Company’s other intangible assets subject to amortization consisted of the following:

			As of December 31, 2019												As of December 31, 2018
	Estimated Useful Lives (years)		Gross Carrying Value				Accumulated Amortization				Net Book Value				Gross Carrying Value				Accumulated Amortization				Net Book Value
Acquired network location intangibles (1)	Up to 20		$	5,150.8			$	(1,920.4	)		$	3,230.4			$	4,780.3			$	(1,704.9	)		$	3,075.4
Acquired tenant-related intangibles	Up to 20		12,674.1				(3,674.6		)		8,999.5				11,156.5				(3,147.2		)		8,009.3
Acquired licenses and other intangibles	3-20		106.7				(18.2		)		88.5				104.1				(14.5		)		89.6
Total other intangible assets			$	17,931.6			$	(5,613.2	)		$	12,318.4			$	16,040.9			$	(4,866.6	)		$	11,174.3

---

(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.

The Company amortizes its acquired network location intangibles and tenant-related intangibles on a straight-line basis over their estimated useful lives. As of December 31, 2019, the remaining weighted average amortization period of the Company’s intangible assets was 15 years. Amortization of intangible assets for the years ended December 31, 2019, 2018 and 2017 was $791.3 million, $1,144.1 million and $785.9 million, respectively. Amortization expense decreased for the year ended December 31, 2019 because in 2018, the Company entered into agreements with one of its tenants in India, Tata Teleservices Limited (“Tata Teleservices”) and related entities (collectively, “Tata”), for a settlement and release of certain contractual lease obligations of Tata Teleservices. As a result, the Company recorded $327.5 million of accelerated amortization related to the Tata tenant relationship in 2018, which was subsequently retired.

Based on current exchange rates, the Company expects to record amortization expense as follows over the next five years:

Fiscal Year		Amount
2020		$	885.7
2021		860.1
2022		856.0
2023		852.4
2024		838.1

6. NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS

Notes receivable and other non-current assets consisted of the following:

	As of
	December 31, 2019				December 31, 2018
Long-term prepaid ground rent	$	—			$	607.5
Notes receivable	1.1				1.0
Other miscellaneous assets	405.3				354.1
Notes receivable and other non-current assets	$	406.4			$	962.6

The reduction in Long-term prepaid ground rent is a result of the reclassification of assets to the Right-of-use asset in connection with the Company’s adoption of the new lease accounting standard.

F-25

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

7. ACQUISITIONS

The Company evaluates each of its acquisitions under the accounting guidance framework to determine whether to treat an acquisition as an asset acquisition or a business combination. For those transactions treated as asset acquisitions, the purchase price is allocated to the assets or rights acquired and liabilities assumed, with no recognition of goodwill. For those transactions treated as business combinations, 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, including tax positions, 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 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 for those acquisitions accounted for as business combinations, 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 and other communications infrastructure assets from wireless carriers or other tower operators and subsequently integrates those sites and related assets into its existing portfolio of communications sites and related assets. The financial results of the Company’s acquisitions have been included in the Company’s consolidated statements of operations for the year ended December 31, 2019 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 on, 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 instead 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.

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; for transactions accounted for as asset acquisitions, these costs are capitalized as part of the purchase price. Acquisition and merger related costs may include finder’s fees, advisory, legal, accounting, valuation and other professional or consulting fees and general administrative costs directly related to completing the transaction. Integration costs include incremental and non-recurring costs necessary to convert data, retain employees and otherwise enable the Company to operate acquired businesses or assets efficiently. The Company records acquisition and merger related expenses for business combinations, as well as integration costs for all acquisitions, in Other operating expenses in the consolidated statements of operations.

During the years ended December 31, 2019, 2018 and 2017, the Company recorded acquisition and merger related expenses for business combinations and non-capitalized asset acquisition costs and integration costs as follows:

		Year Ended December 31,
		2019				2018				2017
Acquisition and merger related expenses		$	26.9			$	14.1			$	16.3
Integration costs		$	9.8			$	16.1			$	11.5

The Company also received $13.1 million related to pre-acquisition contingencies and settlements during the year ended December 31, 2019.

2019 Transactions

The estimated aggregate impact of the acquisitions completed in 2019 on the Company’s revenues and gross margin for the year ended December 31, 2019 was approximately $17.6 million and $12.7 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. Acquisitions completed in 2019 were included in the Company’s U.S, Africa and Latin America property segments.

Eaton Towers Acquisition—On December 31, 2019, the Company acquired 100% of the outstanding shares of Eaton Towers Holdings Limited (“Eaton Towers”), which owns and operates approximately 5,800 communications sites across five African

F-26

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

markets (the “Eaton Towers Acquisition”). The total consideration for the Eaton Towers Acquisition, including the Company’s assumption of Eaton Towers’ existing debt, was approximately $2.0 billion. The purchase price reflects a $9.7 million receivable from the seller for reimbursement of taxes. The Eaton Towers Acquisition was accounted for as a business combination and is subject to post-closing adjustments.

Entel Acquisition—On December 19, 2019, the Company entered into a definitive agreement to acquire approximately 3,200 communications sites in Chile and Peru from Entel PCS Telecomunicaciones S.A. and Entel Peru S.A. (“Entel”) for total consideration of approximately $0.8 billion (as of the date of signing). On December 26, 2019, the Company completed the acquisition of approximately 2,400 communications sites for an aggregate total purchase price of $672.8 million including value-added tax (as of the date of acquisition) (the “Entel Acquisition”). The Entel Acquisition was accounted for as an asset acquisition. The remaining communications sites are expected to close in tranches beginning in the first quarter of 2020, subject to certain closing conditions.

*U.S. Acquisition—*On August 30, 2019, the Company acquired approximately 400 towers and other related property interests in the United States for an aggregate total purchase price of $484.2 million. This acquisition was accounted for as an asset acquisition.

*Other Acquisitions—*During the year ended December 31, 2019, the Company acquired a total of 676 communications sites in the United States, Colombia, Mexico, Paraguay and Peru, as well as other communications infrastructure assets, for an aggregate purchase price of $201.8 million. The majority of these acquisitions were accounted for as asset acquisitions.

The following table summarizes the allocations of the purchase prices for the fiscal year 2019 acquisitions based upon their estimated fair value at the date of acquisition:

		Africa				Latin America				U.S.
		Eaton Towers Acquisition				Entel Acquisition				U.S. Acquisition				Other (1)
Current assets		$	150.4			$	0.4			$	4.0			$	9.3
Property and equipment		304.7				281.0				97.8				66.5
Intangible assets (2):
Tenant-related intangible assets		1,007.6				228.9				271.9				65.5
Network location intangible assets		272.2				70.9				111.2				32.0
Other intangible assets		—				—				—				0.8
Other non-current assets		99.5				191.7				55.5				7.8
Current liabilities		(82.0		)		(20.7		)		(3.1		)		(1.1		)
Deferred tax liability		(319.3		)		—								—
Other non-current liabilities		(138.3		)		(79.4		)		(53.1		)		(13.3		)
Net assets acquired		1,294.8				672.8				484.2				167.5
Goodwill (3)		670.0				—				—				34.3
Fair value of net assets acquired		1,964.8				672.8				484.2				201.8
Debt assumed		(329.8		)		—				—				—
Purchase price		$	1,635.0			$	672.8			$	484.2			$	201.8

---

(1)	Includes 132 sites in Peru held pursuant to long-term finance leases.

(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)	The Company expects goodwill to be partially deductible for tax purposes.

Other Signed Acquisitions

*Orange—*On November 28, 2019, ATC France, a majority-owned subsidiary of the Company, entered into definitive agreements with Orange S.A. for the acquisition of up to approximately 2,000 communications sites in France over a period of up to five years. This transaction is expected to close in multiple tranches beginning in the first half of 2020 for total consideration in the range of approximately 500.0 million Euros (“EUR”) to 600.0 million EUR (approximately $550.5 million to $660.5 million at the date of signing) to be paid over the five-year term.

F-27

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

2018 Transactions

During the year ended December 31, 2019, the allocation of the final purchase price for the acquisition of Idea Cellular Infrastructure Services Limited was finalized with no material post-closing adjustments. During the year ended December 31, 2019, there were no material post-closing adjustments that impacted other 2018 acquisitions.

Pro Forma Consolidated Results (Unaudited)

The following table presents the unaudited pro forma financial results as if the 2019 acquisitions had occurred on January 1, 2018 and the 2018 acquisitions had occurred on January 1, 2017. 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.

		Year Ended December 31,
		2019				2018
Pro forma revenues		$	7,904.2			$	7,936.0
Pro forma net income attributable to American Tower Corporation common stockholders		$	1,844.9			$	1,122.6
Pro forma net income per common share amounts:
Basic net income attributable to American Tower Corporation common stockholders		$	4.17			$	2.55
Diluted net income attributable to American Tower Corporation common stockholders		$	4.14			$	2.53

8. ACCRUED EXPENSES

Accrued expenses consisted of the following:

	As of
	December 31, 2019				December 31, 2018
Accrued property and real estate taxes	$	198.1			$	169.7
Accrued pass-through costs	74.2				71.2
Amounts payable to tenants	77.9				93.5
Accrued rent	75.6				61.4
Payroll and related withholdings	102.4				90.4
Accrued construction costs	27.8				41.5
Accrued income tax payable	55.2				57.9
Other accrued expenses	347.0				362.7
Accrued expenses	$	958.2			$	948.3

F-28

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

9. 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, 2019				December 31, 2018				Contractual Interest Rate (1)			Maturity Date (1)
2018 Term Loan (2) (3)	$	—			$	1,499.8			N/A			N/A
2019 364-Day Term Loan (2) (4)	999.9				—				2.600	%		February 13, 2020
2019 Multicurrency Credit Facility (2)	700.0				1,875.0				2.865	%		June 28, 2023
2019 Term Loan (2)	995.2				994.8				2.925	%		January 31, 2025
2019 Credit Facility (2)	1,600.0				—				4.875	%		January 31, 2025
3.40% senior notes (5)	—				1,000.0				N/A			N/A
2.800% senior notes	749.4				747.8				2.800	%		June 1, 2020
5.050% senior notes (6)	—				698.7				N/A			N/A
3.300% senior notes	748.5				747.2				3.300	%		February 15, 2021
3.450% senior notes	647.7				646.3				3.450	%		September 15, 2021
5.900% senior notes (7)	498.9				498.4				5.900	%		November 1, 2021
2.250% senior notes	592.1				572.7				2.250	%		January 15, 2022
4.70% senior notes	698.2				697.4				4.700	%		March 15, 2022
3.50% senior notes	994.3				992.6				3.500	%		January 31, 2023
3.000% senior notes	704.9				687.5				3.000	%		June 15, 2023
5.00% senior notes	1,001.7				1,002.1				5.000	%		February 15, 2024
3.375% senior notes	644.4				—				3.375	%		May 15, 2024
2.950% senior notes	641.3				—				2.950	%		January 15, 2025
1.375% senior notes	553.0				564.0				1.375	%		April 4, 2025
4.000% senior notes	743.2				742.1				4.000	%		June 1, 2025
4.400% senior notes	496.6				496.1				4.400	%		February 15, 2026
1.950% senior notes	554.4				566.0				1.950	%		May 22, 2026
3.375% senior notes	987.9				986.3				3.375	%		October 15, 2026
3.125% senior notes	397.6				397.3				3.125	%		January 15, 2027
2.750% senior notes	743.5				—				2.750	%		January 15, 2027
3.55% senior notes	744.1				743.5				3.550	%		July 15, 2027
3.600% senior notes	692.6				691.9				3.600	%		January 15, 2028
3.950% senior notes	589.6				—				3.950	%		March 15, 2029
3.800% senior notes	1,631.7				—				3.800	%		August 15, 2029
3.700% senior notes	591.8				—				3.700	%		October 15, 2049
Total American Tower Corporation debt	20,942.5				17,847.5
Series 2013-2A Securities (8)	1,295.0				1,293.4				3.070	%		March 15, 2023
Series 2018-1A Securities (8)	493.8				493.5				3.652	%		March 15, 2028
Series 2015-1 Notes (9)	349.6				348.8				2.350	%		June 15, 2020
Series 2015-2 Notes (10)	521.4				520.8				3.482	%		June 16, 2025
India indebtedness (11)	—				240.1				Various			Various
India preference shares (12)	—				23.9				N/A			N/A
Shareholder loan (13)	—				59.9				N/A			N/A
Other subsidiary debt (14)	422.4				152.5				Various			Various
Total American Tower subsidiary debt	3,082.2				3,132.9
Finance and capital lease obligations	30.7				179.5
Total	24,055.4				21,159.9
Less current portion long-term obligations	(2,928.2		)		(2,754.8		)
Long-term obligations	$	21,127.2			$	18,405.1

F-29

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

---

(1)	Represents the interest rate or maturity date as of December 31, 2019; interest rate does not reflect the impact of the interest rate swap agreements.

(2)	Accrues interest at a variable rate. Interest rates on outstanding balances are calculated using a weighted average.

(3)	Repaid in full on February 14, 2019 using proceeds from the 2019 364-Day Term Loan (as defined below) and cash on hand.

(4)	Repaid in full on the maturity date in February 2020 using proceeds from the 2020 Term Loan (as defined in note 24), borrowings from the 2019 Credit Facility and cash on hand. For more information, see note 24.

(5)	Repaid in full on the maturity date in February 2019 with borrowings from the 2019 Multicurrency Credit Facility and the 2019 Credit Facility (each as defined below).

(6)	Repaid in full on April 22, 2019 with borrowings from the 2019 Credit Facility and cash on hand.

(7)	Repaid in full on January 15, 2020 with borrowings from the 2019 Credit Facility and cash on hand. For more information, see note 24.

(8)	Maturity date reflects the anticipated repayment date; final legal maturity is March 15, 2048.

(9)	Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2045.

(10)	Maturity date reflects the anticipated repayment date; final legal maturity is June 15, 2050.

(11)	Denominated in Indian Rupees (“INR”). Included India working capital facilities, remaining debt assumed by the Company in connection with the Viom Acquisition (as defined in note 15) and debt that had been entered into by ATC TIPL. During the year ended December 31, 2019, the Company repaid all remaining debt assumed in connection with the Viom Acquisition and debt entered into by ATC TIPL.

(12)	Mandatorily redeemable preference shares (the “Preference Shares”) denominated in INR and classified as debt. The Preference Shares were redeemed on March 2, 2019.

(13)

Reflects balance owed to the Company’s joint venture partner in Ghana. The Ghana loan is denominated in Ghanaian Cedi (“GHS”). On June 14, 2019, the Company purchased the remaining 294.4 million GHS ($56.8 million) of principal outstanding under the Ghana loan, plus unpaid interest. Amounts under the loan are now owed to one of the Company’s subsidiaries and, as a result, are eliminated in consolidation as of the purchase date.

(14)

Includes the Brazil Credit Facility (as defined below), which is denominated in Brazilian Real (“BRL”) and has an original amortization through January 15, 2022, 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 Peso (“COP”) and amortizes through April 24, 2021, the Kenya Debt (as defined below), which is denominated in U.S. Dollar (“USD”) and is payable either (i) in future installments subject to the satisfaction of specified conditions or (ii) three years from the note origination date, the U.S. Subsidiary Debt (as defined below) and the Eaton Towers Debt (as defined below), which is denominated in multiple currencies, including USD, EUR, Kenyan Shilling (“KES”), and West African CFA Franc (“XOF”), and amortizes over various terms. Subsequent to December 31, 2019, the Company repaid all of the outstanding Eaton Towers USD denominated and KES denominated debt.

Current portion of long-term obligations—The Company’s current portion of long-term obligations primarily includes (i) $1.0 billion under its unsecured term loan entered into on February 14, 2019 (the “2019 364-Day Term Loan”), which the Company repaid on February 13, 2020, (ii) $750.0 million aggregate principal amount of 2.800% senior unsecured notes due 2020, (iii) $500.0 million aggregate principal amount of 5.900% senior unsecured notes due 2021, which the Company repaid on January 15, 2020 and (iv) $350.0 million aggregate principal amount of the American Tower Secured Revenue Notes, Series 2015-1, Class A, issued by GTP Acquisition Partners I, LLC in a private securitization transaction in May 2015, with anticipated repayment date in 2020.

American Tower Corporation Debt

Bank Facilities

In December 2019, the Company entered into amendments and restatements of (A) its multicurrency senior unsecured revolving credit facility entered into in June 2013, as amended (as amended and restated, the “2019 Multicurrency Credit Facility”), (B) its senior unsecured revolving credit facility entered into in January 2012, as amended and restated in September 2014, as further amended (as amended and restated, the “2019 Credit Facility”) and (C) its unsecured term loan entered into in October 2013, as amended (as amended and restated, the “2019 Term Loan”), to, among other things, (i) extend the maturity dates by one year to June 28, 2023, January 31, 2025 and January 31, 2025, respectively, (ii) increase the commitments under each of the 2019 Multicurrency Credit Facility and the 2019 Credit Facility to $3.0 billion and $2.25 billion, respectively, (iii) increase the maximum Revolving Loan Commitments, after giving effect to any Incremental Commitments (each as defined in the loan agreements for each of the 2019 Multicurrency Credit Facility and the 2019 Credit Facility) to $5.0 billion and $3.75 billion under the 2019 Multicurrency Credit Facility and the 2019 Credit Facility, respectively, (iv) increase the maximum Commitments, after giving effect to any Incremental Commitments (each as defined in the loan agreement for the 2019 Term Loan) to $2.25 billion under the 2019 Term Loan and (v) remove the Interest Coverage Ratio financial covenant as defined in each of the loan agreements.

*2019 Multicurrency Credit Facility—*The Company has the ability to borrow up to $3.0 billion under the 2019 Multicurrency 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, 2019, the Company borrowed an aggregate of $2.5 billion and repaid an aggregate of $3.7 billion of revolving indebtedness under the 2019 Multicurrency Credit Facility. The Company primarily used the borrowings to fund acquisitions, including the Entel Acquisition, to purchase redeemable noncontrolling interests, to repay existing indebtedness and for general corporate purposes.

F-30

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

*2019 Credit Facility—*The Company has the ability to borrow up to $2.25 billion under the 2019 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, 2019, the Company borrowed an aggregate of $3.2 billion and repaid an aggregate of $1.6 billion of revolving indebtedness under the 2019 Credit Facility. The Company used the borrowings to fund acquisitions, including the Eaton Towers Acquisition, to repay existing indebtedness and for general corporate purposes.

2019 364*-Day Term Loan*—On February 14, 2019, the Company entered into the 2019 364-Day Term Loan, the net proceeds of which were used, together with cash on hand, to repay all outstanding indebtedness under the unsecured term loan entered into on March 29, 2018. The 2019 364-Day Term Loan matures on February 13, 2020. Any outstanding principal and accrued but unpaid interest will be due and payable in full at maturity.

The 2019 Multicurrency Credit Facility, the 2019 Credit Facility, the 2019 Term Loan and the 2019 364-Day Term Loan 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 LIBOR as the applicable base rate for borrowings under the 2019 Multicurrency Credit Facility, the 2019 Credit Facility, the 2019 Term Loan and the 2019 364-Day Term Loan. The interest rates on the 2019 Multicurrency Credit Facility, the 2019 Credit Facility, and the 2019 Term Loan range between 0.875% to 1.750% above LIBOR for LIBOR based borrowings or up to 0.750% above the defined base rate for base rate borrowings, in each case based upon the Company’s debt ratings. The interest rate on the 2019 364-Day Term Loan ranges between 0.550% to 1.375% above LIBOR for LIBOR based borrowings or up to 0.375% above the defined base rate for base rate borrowings, in each case based upon the Company’s debt ratings.

As of December 31, 2019, the key terms under the 2019 Multicurrency Credit Facility, the 2019 Credit Facility, the 2019 Term Loan and the 2019 364-Day Term Loan were as follows:

	Outstanding Principal Balance				Undrawn letters of credit				Maturity Date		Current margin over LIBOR			Current commitment fee (1)
2019 Multicurrency Credit Facility	$	700.0			$	3.8			June 28, 2023	(3)	1.125	%		0.110	%
2019 Credit Facility	$	1,600.0			$	6.1			January 31, 2025	(3)	1.125	%		0.110	%
2019 Term Loan	$	1,000.0		(2)	N/A				January 31, 2025		1.125	%		N/A
2019 364-Day Term Loan	$	1,000.0		(2)	N/A				February 13, 2020		0.800	%		N/A

---

(1) Fee on undrawn portion of each credit facility.

(2) Borrowed at LIBOR

(3) Subject to two optional renewal periods.

The loan agreements for the 2019 Multicurrency Credit Facility, the 2019 Credit Facility, the 2019 Term Loan and the 2019 364-Day Term Loan contain certain reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt, guaranties, sales of assets and liens) with which the Company must comply. Failure to comply with the financial and operating covenants of the loan agreements may constitute a default, which could result in, among other things, the amounts outstanding under the applicable agreement, including all accrued interest and unpaid fees, becoming immediately due and payable.

Senior Notes

Repayments of Senior Notes

Repayment of 3.40% *Senior Notes—*On the February 15, 2019 maturity date, the Company repaid $1.0 billion aggregate principal amount of 3.40% senior unsecured notes due 2019 (the “3.40% Notes”). The 3.40% Notes were repaid with borrowings from the Company’s 2019 Multicurrency Credit Facility and the 2019 Credit Facility. Upon completion of the repayment, none of the 3.40% Notes remained outstanding.

Repayment of 5.050% *Senior Notes—*On April 22, 2019, the Company redeemed all of the $700.0 million aggregate principal amount of 5.050% senior unsecured notes due 2020 (the “5.050% Notes”) at a price equal to 103.0050% of the principal amount, plus accrued and unpaid interest up to, but excluding April 22, 2019, for an aggregate redemption price of $726.0 million, including $5.0 million in accrued and unpaid interest. The Company recorded a loss on retirement of long-term obligations of $22.1 million, which includes prepayment consideration of $21.0 million and the associated unamortized discount and deferred financing costs. The redemption was funded with borrowings from the 2019 Credit Facility and cash on hand. Upon completion of the repayment, none of the 5.050% Notes remained outstanding.

F-31

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

Offerings of Senior Notes

3.375% Senior Notes and 3.950% *Senior Notes Offering—*On March 15, 2019, the Company completed a registered public offering of $650.0 million aggregate principal amount of 3.375% senior unsecured notes due 2024 (the “3.375% Notes”) and $600.0 million aggregate principal amount of 3.950% senior unsecured notes due 2029 (the “3.950% Notes”). The net proceeds from this offering were approximately $1,231.0 million, after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2019 Multicurrency Credit Facility and the 2019 Credit Facility. Accrued and unpaid interest is payable in U.S. Dollars semi-annually in arrears and will be computed from the offering date on the basis of a 360 day year comprised of twelve 30-day months, beginning on September 15, 2019 and November 15, 2019 for the 3.950% Notes and the 3.375% Notes, respectively.

2.950% Senior Notes and 3.800% *Senior Notes Offering—*On June 13, 2019, the Company completed a registered public offering of $650.0 million aggregate principal amount of 2.950% senior unsecured notes due 2025 (the “2.950% Notes”) and $1.65 billion aggregate principal amount of 3.800% senior unsecured notes due 2029 (the “3.800% Notes”). The net proceeds from this offering were approximately $2,269.0 million, after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2019 Multicurrency Credit Facility and the 2019 Credit Facility. Accrued and unpaid interest is payable in U.S. Dollars semi-annually in arrears and will be computed from the offering date on the basis of a 360 day year comprised of twelve 30-day months, beginning on January 15, 2020 and February 15, 2020 for the 2.950% Notes and the 3.800% Notes, respectively.

2.750% Senior Notes and 3.700% *Senior Notes Offering—*On October 3, 2019, the Company completed a registered public offering of $750.0 million aggregate principal amount of 2.750% senior unsecured notes due 2027 (the “2.750% Notes”) and $600.0 million aggregate principal amount of 3.700% senior unsecured notes due 2049 (the “3.700% Notes”). The net proceeds from this offering were approximately $1,334.2 million, after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2019 Multicurrency Credit Facility and the 2019 364-Day Term Loan. Accrued and unpaid interest is payable in U.S. Dollars semi-annually in arrears and will be computed from the offering date on the basis of a 360 day year comprised of twelve 30-day months, beginning on January 15, 2020 and April 15, 2020 for the 2.750% Notes and the 3.700% Notes, respectively.

F-32

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

The following table outlines key terms related to the Company’s outstanding senior notes as of December 31, 2019:

					Adjustments to Principal Amount (1)
	Aggregate Principal Amount				2019				2018				Interest payments due (2)		Issue Date		Par Call Date (3)
2.800% Notes	$	750.0			$	(0.6	)		$	(2.2	)		June 1 and December 1		May 7, 2015		May 1, 2020
3.300% Notes	750.0				(1.5		)		(2.8		)		February 15 and August 15		January 12, 2016		January 15, 2021
3.450% Notes	650.0				(2.3		)		(3.7		)		March 15 and September 15		August 7, 2014		N/A
5.900% Notes (4)	500.0				(1.1		)		(1.6		)		May 1 and November 1		October 6, 2011		N/A
2.250% Notes (5)	600.0				(7.9		)		(27.3		)		January 15 and July 15		September 30, 2016		N/A
4.70% Notes	700.0				(1.8		)		(2.6		)		March 15 and September 15		March 12, 2012		N/A
3.50% Notes	1,000.0				(5.7		)		(7.4		)		January 31 and July 31		January 8, 2013		N/A
3.000% Notes (6)	700.0				4.9				(12.5		)		June 15 and December 15		December 8, 2017		N/A
5.00% Notes (7)	1,000.0				1.7				2.1				February 15 and August 15		August 19, 2013		N/A
3.375% Notes	650.0				(5.6		)		—				May 15 and November 15		March 15, 2019		April 15, 2024
2.950% Notes	650.0				(8.7		)		—				January 15 and July 15		June 13, 2019		December 15, 2024
1.375% Notes (8)	560.6				(7.6		)		(9.3		)		April 4		April 6, 2017		January 4, 2025
4.000% Notes	750.0				(6.8		)		(7.9		)		June 1 and December 1		May 7, 2015		March 1, 2025
4.400% Notes	500.0				(3.4		)		(3.9		)		February 15 and August 15		January 12, 2016		November 15, 2025
1.950% Notes (8)	560.6				(6.2		)		(7.3		)		May 22		May 22, 2018		February 22, 2026
3.375% Notes	1,000.0				(12.1		)		(13.7		)		April 15 and October 15		May 13, 2016		July 15, 2026
3.125% Notes	400.0				(2.4		)		(2.7		)		January 15 and July 15		September 30, 2016		October 15, 2026
2.750% Notes	750.0				(6.5		)		—				January 15 and July 15		October 3, 2019		November 15, 2026
3.55% Notes	750.0				(5.9		)		(6.5		)		January 15 and July 15		June 30, 2017		April 15, 2027
3.600% Notes	700.0				(7.4		)		(8.1		)		January 15 and July 15		December 8, 2017		October 15, 2027
3.950% Notes	600.0				(10.4		)		—				March 15 and September 15		March 15, 2019		December 15, 2028
3.800% Notes	1,650.0				(18.3		)		—				February 15 and August 15		June 13, 2019		May 15, 2029
3.700% Notes	600.0				(8.2		)		—				April 15 and October 15		October 3, 2019		April 15, 2049

---

(1)	Includes unamortized discounts, premiums and debt issuance costs and fair value adjustments due to interest rate swaps.

(2)	Interest payments are due semi-annually for each series of senior notes, except for the 1.375% Notes and the 1.950% Notes, for which interest payments are due annually.

(3)	If the Company redeems the notes on or after the par call date, the Company will not be required to pay a make-whole premium.

(4)	The 5.900% Notes were repaid on January 15, 2020. For more information, see note 24.

(5)	Includes ($5.9) million and ($24.3) million fair value adjustment due to interest rate swaps in 2019 and 2018, respectively,

(6)	Includes $9.2 million and ($7.0) million fair value adjustment due to interest rate swaps in 2019 and 2018, respectively.

(7)	The original issue date for the 5.00% Notes was August 19, 2013. The issue date for the reopened 5.00% Notes was January 10, 2014.

(8)	Notes are denominated in EUR.

The Company may redeem each series of senior 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, as applicable, 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

F-33

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

indebtedness if the aggregate amount of indebtedness secured by such liens does not exceed 3.5x Adjusted EBITDA, as defined in the applicable supplemental indenture. As of December 31, 2019, the Company was in compliance with each of these covenants.

American Tower Subsidiary Debt

Securitizations

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 receive 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.

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 3,542 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.

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.

Secured Tower Revenue Securities, Series 2013-2A, Secured Tower Revenue Securities, Series 2018-1, Subclass A and Series 2018-1, Subclass R—On March 29, 2018, the Company completed a securitization transaction (the “2018 Securitization”), in which the American Tower Trust I (the “Trust”) issued $500.0 million aggregate principal amount of Secured Tower Revenue Securities, Series 2018-1, Subclass A (the “Series 2018-1A Securities”). To satisfy the applicable risk retention requirements of Regulation RR promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act” and, such requirements, the “Risk Retention Rules”), the Trust issued, and one of the Company’s affiliates purchased, $26.4 million aggregate principal amount of Secured Tower Revenue Securities, Series 2018-1, Subclass R (the “Series 2018-1R Securities” and, together with the Series 2018-1A Securities, the “2018 Securities”) to retain an “eligible horizontal residual interest” (as defined in the Risk Retention Rules) in an amount equal to at least 5% of the fair value of the 2018 Securities.

The Secured Tower Revenue Securities, Series 2013-2A (the “Series 2013-2A Securities” and, together with the 2018 Securities the “Trust Securities”) issued in a securitization transaction in March 2013 (the “2013 Securitization” and, together with the 2018 Securitization, the “Trust Securitizations”) remain outstanding and are subject to the terms of the Second Amended and Restated Trust and Servicing Agreement entered into in connection with the 2018 Securitization.

The assets of the Trust consist of a nonrecourse loan (the “Loan”) made by the Trust to American Tower Asset Sub, LLC and American Tower Asset Sub II, LLC (together, the “AMT Asset Subs”). The AMT Asset Subs are jointly and severally liable under the Loan, which is secured primarily by mortgages on the AMT Asset Subs’ interests in 5,114 broadcast and wireless communications towers and related assets (the “Trust Sites”).

The component of the Loan corresponding to the Series 2013-2A Securities also remains outstanding and is subject to the terms of the Second Amended and Restated Loan and Security Agreement among the Trust and the AMT Asset Subs, dated as of March 29, 2018 (“Loan Agreement”). The Loan Agreement includes terms and conditions, including with respect to secured assets, substantially consistent with the First Amended and Restated Loan and Security Agreement dated as of March 15, 2013. The 2018 Securities correspond to components of the Loan made to the AMT Asset Subs pursuant to the Loan Agreement and were issued in two separate subclasses of the same series. The 2018 Securities represent a pass-through interest in the components of the Loan corresponding to the 2018 Securities. The Series 2018-1A Securities have an interest rate of 3.652% and the Series 2018-1R Securities have an interest rate of 4.459%. The 2018 Securities have an expected life of approximately ten years with a final repayment date in March 2048. Subject to certain limited exceptions described below, no payments of principal will be

F-34

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

required to be made on the components of the Loan corresponding to the 2018 Securities prior to the monthly payment date in March 2028, which is the anticipated repayment date for such components.

The Loan is secured by (1) mortgages, deeds of trust and deeds to secure debt on substantially all of the Trust Sites and their operating cash flows, (2) a security interest in substantially all of the AMT Asset Subs’ personal property and fixtures and (3) the AMT Asset Subs’ rights under that certain management agreement among the AMT Asset Subs and SpectraSite Communications, LLC entered into in March 2013. American Tower Holding Sub, LLC (the “Guarantor”), 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 is its equity interests in the Guarantor, have each guaranteed repayment of the Loan and pledged their equity interests in their respective subsidiary or subsidiaries as security for such payment obligations.

Under the terms of the Loan Agreement and 2015 Indenture, amounts due will be paid from the cash flows generated by the Trust Sites 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, which 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”), which 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 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, fund required reserves, pay management fees and budgeted operating expenses and 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, as applicable, unless the DSCR 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 is equal to or 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 Trust Securities, an “amortization period” also commences if, on the anticipated repayment date the component of the Loan corresponding to the applicable subclass of the Trust 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 in the applicable Cash Trap Reserve Account would be applied to pay the principal of the Loan or the 2015 Notes, as applicable, on each monthly payment date.

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 2015-1 Notes, 18 months of the anticipated repayment date with respect to the Series 2013-2A Securities or the Series 2015-2 Notes, or 36 months of the anticipated repayment date with respect to the Series 2018 Securities, no prepayment consideration is due.

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 Trust Sites 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, as applicable, 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

F-35

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

upon or otherwise convert the ownership of all or any portion of the Trust Sites 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 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.

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 ground rents, real estate and personal property taxes and insurance premiums, and, under the 2015 Indenture and in certain circumstances under the Loan Agreement, to reserve a portion of advance rents from tenants on the Trust Sites. 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 $50.2 million held in the reserve accounts with respect to the Trust Securitizations and the $13.0 million held in the reserve accounts with respect to the 2015 Securitization as of December 31, 2019 are classified as Restricted cash on the Company’s accompanying consolidated balance sheets.

India Indebtedness*—*The India indebtedness includes several working capital facilities, most of which are subject to annual renewal. The working capital facilities bear interest at rates that consist of the applicable bank’s Marginal Cost of Funds based Lending Rate (as defined in the applicable agreement), plus a spread. Generally, the working capital facilities are payable on demand prior to maturity.

During the year ended December 31, 2019, the Company repaid all remaining debt assumed in connection with the Viom Acquisition and debt entered into by ATC TIPL.

Amounts outstanding and key terms of the India indebtedness consisted of the following as of December 31, 2019 (in millions, except percentages):

		Amount Outstanding (INR)			Amount Outstanding (USD)				Interest Rate (Range)		Maturity Date (Range)
Working capital facilities (1)		—			$	—			8.15% - 8.75%		March 18, 2020 - October 23, 2020

---

(1)	5.6 billion INR ($78.9 million) of borrowing capacity as of December 31, 2019.

Other Subsidiary Debt*—*The Company’s other subsidiary debt includes (i) a credit facility entered into by one of the Company’s South African subsidiaries in December 2015, as amended (the “South African Credit Facility”), (ii) a long-term credit facility entered into by one of the Company’s Colombian subsidiaries in October 2014 (the “Colombian Credit Facility”), (iii) 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, (iv) a note entered into by one of the Company’s subsidiaries in October 2018 in connection with the acquisition of sites in Kenya (the “Kenya Debt”), (v) U.S. subsidiary debt related to a seller-financed acquisition (the “U.S. Subsidiary Debt”) and (vi) debt entered into by certain Eaton Towers subsidiaries acquired in connection with the Eaton Towers Acquisition (the “Eaton Towers Debt”).

Amounts outstanding and key terms of other subsidiary debt consisted of the following as of December 31, (in millions, except percentages):

F-36

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

		Carrying Value (Denominated Currency) (1)						Carrying Value (USD) (1)								Interest Rate			Maturity Date
		2019			2018			2019				2018
South African Credit Facility (2)		288.7			577.4			$	20.6			$	40.2			8.75	%		December 17, 2020
Colombian Credit Facility (3)		79,647.3			109,193.8			$	24.3			$	33.6			8.13	%		April 24, 2021
Brazil Credit Facility (4)		65.4			94.7			$	16.2			$	24.4			Various			January 15, 2022
Kenya Debt (5)		29.6			51.8			$	29.6			$	51.8			8.00	%		October 1, 2021
U.S. Subsidiary Debt (6)		1.9			2.5			$	1.9			$	2.5			—	%		January 1, 2022
Eaton Towers Debt (7):
USD Denominated (8)		238.8			—			$	238.8			$	—			Various			Various
EUR Denominated		26.2			—			$	29.5			$	—			Various			Various
XOF Denominated		16,836.8			—			$	28.8			$	—			Various			Various
KES Denominated (8)		3,319.2			—			$	32.7			$	—			Various			Various

---

(1)	Includes applicable deferred financing costs.

(2)	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. Debt accrues interest at a variable rate. The borrower no longer maintains the ability to draw on the South African Credit Facility.

(3)

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. The borrower no longer maintains the ability to draw on the Colombian Credit Facility.

(4)	Denominated in BRL, with an original principal amount of 271.0 million BRL. Debt accrues interest at a variable rate. The borrower no longer maintains the ability to draw on the Brazil Credit Facility.

(5)	Denominated in USD, with an original principal amount of $51.8 million. The loan agreement for the Kenya Debt requires that the debt be paid either (i) in future installments subject to the satisfaction of specified conditions or (ii) three years from the note origination date.

(6)	Related to a seller-financed acquisition. Denominated in USD with an original principal amount of $2.5 million.

(7)	Related to the Eaton Towers Acquisition. Denominated in multiple currencies, including USD, EUR, KES and XOF. Amounts shown represent principal outstanding as of December 31, 2019.

(8)	Subsequent to December 31, 2019, the Company repaid all of the outstanding USD denominated and KES denominated debt.

Pursuant to the agreements governing the South African Credit Facility and the Colombian Credit Facility, payments of principal and interest are generally payable quarterly in arrears. Outstanding principal and accrued but unpaid interest will be due and payable in full at maturity. 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.

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 Loan— On June 14, 2019, the Company purchased the remaining 294.4 million GHS ($56.8 million) of principal outstanding under the Ghana loan, plus unpaid interest. Amounts under the loan are now owed to one of the Company’s subsidiaries and, as a result, are eliminated in consolidation as of the purchase date.

Finance and Capital Lease Obligations—The Company’s finance and capital lease obligations approximated $30.7 million and $179.5 million as of December 31, 2019 and 2018, respectively. Finance lease obligations are described further in note 4.

F-37

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

Maturities—Aggregate principal maturities of long-term debt, including finance leases, for the next five years and thereafter are expected to be:

Fiscal Year		Amount
2020		$	2,928.2
2021		1,446.6
2022		1,339.0
2023		3,722.8
2024		1,651.2
Thereafter		13,111.9
Total cash obligations		24,199.7
Unamortized discounts, premiums and debt issuance costs and fair value adjustments, net		(144.3		)
Balance as of December 31, 2019		$	24,055.4

10. OTHER NON-CURRENT LIABILITIES

Other non-current liabilities consisted of the following:

	As of
	December 31, 2019				December 31, 2018
Deferred rent liability	$	—			$	506.7
Unearned revenue	525.9				504.6
Other miscellaneous liabilities	411.1				253.8
Other non-current liabilities	$	937.0			$	1,265.1

The reduction in Deferred rent liability is a result of the Company’s adoption of the new lease accounting standard.

11. ASSET RETIREMENT OBLIGATIONS

The changes in the carrying amount of the Company’s asset retirement obligations were as follows:

	2019				2018
Beginning balance as of January 1,	$	1,210.0			$	1,175.3
Additions	61.8				39.6
Accretion expense	81.6				83.6
Revisions in estimates (1)	56.8				(81.5		)
Settlements	(26.1		)		(7.0		)
Balance as of December 31,	$	1,384.1			$	1,210.0

---

(1)	Revisions in estimates include decreases to the liability of $6.7 million and $49.4 million related to foreign currency translation for the years ended December 31, 2019 and 2018, respectively.

As of December 31, 2019, the estimated undiscounted future cash outlay for asset retirement obligations was $3.2 billion.

F-38

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

12. 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	Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
	Level 2	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.
	Level 3	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 values of the Company’s financial assets and liabilities that are required to be measured on a recurring basis at fair value were as follows:

		December 31, 2019											December 31, 2018
		Fair Value Measurements Using											Fair Value Measurements Using
		Level 1			Level 2				Level 3				Level 1			Level 2				Level 3
Assets:
Interest rate swap agreements		—			$	9.0			—				—			—				—
Embedded derivative in lease agreement		—			—				$	10.7			—			—				$	11.5
Liabilities:
Interest rate swap agreements		—			$	7.5			—				—			$	33.8			—
Fair value of debt related to interest rate swap agreements (1)		$	3.3		—				—				$	(31.3	)	—				—
Redeemable noncontrolling interests (2)		—			—				$	1,096.5			—			—				$	1,004.8

---

(1)	Included in the carrying values of the corresponding debt obligations.

(2)	Includes the redeemable noncontrolling interest in ATC TIPL and $523.0 million related to the Company’s agreement with MTN to acquire MTN’s noncontrolling interests in each of the Company’s joint ventures in Ghana and Uganda. The transaction is expected to close in the first quarter of 2020, subject to regulatory approval and other closing conditions.

Interest Rate Swap Agreements

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 the value of the derivatives are recognized 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 that are designated and qualify as cash flow hedges, the Company records the change in fair value for the effective portion of the cash flow hedges in AOCL in the consolidated balance sheets and reclassifies a portion of the value from AOCL 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 (Loss) gain 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 $500.0 million related to the 3.000% senior unsecured notes due 2023 (the “3.000% 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 3.000% 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 3.000% through June 15, 2023.

F-39

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

The Company entered into three interest rate swap agreements with an aggregate notional value of $600.0 million related to the 2.250% senior unsecured notes due 2022 (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.

The fair values of the U.S. interest rate swap asset of $9.0 million and U.S. interest rate swap liability of $7.4 million were included in Other non-current assets and Other non-current liabilities, respectively, on the consolidated balance sheets at December 31, 2019. The fair value of the U.S. interest rate swap liability of $33.5 million was included in Other non-current liabilities on the consolidated balance sheets at December 31, 2018. During the year ended December 31, 2019, the Company recorded net fair value adjustments of $0.5 million related to interest rate swaps and the change in fair value of debt due to interest rate swaps in Other expense in the consolidated statements of operations.

One of the Company’s Colombian subsidiaries is party to an interest rate swap agreement with certain lenders under the Colombian Credit Facility (the “Colombia Interest Rate Swap”). The Colombia Interest Rate Swap, which was designated as a cash flow hedge at inception, was entered into to manage exposure to variability in interest rates on debt. The Colombia Interest Rate Swap requires the payment of a fixed interest rate of 5.74% and pays variable interest at the three-month Inter-bank Rate through the earlier of termination of the underlying debt or April 24, 2021. On October 24, 2019, the aggregate notional amount of the Colombia Interest Rate Swap was increased by 20.0 billion COP ($5.9 million) and the fixed interest rate was decreased to 5.37%. As of December 31, 2019, the aggregate notional amount of the Colombia Interest Rate Swap was 60.0 billion COP ($18.3 million). The fair value of the Colombia Interest Rate Swap as of December 31, 2019 and 2018 was $0.1 million and $0.3 million, respectively, and was included in Other non-current liabilities on the consolidated balance sheets.

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 sheets. 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, 2019, the Company recorded $0.8 million of fair value adjustments, which were recorded in Other expense in the consolidated statements of operations.

Redeemable Noncontrolling Interests

The Company records the carrying amount of the redeemable noncontrolling interests as described in note 15. The fair value of the redeemable noncontrolling interests is determined using a discounted cash flow approach, which takes into consideration Level 3 unobservable inputs, including expected future cash flows and applies a discount factor that captures uncertainties in the future periods. If required, the Company adjusts the redeemable noncontrolling interests to redemption value on each balance sheet date with changes in redemption value recognized as an adjustment to net income (loss) attributable to noncontrolling interests.

The recurring Level 3 fair value measurements of the Company’s embedded derivative in lease agreement, acquisition-related contingent consideration and redeemable noncontrolling interests include the following significant unobservable inputs as of December 31, 2019:

		Significant Unobservable Input		Range
Embedded derivative in lease agreement		Discount rate		10.93%	-	13.96%
Redeemable noncontrolling interests (1)		Revenue growth		3.82%	-	7.88%
		Long-term growth rate				4.00%

---

(1)	Represents the significant unobservable inputs used to measure the fair value of the Company’s redeemable noncontrolling interest in ATC TIPL as of December 31, 2019.

F-40

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

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, 2019, certain long-lived assets held and used with a carrying value of $22.4 billion were written down to their net realizable value as a result of an asset impairment charge of $94.2 million. During the year ended December 31, 2018, certain long-lived assets held and used with a carrying value of $22.4 billion were written down to their net realizable value as a result of an asset impairment charge of $394.0 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, 2019.

Fair Value of Financial Instruments—The Company’s financial instruments for which the carrying value reasonably approximates fair value at December 31, 2019 and 2018 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, 2019, the carrying value and fair value of long-term obligations, including the current portion, were $24.1 billion and $25.0 billion, respectively, of which $17.5 billion was measured using Level 1 inputs and $7.5 billion was measured using Level 2 inputs. As of December 31, 2018, the carrying value and fair value of long-term obligations, including the current portion, were $21.2 billion and $21.1 billion, respectively, of which $13.4 billion was measured using Level 1 inputs and $7.7 billion was measured using Level 2 inputs.

13. INCOME TAXES

Beginning in the taxable year ended December 31, 2012, the Company has filed, and intends to continue to file, U.S. federal income tax returns 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:

	Year Ended December 31,
2019				2018				2017
Current:
Federal	$	(1.7	)		$	(1.4	)		$	(0.1	)
State	(5.0		)		(1.8		)		(3.8		)
Foreign	(48.2		)		(189.7		)		(113.4		)
Deferred:
Federal	1.4				4.0				0.2
State	0.5				0.7				1.0
Foreign	53.2				298.3				85.4
Income tax benefit (provision)	$	0.2			$	110.1			$	(30.7	)

The effective tax rate (“ETR”) on income from continuing operations for the years ended December 31, 2019, 2018 and 2017 differs from the federal statutory rate primarily due to the Company’s qualification for taxation as a REIT, as well as adjustments for state and 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.

In 2019, there was an income tax law change in India that allows companies to elect into an optional concessional tax regime. The new regime allows for a lower effective tax rate from approximately 35% to approximately 25% and no minimum

F-41

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

alternative tax, while disallowing the benefit of the minimum alternative tax credits. As a result, the Company recorded a tax benefit of $113.0 million for the year ended December 31, 2019.

In 2018, the income tax benefit was attributable to impairment charges and accelerated amortization on intangible assets taken in India as well as a benefit of $85.7 million related to the restructuring of international operations in certain jurisdictions. These benefits were partially offset by the receipt of the payment related to the Tata settlement.

In 2015, there was an income tax law change in Ghana that disallowed unused capital allowances to be carried into 2016, which resulted in a charge to income tax expense for the year ended December 31, 2015. In 2017, the Ghana Revenue Authority issued Practice Note Number DT/2016/010 (the “Practice Note”), which clarified the Capital Allowance section of the Income Tax Act of 2015. The Practice Note allowed for unused Capital Allowance from 2015 to be treated as a deduction in 2016. As a result, the Company recorded a tax benefit of $17.8 million for the year ended December 31, 2017.

The December 2017 legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) significantly changed how the U.S. taxes corporations. The Tax Act contained several key provisions including, among other things, a reduction in the corporate income rate from 35% to 21% for tax years beginning after December 31, 2017. As a result of this change in tax rate, the rate at which the Company’s deferred tax assets of the Company’s TRSs decreased, resulting in additional tax expense of $2.4 million, which did not significantly impact the Company's effective tax rate.

Reconciliation between the U.S. statutory rate and the effective rate from continuing operations is as follows:

	Year Ended December 31,
2019			2018			2017
Statutory tax rate	21	%		21	%		35	%
Adjustment to reflect REIT status (1)	(21	)		(21	)		(35	)
Foreign taxes	3			(8	)		1
Foreign withholding taxes	3			4			3
Uncertain tax positions	1			—			—
Changes in tax laws	(6	)		—			(2	)
Impact from restructuring	(1	)		(6	)		—
Effective tax rate	(0	)%		(10	)%		2	%

---

(1) As a result of the ability to utilize the dividends paid deduction to offset the Company’s REIT income and gains.

The domestic and foreign components of income from continuing operations before income taxes are as follows:

	Year Ended December 31,
2019				2018				2017
United States	$	1,527.0			$	1,212.7			$	971.2
Foreign	389.4				(58.1		)		284.9
Total	$	1,916.4			$	1,154.6			$	1,256.1

F-42

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

The components of the net deferred tax asset and liability and related valuation allowance were as follows:

	December 31, 2019				December 31, 2018
Assets:
Operating lease liability	$	878.5			$	—
Net operating loss carryforwards	356.6				264.9
Accrued asset retirement obligations	174.9				165.7
Stock-based compensation	5.6				6.3
Unearned revenue	31.7				28.3
Unrealized loss on foreign currency	3.8				12.9
Other accruals and allowances	65.6				78.6
Items not currently deductible and other	26.1				26.2
Liabilities:
Depreciation and amortization	(1,040.3		)		(757.0		)
Right-of-use asset	(865.1		)		—
Deferred rent	(79.7		)		(36.9		)
Other	—				(15.3		)
Subtotal	(442.3		)		(226.3		)
Valuation allowance	(194.2		)		(151.9		)
Net deferred tax liabilities	$	(636.5	)		$	(378.2	)

The Company 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 evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

At December 31, 2019 and 2018, the Company has provided a valuation allowance of $194.2 million and $151.9 million, respectively, which primarily relates to foreign items. The increase in the valuation allowance for the year ending December 31, 2019 is due to 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, offset by fluctuations in foreign currency exchange rates. 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:

		2019				2018				2017
Balance as of January 1,		$	151.9			$	142.0			$	144.4
Additions (1)		42.5				15.7				11.6
Reversals		—				—				(9.1		)
Foreign currency translation		(0.2		)		(5.8		)		(4.9		)
Balance as of December 31,		$	194.2			$	151.9			$	142.0

---

(1) Includes net charges to expense and allowances established due to 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.

Despite a mandatory one-time inclusion in U.S. taxable income of accumulated earnings of foreign subsidiaries under the Tax Act for the year ended December 31, 2017, the Company intends to continue to reinvest foreign earnings indefinitely outside of the U.S. and does not expect to incur any significant additional taxes, including withholding taxes, related to such amounts.

F-43

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

At December 31, 2019, 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:

Years ended December 31,	Federal				State				Foreign
2020 to 2024	$	—			$	222.3			$	11.9
2025 to 2029	141.6				285.7				104.8
2030 to 2034	7.0				41.4				19.6
2035 to 2039	3.6				159.5				—
Indefinite carryforward	22.8				—				853.8
Total	$	175.0			$	708.9			$	990.1

As of December 31, 2019 and 2018, the total amount of unrecognized tax benefits that would impact the ETR, if recognized, is $158.1 million and $93.7 million, respectively. The amount of unrecognized tax benefits for the year ended December 31, 2019 includes additions to the Company’s existing tax positions of $72.0 million, which includes $63.6 million related to the Eaton Towers Acquisition.

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 $53.0 million.

A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:

	Year Ended December 31,
2019				2018				2017
Balance at January 1	$	107.7			$	116.7			$	107.6
Additions based on tax positions related to the current year	33.3				8.1				7.6
Additions and reductions for tax positions of prior years	37.5				0.3				—
Foreign currency	(1.6		)		(8.1		)		1.9
Reduction as a result of the lapse of statute of limitations	(1.3		)		(2.6		)		(0.4		)
Reduction as a result of effective settlements	—				(6.7		)		—
Balance at December 31	$	175.6			$	107.7			$	116.7

During the years ended December 31, 2019, 2018 and 2017, the statute of limitations on certain unrecognized tax benefits lapsed and certain positions were effectively settled, which resulted in a decrease of $2.5 million, $9.3 million and $0.4 million, respectively, in the liability for uncertain tax benefits.

The Company recorded penalties and tax-related interest expense to the tax provision of $10.3 million, $8.0 million and $5.0 million for the years ended December 31, 2019, 2018 and 2017, respectively. In addition, due to the expiration of the statute of limitations in certain jurisdictions and certain positions that were effectively settled, the Company reduced its liability for penalties and income tax-related interest expense related to uncertain tax positions during the years ended December 31, 2019, 2018 and 2017 by $2.7 million, $16.2 million and $0.6 million, respectively.

As of December 31, 2019 and 2018, the total amount of accrued income tax-related interest and penalties included in the consolidated balance sheets were $26.6 million and $19.1 million, respectively.

The Company has filed for prior taxable years, and for its taxable year ended December 31, 2019 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, 2019.

F-44

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

14. 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, as amended (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 for 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, 2019, the Company had the ability to grant stock-based awards with respect to an aggregate of 7.0 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 15% discount from 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, 2019, 2018 and 2017, the Company recorded and capitalized the following stock-based compensation expenses:

	2019				2018				2017
Stock-based compensation expense - Property	$	1.8			$	2.4			$	2.1
Stock-based compensation expense - Services	1.0				0.9				0.8
Stock-based compensation expense - SG&A	108.6				134.2				105.6
Total stock-based compensation expense	$	111.4			$	137.5			$	108.5
Stock-based compensation expense capitalized as property and equipment	$	1.6			$	2.0			$	1.6

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.

There were no options granted during the years ended December 31, 2019 and December 31, 2018. Key assumptions used to apply the Black-Scholes option pricing model were as follows (percentages and years disclosed in full amounts):

		2017
Range of risk-free interest rate		1.88% - 1.94%
Weighted average risk-free interest rate		1.89%
Range of expected life of stock options		5.2 years
Range of expected volatility of the underlying stock price		18.95% - 19.45%
Weighted average expected volatility of underlying stock price		19.05%
Range of expected annual dividend yield		2.40%

The weighted average grant date fair value per share during the year ended December 31, 2017 was $16.84. The intrinsic value of stock options exercised during the years ended December 31, 2019, 2018 and 2017 was $145.5 million, $98.8 million and $100.3 million, respectively. As of December 31, 2019, total unrecognized compensation expense related to unvested stock options was $0.7 million and is expected to be recognized over a weighted average period of less than one year. The amount of cash received from the exercise of stock options was $94.2 million during the year ended December 31, 2019.

F-45

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

The Company’s option activity for the year ended December 31, 2019 was as follows (share and per share data disclosed in full amounts):

		Options			Weighted Average Exercise Price Per Share				Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value
Outstanding as of January 1, 2019		4,257,470				$84.03
Granted		—			—
Exercised		(1,190,017	)		79.15
Forfeited		(7,211	)		94.71
Expired		—			—
Outstanding as of December 31, 2019		3,060,242				$85.90			4.30			$440.4
Exercisable as of December 31, 2019		2,822,938				$85.09			4.14			$408.6
Vested or expected to vest as of December 31, 2019		3,060,242				$85.90			4.30			$440.4

The following table sets forth information regarding options outstanding at December 31, 2019 (share and per share data disclosed in full amounts):

Options Outstanding											Options Exercisable
Range of Exercise Price Per Share		Outstanding Number of Options			Weighted Average Exercise Price Per Share				Weighted Average Remaining Life (Years)		Options Exercisable			Weighted Average Exercise Price Per Share
$43.11 - $74.06		201,845			$	58.21			1.87		201,845			$	58.21
$76.90 - $77.75		505,525			76.91				2.98		505,525			76.91
$81.18 - $94.23		834,335			81.58				3.94		834,335			81.58
$94.57 - $94.71		1,488,529			94.62				5.23		1,262,051			94.60
$96.70 - $121.15		30,008			111.31				6.52		19,182			109.92
$43.11 - $121.15		3,060,242			$	85.90			4.30		2,822,938			$	85.09

Restricted Stock Units and Performance-Based Restricted Stock Units—The Company’s RSU and PSU activity for the year ended December 31, 2019 was as follows (share and per share data disclosed in full amounts):

	RSUs			Weighted Average Grant Date Fair Value				PSUs			Weighted Average Grant Date Fair Value
Outstanding as of January 1, 2019 (1)	1,649,973			$	121.23			624,511			$	109.97
Granted (2)	551,860			185.41				243,077			147.39
Vested and Released (3)	(671,598	)		114.49				(338,680	)		94.71
Forfeited	(75,885	)		140.81				—			—
Outstanding as of December 31, 2019	1,454,350			$	147.67			528,908			$	136.94
Expected to vest as of December 31, 2019	1,454,350			$	147.67			528,908			$	136.94
Vested and deferred as of December 31, 2019 (4)	19,810			$	124.03			—			$	—

---

(1)

PSUs consist of the target number of shares issuable at the end of the three-year performance period for the 2018 PSUs and the 2017 PSUs (each as defined below), or 131,311 and 154,520 shares, respectively, and the shares issuable at the end of the three-year vesting period for the PSUs granted in 2016 (the “2016 PSUs”), based on achievement against the performance metrics for the three-year performance period, or 338,680 shares.

(2)	PSUs represent the shares above target that are issuable for the 2017 PSUs at the end of the three-year performance cycle based on exceeding the performance metric for the three-year performance period, or 128,254 shares, and the target number of shares issuable at the end of the three-year performance period for the 2019 PSUs, or 114,823 shares.

(3)	This includes 32,596 and 46,500 of previously vested and deferred RSUs and PSUs, respectively. PSUs consist of shares vested pursuant to the 2016 PSUs. There are no additional shares to be earned related to the 2016 PSUs.

(4)	Vested and deferred RSUs are related to deferred compensation for certain former employees.

The total fair value of RSUs and PSUs that vested during the year ended December 31, 2019 was $185.3 million.

*Restricted Stock Units—*As of December 31, 2019, total unrecognized compensation expense related to unvested RSUs granted under the 2007 Plan was $120.4 million and is expected to be recognized over a weighted average period of approximately

F-46

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

two years. Vesting of RSUs is subject generally to the employee’s continued employment or death, disability or qualified retirement (each as defined in the applicable RSU award agreement).

*Performance-Based Restricted Stock Units—*During the years ended December 31, 2019, 2018 and 2017, the Company’s Compensation Committee granted an aggregate of 114,823 PSUs (the “2019 PSUs”), 131,311 PSUs (the “2018 PSUs”) and 154,520 PSUs (the “2017 PSUs”), respectively, to its executive officers and established the performance metrics for these awards. Threshold, target and maximum parameters were established for the metrics for a three-year performance period with respect to each of the 2019 PSUs, the 2018 PSUs and the 2017 PSUs and will be used to calculate the number of shares that will be issuable when each award vests, which may range from zero to 200% of the target amounts. At the end of each 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 each performance period, subject generally to the executive’s continued employment or death, disability or qualified retirement (each as defined in the applicable PSU award agreement). PSUs will accrue dividend equivalents prior to vesting, which will be paid out only in respect of shares that actually vest.

During the year ended December 31, 2019, the Company recorded $23.9 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, 2019 was $12.4 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.

15. REDEEMABLE NONCONTROLLING INTERESTS

India Redeemable Noncontrolling Interests—On April 21, 2016, the Company, through its wholly owned subsidiary, ATC Asia Pacific Pte. Ltd., acquired a 51% controlling ownership interest in ATC TIPL (formerly Viom), a telecommunications infrastructure company that owns and operates wireless communications towers and indoor DAS networks in India (the “Viom Acquisition”), which was subsequently merged with the Company’s existing India property operations.

In connection with the Viom Acquisition, the Company, through one of its subsidiaries, entered into a shareholders agreement (the “Shareholders Agreement”) with Viom and the following remaining Viom shareholders: Tata Sons Limited (“Tata Sons”), Tata Teleservices, IDFC Private Equity Fund III (“IDFC”), Macquarie SBI Infrastructure Investments Pte Limited and SBI Macquarie Infrastructure Trust (collectively, the “Remaining Shareholders”).

The Shareholders Agreement also provides the Remaining Shareholders with put options, which allow them to sell outstanding shares of ATC TIPL to the Company, and the Company with call options, which allow it 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 requires classification as redeemable noncontrolling interests in the consolidated balance sheet, separate from equity.

The noncontrolling interests become redeemable after the passage of time, and therefore, the Company records the carrying amount of the noncontrolling interests outside of permanent equity 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 estimated redemption value. If required, the Company will adjust the redeemable noncontrolling interests to the estimated redemption value on each balance sheet date with changes in the estimated redemption value recognized as an adjustment to Net income attributable to noncontrolling interests. The Company adjusts the estimated redemption value of the noncontrolling interests based on the operating results of ATC TIPL and previously recorded adjustments to the estimated redemption value.

The put options may be exercised, requiring the Company to purchase the Remaining Shareholders’ equity interests, on specified dates through March 31, 2021. The price of the put options will be based on the fair market value of the exercising Remaining Shareholders’ 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 INR 216 per share.

During the year ended December 31, 2019, the Company redeemed 50% of Tata Teleservices and Tata Sons’ combined holdings of ATC TIPL and 100% of IDFC’s holdings of ATC TIPL, for a total consideration of INR 29.4 billion ($425.7 million at the date of redemption). As a result of the redemption, the Company’s controlling interest in ATC TIPL increased from 63% to 79% and the noncontrolling interest decreased from 37% to 21%.

F-47

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

In April 2019, Tata Teleservices and Tata Sons delivered notice of exercise of their put options with respect to 100% of their remaining holdings in ATC TIPL. The Company expects to complete the redemption of the put shares, subject to regulatory approval, for total consideration of INR 24.8 billion (approximately $347.6 million at the December 31, 2019 exchange rate) in the first half of 2020. After the completion of the redemption, the Company will hold an approximately 92% ownership interest in ATC TIPL.

Other Redeemable Noncontrolling Interests—During the year ended December 31, 2019, the Company entered into an agreement with MTN to acquire MTN’s noncontrolling interests in each of the Company’s joint ventures in Ghana and Uganda for total consideration of approximately $523.0 million. The transaction is expected to close in the first quarter of 2020, subject to regulatory approval and other closing conditions. In addition, the Company, through a subsidiary of ATC Europe, entered into an agreement with its local partners in France to form Eure-et-Loir Réseaux Mobiles SAS (“Eure-et-Loir”), a telecommunications infrastructure company that owns and operates wireless communications towers in France. The Company’s controlling interest in Eure-et-Loir is 51% with local partners holding a 49% noncontrolling interest. The agreement provides the local partners with put options, which allow them to sell outstanding shares of Eure-et-Loir to the Company, and the Company with call options, which allow it to buy the noncontrolling shares of Eure-et-Loir. 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 requires classification as redeemable noncontrolling interests in the consolidated balance sheet, separate from equity. The value of the Eure-et-Loir interests as of December 31, 2019 was $2.7 million.

The changes in Redeemable noncontrolling interests for the years ended December 31, 2019, 2018 and 2017 were as follows:

		Year Ended December 31,
		2019				2018				2017
Balance as of January 1,		$	1,004.8			$	1,126.2			$	1,091.3
Additions to redeemable noncontrolling interests		525.7				—				—
Net income (loss) attributable to noncontrolling interests		35.8				(87.9		)		(33.4		)
Adjustment to noncontrolling interest redemption value		(35.8		)		86.7				—
Adjustment to noncontrolling interest due to merger		—				(28.1		)		—
Purchase of redeemable noncontrolling interest		(425.7		)		—				—
Foreign currency translation adjustment attributable to noncontrolling interests		(8.3		)		(92.1		)		68.3
Balance as of December 31,		$	1,096.5			$	1,004.8			$	1,126.2

16. EQUITY

Dividends—The Company may pay dividends in cash or, subject to certain limitations, in shares of common stock or any combination of cash and shares of common stock.

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 the 2007 Plan. During the year ended December 31, 2019, the Company received an aggregate of $105.5 million in proceeds upon exercises of stock options and sales pursuant to the ESPP.

Stock Repurchase Programs—In March 2011, the Company’s Board of Directors approved a stock repurchase program, pursuant to which the Company is authorized to repurchase up to $1.5 billion of its common stock (the “2011 Buyback”). In December 2017, the Board of Directors approved an additional stock repurchase program, pursuant to which the Company is authorized to repurchase up to $2.0 billion of its common stock (the “2017 Buyback” and, together with the 2011 Buyback, the “Buyback Programs”).

During the year ended December 31, 2019, the Company repurchased 93,654 shares of its common stock under the 2011 Buyback for an aggregate of $19.6 million, including commissions and fees. As of December 31, 2019, the Company had repurchased a total of 14,097,197 shares of its common stock under the 2011 Buyback for an aggregate of $1.4 billion, including commissions and fees. There were no repurchases under the 2017 Buyback.

Under the Buyback Programs, the Company is authorized to purchase shares from time to time through open market purchases or in privately negotiated transactions not to exceed market prices and subject to market conditions and other factors. With

F-48

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

respect to open market purchases, the Company may use plans adopted in accordance with Rule 10b5-1 under the Exchange Act in accordance with securities laws and other legal requirements, which allows the Company to repurchase shares during periods when it may otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods.

The Company expects to fund any further repurchases of its common stock through a combination of cash on hand, cash generated by operations and borrowings under its credit facilities. Purchases under the Buyback Programs are subject to, among other things, the Company having available cash to fund repurchases.

Distributions—During the years ended December 31, 2019, 2018 and 2017, the Company declared the following cash distributions (per share data reflects actual amounts):

		For the year ended December 31,
		2019								2018								2017
		Distribution per share				Aggregate Payment Amount				Distribution per share				Aggregate Payment Amount				Distribution per share				Aggregate Payment Amount
Common Stock		$	3.78			$	1,672.8			$	3.15			$	1,389.8			$	2.62			$	1,122.5
Series A Preferred Stock (1)		$	—			$	—			$	—			$	—			$	2.63			$	15.8
Series B Preferred Stock (2)		$	—			$	—			$	13.75			$	18.9			$	55.00			$	75.6

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(1)	5.25% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share (the “Series A Preferred Stock”), which converted into shares of the Company’s common stock pursuant to the provisions of the Certificate of Designations governing the Series A Preferred Stock in 2017.

(2)	5.50% Mandatory Convertible Preferred Stock, Series B, par value $0.01 per share (the “Series B Preferred Stock”), which converted into shares of the Company’s common stock pursuant to the provisions of the Certificate of Designations governing the Series B Preferred Stock in 2018.

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,
		2019							2018							2017
		Per Share				%			Per Share				%			Per Share				%
Common Stock
	Ordinary dividend	$	3.7800		(1)	100.00	%		$	3.1500			100.00	%		$	2.6200			100.00	%
	Capital gains distribution	—				—			—				—			—				—
	Total	$	3.7800			100.00	%		$	3.1500			100.00	%		$	2.6200			100.00	%
Series A Preferred Stock
	Ordinary dividend	$	—			—	%		$	—			—	%		$	3.3643		(2)	100.00	%
	Capital gains distribution	—				—			—				—			—				—
	Total	$	—			—	%		$	—			—	%		$	3.3643			100.00	%
Series B Preferred Stock (3)
	Ordinary dividend	$	—			—	%		$	2.1314		(4)	100.00	%		$	6.5233		(5)	100.00	%
	Capital gains distribution	—				—			—				—			—				—
	Total	$	—			—	%		$	2.1314			100.00	%		$	6.5233			100.00	%

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(1)	Includes dividend declared on December 11, 2019 of $1.01 per share, which was paid on January 14, 2020 to common stockholders of record at the close of business on December 27, 2019.

(2)	Includes a deemed distribution as a result of a conversion rate adjustment triggered on April 27, 2017.

(3)	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.

(4)	Includes a deemed distribution as a result of a conversion rate adjustment triggered on January 18, 2018.

(5)	Includes a deemed distribution as a result of a conversion rate adjustment triggered on April 12, 2017.

The Company accrues distributions on unvested restricted stock units, which are payable upon vesting. The amount accrued for distributions payable related to unvested restricted stock units was $14.3 million and $13.7 million as of December 31, 2019 and 2018, respectively. During the year ended December 31, 2019, the Company paid $7.0 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

F-49

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

paying distributions, the amount, timing and frequency of which will be determined and subject to adjustment by the Company’s Board of Directors.

Dividend to noncontrolling interest— The Company’s joint ventures may, from time to time, declare dividends. During the year ended December 31, 2019, ATC Europe declared a dividend of EUR 24.5 million (approximately $27.0 million) payable in cash to the Company and PGGM in proportion to their respective equity interests in the joint venture. The dividend is payable on or before June 30, 2020 and is accrued for as of December 31, 2019.

17. OTHER OPERATING EXPENSE

Other operating expense consists primarily of impairment charges, net losses on sales or disposals of assets and other operating expense items. The Company records impairment charges to write down certain assets to their net realizable value after an indicator of impairment is identified and subsequent analysis determines that the asset is either partially recoverable or not recoverable. These assets consisted primarily of towers and related assets, which are typically assessed on an individual basis, network location intangibles, which relate directly to towers, and tenant-related intangibles, which are assessed on a tenant basis. Net losses on sales or disposals of assets primarily relate to certain non-core towers, other assets and miscellaneous items. Other operating expenses includes acquisition-related costs and integration costs.

Other operating expenses included the following for the years ended December 31,:

	2019 (1)				2018				2017 (2)
Impairment charges	$	94.2			$	394.0			$	211.4
Net losses on sales or disposals of assets	45.1				85.6				32.8
Other operating expenses	27.0				33.7				11.8
Total Other operating expenses	$	166.3			$	513.3			$	256.0

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(1)	For the year ended December 31, 2019, Other operating expenses includes $13.1 million of refunds related to pre-acquisition contingencies and settlements.

(2)	For the year ended December 31, 2017, Other operating expenses included refunds of acquisition costs and a charitable contribution.

Impairment charges included the following for the years ended December 31,:

	2019				2018 (1)				2017 (2)
Tower and network location intangible assets	$	77.4			$	284.9			$	108.7
Tenant relationships	—				107.3				100.1
Other (3)	16.8				1.8				2.6
Total impairment charges	$	94.2			$	394.0			$	211.4

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(1)	For the year ended December 31, 2018, impairment charges on tower and network location intangible assets included $258.3 million in India primarily related to carrier consolidation-driven churn events. In addition, the Company fully impaired the tenant relationship for Aircel Ltd., which resulted in an impairment charge of $107.3 million.

(2)	During the year ended December 31, 2017, $81.0 million of impairment charges on tower and network location intangible assets and all impairment charges on tenant relationships were related to carrier consolidation-driven churn in India.

(3)	For the year ended December 31, 2019, amount includes impairment charges related to right-of-use assets and land easements.

F-50

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

18. 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, (shares in thousands, except per share data):

	2019				2018				2017
Net income attributable to American Tower Corporation stockholders	$	1,887.8			$	1,236.4			$	1,238.9
Dividends on preferred stock	—				(9.4		)		(87.4		)
Net income attributable to American Tower Corporation common stockholders	$	1,887.8			$	1,227.0			$	1,151.5
Basic weighted average common shares outstanding	442,319				439,606				428,181
Dilutive securities	3,201				3,354				3,507
Diluted weighted average common shares outstanding	445,520				442,960				431,688
Basic net income attributable to American Tower Corporation common stockholders per common share	$	4.27			$	2.79			$	2.69
Diluted net income attributable to American Tower Corporation common stockholders per common share	$	4.24			$	2.77			$	2.67

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):

	2019			2018			2017
Restricted stock awards	2			—			3
Stock options	—			—			4
Preferred stock	—			1,456			14,040

19. 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—In March 2015, the Company entered into an agreement with various operating entities of Verizon Communications Inc. (“Verizon”) that currently provides for the lease, sublease or management of approximately 11,250 wireless communications sites 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 rights 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 that 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, that currently provides for the lease or sublease of approximately 2,200 towers commencing between December 2000 and August 2004. Substantially all of the towers are part of the Trust Securitizations. 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, 2019, the Company has purchased an aggregate of 228 of the subleased towers upon expiration of the applicable agreement, including 79 towers purchased during

F-51

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

the year ended December 31, 2019 for an aggregate purchase price of $40.2 million. The aggregate purchase option price for the remaining towers leased and subleased is $937.8 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, AT&T has the right to continue to lease the reserved space through June 30, 2020 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.

ALLTEL Transaction—In December 2000, the Company entered into an agreement with ALLTEL Communications, LLC, a predecessor entity to Verizon Wireless, 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 had the option to purchase each tower at the expiration of the applicable sublease. During the year ended December 31, 2016, the Company exercised the purchase options for 1,523 towers in a single closing and provided notice to the tower owner, Verizon’s assignee, of its intent to exercise the purchase options related to the remaining 243 towers. On August 30, 2019, the Company purchased the remaining 243 towers for an aggregate purchase price of $43.0 million in cash in lieu of shares of the Company’s common stock.

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. Taxing authorities may issue notices or assessments while audits are being conducted. In certain jurisdictions, taxing authorities may issue assessments with minimal examination. These notices and assessments do not represent amounts that the Company is obligated to pay and are often not reflective of the actual tax liability for which the Company will ultimately be liable. In the process of responding to assessments of taxes that the Company believes are not enforceable, the Company avails itself of both administrative and judicial remedies. The Company evaluates the circumstances of each notification or assessment based on the information available and, in those instances in which the Company does not anticipate a successful defense of positions taken in its tax filings, a liability is recorded in the appropriate amount based on the underlying assessment.

On December 5, 2016, the Company received an income tax assessment of Essar Telecom Infrastructure Private Limited (“ETIPL”) from the India Income Tax Department (the “Tax Department”) for the fiscal year ending 2008 in the amount of INR 4.75 billion ($69.8 million on the date of assessment) related to capital contributions. The Company challenged the assessment before the Office of Commissioner of Income Tax - Appeals, which ruled in the Company’s favor in January 2018. However, the Tax Department has appealed this ruling at a higher appellate authority. The Company estimates that there is a more likely than not probability that the Company’s position will be sustained upon appeal. Accordingly, no 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 with 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.

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. 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, 2019, is not aware of any agreements that could result in a material payment.

F-52

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

20. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information and non-cash investing and financing activities are as follows for the years ended December 31,:

	2019				2018				2017
Supplemental cash flow information:
Cash paid for interest	$	750.2			$	789.7			$	712.1
Cash paid for income taxes (net of refunds of $11.2, $25.0 and $20.7, respectively)	147.5				163.9				136.5
Non-cash investing and financing activities:
(Decrease) increase in accounts payable and accrued expenses for purchases of property and equipment and construction activities	(21.0		)		8.3				34.0
Purchases of property and equipment under finance leases, perpetual easements and capital leases	81.3				57.8				54.8
Fair value of debt assumed through acquisitions	329.8				—				—
Acquisition of Commercialization Rights (1)	—				24.8				—
Conversion of third-party debt to equity	—				—				48.2
Debt financed acquisition of communication sites	—				54.2				—

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(1) Related to the note extinguishment with TV Azteca, S.A. de C.V. in 2018.

21. 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.

During the fourth quarter of 2019, as a result of recent acquisitions, including the Eaton Towers Acquisition, and changes to its organizational structure, the Company reviewed and changed its reportable segments to divide its EMEA property segment into two segments: Africa property and Europe property. Prior to this revision, the Company operated in five business segments: (i) U.S. property, (ii) Asia property (iii) EMEA property, (iv) Latin America property and (v) services. The change is consistent with how the chief operating decision maker reviews financial performance and operating and business management strategies for each of the six segments. The change in reportable segments had no impact on the Company’s consolidated financial statements for any periods. Historical financial information included in this Annual Report on Form 10-K has been adjusted to reflect the change in reportable segments.

As of December 31, 2019, the Company’s property operations consisted of the following:

•	U.S.: property operations in the United States;

•	Asia: property operations in India;

•	Africa: property operations in Burkina Faso, Ghana, Kenya, Niger, Nigeria, South Africa and Uganda;

•	Europe: property operations in France and Germany; and

•	Latin America: property operations in Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay and Peru.

The Company’s services segment offers tower-related services in the United States, including AZP and structural analysis, which primarily support its site leasing business, including the addition of new tenants and equipment on its sites. The services segment is a strategic business unit that offers different services from, and requires different resources, skill sets and marketing strategies than, the property operating segments.

The accounting policies applied in compiling segment information below are similar to those described in note 1. 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, for periods through September 30, 2018, the Latin America property segment gross margin and segment operating profit also included Interest income (expense), TV

F-53

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

Azteca, net. These measures of segment gross margin and segment operating profit are also before Interest income, Interest expense, Gain (loss) on retirement of long-term obligations, Other income (expense), Net income (loss) attributable to noncontrolling interests and Income tax benefit (provision). The categories of expenses indicated above, such as depreciation, have been excluded from segment operating performance as they are not considered in the review of information or the evaluation of results by management. There are no significant revenues resulting from transactions between the Company’s operating segments. All intercompany transactions are eliminated to reconcile segment results and assets to the consolidated statements of operations and consolidated balance sheets.

Summarized financial information concerning the Company’s reportable segments for the years ended December 31, 2019, 2018 and 2017 is shown in the following tables. The “Other” column (i) represents amounts excluded from specific segments, such as business development operations, stock-based compensation expense and corporate expenses included in Selling, general, administrative and development expense; Other operating expenses; Interest income; Interest expense; Gain (loss) on retirement of long-term obligations; and Other income (expense), and (ii) reconciles segment operating profit to Income from continuing operations before income taxes.

		Property																				Total Property				Services				Other				Total
Year ended December 31, 2019		U.S.				Asia				Africa				Europe				Latin America
Segment revenues		$	4,188.7			$	1,217.0			$	583.9			$	134.6			$	1,340.7			$	7,464.9			$	115.4							$	7,580.3
Segment operating expenses (1)		807.9				715.9				209.0				27.8				411.3				2,171.9				42.1								2,214.0
Segment gross margin		3,380.8				501.1				374.9				106.8				929.4				5,293.0				73.3								5,366.3
Segment selling, general, administrative and development expense (1)		175.5				99.9				53.7				23.2				101.0				453.3				12.0								465.3
Segment operating profit		$	3,205.3			$	401.2			$	321.2			$	83.6			$	828.4			$	4,839.7			$	61.3							$	4,901.0
Stock-based compensation expense																														$	111.4			111.4
Other selling, general, administrative and development expense																														156.5				156.5
Depreciation, amortization and accretion																														1,778.4				1,778.4
Other expense (2)																														938.3				938.3
Income from continuing operations before income taxes																																		$	1,916.4
Capital expenditures (3) (4)		$	359.5			$	134.5			$	258.5			$	13.2			$	260.4			$	1,026.1			$	—			$	12.8			$	1,038.9

---

(1)	Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $2.8 million and $108.6 million, respectively.

(2)	Primarily includes interest expense.

(3)	Includes $18.0 million of finance lease payments included in Repayments of notes payable, credit facilities, term loan, senior notes, secured debt and finance leases in the cash flows from financing activities in the Company’s consolidated statements of cash flows.

(4)	Includes $29.6 million of perpetual land easement payments reported in Deferred financing costs and other financing activities in the cash flows from financing activities in the Company’s consolidated statements of cash flows.

F-54

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

		Property																				Total Property				Services				Other				Total
Year ended December 31, 2018		U.S.				Asia				Africa				Europe				Latin America
Segment revenues (1)		$	3,822.1			$	1,540.5			$	545.5			$	141.8			$	1,264.8			$	7,314.7			$	125.4							$	7,440.1
Segment operating expenses (2)		771.0				710.9				208.0				30.1				406.3				2,126.3				48.2								2,174.5
Interest expense, TV Azteca, net		—				—				—				—				(0.1		)		(0.1		)		—								(0.1		)
Segment gross margin		3,051.1				829.6				337.5				111.7				858.4				5,188.3				77.2								5,265.5
Segment selling, general, administrative and development expense (2)		165.2				110.7				48.0				21.1				83.5				428.5				14.4								442.9
Segment operating profit		$	2,885.9			$	718.9			$	289.5			$	90.6			$	774.9			$	4,759.8			$	62.8							$	4,822.6
Stock-based compensation expense																														$	137.5			137.5
Other selling, general, administrative and development expense																														156.1				156.1
Depreciation, amortization and accretion																														2,110.8				2,110.8
Other expense (3)																														1,263.6				1,263.6
Income from continuing operations before income taxes																																		$	1,154.6
Capital expenditures (4)		$	376.9			$	101.0			$	212.5			$	20.2			$	220.7			$	931.3			$	—			$	13.9			$	945.2

---

(1)	Asia segment revenues include a net impact of $333.7 million as a result of the settlement payment received from Tata in the fourth quarter of 2018.

(2)	Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $3.3 million and $134.2 million, respectively.

(3)	Primarily includes interest expense and $394.0 million in impairment charges.

(4)	Includes $32.0 million of capital lease payments included in Repayments of notes payable, credit facilities, term loan, senior notes, secured debt and capital leases in the cash flows from financing activities in the Company’s consolidated statements of cash flows.

F-55

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

		Property																				Total Property				Services				Other				Total
Year ended December 31, 2017		U.S.				Asia				Africa				Europe				Latin America
Segment revenues		$	3,605.7			$	1,164.4			$	503.6			$	122.6			$	1,169.6			$	6,565.9			$	98.0							$	6,663.9
Segment operating expenses (1)		746.5				649.0				212.9				25.4				386.1				2,019.9				33.8								2,053.7
Interest income, TV Azteca, net		—				—				—				—				10.8				10.8				—								10.8
Segment gross margin		2,859.2				515.4				290.7				97.2				794.3				4,556.8				64.2								4,621.0
Segment selling, general, administrative and development expense (1)		151.4				82.4				47.3				20.6				77.5				379.2				13.7								392.9
Segment operating profit		$	2,707.8			$	433.0			$	243.4			$	76.6			$	716.8			$	4,177.6			$	50.5							$	4,228.1
Stock-based compensation expense																														$	108.5			108.5
Other selling, general, administrative and development expense																														138.5				138.5
Depreciation, amortization and accretion																														1,715.9				1,715.9
Other expense (2)																														1,009.1				1,009.1
Income from continuing operations before income taxes																																		$	1,256.1
Capital expenditures (3)		$	360.6			$	118.0			$	124.1			$	17.6			$	197.4			$	817.7			$	—			$	17.7			$	835.4

---

(1)	Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $2.9 million and $105.6 million, respectively.

(2)	Primarily includes interest expense.

(3)	Includes $31.8 million of capital lease payments included in Repayments of notes payable, credit facilities, term loan, senior notes, secured debt and capital leases in the cash flows from financing activities in the Company’s consolidated statements of cash flows.

Additional information relating to the total assets of the Company’s operating segments is as follows for the years ended December 31,:

	2019 (1)				2018				2017
U.S. property	$	22,624.6			$	18,782.0			$	19,032.6
Asia property (2)	5,307.8				4,938.8				4,770.8
Africa property (2)	4,711.1				1,929.7				1,673.4
Europe property (2)	1,535.3				1,438.1				1,540.2
Latin America property (2)	8,125.5				5,594.7				5,868.4
Services	26.8				46.3				42.3
Other (3)	470.5				280.8				286.6
Total assets	$	42,801.6			$	33,010.4			$	33,214.3

---

(1)	Total assets in each of the Company’s property segments includes the Right-of-use asset recognized in connection with the Company’s adoption of the new lease accounting standard.

(2)	Balances are translated at the applicable period end exchange rate, which may impact comparability between periods.

(3)	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.

F-56

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

Summarized geographic information related to the Company’s operating revenues for the years ended December 31, 2019, 2018 and 2017 and long-lived assets as of December 31, 2019 and 2018 is as follows:

	2019				2018				2017
Operating Revenues:
United States	$	4,304.1			$	3,947.5			$	3,703.7
Asia (1):
India	1,217.0				1,540.5				1,164.4
Africa (1):
Burkina Faso (2)	—				—				—
Ghana	124.3				125.4				122.9
Kenya	27.3				7.0				—
Niger (2)	—				—				—
Nigeria	229.9				220.7				213.9
South Africa	129.1				125.3				106.5
Uganda	73.3				67.1				60.3
Europe (1):
France	68.0				72.7				59.5
Germany	66.6				69.1				63.1
Latin America (1):
Argentina	17.3				16.0				15.9
Brazil	605.5				595.5				620.1
Chile	43.3				44.2				40.4
Colombia	102.1				103.8				89.3
Costa Rica	21.1				18.4				19.4
Mexico	515.3				456.5				364.3
Paraguay	12.6				10.4				2.7
Peru	23.5				20.0				17.5
Total International	3,276.2				3,492.6				2,960.2
Total operating revenues	$	7,580.3			$	7,440.1			$	6,663.9

---

(1)	Balances are translated at the applicable exchange rate, which may impact comparability between periods.

(2)	The Company launched operations in Burkina Faso and Niger through the Eaton Towers Acquisition, which closed on December 31, 2019.

F-57

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

	2019				2018
Long-Lived Assets (1):
United States	$	16,578.7			$	16,543.7
Asia (2):
India	3,708.8				3,947.8
Africa (2):
Burkina Faso	275.3				—
Ghana	671.0				159.2
Kenya	761.7				190.0
Niger	199.8				—
Nigeria	648.6				606.5
South Africa	409.4				342.5
Uganda	847.3				138.7
Europe (2):
France	917.1				963.8
Germany	357.3				388.5
Latin America (2):
Argentina	100.0				81.6
Brazil	2,138.4				2,288.1
Chile	437.6				129.7
Colombia	375.2				381.6
Costa Rica	124.1				119.1
Mexico	1,524.9				1,421.3
Paraguay	111.3				107.4
Peru	394.6				113.8
Total International	14,002.4				11,379.6
Total long-lived assets	$	30,581.1			$	27,923.3

---

(1)	Includes Property and equipment, net, Goodwill and Other intangible assets, net.

(2)	Balances are translated at the applicable period end exchange rate, which may impact comparability between periods.

The following tenants within the property and services segments individually accounted for 10% or more of the Company’s consolidated operating revenues for the years ended December 31,:

	2019			2018			2017
AT&T	22	%		19	%		19	%
Verizon Wireless	15	%		15	%		16	%
T-Mobile	10	%		9	%		9	%

22. RELATED PARTY TRANSACTIONS

During the years ended December 31, 2019, 2018 and 2017, the Company had no significant related party transactions.

F-58

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

23. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial data for the years ended December 31, 2019 and 2018 is as follows (in millions, except per share data):

	Three Months Ended																Year Ended December 31,
	March 31,				June 30,				September 30,				December 31,
2019:
Operating revenues	$	1,813.4			$	1,889.6			$	1,953.6			$	1,923.7			$	7,580.3
Costs of operations (1)	543.4				563.3				559.9				550.2				2,216.8
Operating income	614.9				683.9				728.3				661.3				2,688.4
Net income	407.6				434.3				505.3				569.4				1,916.6
Net income attributable to American Tower Corporation stockholders	397.4				429.1				498.6				562.7				1,887.8
Net income attributable to American Tower Corporation common stockholders	397.4				429.1				498.6				562.7				1,887.8
Basic net income per share attributable to American Tower Corporation common stockholders	0.90				0.97				1.13				1.27				4.27
Diluted net income per share attributable to American Tower Corporation common stockholders	0.89				0.96				1.12				1.26				4.24

	Three Months Ended																Year Ended December 31,
	March 31,				June 30,				September 30,				December 31,
2018:
Operating revenues	$	1,741.8			$	1,780.9			$	1,785.5			$	2,131.9			$	7,440.1
Costs of operations (1)	519.9				560.3				556.7				540.9				2,177.8
Operating income	402.9				546.0				567.2				388.9				1,905.0
Net income	280.3				314.4				377.3				292.7				1,264.7
Net income attributable to American Tower Corporation stockholders	285.2				306.7				366.9				277.6				1,236.4
Dividends on preferred stock	(9.4		)		—				—				—				(9.4		)
Net income attributable to American Tower Corporation common stockholders	275.8				306.7				366.9				277.6				1,227.0
Basic net income per share attributable to American Tower Corporation common stockholders	0.63				0.69				0.83				0.63				2.79
Diluted net income per share attributable to American Tower Corporation common stockholders	0.63				0.69				0.83				0.62				2.77

---

(1) Represents Operating expenses, exclusive of Depreciation, amortization and accretion, Selling, general, administrative and development expense, and Other operating expenses.

24. SUBSEQUENT EVENTS

2.400% Senior Notes and 2.900% Senior Notes Offering—On January 10, 2020, the Company completed a registered public offering of $750.0 million aggregate principal amount of 2.400% senior unsecured notes due 2025 and $750.0 million aggregate principal amount of 2.900% senior unsecured notes due 2030. The net proceeds from this offering were approximately $1,483.4 million, after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2019 Credit Facility.

Repayment of 5.900% Senior Notes—On January 15, 2020, the Company redeemed all of the $500.0 million aggregate principal amount of 5.900% senior unsecured notes due 2021 (the “5.900% Notes”) at a price equal to 106.7090% of the

F-59

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, unless otherwise disclosed)

principal amount, plus accrued and unpaid interest up to, but excluding January 15, 2020, for an aggregate redemption price of approximately $539.6 million, including $6.1 million in accrued and unpaid interest. The Company recorded a loss on retirement of long-term obligations of $34.6 million, which includes prepayment consideration of $33.5 million and the associated unamortized discount and deferred financing costs. The redemption was funded with borrowings under the 2019 Credit Facility and cash on hand. Upon completion of the repayment, none of the 5.900% Notes remained outstanding.

2020 Term Loan—On February 13, 2020, the Company entered into a $750.0 million unsecured term loan (the “2020 Term Loan”), the net proceeds of which were used, together with borrowings under the 2019 Credit Facility and cash on hand, to repay all outstanding indebtedness under the 2019 364-Day Term Loan. The 2020 Term Loan matures on February 12, 2021. The Company has the option of choosing either a defined base rate or LIBOR as the applicable base rate for borrowings under the 2020 Term Loan. The interest rate on the 2020 Term Loan is 0.65% above LIBOR for LIBOR based borrowings or 0.00% above the defined base rate for base rate borrowings. Any outstanding principal and accrued but unpaid interest will be due and payable in full at maturity. The 2020 Term Loan does 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 agreement for the 2020 Term Loan contains certain reporting, information, financial and operating covenants and other restrictions (including limitations on additional debt, guaranties, sales of assets and liens) with which the Company must comply. Any failure to comply with the financial and operating covenants of the loan agreement 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.

F-60

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

SCHEDULE III—SCHEDULE OF REAL ESTATE

AND ACCUMULATED DEPRECIATION

(dollars in millions)

Description			Encumbrances					Initial cost to company		Cost capitalized subsequent to acquisition		Gross amount carried at close of current period					Accumulated depreciation at close of current period				Date of construction		Date acquired		Life on which depreciation in latest income statements is computed
177,746	Sites (1)		$	2,736.5		(2)		(3)		(3)		$	17,429.3		(4)		$	(6,382.2	)		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 $2.7 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.

	2019				2018				2017
Gross amount at beginning	$	15,960.1			$	15,349.0			$	14,277.0
Additions during period:
Acquisitions	887.0				721.4				499.7
Discretionary capital projects (1)	258.1				173.5				120.7
Discretionary ground lease purchases (2)	189.8				180.4				150.4
Redevelopment capital expenditures (3)	213.6				177.3				138.8
Capital improvements (4)	161.2				94.0				65.6
Start-up capital expenditures (5)	71.3				113.1				158.1
Other (6)	45.2				(3.0		)		106.4
Total additions	1,826.2				1,456.7				1,239.7
Deductions during period:
Cost of real estate sold or disposed	(304.6		)		(395.7		)		(246.5		)
Other (7)	(52.4		)		(449.9		)		78.8
Total deductions:	(357.0		)		(845.6		)		(167.7		)
Balance at end	$	17,429.3			$	15,960.1			$	15,349.0

	2019				2018				2017
Gross amount of accumulated depreciation at beginning	$	(5,724.7	)		$	(5,181.2	)		$	(4,548.1	)
Additions during period:
Depreciation	(768.4		)		(751.4		)		(718.7		)
Other	—				—				—
Total additions	(768.4		)		(751.4		)		(718.7		)
Deductions during period:
Amount of accumulated depreciation for assets sold or disposed	121.4				129.3				100.7
Other (7)	(10.5		)		78.6				(15.1		)
Total deductions	110.9				207.9				85.6
Balance at end	$	(6,382.2	)		$	(5,724.7	)		$	(5,181.2	)

---

(1)	Includes amounts incurred primarily for the construction of new sites.

(2)	Includes amounts incurred to purchase or otherwise secure the land under communications sites.

(3)	Includes amounts incurred to increase the capacity of existing sites, which results in new incremental tenant revenue.

(4)	Includes amounts incurred to enhance existing sites by adding additional functionality, capacity or general asset improvements.

(5)	Includes amounts incurred in connection with acquisitions or new market launches. Start-up capital expenditures includes non-recurring expenditures contemplated in acquisitions, new market launch business cases or initial deployment of new technologies or innovation solutions that lead to an increase in site-level cash flow generation.

(6)	Primarily includes regional improvements and other additions.

(7)	Primarily includes foreign currency exchange rate fluctuations and other deductions.

F-61