Item 1. UNAUDITED CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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Item 1. UNAUDITED CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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


	September 30, 2021		December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,277.2	$	1,746.3
Restricted cash	422.1		115.1

Accounts receivable, net	750.6		511.6
Prepaid and other current assets	592.0		532.6

Total current assets	5,041.9		2,905.6
PROPERTY AND EQUIPMENT, net	14,268.1		12,808.7
GOODWILL	10,480.8		7,282.7
OTHER INTANGIBLE ASSETS, net	18,768.4		13,839.8
DEFERRED TAX ASSET	150.2		123.1
DEFERRED RENT ASSET	2,403.3		2,084.3
RIGHT-OF-USE ASSET	9,021.9		7,789.2
NOTES RECEIVABLE AND OTHER NON-CURRENT ASSETS	395.4		400.1
TOTAL	$	60,530.0	$	47,233.5
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	217.4	$	139.1
Accrued expenses	1,165.4		1,043.7
Distributions payable	602.2		544.6
Accrued interest	250.2		207.8
Current portion of operating lease liability	734.3		539.9
Current portion of long-term obligations	2,106.4		789.8
Unearned revenue	1,448.2		390.6
Total current liabilities	6,524.1		3,655.5
LONG-TERM OBLIGATIONS	31,439.0		28,497.7
OPERATING LEASE LIABILITY	7,863.2		6,884.4
ASSET RETIREMENT OBLIGATIONS	1,930.2		1,571.3
DEFERRED TAX LIABILITY	1,927.5		859.5
OTHER NON-CURRENT LIABILITIES	1,157.6		984.6
Total liabilities	50,841.6		42,453.0
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS	211.4		212.1
EQUITY (shares in thousands):



Common stock: $.01 par value; 1,000,000 shares authorized; 466,324 and 455,245 shares issued; and 455,409 and 444,330 shares outstanding, respectively	4.7		4.6
Additional paid-in capital	12,081.3		10,473.7
Distributions in excess of earnings	(960.4)		(1,343.0)
Accumulated other comprehensive loss	(4,432.0)		(3,759.4)
Treasury stock (10,915 shares at cost)	(1,282.4)		(1,282.4)
Total American Tower Corporation equity	5,411.2		4,093.5
Noncontrolling interests	4,065.8		474.9
Total equity	9,477.0		4,568.4
TOTAL	$	60,530.0	$	47,233.5

See accompanying notes to unaudited consolidated and condensed consolidated financial statements.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
REVENUES:
Property	$	2,368.9	$	1,987.6	$	6,731.6	$	5,854.0
Services	85.4		25.3		180.1		65.0
Total operating revenues	2,454.3		2,012.9		6,911.7		5,919.0
OPERATING EXPENSES:
Costs of operations (exclusive of items shown separately below):
Property	693.4		552.1		1,880.0		1,626.5
Services	30.9		10.5		66.5		28.1
Depreciation, amortization and accretion	611.4		473.9		1,688.7		1,401.1
Selling, general, administrative and development expense	205.9		176.0		595.7		582.4
Other operating expenses	85.2		15.3		175.4		67.7
Total operating expenses	1,626.8		1,227.8		4,406.3		3,705.8
OPERATING INCOME	827.5		785.1		2,505.4		2,213.2
OTHER INCOME (EXPENSE):

Interest income	9.4		9.7		28.4		28.2
Interest expense	(226.1)		(190.9)		(646.8)		(597.4)
Loss on retirement of long-term obligations	—		(37.2)		(25.7)		(71.8)
Other income (expense) (including foreign currency gains (losses) of $180.5, $(49.4), $422.1, and $(152.7) respectively)	166.8		(64.5)		439.6		(170.8)
Total other expense	(49.9)		(282.9)		(204.5)		(811.8)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	777.6		502.2		2,300.9		1,401.4
Income tax provision	(51.4)		(39.3)		(174.5)		(71.5)
NET INCOME	726.2		462.9		2,126.4		1,329.9
Net (income) loss attributable to noncontrolling interests	(3.2)		1.5		(12.1)		(4.4)


NET INCOME ATTRIBUTABLE TO AMERICAN TOWER CORPORATION COMMON STOCKHOLDERS	$	723.0	$	464.4	$	2,114.3	$	1,325.5
NET INCOME PER COMMON SHARE AMOUNTS:
Basic net income attributable to American Tower Corporation common stockholders	$	1.59	$	1.05	$	4.70	$	2.99
Diluted net income attributable to American Tower Corporation common stockholders	$	1.58	$	1.04	$	4.68	$	2.97
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in thousands):
BASIC	455,224		443,766		450,148		443,420
DILUTED	456,977		446,156		451,981		446,008

See accompanying notes to unaudited consolidated and condensed consolidated financial statements.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	726.2	$	462.9	$	2,126.4	$	1,329.9
Other comprehensive income (loss):
Changes in fair value of cash flow hedges, each net of tax expense of $0	—		(0.1)		(0.0)		(0.2)
Reclassification of unrealized losses on cash flow hedges to net income, each net of tax expense of $0	—		0.1		0.1		0.2


Foreign currency translation adjustments, net of tax expense (benefit) of $0.0, $(0.0), $(0.0) and $(0.0), respectively.	(622.0)		115.0		(826.9)		(1,222.7)
Other comprehensive (loss) income	(622.0)		115.0		(826.8)		(1,222.7)
Comprehensive income	104.2		577.9		1,299.6		107.2
Comprehensive loss (income) attributable to noncontrolling interests	89.7		(30.2)		94.6		(7.1)
Allocation of accumulated other comprehensive income (loss) resulting from purchases of noncontrolling interest and redeemable noncontrolling interests	—		—		47.5		(142.2)
Comprehensive income (loss) attributable to American Tower Corporation stockholders	$	193.9	$	547.7	$	1,441.7	$	(42.1)

See accompanying notes to unaudited consolidated and condensed consolidated financial statements.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Nine Months Ended September 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,126.4	$	1,329.9
Adjustments to reconcile net income to cash provided by operating activities
Depreciation, amortization and accretion	1,688.7		1,401.1
Stock-based compensation expense	98.0		99.0
Loss on early retirement of long-term obligations	25.7		71.8
Other non-cash items reflected in statements of operations	(340.8)		248.1
Increase in net deferred rent balances	(324.3)		(178.9)
Right-of-use asset and Operating lease liability, net	13.9		0.2
Changes in unearned revenue	995.1		12.0
Increase in assets	(201.6)		(148.9)
Increase (decrease) in liabilities	59.9		(85.2)
Cash provided by operating activities	4,141.0		2,749.1
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchase of property and equipment and construction activities	(916.7)		(668.8)
Payments for acquisitions, net of cash acquired	(9,595.3)		(333.6)

Proceeds from sale of short-term investments and other non-current assets	13.8		14.7
Payment for investments in equity securities	(25.0)		—
Deposits and other	(1.3)		17.1
Cash used for investing activities	(10,524.5)		(970.6)
CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings under credit facilities	7,666.9		5,380.4
Proceeds from issuance of senior notes, net	5,609.4		6,232.1
Proceeds from term loans	2,347.0		1,940.0


Repayments of notes payable, credit facilities, senior notes, secured debt, term loans and finance leases	(10,752.8)		(12,918.1)
Distributions to noncontrolling interest holders	(223.1)		(13.8)

Contributions from noncontrolling interest holders	3,078.2		—
Purchases of common stock	—		(56.0)
Proceeds from stock options and employee stock purchase plan	60.4		82.5
Distributions paid on common stock	(1,674.4)		(1,421.8)

Proceeds from the issuance of common stock, net	2,361.8		—

Payment for early retirement of long-term obligations	(61.9)		(68.2)
Deferred financing costs and other financing activities	(126.2)		(152.1)
Purchase of redeemable noncontrolling interest	(2.5)		(524.4)

Cash provided by (used for) financing activities	8,282.8		(1,519.4)
Net effect of changes in foreign currency exchange rates on cash and cash equivalents, and restricted cash	(61.4)		(106.9)
NET INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH	1,837.9		152.2
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	1,861.4		1,578.0
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	3,699.3	$	1,730.2
CASH PAID FOR INCOME TAXES (NET OF REFUNDS OF $35.2 AND $24.2, RESPECTIVELY)	$	121.1	$	86.0
CASH PAID FOR INTEREST	$	576.9	$	643.4
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchases of property and equipment under finance leases and perpetual easements	$	42.2	$	48.7
Decrease in accounts payable and accrued expenses for purchases of property and equipment and construction activities	$	(0.4)	$	(16.7)
Settlement of third-party debt	$	(9.0)	$	(5.0)

See accompanying notes to unaudited consolidated and condensed consolidated financial statements.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in millions, share counts in thousands)


	Common Stock	Treasury Stock			Additional Paid-in Capital	Accumulated Other Comprehensive Loss		Distributions in Excess of Earnings		Noncontrolling Interests		Total Equity
Three Months Ended September 30, 2020 and 2021		Issued Shares	Amount		Shares	Amount
BALANCE, JULY 1, 2020		454,476	$	4.5	(10,915)	$	(1,282.4)	$	10,297.8	$	(4,274.5)	$	(1,125.1)	$	440.0	$	4,060.3
Stock-based compensation related activity		629	0.0		—	—		71.8		—		—		—		71.8




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		—	—		—	—		—		0.1		—		—		0.1
Foreign currency translation adjustment, net of tax		—	—		—	—		—		83.3		—		18.9		102.2


Distributions to noncontrolling interest holders		—	—		—	—		—		—		—		(0.2)		(0.2)


Common stock distributions declared		—	—		—	—		—		—		(508.1)		—		(508.1)

Net income (loss)		—	—		—	—		—		—		464.4		(1.3)		463.1
BALANCE, SEPTEMBER 30, 2020		455,105	$	4.5	(10,915)	$	(1,282.4)	$	10,369.6	$	(4,191.2)	$	(1,168.8)	$	457.4	$	4,189.1

BALANCE, JULY 1, 2021		465,946	$	4.7	(10,915)	$	(1,282.4)	$	12,019.8	$	(3,902.9)	$	(1,085.0)	$	1,069.2	$	6,823.4
Stock-based compensation related activity		378	0.0		—	—		61.5		—		—		—		61.5






Foreign currency translation adjustment, net of tax		—	—		—	—		—		(529.1)		—		(93.2)		(622.3)

Contributions from noncontrolling interest holders		—	—		—	—		—		—		—		3,078.2		3,078.2
Distributions to noncontrolling interest holders		—	—		—	—		—		—		—		(0.1)		(0.1)
Purchase of noncontrolling interest		—	—		—	—		—		—		—		10.2		10.2


Common stock distributions declared		—	—		—	—		—		—		(598.4)		—		(598.4)

Net income		—	—		—	—		—		—		723.0		1.5		724.5
BALANCE, SEPTEMBER 30, 2021		466,324	$	4.7	(10,915)	$	(1,282.4)	$	12,081.3	$	(4,432.0)	$	(960.4)	$	4,065.8	$	9,477.0

See accompanying notes to unaudited consolidated and condensed consolidated financial statements.










































	Common Stock	Treasury Stock			Additional Paid-in Capital	Accumulated Other Comprehensive Loss		Distributions in Excess of Earnings		Noncontrolling Interests		Total Equity
Nine Months Ended September 30, 2020 and 2021		Issued Shares	Amount		Shares	Amount
BALANCE, JANUARY 1, 2020		453,541	$	4.5	(10,651)	$	(1,226.4)	$	10,117.7	$	(2,823.6)	$	(1,016.8)	$	435.0	$	5,490.4
Stock-based compensation related activity		1,526	0.0		—	—		102.8		—		—		—		102.8
Issuance of common stock- stock purchase plan		38	0.0		—	—		6.9		—		—		—		6.9


Treasury stock activity		—	—		(264)	(56.0)		—		—		—		—		(56.0)
Changes in fair value of cash flow hedges, net of tax		—	—		—	—		—		(0.2)		—		—		(0.2)
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		—	—		—	—		—		(1,225.4)		—		21.1		(1,204.3)


Distributions to noncontrolling interest holders		—	—		—	—		—		—		—		(1.9)		(1.9)
Purchase of redeemable noncontrolling interest		—	—		—	—		142.2		(142.2)		—		—		—

Common stock distributions declared		—	—		—	—		—		—		(1,477.5)		—		(1,477.5)

Net income		—	—		—	—		—		—		1,325.5		3.2		1,328.7
BALANCE, SEPTEMBER 30, 2020		455,105	$	4.5	(10,915)	$	(1,282.4)	$	10,369.6	$	(4,191.2)	$	(1,168.8)	$	457.4	$	4,189.1

BALANCE, JANUARY 1, 2021		455,245	$	4.6	(10,915)	$	(1,282.4)	$	10,473.7	$	(3,759.4)	$	(1,343.0)	$	474.9	$	4,568.4
Stock-based compensation related activity		1,115	0.0		—	—		99.9		—		—		—		99.9
Issuance of common stock- stock purchase plan		38	0.0		—	—		7.7		—		—		—		7.7
Issuance of common stock		9,900	0.1		—	—		2,361.7		—		—		—		2,361.8


Changes in fair value of cash flow hedges, net of tax		—	—		—	—		—		(0.0)		—		—		(0.0)
Reclassification of unrealized losses on cash flow hedges to net income, net of tax		—	—		—	—		—		0.1		—		—		0.1
Foreign currency translation adjustment, net of tax		—	—		—	—		—		(720.2)		—		(103.3)		(823.5)
Adjustment to noncontrolling interest		—	—		—	—		(648.4)		47.4		—		601.0		—
Contributions from noncontrolling interest holders		—	—		—	—		—		—		—		3,078.2		3,078.2
Distributions to noncontrolling interest holders		—	—		—	—		(214.9)		—		—		(0.4)		(215.3)
Redemption of noncontrolling interest		26	0.0		—	—		1.7		—		—		(1.7)		—
Purchase of redeemable noncontrolling interest		—	—		—	—		(0.1)		0.1		—		—		—
Purchase of noncontrolling interest		—	—		—	—		—		—		—		10.2		10.2
Common stock distributions declared		—	—		—	—		—		—		(1,731.7)		—		(1,731.7)

Net income		—	—		—	—		—		—		2,114.3		6.9		2,121.2
BALANCE, SEPTEMBER 30, 2021		466,324	$	4.7	(10,915)	$	(1,282.4)	$	12,081.3	$	(4,432.0)	$	(960.4)	$	4,065.8	$	9,477.0

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated and condensed consolidated financial statements have been prepared by American Tower Corporation (together with its subsidiaries, “ATC” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial information included herein is unaudited. However, the Company believes that all adjustments, which are of a normal and recurring nature, considered necessary for a fair presentation of its financial position and results of operations for such periods have been included herein. The consolidated and condensed consolidated financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the entire year.

Principles of Consolidation and Basis of Presentation—The accompanying consolidated and condensed 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 September 30, 2021, the Company holds (i) a 92% controlling interest in ATC Telecom Infrastructure Private Limited (“ATC TIPL”), formerly Viom Networks Limited (“Viom”), in India, (ii) a 52% controlling interest in subsidiaries whose holdings consist of the Company’s operations in France, Germany, Poland and Spain (such subsidiaries collectively, “ATC Europe”) (Allianz and CDPQ (each as defined in note 12) hold the noncontrolling interests), and (iii) a 51% controlling interest in a joint venture whose holdings consist of the Company’s operations in Bangladesh (Confidence Tower Holdings Ltd. (“Confidence Group”) holds the noncontrolling interest). As of September 30, 2021, ATC Europe holds an 87% and an 83% controlling interest in subsidiaries that consist of the Company’s operations in Germany and Spain, respectively (PGGM holds the noncontrolling interests). See note 12 for a discussion of changes to the Company’s noncontrolling interests during the three and nine months ended September 30, 2021.

Reportable Segments— During the fourth quarter of 2020, as a result of the Company’s acquisition of InSite Wireless Group, LLC (“InSite,” and the acquisition, the “InSite Acquisition”), the Company updated its reportable segments to rename U.S. property and Asia property to U.S. & Canada property and Asia-Pacific property, respectively. The Company continues to report its results in six segments – U.S. & Canada property, Asia-Pacific property, Africa property, Europe property, Latin America property and services, which are discussed further in note 16. The change in reportable segment names is solely reflective of the inclusion of Canada and Australia in the Company’s business operations, as a result of the InSite Acquisition, and had no impact on the Company’s consolidated financial statements or historical segment financial information for any prior periods.

Significant Accounting Policies—The Company’s significant accounting policies are described in note 1 to the Company’s consolidated financial statements included in the 2020 Form 10-K. There have been no material changes to the Company’s significant accounting policies during the nine months ended September 30, 2021.

Cash and Cash Equivalents and Restricted Cash—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 statement of cash flows is as follows:


	Nine Months Ended September 30,
	2021		2020
Cash and cash equivalents	$	3,277.2	$	1,626.0
Restricted cash	422.1		104.2
Total cash, cash equivalents and restricted cash	$	3,699.3	$	1,730.2

The increase in restricted cash during the nine months ended September 30, 2021 is due to advance payments from a tenant.

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

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

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 distributed antenna system (“DAS”) networks and fiber and other related assets results from agreements with tenants that are generally not accounted for as leases.

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 generally require that the Company provide the tenant the right to use available capacity on the 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. There were no material changes in the receivables, contract assets and contract liabilities from contracts with tenants for the three and nine months ended September 30, 2021.

Services revenue—The Company offers tower-related services in the United States. These services include site application, zoning and permitting (“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.

A summary of revenue disaggregated by source and geography is as follows:


Three Months Ended September 30, 2021	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America		Total
Non-lease property revenue	$	73.2	$	2.6	$	6.3	$	2.1	$	35.1	$	119.3
Services revenue	85.4		—		—		—		—		85.4
Total non-lease revenue	$	158.6	$	2.6	$	6.3	$	2.1	$	35.1	$	204.7
Property lease revenue	1,158.0		310.9		251.1		173.7		355.9		2,249.6
Total revenue	$	1,316.6	$	313.5	$	257.4	$	175.8	$	391.0	$	2,454.3


Three Months Ended September 30, 2020	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America		Total
Non-lease property revenue	$	72.0	$	2.3	$	3.6	$	1.7	$	26.7	$	106.3
Services revenue	25.3		—		—		—		—		25.3
Total non-lease revenue	$	97.3	$	2.3	$	3.6	$	1.7	$	26.7	$	131.6
Property lease revenue	1,050.3		302.9		216.4		37.0		274.7		1,881.3
Total revenue	$	1,147.6	$	305.2	$	220.0	$	38.7	$	301.4	$	2,012.9


Nine Months Ended September 30, 2021	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America		Total
Non-lease property revenue	$	214.9	$	6.8	$	17.5	$	6.0	$	100.9	$	346.1
Services revenue	180.1		—		—		—		—		180.1
Total non-lease revenue	$	395.0	$	6.8	$	17.5	$	6.0	$	100.9	$	526.2
Property lease revenue	3,481.0		886.3		723.6		302.2		992.4		6,385.5
Total revenue	$	3,876.0	$	893.1	$	741.1	$	308.2	$	1,093.3	$	6,911.7


Nine Months Ended September 30, 2020	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America		Total
Non-lease property revenue	$	193.0	$	6.8	$	9.5	$	4.8	$	87.9	$	302.0
Services revenue	65.0		—		—		—		—		65.0
Total non-lease revenue	$	258.0	$	6.8	$	9.5	$	4.8	$	87.9	$	367.0
Property lease revenue	3,106.7		856.3		642.0		103.1		843.9		5,552.0
Total revenue	$	3,364.7	$	863.1	$	651.5	$	107.9	$	931.8	$	5,919.0

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

Property revenue for the three months ended September 30, 2021 and 2020 includes straight-line revenue of $99.6 million and $68.1 million, respectively. Property revenue for the nine months ended September 30, 2021 and 2020 includes straight-line revenue of $324.3 million and $178.9 million, respectively.

Unearned revenue—Amounts billed upfront in connection with the execution of lease agreements are initially deferred and reflected in Unearned revenue in the consolidated balance sheets and recognized as revenue over the terms of the applicable lease arrangements. Amounts billed or received for services prior to being earned are deferred and reflected in Unearned revenue in the consolidated balance sheets until the criteria for recognition have been met. The increase in unearned revenue during the nine months ended September 30, 2021 is due to advance payments from a tenant.

Accounting Standards Updates

In March 2020, the Financial Accounting Standards Board (the “FASB”) issued guidance to provide optional expedients and exceptions for applying accounting principles generally accepted in the United States to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The guidance applies only to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022 for which an entity has elected certain optional expedients that are retained through the end of the hedging relationship. In January 2021, the FASB issued additional guidance that clarifies that certain practical expedients and exceptions for contract modifications and hedge accounting apply to derivatives that are affected by reference rate reform. As of September 30, 2021, the Company has not modified any contracts as a result of reference rate reform and is evaluating the impact this standard may have on its financial statements.

2. PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consisted of the following:


	As of
	September 30, 2021		December 31, 2020
Prepaid assets	$	89.6	$	66.1
Prepaid income tax	91.6		143.7

Unbilled receivables	261.6		176.9
Value added tax and other consumption tax receivables	67.3		66.3
Other miscellaneous current assets	81.9		79.6
Prepaid and other current assets	$	592.0	$	532.6

3. 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.

During the nine months ended September 30, 2021, the Company made no changes to the methods described in note 4 to its consolidated financial statements included in the 2020 Form 10-K. As of September 30, 2021, the Company does not have any material related party leases as either a lessor or a lessee. To the extent there are any intercompany leases, these are eliminated in consolidation.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

Lessor— 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 September 30, 2021 were as follows:


Fiscal Year	Amount (1)
Remainder of 2021	$	1,648.0
2022	5,953.2
2023	6,611.2
2024	6,489.2
2025	6,044.5
Thereafter	34,158.8
Total	$	60,904.9

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

Lessee—The Company assesses its right-of-use asset and other lease-related assets for impairment, as described in note 1 to the Company’s consolidated financial statements included in the 2020 Form 10-K. There were no material impairments recorded related to these assets during the three and nine months ended September 30, 2021 and 2020.

The Company leases certain land, rooftops and office space under operating leases and land and improvements, towers and vehicles under finance leases. As of September 30, 2021, 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. During the nine months ended September 30, 2021, other than leases acquired in connection with acquisitions, there were no material changes in the terms and provisions of the Company’s operating leases in which the Company is a lessee. There were no material changes in finance lease assets and liabilities during the nine months ended September 30, 2021.

Information about other lease-related balances is as follows:


	As of
	September 30, 2021		December 31, 2020
Operating leases:
Right-of-use asset	$	9,021.9	$	7,789.2

Current portion of lease liability	$	734.3	$	539.9
Lease liability	7,863.2		6,884.4
Total operating lease liability	$	8,597.5	$	7,424.3

The weighted-average remaining lease terms and incremental borrowing rates are as follows:


	As of
	September 30, 2021		December 31, 2020
Operating leases:
Weighted-average remaining lease term (years)	13.0		13.7
Weighted-average incremental borrowing rate	5.3	%	5.6	%

The following table sets forth the components of lease cost:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease cost	$	295.6	$	242.6	$	815.3	$	731.3
Variable lease costs not included in lease liability (1)	94.3		69.7		248.7		202.3

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

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

Supplemental cash flow information is as follows:


	Nine Months Ended September 30,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(798.2)	$	(732.8)



Non-cash items:
New operating leases (1)	$	1,607.2	$	125.7
Operating lease modifications and reassessments	$	165.3	$	573.2

(1)Amount includes new operating leases and leases acquired in connection with acquisitions, including $1.4 billion related to the Telxius Acquisition (as defined in note 6).

As of September 30, 2021, the Company does not have material operating or financing leases that have not yet commenced.

Maturities of operating lease liabilities as of September 30, 2021 were as follows:


Fiscal Year	Operating Lease (1)
Remainder of 2021	$	285.9
2022	1,085.1
2023	1,042.2
2024	993.4
2025	936.1
Thereafter	7,509.8
Total lease payments	11,852.5
Less amounts representing interest	(3,255.0)
Total lease liability	8,597.5
Less current portion of lease liability	734.3
Non-current lease liability	$	7,863.2

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

4. 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. & Canada		Asia-Pacific		Africa		Europe		Latin America
Balance as of January 1, 2021	$	4,750.8	$	1,016.9	$	625.6	$	279.1	$	608.3	$	2.0	$	7,282.7
Additions and adjustments (1)	(74.4)		9.5		—		3,177.6		322.4		—		3,435.1
Effect of foreign currency translation	2.4		(16.6)		(3.3)		(176.7)		(42.8)		—		(237.0)
Balance as of September 30, 2021	$	4,678.8	$	1,009.8	$	622.3	$	3,280.0	$	887.9	$	2.0	$	10,480.8

(1)Europe and Latin America consist of additions and measurement period adjustments related to the Telxius Acquisition. U.S. & Canada consists of measurement period adjustments related to the InSite Acquisition. Asia-Pacific consists of $9.2 million of additions related to the Bangladesh acquisition (as discussed in note 15) and measurement period adjustments related to the InSite Acquisition.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

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


		As of September 30, 2021						As of December 31, 2020
	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	$	6,329.5	$	(2,305.1)	$	4,024.4	$	5,784.0	$	(2,117.6)	$	3,666.4
Acquired tenant-related intangibles	Up to 20	19,471.9		(4,816.3)		14,655.6		14,322.5		(4,237.5)		10,085.0
Acquired licenses and other intangibles	3-20	99.9		(11.5)		88.4		97.8		(9.4)		88.4
Total other intangible assets		$	25,901.3	$	(7,132.9)	$	18,768.4	$	20,204.3	$	(6,364.5)	$	13,839.8

(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, generally 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 September 30, 2021, the remaining weighted average amortization period of the Company’s intangible assets was 16 years. Amortization of intangible assets for the three and nine months ended September 30, 2021 was $318.0 million and $846.2 million, respectively. Amortization of intangible assets for the three and nine months ended September 30, 2020 was $215.1 million and $643.4 million, respectively. Based on current exchange rates, the Company expects to record amortization expense as follows over the remaining current year and the five subsequent years:


Fiscal Year	Amount
Remainder of 2021	$	318.0
2022	1,270.8
2023	1,237.8
2024	1,224.1
2025	1,196.7
2026	1,162.9

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

5. ACCRUED EXPENSES

Accrued expenses consisted of the following:


	As of
	September 30, 2021		December 31, 2020
Accrued construction costs	$	96.3	$	46.5
Accrued income tax payable	27.2		20.6
Accrued pass-through costs	76.1		67.1
Amounts payable for acquisitions	14.1		58.9
Amounts payable to tenants	78.7		66.4
Accrued property and real estate taxes	246.0		219.1
Accrued rent	77.8		82.6

Payroll and related withholdings	104.9		104.4
Other accrued expenses	444.3		378.1
Total accrued expenses	$	1,165.4	$	1,043.7

6. 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
	September 30, 2021		December 31, 2020		Maturity Date
2020 Term Loan (1) (2)	$	—	$	749.4	N/A
2021 Multicurrency Credit Facility (1) (3)	1,568.6		—		June 28, 2024
2019 Term Loan (1)	496.3		996.1		January 31, 2025
2021 Credit Facility (1)	—		2,295.0		January 31, 2026
2021 364-Day Delayed Draw Term Loan (1) (3) (4)	787.2		—		May 28, 2022
2021 Three Year Delayed Draw Term Loan (1) (3)	955.1		—		May 28, 2024
2.250% senior notes	601.6		605.1		January 15, 2022
4.70% senior notes (5)	699.6		699.0		March 15, 2022
3.50% senior notes	997.5		996.1		January 31, 2023
3.000% senior notes	714.9		721.9		June 15, 2023
0.600% senior notes	497.6		496.8		January 15, 2024
5.00% senior notes	1,001.0		1,001.3		February 15, 2024
3.375% senior notes	646.6		645.7		May 15, 2024
2.950% senior notes	644.3		643.1		January 15, 2025
2.400% senior notes	745.8		745.0		March 15, 2025
1.375% senior notes (6)	573.6		604.1		April 4, 2025
4.000% senior notes	745.2		744.3		June 1, 2025
1.300% senior notes	496.1		495.4		September 15, 2025
4.400% senior notes	497.5		497.1		February 15, 2026
1.600% senior notes	694.9		—		April 15, 2026
1.950% senior notes (6)	574.2		605.2		May 22, 2026
1.450% senior notes	592.6		—		September 15, 2026
3.375% senior notes	990.8		989.5		October 15, 2026
3.125% senior notes	398.2		397.9		January 15, 2027
2.750% senior notes	745.0		744.3		January 15, 2027
0.450% senior notes (6)	862.1		—		January 15, 2027
3.55% senior notes	745.4		744.8		July 15, 2027
0.500% senior notes (6)	860.3		907.4		January 15, 2028
3.600% senior notes	694.1		693.4		January 15, 2028
1.500% senior notes	645.6		645.1		January 31, 2028

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)


3.950% senior notes	591.3		590.6		March 15, 2029
0.875% senior notes (6)	862.3		—		May 21, 2029
3.800% senior notes	1,634.7		1,633.5		August 15, 2029
2.900% senior notes	742.3		741.7		January 15, 2030
2.100% senior notes	740.9		740.2		June 15, 2030
1.875% senior notes	791.2		790.5		October 15, 2030
2.700% senior notes	693.6		—		April 15, 2031
2.300% senior notes	690.8		—		September 15, 2031
1.000% senior notes (6)	744.9		786.1		January 15, 2032
1.250% senior notes (6)	571.3		—		May 21, 2033
3.700% senior notes	592.0		591.9		October 15, 2049
3.100% senior notes	1,037.9		1,037.7		June 15, 2050
2.950% senior notes	1,021.3		538.2		January 15, 2051
Total American Tower Corporation debt	31,186.2		26,113.4

Series 2013-2A securities (7)	1,297.8		1,296.6		March 15, 2023
Series 2018-1A securities (7)	495.1		494.6		March 15, 2028
Series 2015-2 notes (8)	522.6		522.1		June 16, 2025
InSite Debt (9)	—		800.0		N/A
Other subsidiary debt (10)	11.7		32.9		Various
Total American Tower subsidiary debt	2,327.2		3,146.2
Finance lease obligations	32.0		27.9
Total	33,545.4		29,287.5
Less current portion of long-term obligations	(2,106.4)		(789.8)
Long-term obligations	$	31,439.0	$	28,497.7

(1)Accrues interest at a variable rate.

(2)Repaid in full on February 5, 2021 using borrowings from the 2021 Multicurrency Credit Facility (as defined below) and cash on hand.

(3)As of September 30, 2021 reflects borrowings denominated in Euros (“EUR”).

(4)Repaid in full on October 7, 2021, as further discussed in note 17.

(5)Repaid in full on October 18, 2021, as further discussed in note 17.

(6)Notes are denominated in EUR.

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

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

(9)Debt entered into by certain InSite subsidiaries acquired in connection with the InSite Acquisition (the “InSite Debt”). On January 15, 2021, all amounts outstanding under the InSite Debt were repaid.

(10)Includes (a) debt entered into by the Company’s Kenyan subsidiary in connection with an acquisition of sites in Kenya, which is denominated in 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, and (b) U.S. subsidiary debt related to a seller-financed acquisition. As of December 31, 2020 also included the Colombian credit facility (the “Colombian Credit Facility”), which was denominated in Colombian Pesos and was fully repaid on its maturity date of April 24, 2021. As of September 30, 2021, no amounts remained outstanding under the Colombian Credit Facility.

*Current portion of long-term obligations—*The Company’s current portion of long-term obligations primarily includes (i) $600.0 million aggregate principal amount of 2.250% senior unsecured notes due January 15, 2022, (ii) $700.0 million aggregate principal amount of 4.70% senior unsecured notes due March 15, 2022 (the “4.70% Notes”) and (iii) 680.0 million EUR (approximately $787.2 million) in borrowings under the 2021 364-Day Delayed Draw Term Loan (as defined below).

*Securitized Debt—*Cash flows generated by the sites that secure the securitized debt of the Company 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 service 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.

*Repayment of InSite Debt—*The InSite Debt included securitizations entered into by certain InSite subsidiaries. The Company acquired this debt in connection with the InSite Acquisition. The InSite Debt was recorded at fair value upon acquisition. On January 15, 2021, the Company repaid the entire amount outstanding under the InSite Debt, plus accrued and unpaid interest up to, but excluding, January 15, 2021, for an aggregate redemption price of $826.4 million,

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

including $2.3 million in accrued and unpaid interest. The Company recorded a loss on retirement of long-term obligations of approximately $25.7 million, which includes prepayment consideration partially offset by the unamortized fair value adjustment recorded upon acquisition. The repayment of the InSite Debt was funded with borrowings under the 2021 Multicurrency Credit Facility and the 2021 Credit Facility and cash on hand.

Offerings of Senior Notes

*1.600% Senior Notes and 2.700% Senior Notes Offering—*On March 29, 2021, the Company completed a registered public offering of $700.0 million aggregate principal amount of 1.600% senior unsecured notes due 2026 (the “1.600% Notes”) and $700.0 million aggregate principal amount of 2.700% senior unsecured notes due 2031 (the “2.700% Notes”). The net proceeds from this offering were approximately $1,386.3 million, after deducting commissions and estimated expenses. The Company used all of the net proceeds to repay existing indebtedness under the 2021 Multicurrency Credit Facility.

*0.450% Senior Notes, 0.875% Senior Notes and 1.250% Senior Notes Offering—*On May 21, 2021, the Company completed a registered public offering of 750.0 million EUR ($913.7 million at the date of issuance) aggregate principal amount of 0.450% senior unsecured notes due 2027 (the “0.450% Notes”), 750.0 million EUR ($913.7 million at the date of issuance) aggregate principal amount of 0.875% senior unsecured notes due 2029 (the “0.875% Notes”) and 500.0 million EUR ($609.1 million at the date of issuance) aggregate principal amount of 1.250% senior unsecured notes due 2033 (the “1.250% Notes”). The net proceeds from this offering were approximately 1,983.1 million EUR (approximately $2,415.8 million at the date of issuance), after deducting commissions and estimated expenses. The Company used all of the net proceeds to fund its transaction with Telxius Telecom, S.A. (“Telxius,” and the acquisition, the “Telxius Acquisition”), as further described in note 15.

1.450% Senior Notes, 2.300% Senior Notes and 2.950% Senior Notes Offering—On September 27, 2021, the Company completed a registered public offering of $600.0 million aggregate principal amount of 1.450% senior unsecured notes due 2026 (the “1.450% Notes”), $700.0 million aggregate principal amount of 2.300% senior unsecured notes due 2031 (the “2.300% Notes”) and $500.0 million aggregate principal amount through a reopening of its 2.950% senior unsecured notes due 2051, originally issued on November 20, 2020 (the “2.950% Notes” and, collectively with the 1.600% Notes, the 2.700% Notes, the 0.450% Notes, the 0.875% Notes, the 1.250% Notes, the 1.450% Notes and the 2.300% Notes, the “Notes”). The net proceeds from this offering were approximately $1,765.1 million, after deducting commissions and estimated expenses. The Company used the net proceeds to repay existing indebtedness under the 2019 Term Loan (as defined below) and for general corporate purposes.

The key terms of the Notes are as follows:


Senior Notes	Aggregate Principal Amount (in millions)		Issue Date and Interest Accrual Date	Maturity Date	Contractual Interest Rate		First Interest Payment	Interest Payments Due (1)	Par Call Date (2)
1.600% Notes	$	700.0	March 29, 2021	April 15, 2026	1.600	%	October 15, 2021	April 15 and October 15	March 15, 2026
2.700% Notes	$	700.0	March 29, 2021	April 15, 2031	2.700	%	October 15, 2021	April 15 and October 15	January 15, 2031
0.450% Notes (3)	$	913.7	May 21, 2021	January 15, 2027	0.450	%	January 15, 2022	January 15	November 15, 2026
0.875% Notes (3)	$	913.7	May 21, 2021	May 21, 2029	0.875	%	May 21, 2022	May 21	February 21, 2029
1.250% Notes (3)	$	609.1	May 21, 2021	May 21, 2033	1.250	%	May 21, 2022	May 21	February 21, 2033
1.450% Notes	$	600.0	September 27, 2021	September 15, 2026	1.450	%	March 15, 2022	March 15 and September 15	August 15, 2026
2.300% Notes	$	700.0	September 27, 2021	September 15, 2031	2.300	%	March 15, 2022	March 15 and September 15	June 15, 2031
2.950% Notes (4)	$	1,050.0	September 27, 2021	January 15, 2051	2.950	%	January 15, 2022	January 15 and July 15	July 15, 2050

(1)Accrued and unpaid interest on USD denominated notes is payable in USD semi-annually in arrears and will be computed from the issue date on the basis of a 360-day year comprised of twelve 30-day months. Interest on EUR denominated notes is payable in EUR annually and will be

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the notes, beginning on the issue date.

(2)The Company may redeem the Notes at any time, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes plus a make-whole premium, together with accrued interest to the redemption date. If the Company redeems the Notes on or after the par call date, the Company will not be required to pay a make-whole premium.

(3)The 0.450% Notes, the 0.875% Notes and the 1.250% Notes are denominated in EUR. Represents the dollar equivalent of the aggregate principal amount as of the issue date.

(4)The initial 2.950% Notes were issued on November 20, 2020. The reopened 2.950% Notes were issued on September 27, 2021.

If the Company undergoes a change of control and corresponding ratings decline, each as defined in the applicable supplemental indenture for the Notes, the Company may be required to repurchase all of the 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.

The supplemental indentures contain certain covenants that restrict the Company’s ability to merge, consolidate or sell assets and its (together with its subsidiaries’) ability to incur liens. These covenants are subject to a number of exceptions, including that the Company and its subsidiaries may incur certain liens on assets, mortgages or other liens securing indebtedness if the aggregate amount of indebtedness secured by such liens does not exceed 3.5x Adjusted EBITDA, as defined in the applicable supplemental indenture.

Subsequent to September 30, 2021, the Company completed a registered public offering of the 0.400% Notes and the 0.950% Notes, each as defined and further discussed in note 17.

Bank Facilities

Amendments to Bank Facilities—On February 10, 2021, the Company amended and restated its senior unsecured multicurrency revolving credit facility (as amended, the “2021 Multicurrency Credit Facility”) and its senior unsecured revolving credit facility (as amended, the “2021 Credit Facility”) and entered into an amendment agreement with respect to its $1.0 billion unsecured term loan, as amended and restated in December 2019 (as amended, the “2019 Term Loan”).

These amendments, among other things,

i.extend the maturity dates by one year to June 28, 2024 and January 31, 2026 for the 2021 Multicurrency Credit Facility and the 2021 Credit Facility, respectively,

ii.increase the commitments under the 2021 Multicurrency Credit Facility and the 2021 Credit Facility to $4.1 billion and $2.9 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 2021 Multicurrency Credit Facility and the 2021 Credit Facility) to $6.1 billion and $4.4 billion under the 2021 Multicurrency Credit Facility and the 2021 Credit Facility, respectively,

iv.expand the sublimit for multicurrency borrowings under the 2021 Multicurrency Credit Facility from $1.0 billion to $3.0 billion and add a EUR borrowing option for the 2021 Credit Facility with a $1.5 billion sublimit,

v.amend the limitation of the Company’s permitted ratio of Total Debt to Adjusted EBITDA (each as defined in each of the loan agreements for each of the facilities) to be no greater than 7.50 to 1.00 for the four fiscal quarters following the consummation of the Telxius Acquisition, which began with the quarter ended June 30, 2021, stepping down to 6.00 to 1.00 thereafter (with a further step up to 7.00 to 1.00 if the Company consummates a Qualified Acquisition (as defined in each of the loan agreements for the facilities)),

vi.amend the limitation on indebtedness of, and guaranteed by, the Company’s subsidiaries to the greater of (a) $3.0 billion and (b) 50% of Adjusted EBITDA (as defined in each of the loan agreements for the facilities) of the Company and its subsidiaries on a consolidated basis and

vii.increase the threshold for certain defaults with respect to judgments, attachments or acceleration of indebtedness from $400.0 million to $500.0 million.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

*2021 Multicurrency Credit Facility—*During the nine months ended September 30, 2021, the Company borrowed an aggregate of $4.6 billion, including an aggregate of 2.4 billion EUR ($2.9 billion as of the borrowing dates), and repaid an aggregate of $3.0 billion of revolving indebtedness, including an aggregate of 1.0 billion EUR ($1.2 billion as of the repayment date) primarily using proceeds from the ATC Europe Transactions (as defined in note 12), under the 2021 Multicurrency Credit Facility. The Company used the borrowings to fund the Telxius Acquisition, to repay existing indebtedness, including the InSite Debt and its $750.0 million unsecured term loan due February 12, 2021 (the “2020 Term Loan”), and for general corporate purposes.

*2021 Credit Facility—*During the nine months ended September 30, 2021, the Company borrowed an aggregate of $2.9 billion, including an aggregate of 1.2 billion EUR ($1.4 billion as of the borrowing dates), and repaid an aggregate of $5.2 billion of revolving indebtedness, including an aggregate of 1.2 billion EUR ($1.4 billion as of the repayment date) primarily using proceeds from the ATC Europe Transactions, under the 2021 Credit Facility. The Company used the borrowings to fund the Telxius Acquisition and for general corporate purposes.

Repayment of the 2020 Term Loan—On February 5, 2021, the Company repaid all amounts outstanding under the 2020 Term Loan using borrowings from the 2021 Multicurrency Credit Facility and cash on hand.

*Repayment under the 2019 Term Loan—*On September 27, 2021, the Company repaid $500.0 million of indebtedness under the 2019 Term Loan using proceeds from the issuance of the 1.450% Notes, the 2.300% Notes and the 2.950% Notes.

2021 Delayed Draw Term Loans—On February 10, 2021, the Company entered into (i) a 1.1 billion EUR (approximately $1.3 billion at the date of signing) unsecured term loan, the proceeds of which are to be used to fund the Telxius Acquisition, with a maturity date that is 364 days from the date of the first draw thereunder and that bears interest at a rate based on the senior unsecured debt rating of the Company, which, based on the Company’s current debt ratings, is 1.000% above the Euro Interbank Offered Rate (“EURIBOR”) (the “2021 364-Day Delayed Draw Term Loan”) and (ii) an 825.0 million EUR (approximately $1.0 billion at the date of signing) unsecured term loan, the proceeds of which are to be used to fund the Telxius Acquisition, with a maturity date that is three years from the date of the first draw thereunder and that bears interest at a rate based on the senior unsecured debt rating of the Company, which, based on the Company’s current debt ratings, is 1.125% above EURIBOR (the “2021 Three Year Delayed Draw Term Loan,” and, together with the 2021 364-Day Delayed Draw Term Loan, the “2021 Delayed Draw Term Loans”).

On May 28, 2021, the Company borrowed 1.1 billion EUR ($1.3 billion as of the borrowing date) under the 2021 364-Day Delayed Draw Term Loan and 825.0 million EUR ($1.0 billion as of the borrowing date) under the 2021 Three Year Delayed Draw Term Loan. The Company used the borrowings to fund the Telxius Acquisition.

On September 16, 2021, the Company repaid 420.0 million EUR ($494.2 million as of the repayment date) under the 2021 364-Day Delayed Draw Term Loan using proceeds from the ATC Europe Transactions. Subsequent to September 30, 2021, the Company repaid all remaining amounts outstanding under the 2021 364-Day Delayed Draw Term Loan, as further discussed in note 17.

The loan agreements for the 2021 Delayed Draw Term Loans 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 could not only prevent the Company from being able to borrow additional funds under the revolving credit facilities, but may constitute a default, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable.

Bridge Facility—In connection with entering into the Telxius Acquisition, the Company entered into a commitment letter (the “Commitment Letter”), dated January 13, 2021, with Bank of America, N.A. and BofA Securities, Inc. (together, “BofA”) pursuant to which BofA had, with respect to bridge financing, committed to provide up to 7.5 billion EUR (approximately $9.1 billion at the date of signing) in bridge loans (the “Bridge Loan Commitment”) to ensure financing for the Telxius Acquisition. Effective February 10, 2021, the Bridge Loan Commitment was reduced to 4.275 billion EUR (approximately $5.2 billion at the date of signing) as a result of an aggregate of 3.225 billion EUR (approximately $3.9 billion at the date of signing) of additional committed amounts under the 2021 Multicurrency Credit Facility, the 2021 Credit Facility and the 2021 Delayed Draw Term Loans, as described above. The Bridge Loan Commitment was further reduced as a result of the May 2021 common stock offering, as further described in note 11. Effective May 24, 2021, upon receipt of the proceeds from the issuance of the 0.450% Notes, the 0.875% Notes and the 1.250% Notes, the Company determined that it had adequate cash resources and undrawn availability under its revolving

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

credit facilities and the 2021 Delayed Draw Term Loans to fund the cash consideration payable in connection with the Telxius Acquisition and terminated the Commitment Letter. The Company did not make any borrowings under the Bridge Loan Commitment.

India Credit Facilities—During the nine months ended September 30, 2021, the Company entered into two working capital facilities in India with an aggregate borrowing capacity of 1.95 billion Indian Rupees (“INR”) (approximately $26.3 million) and one overdraft facility with a borrowing capacity of INR 380.0 million (approximately $5.1 million). The working capital facilities are subject to annual renewals and bear interest at a rate equal to the one-month India Treasury Bill rate at the time of borrowing plus a spread. The overdraft facility bears interest at the Overnight Mumbai Inter-Bank Offer Rate (“MIBOR”) at the time of borrowing plus a spread. As of September 30, 2021, the Company has not borrowed under the facilities.

As of September 30, 2021, the key terms under the 2021 Multicurrency Credit Facility, the 2021 Credit Facility, the 2019 Term Loan, the 2021 364-Day Delayed Draw Term Loan and the 2021 Three Year Delayed Draw Term Loan were as follows:


	Outstanding Principal Balance (in millions)	Undrawn letters of credit (in millions)		Maturity Date		Current margin over LIBOR or EURIBOR (1)		Current commitment fee (2)
2021 Multicurrency Credit Facility	1,568.6	$	3.5	June 28, 2024	(3)	1.125	%	0.110	%
2021 Credit Facility	—	$	0.9	January 31, 2026	(3)	1.125	%	0.110	%
2019 Term Loan	496.3	N/A		January 31, 2025		1.125	%	N/A
2021 364-Day Delayed Draw Term Loan	787.2	N/A		May 28, 2022		1.000	%	0.110	%
2021 Three Year Delayed Draw Term Loan	955.1	N/A		May 28, 2024		1.125	%	0.110	%

(1)LIBOR applies to the USD denominated borrowings under the 2021 Multicurrency Credit Facility, the 2021 Credit Facility and the 2019 Term Loan. EURIBOR applies to the EUR denominated borrowings under the 2021 Multicurrency Credit Facility and the 2021 Credit Facility, and all of the borrowings under the 2021 Delayed Draw Term Loans.

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

(3)Subject to two optional renewal periods.

7. 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.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

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:


	September 30, 2021					December 31, 2020
	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	—		$	17.5	—	—		$	29.2	—

Investments in equity securities (1)	$	50.5	—		—	—		$	6.0	—
Liabilities:


Fair value of debt related to interest rate swap agreements (2)	$	19.1	—		—	$	31.4	—		—

(1)Investments in equity securities are recorded in Notes receivable and other non-current assets in the consolidated balance sheet at fair value. Unrealized holding gains and losses for equity securities are recorded in Other income (expense) in the consolidated statements of operations in the current period. During the three and nine months ended September 30, 2021, the Company recognized unrealized (losses) gains of $(9.9) million and $19.5 million, respectively, for equity securities held as of September 30, 2021.

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

During the nine months ended September 30, 2021, the Company made no changes to the methods described in note 12 to its consolidated financial statements included in the 2020 Form 10-K that it used to measure the fair value of its interest rate swap agreements. On April 24, 2021, the interest rate swap agreement with certain lenders under the Colombian Credit Facility (the “Colombia Interest Rate Swap”) expired upon maturity of the underlying debt. As of September 30, 2021, there were no amounts outstanding under the Colombia Interest Rate Swap.

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. There were no material impairments during the three and nine months ended September 30, 2021 and 2020. There were no other items measured at fair value on a nonrecurring basis during the nine months ended September 30, 2021 or 2020.

Fair Value of Financial Instruments—The Company’s financial instruments for which the carrying value reasonably approximates fair value at September 30, 2021 and December 31, 2020 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 September 30, 2021 and December 31, 2020, the carrying value of long-term obligations, including the current portion, was $33.5 billion and $29.3 billion, respectively. As of September 30, 2021, the fair value of long-term obligations, including the current portion, was $34.8 billion, of which $28.6 billion was measured using Level 1 inputs and $6.2 billion was measured using Level 2 inputs. As of December 31, 2020, the fair value of long-term obligations, including the current portion, was $31.4 billion, of which $24.0 billion was measured using Level 1 inputs and $7.4 billion was measured using Level 2 inputs.

8. INCOME TAXES

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate (“ETR”) for the full fiscal year. Cumulative adjustments to the Company’s estimate are recorded in the interim period in which a change in the estimated annual ETR is determined. Under the provisions of the Internal Revenue Code of 1986, as amended, the Company may deduct amounts distributed to stockholders against the income generated by its real estate investment trust (“REIT”) operations. The Company continues to be subject to income taxes on the income of its domestic taxable REIT subsidiaries and income taxes in foreign jurisdictions where it conducts operations. In addition, the Company is able to offset certain income by utilizing its net operating losses, subject to specified limitations.

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.

The increase in the income tax provision during the three months ended September 30, 2021 was primarily attributable to net additions to reserves for the Company’s existing tax positions. The increase in the income tax provision during the

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

nine months ended September 30, 2021 was primarily attributable to increases in foreign earnings, net additions to reserves for the Company’s existing tax positions and changes in tax law in certain foreign jurisdictions in the current period. The income tax provision for the three and nine months ended September 30, 2020 includes a benefit related to the remeasurement of the Company’s net deferred tax liabilities in Kenya as a result of a change in tax rate.

As of September 30, 2021 and December 31, 2020, the total unrecognized tax benefits that would impact the ETR, if recognized, were approximately $89.9 million and $105.9 million, respectively. The amount of unrecognized tax benefits during the three and nine months ended September 30, 2021 includes (i) additions to the Company’s existing tax positions of $12.9 million and $22.6 million, respectively, (ii) reductions due to foreign currency exchange rate fluctuations of $3.3 million and $2.9 million, respectively, (iii) reductions to the Company’s prior year tax positions of $21.6 million and $39.7 million, respectively, (iv) reductions due to statute of limitations of $1.6 million and $3.6 million, respectively, and (v) reductions to the Company’s prior year tax positions due to settlements of $8.8 million for each of the three and nine months ended September 30, 2021. Unrecognized tax benefits are expected to change over the next 12 months if certain tax matters ultimately settle with the applicable taxing jurisdiction during this time frame, as described in note 13 to the Company’s consolidated financial statements included in the 2020 Form 10-K. The impact of the amount of these changes to previously recorded uncertain tax positions could range from zero to $24.7 million.

The Company recorded the following penalties and income tax-related interest expense during the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Penalties and income tax-related interest expense (1)	$	9.6	$	6.6	$	43.1	$	9.3

(1)Nine months ended September 30, 2021 reflects an increase of $16.6 million due to a reclassification of unrecognized tax benefits to penalties and income tax-related interest expense.

As of September 30, 2021 and December 31, 2020, the total amount of accrued income tax related interest and penalties included in the consolidated balance sheets were $76.4 million and $34.4 million, respectively.

9. 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 time-based restricted stock units (“RSUs”) and stock options and three years for performance-based restricted stock units (“PSUs”). Stock options generally expire ten years from the date of grant. As of September 30, 2021, the Company had the ability to grant stock-based awards with respect to an aggregate of 5.9 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 three and nine months ended September 30, 2021 and 2020, the Company recorded and capitalized the following stock-based compensation expense:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021 (1)		2020 (2)		2021 (1)		2020 (2)
Stock-based compensation expense	$	28.1	$	24.1	$	98.0	$	99.0

(1)For the three and nine months ended September 30, 2021, stock-based compensation expense consisted of $28.1 million and $98.0 million, respectively, included in selling, general, administrative and development expense.

(2)For the three and nine months ended September 30, 2020, stock-based compensation expense consisted of (i) $0.4 million and $1.4 million, respectively, included in Property costs of operations, (ii) $0.3 million and $0.9 million, respectively, included in Services costs of operations and (iii) $23.4 million and $96.7 million, respectively, included in selling, general, administrative and development expense. For the three and nine

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

months ended September 30, 2020, stock-based compensation expense capitalized as property and equipment was $0.4 million and $1.3 million, respectively.

Stock Options—As of September 30, 2021, there was no unrecognized compensation expense related to unvested stock options.

The Company’s option activity for the nine months ended September 30, 2021 was as follows (shares disclosed in full amounts):


						Number of Options
Outstanding as of January 1, 2021						2,016,261

Exercised						(629,515)
Forfeited						—
Expired						—
Outstanding as of September 30, 2021						1,386,746

*Restricted Stock Units—*As of September 30, 2021, total unrecognized compensation expense related to unvested RSUs granted under the 2007 Plan was $149.9 million and is expected to be recognized over a weighted average period of approximately 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 nine months ended September 30, 2021, the Company’s Compensation Committee (the “Compensation Committee”) granted an aggregate of 98,694 PSUs (the “2021 PSUs”) to its executive officers and established the performance metrics for these awards. During the years ended December 31, 2020 and 2019, the Compensation Committee granted an aggregate of 110,925 PSUs (the “2020 PSUs”) and 114,823 PSUs (the “2019 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 2021 PSUs, the 2020 PSUs and the 2019 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.

Restricted Stock Units and Performance-Based Restricted Stock Units—The Company’s RSU and PSU activity for the nine months ended September 30, 2021 was as follows (shares disclosed in full amounts):


	RSUs	PSUs
Outstanding as of January 1, 2021 (1)	1,245,075	320,510
Granted (2)	546,698	98,694
Vested and Released (3)	(564,397)	(162,882)
Forfeited	(46,649)	—
Outstanding as of September 30, 2021	1,180,727	256,322
Vested and deferred as of September 30, 2021 (4)	17,121	—

(1)PSUs consist of the target number of shares issuable at the end of the three-year performance period for the outstanding 2020 PSUs and the outstanding 2019 PSUs, or 70,739 and 86,889 shares, respectively, and the shares issuable at the end of the three-year performance period for the

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

PSUs granted in 2018 (the “2018 PSUs”) based on achievement against the performance metrics for the three-year performance period, or 162,882 shares.

(2)PSUs consist of the target number of shares issuable at the end of the three-year performance period for the 2021 PSUs, or 98,694 shares.

(3)This includes 58,204 and 96,048 of previously vested and deferred RSUs and PSUs, respectively. PSUs consist of shares vested pursuant to the 2018 PSUs. There are no additional shares to be earned related to the 2018 PSUs.

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

During the three and nine months ended September 30, 2021, the Company recorded $6.8 million and $16.4 million, respectively, 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 September 30, 2021 was $7.5 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.

10. 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 Limited (“Tata Teleservices”), IDFC Private Equity Fund III (“IDFC”), Macquarie SBI Infrastructure Investments Pte Limited and SBI Macquarie Infrastructure Trust (together, “Macquarie,” and, collectively with Tata Sons, Tata Teleservices and IDFC, 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.

During the nine months ended September 30, 2021, the Company made no changes to the methods of determining redemption value described in note 15 to its consolidated financial statements included in the 2020 Form 10-K.

During the year ended December 31, 2020, the Company redeemed 100% of Tata Teleservices and Tata Sons’ remaining combined holdings of ATC TIPL for total consideration of INR 24.8 billion ($337.3 million at the date of redemption). As a result of the redemption, the Company’s controlling interest in ATC TIPL increased from 79% to 92% and the noncontrolling interest decreased from 21% to 8%.

During the nine months ended September 30, 2021, the Company entered into an agreement with Macquarie to redeem 100% of their combined holdings in ATC TIPL at a price of INR 175 per share, subject to certain adjustments. Accordingly, the Company expects to pay an amount equivalent to INR 12.9 billion (approximately $173.8 million) to redeem the shares in 2021, subject to regulatory approval. After the completion of the redemption, the Company will hold a 100% ownership interest in ATC TIPL.

Other Redeemable Noncontrolling Interests—During the year ended December 31, 2020, the Company completed the acquisition of MTN Group Limited’s noncontrolling interests in each of the Company’s joint ventures in Ghana and Uganda for total consideration of approximately $524.4 million, including a net adjustment of $1.4 million made during the three months ended March 31, 2020, which resulted in an increase in the Company’s controlling interests in such joint ventures from 51% to 100%.

In 2019, the Company 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 owned and operated wireless communications towers in France. During the nine months ended September 30, 2021, the Company liquidated its interests in Eure-et-Loir for total consideration of 2.2 million EUR (approximately $2.5 million at the date of redemption).

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

The changes in Redeemable noncontrolling interests were as follows:


	Nine Months Ended September 30,
	2021		2020
Balance as of January 1,	$	212.1	$	1,096.5
Net income attributable to noncontrolling interests	4.0		11.2
Adjustment to noncontrolling interest redemption value	1.2		(10.0)

Purchase of redeemable noncontrolling interest	(2.5)		(524.4)
Foreign currency translation adjustment attributable to noncontrolling interests	(3.4)		(18.4)
Balance as of September 30,	$	211.4	$	554.9

11. EQUITY

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 nine months ended September 30, 2021, the Company received an aggregate of $60.4 million in proceeds upon exercises of stock options and sales pursuant to the ESPP.

2020 “At the Market” Stock Offering Program—In August 2020, the Company established an “at the market” stock offering program through which it may issue and sell shares of its common stock having an aggregate gross sales price of up to $1.0 billion (the “2020 ATM Program”). Sales under the 2020 ATM Program may be made by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or, subject to specific instructions of the Company, at negotiated prices. The Company intends to use the net proceeds from any issuances under the 2020 ATM Program for general corporate purposes, which may include, among other things, the funding of acquisitions, additions to working capital and repayment or refinancing of existing indebtedness. As of September 30, 2021, the Company has not sold any shares of common stock under the 2020 ATM Program.

Common Stock Offering—On May 10, 2021, the Company completed a registered public offering of 9,000,000 shares of its common stock, par value $0.01 per share, at $244.75 per share. On May 10, 2021, the Company issued an additional 900,000 shares of its common stock in connection with the underwriters’ exercise in full of their over-allotment option. Aggregate net proceeds from this offering were approximately $2.4 billion after deducting underwriting discounts and estimated offering expenses. The Company used the net proceeds to finance the Telxius Acquisition.

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”).

Under the Buyback Programs, the Company is authorized to purchase shares from time to time through open market purchases, in privately negotiated transactions not to exceed market prices, and (with respect to such open market purchases) pursuant to plans adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with securities laws and other legal requirements and subject to market conditions and other factors.

During the nine months ended September 30, 2021, there were no repurchases under either of the Buyback Programs. As of September 30, 2021, the Company has repurchased a total of 14,361,283 shares of its common stock under the 2011 Buyback for an aggregate of $1.5 billion, including commissions and fees. As of September 30, 2021, the Company has not made any repurchases under the 2017 Buyback.

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. Repurchases under the Buyback Programs are subject to, among other things, the Company having available cash to fund the repurchases.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

Distributions—During the nine months ended September 30, 2021, the Company declared or paid the following cash distributions (per share data reflects actual amounts):


Declaration Date	Payment Date	Record Date	Distribution per share		Aggregate Payment Amount (1)
Common Stock
September 16, 2021	October 15, 2021	September 28, 2021	$	1.31	$	596.6
May 27, 2021	July 9, 2021	June 18, 2021	$	1.27	$	577.8
March 4, 2021	April 29, 2021	April 13, 2021	$	1.24	$	551.5
December 3, 2020	February 2, 2021	December 28, 2020	$	1.21	$	537.6

(1)Does not include amounts accrued for distributions payable related to unvested restricted stock units.

During the nine months ended September 30, 2020, the Company declared or paid the following cash distributions (per share data reflects actual amounts):


Declaration Date	Payment Date	Record Date	Distribution per share		Aggregate Payment Amount (1)
Common Stock
September 10, 2020	October 16, 2020	September 28, 2020	$	1.14	$	506.4
May 19, 2020	July 10, 2020	June 19, 2020	$	1.10	$	487.9
March 12, 2020	April 29, 2020	April 14, 2020	$	1.08	$	478.8
December 11, 2019	January 14, 2020	December 27, 2019	$	1.01	$	447.3

(1)Does not include amounts accrued for distributions payable related to unvested restricted stock units.

The Company accrues distributions on unvested restricted stock units, which are payable upon vesting. As of September 30, 2021, the amount accrued for distributions payable related to unvested restricted stock units was $10.9 million. During the nine months ended September 30, 2021 and 2020, the Company paid $7.5 million and $7.8 million of distributions upon the vesting of restricted stock units, respectively. To maintain its qualification for taxation as a REIT, the Company expects to continue paying distributions, the amount, timing and frequency of which will be determined, and subject to adjustment, by the Company’s Board of Directors.

12. NONCONTROLLING INTERESTS

Dividend to noncontrolling interest— Certain of the Company’s subsidiaries may, from time to time, declare dividends. During the year ended December 31, 2020, the subsidiary that primarily consisted of the Company’s operations in France, Germany and Poland (“Former ATC Europe”) declared a dividend of 13.2 million EUR (approximately $16.2 million accrued as of December 31, 2020) payable in cash to the Company and PGGM in proportion to their respective equity interests in Former ATC Europe. The dividend was paid on January 6, 2021.

*Purchase of Interests—*During the nine months ended September 30, 2021, the Company purchased the remaining minority interests held in a subsidiary in the United States for total consideration of $6.0 million. The purchase price was settled with unregistered shares of the Company’s common stock, in lieu of cash. The Company now owns 100% of the subsidiary as a result of the purchase.

*Reorganization of European Interests—*During the nine months ended September 30, 2021, in connection with the funding of the Telxius Acquisition, the Company completed a reorganization of its subsidiaries in Europe. As part of the reorganization, PGGM converted its previously held 49% noncontrolling interest in Former ATC Europe into noncontrolling interests in new subsidiaries, consisting of the Company's operations in Germany and Spain, inclusive of the assets acquired pursuant to the Telxius Acquisition. The reorganization included cash consideration paid to PGGM of 178.0 million EUR (approximately $214.9 million). The reorganization is reflected in the consolidated statements of equity as (i) a reduction in Additional Paid-in Capital of $648.4 million and (ii) an increase in Noncontrolling Interests of $601.0 million, and in the consolidated statements of comprehensive income (loss) as an increase in Comprehensive income attributable to American Tower Corporation stockholders of $47.4 million.

CDPQ and Allianz Partnerships—During the nine months ended September 30, 2021, the Company entered into agreements with Caisse de dépôt et placement du Québec (“CDPQ”) and Allianz insurance companies and funds

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

managed by Allianz Capital Partners GmbH, including the Allianz European Infrastructure Fund (collectively, “Allianz”), for CDPQ and Allianz to acquire 30% and 18% noncontrolling interests, respectively, in ATC Europe (the “ATC Europe Transactions”). The Company completed the ATC Europe Transactions during the three months ended September 2021 for total aggregate consideration of 2.6 billion EUR (approximately $3.1 billion at the date of closing). After the completion of the ATC Europe Transactions, the Company holds a 52% controlling ownership interest in ATC Europe.

As of September 30, 2021, ATC Europe consists of the Company’s operations in France, Germany, Poland and Spain. The Company currently holds a 52% controlling interest in ATC Europe, with CDPQ and Allianz holding 30% and 18% noncontrolling interests, respectively. ATC Europe holds a 100% interest in the subsidiaries that consist of the Company’s operations in France and Poland and an 87% and an 83% controlling interest in the subsidiaries that consist of the Company’s operations in Germany and Spain, respectively, with PGGM holding a 13% and a 17% noncontrolling interest in each respective subsidiary.

Bangladesh Partnership—During the three months ended September 30, 2021, the Company acquired a 51% controlling interest in Kirtonkhola Tower Bangladesh Limited (“KTBL”) for 900 million Bangladeshi Taka (“BDT”) (approximately $10.6 million at the date of closing) through a joint venture partnership with Confidence Group (which holds a 49% noncontrolling interest in KTBL).

The changes in noncontrolling interests were as follows:


	Nine Months Ended September 30,
	2021
Balance as of January 1,	$	474.9
ATC Europe Transactions (1)	3,078.2
Bangladesh partnership (2)	10.2
Adjustment to noncontrolling interest due to reorganization (3)	601.0
Redemption of noncontrolling interest (4)	(1.7)
Net income attributable to noncontrolling interests	6.9
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax	(103.3)

Distributions to noncontrolling interest holders	(0.4)

Balance as of September 30,	$	4,065.8

(1)Represents the impact of contributions received from CDPQ and Allianz described above on Noncontrolling interests as of September 30, 2021. Reflected within Contributions from noncontrolling interest holders in the consolidated statements of equity.

(2)Represents the impact of contributions made by the Company to establish the joint venture in Bangladesh described above on Noncontrolling interests as of September 30, 2021. Reflected within Purchase of noncontrolling interest in the consolidated statements of equity.

(3)Represents the impact of the reorganization of European interests described above on Noncontrolling interests as of September 30, 2021.

(4)Represents the impact of the purchase of interests described above on Noncontrolling interests as of September 30, 2021.

13. EARNINGS PER COMMON SHARE

The following table sets forth basic and diluted net income per common share computational data (shares in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020


Net income attributable to American Tower Corporation common stockholders	$	723.0	$	464.4	$	2,114.3	$	1,325.5
Basic weighted average common shares outstanding	455,224		443,766		450,148		443,420
Dilutive securities	1,753		2,390		1,833		2,588
Diluted weighted average common shares outstanding	456,977		446,156		451,981		446,008
Basic net income attributable to American Tower Corporation common stockholders per common share	$	1.59	$	1.05	$	4.70	$	2.99
Diluted net income attributable to American Tower Corporation common stockholders per common share	$	1.58	$	1.04	$	4.68	$	2.97

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

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 (in thousands, on a weighted average basis):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Restricted stock units	—	0	—	1

14. 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 Inc. (“AT&T”), that currently provides for the lease or sublease of approximately 2,000 towers commencing between December 2000 and August 2004. Substantially all of the towers are part of the securitization transactions completed in March 2013 and March 2018. 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 September 30, 2021, the Company has purchased an aggregate of approximately 400 of the subleased towers which are subject to the applicable agreement. The aggregate purchase option price for the remaining towers leased and subleased is $1.0 billion and includes per annum accretion 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, 2025 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 five successive five-year terms.

Other Contingencies—The Company is subject to income tax and other taxes in the geographic areas where it holds assets or 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

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

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.

15. ACQUISITIONS

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 nine months ended September 30, 2021 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.

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 acquired, with no recognition of goodwill.

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 and systems, 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 three and nine months ended September 30, 2021 and 2020, the Company recorded acquisition and merger related expenses for business combinations and non-capitalized asset acquisition costs and integration costs as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Acquisition and merger related expenses	$	25.3	$	0.7	$	88.8	$	11.1
Integration costs	$	6.9	$	7.0	$	32.9	$	16.1

During the nine months ended September 30, 2021 and 2020, the Company also recorded benefits of $4.4 million and $4.6 million, respectively, related to pre-acquisition contingencies and settlements. The increase in acquisition and merger related costs during the three and nine months ended September 30, 2021 was primarily associated with the Telxius Acquisition.

2021 Transactions

The estimated aggregate impact of the acquisitions completed in 2021 on the Company’s revenues and gross margin for the three months ended September 30, 2021 was approximately $170.2 million and $91.3 million, respectively, and for the nine months ended September 30, 2021 was approximately $226.2 million and $116.2 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.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

Telxius Acquisition—On January 13, 2021, the Company entered into the Telxius Acquisition, pursuant to which the Company agreed to acquire Telxius’ European and Latin American tower divisions, comprising approximately 31,000 communications sites in Argentina, Brazil, Chile, Germany, Peru and Spain, for approximately 7.7 billion EUR (approximately $9.4 billion at the date of signing), subject to certain adjustments. In June 2021, the Company completed the acquisition of nearly 20,000 communications sites in Germany and Spain, for total consideration of approximately 6.3 billion EUR (approximately $7.7 billion at the date of closing), subject to certain post-closing adjustments and over 7,000 communications sites in Brazil, Peru, Chile and Argentina, for total consideration of approximately 0.9 billion EUR (approximately $1.1 billion at the date of closing), subject to certain post-closing adjustments.

On August 2, 2021, the Company completed the acquisition of the approximately 4,000 remaining communications sites in Germany pursuant to the Telxius Acquisition for 0.6 billion EUR (approximately $0.7 billion at the date of closing).

Of the aggregate purchase price, 229.4 million EUR (approximately $265.6 million), including post-closing adjustments, of deferred payments are due in September 2025 and August 2026 and are reflected in Other non-current liabilities in the consolidated balance sheet as of September 30, 2021. The acquired operations in Germany and Spain are included in the Europe property segment and the acquired operations in Brazil, Peru, Chile and Argentina are included in the Latin America property segment. The Telxius 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. for total consideration of approximately $0.8 billion (as of the date of signing). The Company completed the acquisition of approximately 2,400 communications sites in December 2019 and an additional 530 communications sites pursuant to this agreement during the year ended December 31, 2020. During the nine months ended September 30, 2021, the Company completed the acquisition of an additional 156 communications sites pursuant to this agreement for an aggregate total purchase price of $44.5 million (as of the dates of acquisition), including value added tax, which are being accounted for as an acquisition of assets and are included in the table below in “Other.” The remaining communications sites are expected to continue to close in tranches, subject to certain closing conditions.

Bangladesh Acquisition—During the three months ended September 30, 2021, the Company acquired a 51% controlling interest in KTBL for 900 million BDT (approximately $10.6 million at the date of closing) through a joint venture partnership with Confidence Group (which holds a 49% noncontrolling interest in KTBL). This acquisition is being accounted for as a business combination and is subject to post-closing adjustments. This acquisition is included in the table below in “Other.”

Other Acquisitions—During the nine months ended September 30, 2021, the Company acquired a total of 718 communications sites as well as other communications infrastructure assets in the United States, France, Mexico, Nigeria, Peru and Poland, including 180 communications sites in connection with the Company’s agreement with Orange S.A. (“Orange”) as further described below, for an aggregate purchase price of $326.9 million. Of the aggregate purchase price, $8.5 million is reflected as a payable in the consolidated balance sheet as of September 30, 2021. These acquisitions were accounted for as asset acquisitions.

The following table summarizes the allocations of the purchase prices for the fiscal year 2021 acquisitions based upon their estimated fair value at the date of acquisition:

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)


	Telxius Acquisition		Other (1)
Current assets	$	289.0	$	25.9

Property and equipment	1,417.7		119.2
Intangible assets (2):
Tenant-related intangible assets	5,391.2		190.8
Network location intangible assets	675.8		55.9
Other intangible assets	—		—
Other non-current assets	1,380.3		39.2
Current liabilities	(331.9)		(11.4)
Deferred tax liability	(1,227.5)		—
Other non-current liabilities	(1,504.8)		(36.6)
Net assets acquired	6,089.8		383.0
Goodwill (3)	3,500.0		9.2
Fair value of net assets acquired	9,589.8		392.2
Debt assumed	—		—
Noncontrolling interest	—		(10.2)
Purchase price	$	9,589.8	$	382.0

(1)Includes 21 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 generally over a 20 year period.

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

Other Signed Acquisitions

Orange Acquisition—On November 28, 2019, the Company entered into definitive agreements with Orange for the acquisition of up to approximately 2,000 communications sites in France over a period of up to five years for total consideration in the range of approximately 500.0 million 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. The Company completed the acquisition of 564 of these communications sites during the year ended December 31, 2020. Subsequent to September 30, 2021, the Company completed the acquisition of an additional 157 of these communications sites. The remaining communications sites are expected to continue to close in tranches, subject to customary closing conditions.

2020 Transactions

InSite Acquisition—On December 23, 2020, the Company acquired 100% of the outstanding units of IWG Holdings, LLC, the parent company of InSite, which owned, operated and managed approximately 3,000 communications sites in the U.S. and Canada. The portfolio included approximately 1,400 owned towers in the United States, over 200 owned towers in Canada and approximately 40 DAS networks in the United States. In addition, the portfolio included more than 600 land parcels under communications sites in the United States, Canada and Australia, as well as approximately 400 rooftop sites. The total consideration for the InSite Acquisition, including cash acquired, the repayment and assumption of certain debt held by InSite, was approximately $3.5 billion, subject to certain post-closing adjustments. The InSite Acquisition was accounted for as a business combination and is subject to post-closing adjustments. During the nine months ended September 30, 2021, certain adjustments were made to increase assets by $6.8 million and reduce liabilities by $67.3 million, primarily related to deferred tax liabilities, with a corresponding decrease in goodwill of $74.1 million and there were no other material post-closing adjustments. The full reconciliation and finalization of the assets acquired and liabilities assumed, including those subject to valuation, have not been completed and, as a result, there may be additional post-closing adjustments.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

Pro Forma Consolidated Results (Unaudited)

The following table presents the unaudited pro forma financial results as if the 2021 acquisitions had occurred on January 1, 2020 and the 2020 acquisitions had occurred on January 1, 2019. The pro forma results, to the extent available, are based on historical information, and accordingly may not fully reflect the current operations of the acquired business. In addition, 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 date indicated, nor are they indicative of the future operating results of the Company.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Pro forma revenues	$	2,460.9	$	2,203.1	$	7,224.5	$	6,460.1
Pro forma net income attributable to American Tower Corporation common stockholders	$	721.9	$	392.1	$	2,144.9	$	1,106.4
Pro forma net income per common share amounts:
Basic net income attributable to American Tower Corporation common stockholders	$	1.59	$	0.86	$	4.72	$	2.44
Diluted net income attributable to American Tower Corporation common stockholders	$	1.58	$	0.86	$	4.70	$	2.43

16. 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 2020, as a result of the InSite Acquisition, the Company updated its reportable segments to rename U.S. property and Asia property to U.S. & Canada property and Asia-Pacific property, respectively. The Company continues to report its results in six segments – U.S. & Canada property, Asia-Pacific property, Africa property, Europe property, Latin America property and services. The change in reportable segment names is solely reflective of the inclusion of Canada and Australia in the Company’s business operations, as a result of the InSite Acquisition, and had no impact on the Company’s consolidated financial statements or historical segment financial information for any prior periods.

As of September 30, 2021, the Company’s property operations consisted of the following:

U.S. & Canada: property operations in Canada and the United States;
Asia-Pacific: property operations in Australia, Bangladesh, India and the Philippines;
Africa: property operations in Burkina Faso, Ghana, Kenya, Niger, Nigeria, South Africa and Uganda;
Europe: property operations in France, Germany, Poland and Spain; 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 to the Company’s consolidated financial statements included in the 2020 Form 10-K and as updated in note 1 above. 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. These measures of segment gross margin and segment operating profit are also before Interest income, Interest expense, Gain (loss) on

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

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 three and nine months ended September 30, 2021 and 2020 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
Three Months Ended September 30, 2021	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America
Segment revenues	$	1,231.2	$	313.5	$	257.4	$	175.8	$	391.0	$	2,368.9	$	85.4			$	2,454.3
Segment operating expenses	221.4		187.1		88.2		73.0		123.7		693.4		30.9				724.3
Segment gross margin	1,009.8		126.4		169.2		102.8		267.3		1,675.5		54.5				1,730.0
Segment selling, general, administrative and development expense (1)	48.1		21.5		16.5		12.8		26.3		125.2		3.8				129.0
Segment operating profit	$	961.7	$	104.9	$	152.7	$	90.0	$	241.0	$	1,550.3	$	50.7			$	1,601.0
Stock-based compensation expense															$	28.1	28.1
Other selling, general, administrative and development expense															48.8		48.8
Depreciation, amortization and accretion															611.4		611.4
Other expense (2)															135.1		135.1
Income from continuing operations before income taxes																	$	777.6
Total assets	$	27,375.0	$	5,164.2	$	4,965.4	$	12,123.2	$	8,764.1	$	58,391.9	$	100.9	$	2,037.2	$	60,530.0

(1)Segment selling, general, administrative and development expenses exclude stock-based compensation expense of $28.1 million.

(2)Primarily includes interest expense, partially offset by foreign currency gains.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)


	Property										Total Property		Services		Other		Total
Three Months Ended September 30, 2020	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America
Segment revenues	$	1,122.3	$	305.2	$	220.0	$	38.7	$	301.4	$	1,987.6	$	25.3			$	2,012.9
Segment operating expenses (1)	207.3		167.1		74.1		7.7		95.5		551.7		10.2				561.9

Segment gross margin	915.0		138.1		145.9		31.0		205.9		1,435.9		15.1				1,451.0
Segment selling, general, administrative and development expense (1)	38.3		24.1		18.5		5.3		20.9		107.1		4.2				111.3
Segment operating profit	$	876.7	$	114.0	$	127.4	$	25.7	$	185.0	$	1,328.8	$	10.9			$	1,339.7
Stock-based compensation expense															$	24.1	24.1
Other selling, general, administrative and development expense															41.3		41.3
Depreciation, amortization and accretion															473.9		473.9
Other expense (2)															298.2		298.2
Income from continuing operations before income taxes																	$	502.2
Total assets	$	22,610.8	$	5,142.3	$	4,645.3	$	1,743.7	$	6,855.4	$	40,997.5	$	35.1	$	429.6	$	41,462.2

(1)Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $0.7 million and $23.4 million, respectively.

(2)Primarily includes interest expense.


	Property										Total Property		Services		Other		Total
Nine Months Ended September 30, 2021	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America
Segment revenues	$	3,695.9	$	893.1	$	741.1	$	308.2	$	1,093.3	$	6,731.6	$	180.1			$	6,911.7
Segment operating expenses	631.1		546.4		254.8		110.7		337.0		1,880.0		66.5				1,946.5
Segment gross margin	3,064.8		346.7		486.3		197.5		756.3		4,851.6		113.6				4,965.2
Segment selling, general, administrative and development expense (1)	129.8		52.7		52.9		26.3		79.6		341.3		12.1				353.4
Segment operating profit	$	2,935.0	$	294.0	$	433.4	$	171.2	$	676.7	$	4,510.3	$	101.5			$	4,611.8
Stock-based compensation expense															$	98.0	98.0
Other selling, general, administrative and development expense															144.3		144.3
Depreciation, amortization and accretion															1,688.7		1,688.7
Other expense (2)															379.9		379.9
Income from continuing operations before income taxes																	$	2,300.9

(1)Segment selling, general, administrative and development expenses exclude stock-based compensation expense of $98.0 million.

(2)Primarily includes interest expense, partially offset by foreign currency gains.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)


	Property										Total Property		Services		Other		Total
Nine Months Ended September 30, 2020	U.S. & Canada		Asia-Pacific		Africa		Europe		Latin America
Segment revenues	$	3,299.7	$	863.1	$	651.5	$	107.9	$	931.8	$	5,854.0	$	65.0			$	5,919.0
Segment operating expenses (1)	599.7		489.7		221.5		21.1		293.1		1,625.1		27.2				1,652.3
Segment gross margin	2,700.0		373.4		430.0		86.8		638.7		4,228.9		37.8				4,266.7
Segment selling, general, administrative and development expense (1)	117.6		90.2		56.4		15.6		67.8		347.6		9.8				357.4
Segment operating profit	$	2,582.4	$	283.2	$	373.6	$	71.2	$	570.9	$	3,881.3	$	28.0			$	3,909.3
Stock-based compensation expense															$	99.0	99.0
Other selling, general, administrative and development expense															128.3		128.3
Depreciation, amortization and accretion															1,401.1		1,401.1
Other expense (2)															879.5		879.5
Income from continuing operations before income taxes																	$	1,401.4

(1)Segment operating expenses and segment selling, general, administrative and development expenses exclude stock-based compensation expense of $2.3 million and $96.7 million, respectively.

(2)Primarily includes interest expense.

17. SUBSEQUENT EVENTS

*Data Centers Acquisition—*On October 5, 2021, the Company completed the acquisition of two multi-tenant data centers in the United States for total consideration of approximately $201 million. A preliminary purchase price allocation is not available due to the timing of the closing.

*0.400% Senior Notes and 0.950% Senior Notes Offering—*On October 5, 2021, the Company completed a registered public offering of 500.0 million EUR ($579.9 million at the date of issuance) aggregate principal amount of 0.400% senior unsecured notes due 2027 (the “0.400% Notes”) and 500.0 million EUR ($579.9 million at the date of issuance) aggregate principal amount of 0.950% senior unsecured notes due 2030 (the “0.950% Notes”). The net proceeds from this offering were approximately 987.7 million EUR (approximately $1,145.6 million at the date of issuance), after deducting commissions and estimated expenses. The Company used the net proceeds to repay EUR denominated existing indebtedness under the 2021 Multicurrency Credit Facility and the 2021 364-Day Delayed Draw Term Loan.

The 0.400% Notes will mature on February 15, 2027 and bear interest at a rate of 0.400% per annum. The 0.950% Notes will mature on October 5, 2030 and bear interest at a rate of 0.950% per annum. Accrued and unpaid interest on the 0.400% Notes will be payable in EUR in arrears on February 15 of each year, beginning on February 15, 2022. Accrued and unpaid interest on the 0.950% Notes will be payable in EUR in arrears on October 5 of each year, beginning on October 5, 2022. Interest on the 0.400% Notes and the 0.950% Notes will accrue from October 5, 2021 and will be computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the notes, beginning on the issue date.

The Company may redeem the 0.400% Notes and the 0.950% Notes at any time, in whole or in part, at a redemption price equal to 100% of the principal amount of the 0.400% Notes and the 0.950% Notes plus a make-whole premium, together with accrued interest to the redemption date. If the Company redeems the 0.400% Notes on or after December 15, 2026 or the 0.950% Notes on or after July 5, 2030, the Company will not be required to pay a make-whole premium. In addition, if the Company undergoes a change of control and corresponding ratings decline, each as defined in the supplemental indenture, it may be required to repurchase all of the 0.400% Notes and the 0.950% 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 0.400% Notes and the 0.950% 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.

AMERICAN TOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions, unless otherwise noted)

The supplemental indenture contains certain covenants that restrict the Company’s ability to merge, consolidate or sell assets and its (together with its subsidiaries’) ability to incur liens. These covenants are subject to a number of exceptions, including that the Company and its subsidiaries may incur certain liens on assets, mortgages or other liens securing indebtedness if the aggregate amount of indebtedness secured by such liens does not exceed 3.5x Adjusted EBITDA, as defined in the supplemental indenture.

*Repayment of the 2021 364-Day Delayed Draw Term Loan—*On October 7, 2021, the Company repaid all amounts outstanding under the 2021 364-Day Delayed Draw Term Loan using proceeds from the issuance of the 0.400% Notes and the 0.950% Notes.

*Repayment of 4.70% Senior Notes—*On October 18, 2021, the Company redeemed all of the 4.70% Notes at a price equal to 101.7270% of the principal amount, plus accrued and unpaid interest up to, but excluding October 18, 2021, for an aggregate redemption price of approximately $715.1 million, including $3.0 million in accrued and unpaid interest. The Company expects to record a loss on retirement of long-term obligations of approximately $12.4 million, which includes prepayment consideration of $12.1 million and the associated unamortized discount and deferred financing costs. The redemption was funded with cash on hand. Upon completion of this redemption, none of the 4.70% Notes remained outstanding.

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